FENIX RESOURCES LTD - Annual Report 2013

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ABN 68 125 323 622

Annual Report 2013

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Annual Report for the Year Ended 30 June 2013
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ABN 68 125 323 622

Contents
	Page
Corporate Directory	2
Chairman’s Letter	3
Review of Operations	4-7
Corporate Governance Statement	8-14
Directors’ Report	15-22
Auditor’s Independence Declaration	23
Statement of Comprehensive Income	24
Statement of Financial Position	25
Statement of Changes in Equity	26
Statement of Cash Flows	27
Notes to the Consolidated Financial Statements	28-50
Directors’ Declaration	51
Independent Auditor’s Report	52-53
ASX Additional Information	54
Tenement Schedule	55

Emergent Resources Limited

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Corporate Directory

Directors

Jian-Hua Sang Non-Executive Chairman Andrew Tunks Executive Director Sai Kit Wong Non-Executive Director Wolfgang Fischer Non-Executive Director Patrick Burke Non-Executive Director

Company Secretary

Patrick Burke

Principal and Registered Office

Level 1, 33 Ord Street West Perth, Western Australia 6005 Web www.emergentresources.com.au

Auditor

Grant Thornton Audit Pty Ltd Level 1, 10 Kings Park Road West Perth, Western Australia 6005

Share Registry

Computershare Investor Services Pty Ltd Level 2, 45 St George’s Terrace Perth, Western Australia 6000

Stock Exchange Listing

The Company’s shares are quoted on the Australian Securities Exchange.

The home exchange is Perth, Western Australia.

ASX Code

EMG – Ordinary shares

Chairman’s Letter

Dear Shareholders

On behalf of the Board of Emergent Resources Limited (Emergent or the Company), I am pleased to present the Company’s 2013 Annual Report in what has been a year of change within the Company.

The Company, whilst retaining and continuing to develop its core Beyondie Iron Ore and Extension Gold Projects, has successfully rationalised the balance of its tenement portfolio resulting in it becoming a far more focussed and cost effective explorer.

In addition, the Company has significantly increased its technical expertise with the appointment of Executive Director, Dr Andrew Tunks. Dr Tunks brings a wealth of experience in the sourcing, reviewing, securing and developing of new mineral resource projects. Along with continuing to develop the Company’s existing assets, Dr Tunks is focussed on growing the Company through strategic investment and acquisition.

The Company has added an additional cornerstone Chinese shareholder, Advanced Endeavour Enterprises Limited whom, together with existing cornerstone shareholder, International Natural Resources, have confirmed their interest in possible additional financial backing for any investment or acquisition made by the Company. This has greatly expanded the range of projects under consideration by the Company.

In addition to the strength of its asset base and technical expertise, the Company’s cash position remains very strong with cash reserves of approximately $3,000,000.

The Board considers this a very exciting time for the Company and is looking forward to both developing its existing Projects and growing the Company through investment and acquisition.

Thank you for your continued support.

Sincerely

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Jian-Hua Sang Non-Executive Chairman

Emergent Resources Limited

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Review of Operations

During the financial year the Company continued to evaluate opportunities within its current acreage portfolio and seek new opportunities both locally and abroad.

Newly appointed Executive Director, Dr Andrew Tunks, brings a wealth of experience in the sourcing, reviewing, securing and developing of new mineral resource projects. Along with continuing to develop the Company’s existing assets, Dr Tunks is focussed on growing the Company through strategic investment and acquisition.

In addition to its cash reserves of approximately $3,000,000, the Company has the support of its two major Chinese shareholders, International Natural Resources and Advanced Endeavour Enterprises Limited, who have confirmed their interest in possible additional financial backing for any investment or acquisition made by the Company. This has greatly expanded the range of projects under consideration by the Company.

The Company considers that its combination of corporate and technical expertise, significant financial backing and cash reserves at a premium to its current market capitalisation makes it ideally placed to grow through investment and acquisition and the development of its existing assets.

BEYONDIE IRON PROJECT

E52/1806 and E52/2215 (EMG – 80% Iron Ore, Vanadium and Manganese EMG)

The Beyondie Iron Project is located adjacent to the Great Northern Highway and Goldfields Gas Pipeline (Figure 1) in the northern part of WA’s mid-west iron ore precinct.

The Company has spent considerable exploration effort since 2007 on the Beyondie Iron Project with the result that the Project now comprises:

n Magnetite Inferred JORC Resource of 561 million tonnes grading 27.5% Fe in tenement E52/1806;
n Magnetite Exploration Target of 480 to 510 million tonnes grading 27.0 to 28.5% Fe in tenement E52/1806; and
n Magnetite Exploration Target1 of 3.7 to 4.2 billion tonnes grading 27.0 to 28.5% Fe in tenement E52/2215.

The potential quantity and grade of the above Exploration Targets is conceptual in nature. There has been insufficient exploration to define a Mineral Resource, and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Potential exists to further expand the resource base at Beyondie with exploration potential present for both Magnetite and Hematite mineralisation. The Company is currently conducting a complete a review of its very large database with a view to determining how best to expand the resource base at Beyondie.

The Company is also planning a program of laboratory work to prove up the metallurgical parameters for any possible production scenario. Because Beyondie is dominantly a Magnetite ore body magnetic separation is a key element of any process route. Initial testing shall comprise:

n Optimum Grind testwork: to determine the grind size at which the magnetite and deleterious elements will achieve a suitable specification for market. A range of grind sizes and off-take grades will be tested; and
n Davis Tube Recovery (DTR) testwork: to evaluate the grade characteristics throughout the Beyondie deposit to determine potential product characteristics and assist the compilation of a mining schedule.

Annual Report for the Year Ended 30 June 2013

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EXTENSION GOLD PROJECT

E52/2559 (100% EMG)

The northeast-trending Plutonic Well Greenstone Belt (Plutonic Belt) is the sixth largest gold region in Western Australia. The gold resources identified are at least 7Moz’s, belonging to the Marymia and Plutonic Gold mines. Emergent holds EL 52/2559 at the northern end of the belt which has produced some 6 Moz’s of gold since the 1990’s (Figure 2).

Unlike southern parts of the Plutonic Belt, this northern extension has not been subject to significantly systematic or modern exploration since the early 1990’s, and lies under sand cover or shallow sediments associated with the Earaheedy and Collier Basins. Outcrop of the underlying greenstone is limited. Consequently, historic exploration in the area has been largely inadequate and has left gold targets untested with significant scope to explore using modern exploration techniques.

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Figure 1: Beyondie Iron Project location in Mid-West.

Emergent Resources Limited

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Review of Operations (continued)

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Figure 2: Extension Gold Project location highlighting nearby gold mines and infrastructure, the drilling target at Extension is indicated by the blue star, Note EMG relinquished EL52/2474 in July 2013.

Emergent has previously completed Mobile Metal Ion (MMI) soil sampling and stream sediment sampling respectively on its Extension Prospect.

The Company intends to conduct a targeted drilling program to test gold in soil Mobile Metal Ions (MMI) anomalies generated by previous exploration conducted on its Extension Gold Project (Figure 3). The gold anomalies are coincident with mineralisation intersected in previous drilling of a NE trending shear zone close to a mafic-granite contact, geological features that are prospective for gold mineralisation.

Following preparatory works, the drilling program will comprise 800-1,000 metres of RC drilling, allowing the program to test structures at depth and across lithologies. The program will consist of 3 drill sections to investigate the shear zone in the areas of highest MMI anomalism. Final planning for holes is yet to be completed but it is expected that the first hole will target the up-dip expression of an 8m at 5.3g/t Au intercept in GCM hole MD5.

Annual Report for the Year Ended 30 June 2013

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Figure 3: Peak response of Soil Geochemical Survey and the planned zone for drill testing.

ASSET REVIEW

During the reporting period, as part of a regular process, the Company’s assets were reviewed. As a result of this asset review the decision was taken to relinquish the Marble Bar, Diamond Well, Mt Bartle, Paterson, North Pool, Yibbie Range and Beyondie North Projects. Following the reporting period the Company relinquished the Extension North Project and the non-prospective areas of the Beyondie Iron Project.

Competent Persons Statement

The information in this report which relates to Exploration Results and Mineral Resources is based on information compiled by Dr Andrew Tunks, a Director, who is a Member of the Australian Institute of Geoscientists. Dr Tunks has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves’ (The JORC Code). Dr Tunks consents to the inclusion in this announcement of the statements based on this information in the form and context in which it appears.

Emergent Resources Limited

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Corporate Governance Statement

Introduction

Since the introduction of the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations (“ASX Guidelines” or “the Recommendations”), the Company has sought to adopt systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this report. Commensurate with the spirit of the ASX Guidelines, the Company has followed each Recommendation where the Board has considered the Recommendation to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company, the Board, resources available and activities of the Company. Where, after due consideration, the Company’s corporate governance practices depart from the Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice.

The Board of the Company is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs.

Further information about the Company’s corporate governance practices is set out on the Company’s website at www.emergentresources.com.au . In accordance with the recommendations of the ASX, information published on the Company’s website includes:

Audit Committee Charter

Board Charter

Code of Conduct for Directors, Senior Executive & Employees

Continuous Disclosure Policy

Directors Disclosure Obligations Diversity Policy Environmental Policy Ethics and Conduct Policy Remuneration Committee Charter

Risk Management Statement Securities Trading Policy Shareholder Communications Policy

Explanation for Departures from Best Practice Recommendations

During the 2013 financial year the Company has complied with the Corporate Governance Principles and the corresponding Best Practice Recommendations as published by the ASX Corporate Governance Council (“Corporate Governance Principles and Recommendations”) and has adopted the revised Principles and Recommendations taking effect from reporting periods beginning on or after 1 January 2008. Significant policies and details of any significant deviations from the principles are specified below.

Corporate Governance Council Recommendation 1 Lay Solid Foundations for Management and Oversight

Role of the Board of Directors

The role of the Board is to increase shareholder value within an appropriate framework which safeguards the rights and interests of the Company’s shareholders and to ensure the Company is properly managed.

In order to fulfil this role, the Board is responsible for the overall corporate governance of the Company including formulating its strategic direction, setting remuneration and monitoring the performance of Directors and executives. The Board relies on senior executives to assist it in approving and monitoring expenditure, ensuring the integrity of internal controls and management information systems and monitoring and approving financial and other reporting.

In complying with Recommendation 1.1 of the Corporate Governance Council, the Company has adopted a Board Charter which defines the respective roles of the Board and senior management and assists in decision making processes. A copy of the Board Charter is available on the Company’s website.

Annual Report for the Year Ended 30 June 2013

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Corporate Governance Council Recommendation 1 (continued) Lay Solid Foundations for Management and Oversight

Board Processes

An agenda for Board meetings is determined to ensure certain standing information is addressed and other items which are relevant to reporting deadlines and or regular review are scheduled when appropriate. The agenda is regularly reviewed by the Chairman, the Non-Executive Directors and the Company Secretary.

Evaluation of Senior Executive Performance

The Company has not complied with Recommendation 1.2 of the Corporate Governance Council. The Board qualitatively assesses the performance of the Executive Director and Non-Executive Directors on a regular basis. Because of the early stage of development of the Company it is difficult for quantitative measures of performance to be established. As the Company progresses its projects, the Board intends to establish appropriate formal, quantitative and qualitative performance evaluation procedures.

Corporate Governance Council Recommendation 2 Structure the Board to Add Value

Board Composition

The Constitution of the Company provides that the number of Directors shall not be less than three. There is no requirement for any shareholding qualification.

The membership of the Board, its activities and composition is subject to periodic review. The criteria for determining the identification and appointment of a suitable candidate for the Board shall include the quality of the individual, background of experience and achievement, compatibility with other Board members, credibility within the scope of activities of the Company, intellectual ability to contribute to Board discussions and physical ability to undertake Board duties and responsibilities.

Directors are initially appointed by the Board and are subject to re-election by shareholders at the next general meeting. In any event a minimum of one third of the Directors are subject to re-election by shareholders at each general meeting.

The Board currently comprises five members, a Non-Executive Chairman, three Non-Executive Directors and an Executive Director. The Non-Executive Chairman is Mr Jian-Hua Sang with Mr Wolfgang Fischer, Mr Patrick Burke and Mr Sai Kit Wong as the Non-Executive Directors and Dr Andrew Tunks as Executive Director. The skills, experience and expertise of all Directors is set out in the Directors’ Report.

The Board has assessed the independence of its Non-Executive Directors according to the definition contained within the ASX Corporate Governance Guidelines and has concluded that at the date of this report two of the current Non-Executive Directors being Mr Fischer and Mr Burke meet the recommended independence criteria. Mr Sang and Mr Wong are not considered independent as they associated with substantial shareholders of the Company. As a result the Company is not in compliance with Recommendation 2.1 of the Corporate Governance Council at this time.

Independent Chairman

The Chairman Mr Sang is not an independent director and as such Recommendation 2.2 of the Corporate Governance Council has not been complied with.

Roles of Chairman and Chief Executive Officer

The role of Chairman was exercised by Mr Fischer during the financial year. Effective 21 June 2013, Mr Fischer stepped down as Chairman and remains a Non-Executive Director and existing Non-Executive Director Mr Sang was been appointed Non-Executive Chairman. The Company did not have a Chief Executive Officer during the financial year.

Nomination Committee

The Board does not have a separate Nomination Committee comprising of a majority of independent Directors and as such does not comply with Recommendation 2.4 of the Corporate Governance Council. The selection and appointment process for Directors is carried out by the full Board. The Board considers that given the importance of Board composition it is appropriate that all members of the Board partake in such decision making. The Company does not have a Nomination Committee Charter.

Emergent Resources Limited

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Corporate Governance Statement (continued)

Corporate Governance Council Recommendation 2 (continued) Structure the Board to Add Value

Evaluation of Board Performance

The Company does not have a formal process for the evaluation of the performance of the Board and as such does not comply with Recommendation 2.5 of the Corporate Governance Council. The Chairman regularly assesses the performance of the Board and individual Directors on qualitative basis.

Education

All Directors are encouraged to attend professional education courses relevant to their roles and to be members of the Australian Institute of Company Directors.

Independent Professional Advice and Access to Information

Each Director has the right to access all relevant information in respect of the Company and to make appropriate enquiries of senior management. Each Director has the right to seek independent professional advice at the Company’s expense, subject to the prior approval of the Chairman, which shall not be unreasonably withheld.

Corporate Governance Council Recommendation 3 Promote Ethical and Responsible Decision Making

The Board actively promotes ethical and responsible decision making.

Code of Conduct

The Board has adopted a Code of Conduct that applies to all employees, executives and Directors of the Company, and as such complies with Recommendation 3.1 of the Corporate Governance Council. This Code addresses expectations for conduct in accordance with legal requirements and agreed ethical standards. A copy of the Code is available on the Company’s website.

Guidelines for Trading in Company Securities

The Board has committed to ensuring that the Company, its Directors and executives comply with their legal obligations as well as conducting their business in a transparent and ethical manner. The Board has adopted a procedure on dealing in the Company’s securities by Directors, officers and employees which prohibits dealing in the Company’s securities when those persons possess inside information.

The guidelines also provide that the acknowledgement of the Chairman or the Board should be obtained prior to trading. In the case of a Director, acknowledgement from the entire Board must be obtained prior to trading. A summary of the Guidelines are available on the Company’s website.

The Company’s policy restricts, notwithstanding exceptional circumstances, the trading in Company’s securities by those individuals covered by the policy to trading windows that are open for 10 days commencing 24 hours following the hosting of General Meetings of the Company, the release of annual, half yearly results and quarterly reports and after any other public announcement on the ASX.

Diversity

The Board has adopted a diversity policy that details the purpose of the policy and the employee selection and appointment guidelines, consistent with the recommendations of the Corporate Governance Council. The Board believes that the adoption of an efficient diversity policy has the effect of broadening the employee recruitment pool, supporting employee retention, including different perspectives and is socially and economically responsible governance practice.

The Company employs new employees and promotes current employees on the basis of performance, ability and attitude. The Board is continually reviewing its practices with a focus on ensuring that the selection process at all levels within the organisation is formal and transparent and that the workplace environment is open, fair and tolerant. The Company currently has no full time employees.

Annual Report for the Year Ended 30 June 2013

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Corporate Governance Council Recommendation 3 (continued) Promote Ethical and Responsible Decision Making

Diversity (continued)

The Company, in keeping with the recommendations of the Corporate Governance Council provides the following information regarding the proportion of gender diversity in the organisation as at 30 June 2013:

*Proportion of female /* *total number of persons employed*	*Proportion of female /* *total number of persons employed*
Females employed in the Company as a whole	0/0
Females employed in the Company in senior positions	0/0
Females appointed as a Director of the Company	0/5

The recommendations of the Corporate Governance Council relating to reporting require a Board to set measurable objectives for achieving diversity within the organisation, and to report against them on an annual basis. The Company has implemented measurable objectives as follows:

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Objective
Measurable Objective Satisfied Comment
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Adoption and promotion of a Formal Diversity Policy	Yes	The Company has adopted a formal diversity policy which has been made publicly available via the ASX and the Company’s website.
To ensure Company policies are consistent with and aligned with the goals of the Diversity Policy	Yes	The Company’s selection, remuneration and promotion practices are merit based and as such are consistent with the goals of the Company’s Diversity Policy.
To provide fexible work and salary arrangements to accommodate family commitments, study and self- improvement goals, cultural traditions and other personal choices of current and potential employees.	Yes	The Company will, where considered reasonable, and without prejudice, accommodate requests for fexible working arrangements.
To implement clear and transparent policies governing reward and recognition practices.	Yes	The Company grants reward and promotion based on merit and responsibility as part of its annual and ongoing review processes.
To provide relevant and challenging professional development and training opportunities for all employees.	Yes	The Company seeks to continually encourage self- improvement in all employees, irrespective of seniority, ability or experience, through external and internal training courses, regular staff meetings and relevant on job mentoring.

The Company has not implemented specific measurable objectives regarding the proportion of females to be employed within the organisation or implement requirements for a proportion of female candidates for employment and Board positions. The Board considers that the setting of quantitative gender based measurable targets is not consistent with the merit and ability based policies currently implemented by the Company.

The Board will consider the future implementation of gender based diversity measurable objectives when it is more appropriate to the size and nature of the Company’s operations.

Emergent Resources Limited

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Corporate Governance Statement (continued)

Corporate Governance Council Recommendation 4 Safeguarding Integrity in Financial Reporting

Audit Committee

The Company does not have a separate Audit Committee as suggested by Recommendations 4.1, 4.2 and 4.3 of the Corporate Governance Council. The full Board currently carries out the function of an Audit Committee and believes that the Company is not of a sufficient size to warrant a separate committee and that the full Board is able to meet objectives of the best practice recommendations and discharge its duties in this area. The Board has adopted an Audit Committee Charter that is available on the Company’s website, and functions in accordance with this document.

The relevant experience of all the Board members is detailed in the Directors’ section of the Directors’ Report.

The Board considers the appointment of the external auditor, their independence, the audit fee and any questions of resignation or dismissal. Auditor rotation is as required by the Corporations Act 2001.

Financial Reporting

The Board relies on its Directors to monitor the internal controls within the Company. Financial performance is monitored on a regular basis by the Board, and is discussed by the Board at its Board meetings.

Corporate Governance Council Recommendation 5 Make Timely and Balanced Disclosure

The Board reviews the performance of the external auditors on an annual basis and meets with them during the year to review findings and assist with Board recommendations.

In the absence of a formal Audit Committee the Non-Executive Directors of the Company are available for communication with the auditors of the Company.

Continuous Disclosure

The Board is committed to the promotion of investor confidence by providing full and timely information to all security holders and market participants about the Company’s activities and to comply with the continuous disclosure requirements contained in the Corporations Act 2001 and the Australian Securities Exchange’s Listing Rules. The Company has established written policies and procedures, designed to ensure compliance with the ASX Listing Rule Requirements, in accordance with Recommendation 5.1 of the Corporate Governance Council. A copy of the Company’s Disclosure Policy is available on the Company’s website.

Continuous disclosure is discussed at all regular Board meetings and on an ongoing basis the Board ensures that all activities are reviewed with a view to the necessity for disclosure to security holders.

In accordance with ASX Listing Rules the Company Secretary is appointed as the Company’s disclosure officer.

Corporate Governance Council Recommendation 6 Respect the Rights of Shareholders

Communications

The Board fully supports security holder participation at general meetings as well as ensuring that communications with security holders are effective and clear. This has been incorporated into a formal Shareholder Communication Policy, in accordance with Recommendation 6.1 of the Corporate Governance Council. A copy of the policy is available on the Company’s website.

In addition to electronic communication via the ASX website, the Company publishes all significant announcements together with all quarterly reports. These documents are available in both hardcopy on request and on the Company website at www.emergentresources.com.au.

Shareholders are able to pose questions on the audit process and the financial statements directly to the independent auditor who attends the Company Annual General Meeting for that purpose.

Annual Report for the Year Ended 30 June 2013

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Corporate Governance Council Recommendation 7 Recognise and Manage Risk

Risk Management Policy

The Board has adopted a Risk Management Policy, which is available on the Company’s website that sets out a framework for a system of risk management and internal compliance and control, whereby the Board delegates day-to-day management of risk to the Executive Director. The Company complies with Recommendation 7.1 of the Corporate Governance Council. The Board is responsible for supervising management’s framework of control and accountability systems to enable risk to be assessed and managed.

Risk management and the internal control system

The Board has responsibility for identifying, assessing, treating and monitoring risks.

In order to implement the Company’s Risk Management Policy, it was considered important that the Company establish an internal control regime in order to:

n Assist the Company to achieve its strategic objectives;
n Safeguard the assets and interests of the Company and its stakeholders; and
n Ensure the accuracy and integrity of external reporting.

Key identified risks to the business are monitored on an ongoing basis as follows:

n Business risk management

The Company manages its activities within budgets and operational and strategic plans.

n Internal controls

The Board has implemented internal control processes typical for the Company’s size and stage of development. It ensures the proper functioning of internal controls and in addition it obtains advice from the external auditors as considered necessary.

n Financial reporting

Directors approve budgets for the Company and review performance against budgets at each Board Meeting.

n Environment and safety

The Company is committed to ensuring that sound environmental management and safety practices are maintained in its exploration activities. This is achieved by training staff and ensuring that they are aware of and follow all legislative, Company and industry standards in relation to environmental management and safety practices.

The Company’s risk management strategy is evolving and its development is an ongoing process. It is recognised that the level and extent of the strategy will develop with the growth of and changes in the Company’s activities.

The Company has not yet developed a formal risk management and internal control system to identify and manage material business risks.

Risk Reporting

As the Board has responsibility for the monitoring of risk management it has not required a formal report regarding the material risks that have been identified and whether those risks are managed effectively therefore not complying with Recommendation 7.2 of the Corporate Governance Council. The Board believes that the Company’s affairs are not of sufficient complexity to justify the implementation of a more formal system than that which is in place for identifying, assessing, monitoring and managing risk.

The Company does not have an internal audit function.

Emergent Resources Limited

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Corporate Governance Statement (continued)

Corporate Governance Council Recommendation 7 (continued) Recognise and Manage Risk

Chief Executive Officer and Chief Financial Officer Written Statement

The Board requires the Chief Executive Officer and the Chief Financial Controller, or equivalent, to provide a written statement that the financial statements of company present a true and fair view, in all material aspects, of the financial position and operational results and have been prepared in accordance with Australian Accounting Standards and the Corporation Act. The Board also requires that the Chief Executive Officer and the Chief Financial Controller, or equivalent, provide sufficient assurance that the declaration is founded on a sound system of risk management and internal control, and that the system is working effectively.

The declarations have been received by the Board, in accordance with Recommendation 7.3 of the Corporate Governance Council.

Corporate Governance Council Recommendation 8 Remunerate Fairly and Responsibly

Remuneration Committee

The Board does not have a separate Remuneration Committee and as such does not comply with Recommendation 8.1 of the Corporate Governance Council. Remuneration arrangements for Directors are determined by the full Board. The Board is also responsible for setting performance criteria, performance monitors, share option schemes, superannuation, termination and retirement entitlements, and professional indemnity and liability insurance cover.

The Board considers that the Company is effectively served by the full Board acting as a whole in remuneration matters. All matters of remuneration continue to be decided upon in accordance with Corporations Act requirements, by ensuring that no Director participates in any deliberations regarding their own remuneration or related issues.

Distinguish Between Executive and Non-Executive Remuneration

The Company does distinguish between the remuneration policies of its Executive and Non-Executive Directors in accordance with Recommendation 8.2 of the Corporate Governance Council.

Executive Directors may receive remuneration which may include performance based components, designed to reward and motivate, which may include the granting of share options, subject to shareholder approval and vesting conditions relating to continuity of engagement.

Non-Executive Directors receive fees agreed on an annual basis by the Board, within total Non-Executive remuneration limits voted upon by shareholders at Annual General Meetings. In the current financial year, no Non-Executive Director received share options as remuneration.

Annual Report for the Year Ended 30 June 2013

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Directors’ Report

The Directors present their report on Emergent Resources Limited for the year ended 30 June 2013.

Directors

The names and details of the Directors of Emergent Resources Limited during the financial year and until the date of this report are:

Jian-Hua Sang

Non-Executive Director effective 17 September 2012, appointed as Non-Executive Chairman effective 21 June 2013

Mr Jian-Hua Sang trained in China and was the first Chinese postgraduate student studying Economic Geology in Western Australia. He has more than 25 years of international exploration, mining and corporate experience in Asia, Australia and Africa. He is a Director of International Natural Resources Limited, Emergent’s strategic investment partner and largest shareholder.

Directorships of other ASX listed companies in the last three years:

n Vector Resources Limited – 13 September 2012 to current; and

n Chrysalis Resources Limited – 5 July 2013 to current.

Dr Andrew Tunks

Executive Director effective 21 June 2013

Dr Tunks holds B.Sc. (Hons) from Monash University and a Ph.D. in geology from the University of Tasmania. He has over 25 years of experience in exploration and mining in Australia, Africa and South America. Dr. Tunks’ core expertise is in structural and economic geology relating to gold deposits. As a former Senior Lecturer in Geology at the University of Tasmania he has been published in peer-reviewed journals and presented at various international conferences. He is also an accredited member of the Australian Institute of Geoscientists.

Dr Tunks has been able to combine his academic credentials with a very successful career in exploration leading successful exploration teams in West Africa and Botswana. Prior to becoming the CEO at A-Cap Resources Limited, he was Chief Geologist with IAMGOLD Corporation and held gold exploration positions with Ranger Minerals Limited in West Africa, North Limited and Western Mining Corporation in Western Australia. Dr Tunks held the Managing Director position at A-Cap Resources Limited and Botswana Metals Limited and was CEO at Ausgold Limited, during that time he has managed several capital raisings in domestic and international financial markets raising over $50M for exploration activities.

Directorships of other ASX listed companies in the last three years:

n A-Cap Resources Limited – 2007-2013; and

n Minerals Corporation Limited – 4 September 2013 to current

Sai Kit Wong

Non-Executive Director effective 21 June 2013

Mr Wong is a Hong Kong based lawyer. Mr Wong is admitted to practice law in Hong Kong and New York and also has Chinese legal qualifications. He has been involved in the restructuring, financing and listing of commercial enterprises in Hong Kong and mainland China as both a lawyer and executive and brings excellent legal and commercial contacts to the Company.

Mr Wong held no other directorships of other ASX listed companies in the last three years.

Wolfgang Fischer – BSc (Hons), FAICD, FausIMM

Non-Executive Chairman effective 22 December 2011,

resigned as Non-Executive Chairman and appointed as Non-Executive Director effective 21 June 2013

Mr Fischer has more than 35 years of top level experience in the Australian and international natural resources industry. He has held executive management and Board positions in a range of operational and corporate roles with several large and successful international petroleum, and exploration and development companies. Mr Fischer has a strong background on corporate governance standards, and has had considerable mineral and petroleum project management experience from project start-up to production and operating joint ventures.

Mr Fischer has had no directorships of other ASX listed companies in the last three years.

Emergent Resources Limited

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Directors’ Report (continued)

Directors (continued)

Patrick Burke LLB

Non-Executive Director effective 1 April 2013, Company Secretary effective 1 August 2013

Mr Burke holds a Bachelor of Laws degree from the University of Western Australia. He has approximately twenty years’ experience working in law firms and companies in Australia and Europe.

His expertise is in corporate, commercial and securities law with an emphasis on capital raisings and mergers and acquisitions. He contributes general corporate and legal skills along with a strong knowledge of the ASX requirements.

Directorships of other listed companies in the last three years:

n Monto Minerals Limited – 26 June 2009 to current;
n Sirocco Energy Limited – 23 July 2009 to current;
n Mineral Corporation Limited – 17 February 2011 to current;
n New Horizon Coal Ltd – 4 June 2010 to 2 December 2011;
n Fraser Range Metals Group Limited – 14 March 2011 to 5 February 2013; and
n WAG Limited – 20 December 2006 to 23 May 2013.

Former Directors

Nathan Lude

Non-Executive Director resigned effective 29 November 2012

Francis De Souza B Com.

Non-Executive Director resigned effective 1 April 2013

Company Secretary

Kevin Hart

Mr Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 2 March 2009. He has over 20 years’ experience in accounting and the management and administration of public listed entities in the mining and exploration industry.

He is currently a partner in an advisory firm which specialises in the provision of company secretarial services to ASX listed entities.

Mr Hart resigned as Company Secretary on 1 August 2013 and was replaced by Patrick Burke.

Directors’ Interests

As at the date of this report the Directors’ interests in shares and unlisted options of the Company are as follows:

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Directors’ Interests
Directors’ Interests Directors’ Interests Directors’ Interests in Options that are
Director in Ordinary Shares in Unlisted Options in Listed Options Vested and Exercisable
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W Fischer	4,750,667	125,000	–	125,000
Jian-Hua Sang	40,244,609	–	–	–
Patrick Burke	1,673,602	–	–	–
Andrew Tunks	500,000	10,000,000	–	–
Sai Kit Wong	–	–	–	–

Annual Report for the Year Ended 30 June 2013

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Directors’ Meetings

The number of meetings of the Company’s Directors held during the year ended 30 June 2013, and the number of meetings attended by each Director are as follows:

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Board of Directors’ Meetings
Director Held during term of office Attended
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W Fischer	9	9
F. De Souza_(resigned 1/04/13)_	8	8
N. Lude_(resigned 29/11/12)_	5	5
JH Sang (appointed 17/09/12)	7	6
P Burke_(appointed 1/04/13)_	1	1
A Tunks_(appointed 21/06/13)_	0	0
S K Wong (appointed 21/06/13)	0	0

Principal Activities

The principal activities of the Company during the financial year were exploration for iron, base metals, precious metals and uranium in Western Australia.

There were no significant changes in these activities during the financial year.

Results of Operations

The net loss after income tax for the financial year was $1,460,042 (2012: $6,370,435). Included in the loss for the year was an impairment charge in respect of the Company’s exploration assets of $1,080,624 (2012: 5,708,372).

Dividends

No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current year.

Review of Activities

Exploration

The exploration activity highlights include:

NEW PROJECTS

n Reviewed multiple project opportunities both locally and abroad.
n The Company is focused on reshaping its project portfolio to one with the potential to more effectively deliver near term value for shareholders.
n Appointment of Executive Director, Dr Andrew Tunks, to develop the Company’s existing assets and grow the Company through strategic investment and acquisition.

BEYONDIE IRON PROJECT

n The Company considers that potential still exists to further expand the resource base at Beyondie with exploration potential present for both Magnetite and Hematite mineralisation. The Company has been focussed on reviewing its very large database with a view to determining how best to expand the resource base at Beyondie.

EXTENSION GOLD PROJECT:

n Following completion of Mobile Metal Ion (MMI) soil sampling and stream sediment sampling respectively on the Extension Gold Project, the Company has been conducting a detailed review of results and has designed a targeted drilling program to test gold in soil MMI anomalies generated by previous exploration.
A detailed review of activities is available in the section of this Annual Report titled Review of Operations.

Emergent Resources Limited

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Directors’ Report (continued)

Review of Activities (continued)

Financial Position

At the end of the financial year the Company had $2,797,344 (2012: $3,445,912) in cash and at call deposits. Capitalised mineral exploration and evaluation expenditure is $4,325,509 (2012: $5,126,148). Mineral exploration and evaluation expenditure during the year for the Company was $280,088 (2012: $456,953). Impairment of Capitalised mineral exploration and evaluation expenditure during the year for the Company was $1,080,726 (2012: $5,708,372)

Expenditure was principally focused on the exploration for and evaluation of iron mineralisation, precious metals and base metals in Western Australia.

Significant Changes in the State of Affairs

Other than disclosed elsewhere in this report, there have been no significant changes in the state of affairs of the Company during or since the end of the financial year.

Options Over Unissued Capital

Unlisted Options

During the financial year the Company granted the following unlisted options over unissued shares:

*Number of Options Issued* *Date of Issue* *Exercise Price* *Expiry Date*	*Number of Options Issued* *Date of Issue* *Exercise Price* *Expiry Date*	*Number of Options Issued* *Date of Issue* *Exercise Price* *Expiry Date*	*Number of Options Issued* *Date of Issue* *Exercise Price* *Expiry Date*
5,000,000	21 June 2013	2.5 cents	21 June 2017
5,000,000	21 June 2013	5 cents	21 June 2018

The Company did not issue any ordinary shares during the financial year on the exercise of unlisted options. Since the end of the financial year, no unlisted options have been exercised.

As at the date of this report unlisted options over unissued shares in the Company are:

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Number of Options on Issue Exercise Price Expiry Date
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125,000	150 cents	30 September 2013
5,000,000	2.5 cents	21 June 2017
5,000,000	5 cents	21 June 2018

(i) Unlisted options are subject to various vesting periods. 125,000 (2012: 3,296,443) are vested and exercisable as at the date of this report. No options are vested and un-exercisable.

Listed Options

No listed options have been granted by the company during the current and previous financial year. Since the end of the financial year no listed options have been issued (2012: Nil).

No ordinary shares were issued during the financial year on the exercise of listed options (2012: Nil). No shares have been issued on the exercise of listed options since the end of the financial year. As at the date of this report there are no listed options over unissued shares in the Company.

Annual Report for the Year Ended 30 June 2013

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Matters Subsequent to the End of the Financial Year

Other than the matters below, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

n On 9 July 2013, the Company completed a share placement to a sophisticated investor to raise $260,000 by issued of 20,000,000 shares at 1.3 cents each.

Likely Developments and Expected Results of Operations

Disclosure of any further information has not been included in this report because, in the reasonable opinion of the Directors, to do so would be likely to prejudice the business activities of the Company and is dependent upon the results of future exploration and evaluation.

Environmental Regulation and Performance

The Company holds various exploration licences to regulate its exploration activities in Australia. These licences include conditions and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration activities.

So far as the Directors are aware, all exploration activities have been undertaken in compliance with all relevant environmental regulations.

Remuneration Report (Audited)

Remuneration Policy

Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and senior executives. Remuneration packages include fixed remuneration with bonuses or equity based remuneration entirely at the discretion of the Board based on the performance of the Company and Shareholder approval where required.

The Remuneration Report outlines Directors’ and executive remuneration arrangements of the Company. For the purposes of this report, Key Management Personnel are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, including any Directors of the Company and the five executives receiving the highest remuneration.

During the period the Board performed the role of the Remuneration Committee. The Board is responsible for determining and reviewing the remuneration of the Directors and executives. The Board assesses the appropriateness of the nature and amount of the remuneration on a periodic basis by reference to market and industry conditions.

Fees and payment to Non-Executive Directors reflects the demands that are made on and the responsibilities of, the Directors from time to time. Total remuneration for all Non-Executive Directors was last voted on by shareholders on 30 November 2010, whereby it is not to exceed $300,000 per annum. Non-Executive Directors do not receive bonuses. Directors’ fees cover all normal Board activities.

At the date of this report the Company has not entered into any agreements with Directors or senior executives which include performance based components.

A Director may also be paid fees or other amounts as the Directors determine, if a Director performs special duties or otherwise performs duties outside the scope of the normal duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

Emergent Resources Limited

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Directors’ Report (continued)

Remuneration Report (Audited) (continued)

Executive Employment Agreements

The Company has not entered into any executive employment agreement during the year. The Company has retained the services of Dr Andrew Tunks as an Executive Director on a part time basis of not less than two days per week. It is anticipated that this will expand to a full time role upon the securing of a further project for the Company. The term of Dr Tunks engagement is ongoing subject to either party giving three months’ notice. Dr Tunks salary as a part time Executive Director is $95,000 per annum excluding mandatory superannuation contributions, to be reviewed upon the securing of a further project for the Company. In addition, the Company has agreed to grant Dr Tunks the options set out below.

Unlisted Options

Save as set out below, no options over unissued shares has been issued to Directors and Key Management Personnel of the Company during, or since the end of, the financial year.

No options, granted as remuneration, have been exercised by Directors or Key Management Personnel during or since the end of the financial year.

125,000 options issued to Wolfgang Fischer on the 14 December 2010 with an exercise price of 150 cents expired on 30 September 2013.

5,000,000 options issued to Andrew Tunks on the 21 June 2013 with an exercise price of 2.5 cents and expiry date of 21 June 2017 vesting on 21 June 2014.

5,000,000 options issued to Andrew Tunks on the 21 June 2013 with an exercise price of 5 cents and expiry date of 21 June 2018 vesting on 21 June 2014.

Other Share Based Remuneration

The Company has not issue any share based remuneration during the year.

Details of Remuneration for Key Management Personnel

During the year the Company identified the Company Directors and Chief Executive Officer as Key Management Personnel for which disclosure is required.

Details of the remuneration of each Key Management Personal of the Company are as follows:

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Percentage of
2013 Base Superannuation Other Equity based remuneration
Emolument Contributions Benefits remuneration Total paid in Equity
Key Management Personal $ $ $ $ $ (%)
Directors
W Fischer 42,000 4,230 – 1,465 47,695 3.07
– – –
J H Sang 28,500 2,565 31,065
P Burke 9,000 810 – – 9,810 –
A Tunks 1,583 146 – 1,288 3,017 42.69
S K Wong 600 – – – 600 –
F De Souza 27,994 2,520 – – 30,514 –
Nathan Lude 58,444 5,260 – – 63,704 –
Total 168,121 15,531 – 2,753 186,405
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Annual Report for the Year Ended 30 June 2013

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Remuneration Report (Audited) (continued)

Details of Remuneration for Key Management Personnel (continued)

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Percentage of
2012 Base Superannuation Other Equity based remuneration
Emolument Contributions Benefits remuneration Total paid in Equity
Key Management Personal $ $ $ $ $ (%)
Directors
W Fischer 88,433 8,116 – 29,000 125,549 23.09
F De Souza 20,955 1,888 – 20,500 43,343 47.25
N Martin 23,790 2,141 – – 25,931 –
resigned 22 December 2011
S Hall 23,790 2,141 – – 25,931 –
resigned 22 December 2011
G Cowie 20,833 1,875 – – 22,708 –
resigned 27 October 2011
Executives
Nathan Lude [i] 207,701 18,693 – 61,500 287,894 21.36
Total 385,502 34,854 – 111,000 531,356
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i Mr Nathan Lude was appointed Managing Director on 22 December 2011. Effective 1 July 2012, Mr Lude stepped down as Managing Director and was appointed as a Non-Executive Director.

Remuneration of Company Executives

Company secretarial and accounting services are provided to the Company by Endeavour Corporate Pty Ltd, an entity that the Company Secretary, Mr Kevin Hart is a principal of.

End of Remuneration Report

Officers’ Indemnities and Insurance

During the year the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company covered by the insurance policy include the Directors named in this report.

The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under the insurance policy.

The Company has entered into an agreement to indemnify all Directors and Officers against all indemnifiable losses or liabilities incurred by each Director or Officer in their capacities as Directors and Officers of the Company. The Company has not provided any indemnity or insurance for an auditor of the Company.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

Emergent Resources Limited

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Directors’ Report (continued)

Corporate Governance

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the Company support and have adhered to the principles of corporate governance. The Company’s Corporate Governance Statement is contained in the Annual Report.

Non-audit Services

During the year Grant Thornton Audit Pty Ltd, the Company’s auditor, has performed no other services in addition to their statutory audit duties.

Total remuneration paid to auditors during the fnancial year: Audit and review of the Company’s fnancial statements Total	2013 2012 $ $ 25,680 25,250
	25,680 25,250

Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on page 23.

This report is made in accordance with a resolution of the Directors.

DATED at Perth this 24th day of September 2013.

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Jian-Hua Sang Non-Executive Chairman

Annual Report for the Year Ended 30 June 2013

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Auditor’s Independence Declaration

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E [email protected] W www.grantthornton.com.au

To the Directors of Emergent Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Emergent Resources Limited for the year ended 30 June 2013, 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.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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P W Warr Partner - Audit & Assurance

Perth, 24 September 2013

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Emergent Resources Limited

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Statement of Comprehensive Income

For the financial year ended 30 June 2013

Statement of Comprehensive Income For the fnancial year ended 30 June 2013
Note Continuing operations Revenue and other income 5 Total revenue Administration expenses Employee expenses 6 Corporate expenses Occupancy expenses Marketing expenses Depreciation expenses 11 Impairment expense Exploration expenses written off Loss before income tax Income tax beneft 7 Net loss for the year Other comprehensive income Total comprehensive income for the year Earnings per share for loss attributable to the ordinary equity holders of the Company Basic (loss) per share (cents per share) 28 Diluted (loss) per share (cents per share) 28	2013 2012 $ $ 145,187 115,780
	145,187 115,780 (96,691) (631,483) (179,264) (438,911) (130,834) (139,539) (15,650) (38,759) (4,329) (28,622) (7,762) (14,489) (1,080,726) (5,708,372)
	(89,973) – (1,460,042) (6,884,395) – 513,960
	(1,460,042) (6,370,435) – –
	(1,460,042) (6,370,435)
	(0.71) (3.95)
	(0.71) (3.95)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

Annual Report for the Year Ended 30 June 2013

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Statement of Financial Position

As at 30 June 2013

Note Current assets Cash and cash equivalents 8 Trade and other receivables 9 Other current assets 10(a) Total current assets Non-current assets Property, plant and equipment 11 Capitalised mineral exploration and evaluation expenditure 12 Other non-current assets 10(b) Total non-current assets Total assets Current liabilities Trade and other payables 13(a) Employee benefts provision 13(b) Total current liabilities Total liabilities Net assets Equity Issued capital 14 Share based payments reserve 16 Accumulated losses 16(b) Total equity	2013 2012 $ $ 2,797,344 3,445,912 3,922 6,320 – –
	2,801,266 3,452,232
	29,737 37,499 4,325,509 5,126,148 58,351 57,132
	4,413,597 5,220,779
	7,214,863 8,673,011
	44,593 39,783 – 5,669
	44,593 45,452
	44,593 45,452
	7,170,270 8,627,559
	19,131,199 19,131,199 11,790 250,779 (11,972,719) (10,754,419)
	7,170,270 8,627,559

The above statement of financial position should be read in conjunction with the accompanying notes.

Emergent Resources Limited

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Statement of Changes in Equity For the financial year ended 30 June 2013

Note Balance at 1 July 2011 Total comprehensive income for the fnancial year 16 Shares issued during the fnancial year 14 Share issue costs 14 Options issued during the fnancial year 16 Options expired during year 16 Balance at 30 June 2012	Share Based Issued Payments Accumulated capital Reserve losses Total $ $ $ $ 15,112,849 217,010 (4,391,512) 10,938,347 – – (6,370,435) (6,370,435) 4,070,880 – – 4,070,880 (52,530) – – (52,530) – 41,297 – 41,297 – (7,528) 7,528 –
	19,131,199 250,779 (10,754,419) 8,627,559

Total comprehensive income for the fnancial year 16 Shares issued during the fnancial year 14 Share issue costs 14 Options issued during the fnancial year 16 Options expired during year 16 Balance at 30 June 2013	– – (1,460,042) (1,460,042) – – – – – – – – – 2,753 – 2,753 – (241,742) 241,742 –
	19,131,199 11,790 (11,972,719) 7,170,270

The above statement of changes in equity should be read in conjunction with the accompanying notes.

Annual Report for the Year Ended 30 June 2013

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Statement of Cash Flows

For the financial year ended 30 June 2013

Note Cash fows from operating activities Interest received Research and development tax concession refund Payments to suppliers and employees Net cash used in operating activities 27 Cash fows from investing activities Payments for exploration and evaluation Proceeds from the sale of property, plant and equipment Payments for property, plant and equipment Net cash used in investing activities Cash fows from fnancing activities Received on the issue of shares Payments for transaction costs relating to share issues Net cash provided by fnancing activities Net (decrease)/increase in cash held Cash and cash equivalents at the beginning of the fnancial year Cash and cash equivalents at the end of the fnancial year 8	2013 2012 $ $ 143,317 112,559 – 513,960 (427,266) (1,295,634)
	(283,949) (669,115)
	(364,619) (668,097) – 55,633 – (8,043)
	(364,619) (620,507)
	– 3,968,380 – (52,531)
	– 3,915,849
	(648,568) 2,626,227 3,445,912 819,685
	2,797,344 3,445,912

The above statement of cash flows should be read in conjunction with the accompanying notes.

Emergent Resources Limited

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Notes to the Consolidated Financial Statements

For the financial year ended 30 June 2013

Note 1 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report includes financial statements for Emergent Resources Limited as a single entity (“Company”).

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001, as appropriate for for-profit oriented entities.

The financial report is presented in Australian dollars and all values are rounded to the nearest dollar.

The financial report of the Company was authorised for issue in accordance with a resolution of Directors on 24 September 2013.

Statement of Compliance

The financial report of Emergent Resources Limited complies with Australian Accounting Standards in their entirety. Compliance with Australian Accounting Standards ensures that the financial report also complies with International Financial Reporting Standards (IFRS) in their entirety.

Reporting basis and conventions

These financial statements have been prepared under the historical cost convention, and on an accrual basis.

Critical accounting estimates

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.

(b) Segment reporting

Operating segments are identified and segment information disclosed, where appropriate, on the basis of internal reports reviewed by the Company’s Board of Directors, being the Company’s Chief Operating Decision Maker, as defined by AASB 8. Adoption of AASB 8 by the Company in the prior financial year has not resulted in a redefinition of previously reported operating segments.

(c) Revenue recognition and receivables

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, allowances and amounts collectable on behalf of third parties.

Interest income

Interest income is recognised on a time proportion basis and is recognised as it accrues.

(d) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to the temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary timing differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantially enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to those timing differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Annual Report for the Year Ended 30 June 2013

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Note 1 Summary of significant accounting policies (continued)

(d) Income tax

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

(e) Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases (Note 23). Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight line basis over the period of the lease.

(f) Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the non-financial asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non-financial assets, other than goodwill, that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

(g) Cash and cash equivalents

For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(h) Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the assets.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation of property, plant and equipment is calculated using the straight line and written down value methods to allocate their cost, net of residual values, over their estimated useful lives, as follows:

Field equipment	5-33.3%
Offce equipment	5-50%
Motor Vehicles	10-25%

The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 1(f)). Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement.

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 1 Summary of significant accounting policies (continued)

(i) Mineral exploration and evaluation expenditure

Mineral exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which:

n such costs are expected to be recouped through the successful development and exploitation of the area of interest, or alternatively by its sale; or
n exploration and/or evaluation activities in the area have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active or significant operations in, or in relation to, the area of interest are continuing.

In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value, accumulated costs carried forward are written off in the year in which that assessment is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Immediate restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are expensed as incurred and treated as exploration and evaluation expenditure. Exploration activities resulting in future obligations in respect of restoration costs result in a provision to be made by capitalising the estimated costs, on a discounted cash basis, of restoration and depreciating over the useful life of the asset. The unwinding of the effect of the discounting on the provision is recorded as a finance cost in the income statement.

(j) Joint ventures

Interests in joint ventures are brought to account by including the appropriate share of the relevant assets, liabilities and costs of the joint ventures in their relevant categories in the financial statements.

(k) Trade and other payables

These amounts represent liabilities, at amortised cost, for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and usually paid within the payment terms negotiated with the creditor.

(l) Employee benefits

Wages, salaries and annual leave.

Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future salaries, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Share based payments

Share based compensation payments are made available to Directors and employees.

The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free rate for the term of the option.

Annual Report for the Year Ended 30 June 2013

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Note 1 Summary of significant accounting policies (continued)

(l) Employee benefits (continued)

Share based payments (continued)

The fair value of the options granted is adjusted to reflect market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

Upon the exercise of options, the balance of the share based payments reserve relating to those options is transferred to share capital and the proceeds received, net of any directly attributable transaction costs, are credited to share capital.

(m) Issued capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(n) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Goods and services tax (GST)

Revenues, expenses, assets commitments and contingencies are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as a part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority, are presented as operating cash flow.

(o) Comparative figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(p) Financial instruments

Recognition

When financial assets are recognised initially, they are measured at fair value, plus in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Company determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

All regular way purchases and sales of financial assets are recognised on the trade date, i.e. the date that the Company commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 1 Summary of significant accounting policies (continued)

(p) Financial instruments (continued)

(i) Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity. Investments included to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

(iii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

(iv) Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

(q) Fair value estimation

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods:

Investments in equity and debt securities

The fair value of financial assets at fair value through profit or loss, held to maturity investments and available for sale financial assets is determined by reference to their quoted bid price at the reporting date. The fair value of held to maturity investments is determined for disclosure purposes only. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

Trade and other receivables

The fair value of trade and other receivables, excluding construction work in progress, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

Impairment

At the end of each reporting period, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point.

Annual Report for the Year Ended 30 June 2013

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Note 1 Summary of significant accounting policies (continued)

(r) New Accounting Standards for application in future periods

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting period, some of which are relevant to the Company. The Company has decided not to early adopt any of the new and amended pronouncements. The Company’s assessment of the new and amended pronouncements that are relevant to the Company but applicable in future reporting periods is set out below:

n AASB 9: Financial Instruments (December 2010) and AASB 2010-7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).

This standard is mandatorily applicable for annual reporting periods commencing on or after 1 January 2013. However, AASB 2012-6 defers the application date of AASB 9 from 1 January 2013 to 1 January 2015. AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities.

Although the Directors anticipate that the adoption of AASB 9 and AASB 2010-7 may have an impact on the Company’s financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.

n AASB 10: Consolidated Financial Statements , AASB 11: Joint Arrangements , AASB 12: Disclosure of Interests in Other Entities, AASB 127: Separate Financial Statements (August 2011) and AASB 128: Investments in Associates and Joint Ventures (August 2011) (as amended by AASB 2012-10: Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments) , and AASB 2011-7: Amendments to Australian Accounting Standards.

AASB 10 provides a revised definition of “control” and additional application guidance so that a single control model will apply to all investees. When adopted, this Standard is not expected to significantly impact the Company’s financial statements.

AASB 11 requires joint arrangements to be classified as either “joint operations” (where the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities) or “joint ventures” (where the parties that have joint control of the arrangement have rights to the net assets of the arrangement). When adopted, this Standard is not expected to significantly impact the Company’s financial statements.

AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary, joint venture, joint operation or associate. AASB 12 also introduces the concept of a “structured entity”, replacing the “special purpose entity: concept currently used in Interpretation 112, and requires specific disclosures in respect of any investments in unconsolidated structured entities. When adopted, this Standard will affect disclosures only and therefore is not expected to significantly impact the Company’s financial statements.

n AASB 13: Fair Value Measurement and AASB 2011-8: Amendments to Australian Accounting Standards arising from AASB 2013 (applicable for annual reporting periods commencing on or after 1 January 2013).

AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted by other Standards.

These Standards are expected to result in more detailed fair value disclosures, but are not expected to significantly impact the amounts recognised in these financial statements.

n AASB 2011-4: Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (applicable for annual reporting periods beginning on or after 1 January 2013).

This Standard makes amendments to AASB 124 Related Party Disclosures to remove the individual key management personnel (KMP) disclosure requirements by Australia specific paragraphs.

When adopted, these amendments are unlikely to have any significant impact on the financial statements.

n AASB 119: Employee Benefits (September 2011) and AASB 2011-10: Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) (applicable for annual reporting periods beginning on or after 1 January 2013).

This Standard introduces a number of changes to presentation and disclosure of a defined benefit plan. AASB 119 also includes changes to the criteria for determining when termination benefits should be recognised as obligation. The entity does not have any defined benefit plans. Therefore, these amendments will have no significant impact on the entity.

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 1 Summary of significant accounting policies (continued)

(r) New Accounting Standards for application in future periods (continued)
n AASB Interpretation 20: Stripping Costs in the Production Phase of Surface Mining (applicable for annual reporting periods beginning on or after 1 January 2013).

This interpretation clarifies that costs of removing mine waste materials (overburden) to gain access to mineral ore deposits during the production stage of a mine must be capitalized as inventories under AASB 102: Inventories if the benefits from stripping activity is realised in the form of inventory produced.

The entity does not operate a surface mine. Therefore, there will be no impact on the financial statements when this interpretation is first adopted.

n AASB 2012-2: Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities (application for annual reporting periods commencing on or after 1 January 2014).

This Standard amends the required disclosures in AASB 7 to include information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s statement of financial position.

When adopted, there will be no impact on the entity as the entity does not have any netting arrangements in place.

n AASB 2012-5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 (applicable for annual reporting periods beginning on or after 1 January 2013).

These amendments are a consequence of the annual improvement process, which provides a vehicle for making non-urgent but necessary amendments to Standards.

When these amendments are first adopted, this Standard is not expected to significantly impact the Company’s financial statements.

Note 2 Financial risk management

The Company has exposure to a variety of risks arising from its use of financial instruments. This note presents information about the Company’s exposure to the specific risks, and the policies and processes for measuring and managing those risks. The Board of Directors has the overall responsibility for the risk management framework and has adopted a Risk Management Policy.

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from transactions with customers and investments.

Trade and other receivables

The Company has no investments and the nature of the business activity of the Company does not result in trading receivables. The receivables that the Company does experience through its normal course of business are short term and the risk of recovery of no recovery of receivables is considered to be negligible.

Cash deposits

The Company’s bankers are ANZ Limited and Westpac Banking Corporation and, at balance date, all operating accounts and funds held on deposit are with these banks. The Directors believe any risk associated with the use of these banks is addressed through the use of an AA rated bank as the primary banker. Except for this matter the Company currently has no significant concentrations of credit risk.

(b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Annual Report for the Year Ended 30 June 2013

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Note 2 Financial risk management (continued)

(b) Liquidity risk (continued)

The Company manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is cognisant of the future demands for liquid finance resources to finance the Company’s current and future operations, and consideration is given to the liquid assets available to the Company before commitment is made to future expenditure or investment. If the Company does not raise capital, it can continue as a going concern by reducing planned but not committed expenditure until funding is available or joint venture arrangements can be entered in to.

(c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising any return.

Interest rate risk

The Company has significant cash assets which may be susceptible to fluctuations in changes in interest rates. Whilst the Company requires the cash assets to be sufficiently liquid to cover any planned or unforeseen future expenditure, which prevents the cash assets being committed to long term fixed interest arrangements; the Company does mitigate potential interest rate risk by entering into short to medium term fixed interest investments.

Other market risks

The Company does not have any direct contact with foreign exchange or equity risks other than their effect on the general economy.

(d) Capital management

The Board of Directors monitors capital expenditure and cash flows as mentioned in (b). The Company’s capital structure may be amended by the issue of equity securities or by entering in to other finance arrangements as necessary to fund the Company’s operations and to continue as a going concern.

The Company’s current capital structure has been comprised entirely of equity based securities since its incorporation, and has no externally imposed capital requirements to which it is subject to, other than the requirements of the Corporations Act and ASX Listing Rules. There has been no material change to the composition of the Company’s capital in this or prior reporting periods.

Note 3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

Accounting for capitalised exploration and evaluation expenditure

The Company’s accounting policy is stated at Note 1(i). There is some subjectivity involved in the carrying forward as capitalised or writing off to the income statement exploration and evaluation expenditure, however the Board and management give due consideration to areas of interest on a regular basis and are confident that decisions to either write off or carry forward such expenditure reflect fairly the prevailing situation. In the year ended 30 June 2013 an amount of $1,080,726 has been written off (2012: $5,708,372).

Impairment

The Company assess impairment at the end of each reporting period by evaluating conditions and events specific to the Company that may be indicative of impairment triggers. Where an impairment trigger exists, the recoverable amount of the asset is determined. Impairment in respect of exploration and evaluation expenditure is detailed in Note 12 to the financial statements.

Measurement of share-based payments

The Company’s accounting policy is stated at 1(l). The fair value of options granted is measured using a valuation model taking into account the share price at the grant date, exercise price, expected option life and the expected volatility of the share price traded on the ASX.

Refer Note 17 for details of carrying amounts, estimates and assumptions used.

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 4 Segment information

The Company has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based on aggregating operating segments, where the segments have similar characteristics. The Company’s only material reportable segment for the financial period has been identified as the Beyondie Project in the Mid-West region of Western Australia.

Capitalised exploration for the year: Beyondie Project Other Result for the year: Beyondie Project Other Total segment assets: Beyondie Project Other Note 5 Revenue Interest income Gain on disposal of plant and equipment Other income Note 6 Loss for the year Loss before income tax includes the following specifc expenses: Depreciation: Offce equipment Plant and equipment Employee expenses Wages and salaries Superannuation Salary costs capitalised to exploration Directors’ fees Other employment expenses Impairment expense	2013 2012 $ $ 171,670 213,995 108,417 242,957
	280,087 456,952
	(38,478) (4,160,685) (1,421,564) (2,209,750)
	(1,460,042) (6,370,435) 4,325,509 4,089,918 2,889,354 4,583,093
	7,214,863 8,673,011
	144,537 109,053 – 6,137 650 590
	145,187 115,780
	5,230 10,410 2,532 4,079
	7,762 14,489
	58,444 416,331 15,532 42,579 – (203,697) 109,677 178,903 (4,389) 4,795
	179,264 438,911
	1,080,726 5,708,372

Annual Report for the Year Ended 30 June 2013

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Note 7 Income tax (a) Income tax expense Current income tax: Current income tax charge (beneft) Research and development tax concession Deferred income tax: Relating to origination and reversal of timing differences Income tax expense reported in the income statement (b) Reconciliation of income tax expense to prima facie tax payable Loss from continuing operations before income tax expense Tax at the Australian rate of 30% (2012: 30%) Tax effect of permanent differences: Exploration costs written off Non-deductible share based payment Impairment charge Capital raising costs Research and development tax concession Deferred tax effect of prior year tax losses not brought to account Net deferred tax asset beneft not brought to account Tax (beneft)/expense (c) Deferred tax – Balance Sheet Liabilities Capitalised exploration expenditure Assets Revenue losses available to offset against future taxable income Employee provisions Accrued expenses Deductible equity raising costs Net unrecognised deferred tax asset (d) Deferred tax – Income Statement Liabilities Accrued Income Capitalised exploration expenditure Assets Accrued expenses Increase in tax losses carried forward Employee provisions Superannuation Payable Deferred tax beneft not recognised	2013 2012 $ $ (288,994) (613,071) – (513,960) 288,994 613,071
	– (513,960)
	(1,460,042) (6,361,435)
	(438,013) (1,908,430) – 826 12,389 351,210 1,712,512 (90,190) (98,355) – (513,960) – 213,220 176,167 68,664
	– (513,960)
	(1,297,653) (1,537,844)
	(1,297,653) (1,537,844)
	4,684,006 4,397,712 – 1,701 8,892 6,300 90,073 180,262
	4,782,971 3,048,131
	– 485 (111,018) (137,086)
	(111,018) (136,601) (108) (35,351) 288,994 245,662 (1,701) (2,674) – (2,372)
	176,167 68,664

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 7 Income tax (continued)

(c) Deferred tax – Balance Sheet (continued)

The deferred tax assets of tax losses not brought to account will only be obtained if:

(i) The Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the tax losses to be realised;
(ii) The Company continues to comply with the conditions for deductibility imposed by tax legislation; and
(iii) No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses.

All unused tax losses were incurred by Australian entities.

Note 8 Current assets – Cash and cash equivalents (a) Reconciliation to cash at the end of the year The fgures below are reconciled to cash at the end of the fnancial year as shown in the cash fow statement as follows: Cash at bank Deposits at call Cash and cash equivalents per statement of cash fows The above amount includes $50,000 (2012: $50,000) that is held in a restricted term deposit by ANZ as security against the Company’s credit card liability. (b) Deposits at call The deposits are bearing fxed interest rates of 5.9% (2010: N/A). Note 9 Current assets – Trade and other receivables Other receivable GST recoverable Details of fair value and exposure to interest risk are included at Note 18. Note 10 Other assets (a) Other assets – Current Deposits & Bonds (b) Other assets – Non-current Deposits & Bonds	2013 2012 $ $ 197,344 195,913 2,600,000 3,249,999
	2,797,344 3,445,912
	– 6,320 3,922 –
	3,922 6,320
	– –
	– –
	58,351 57,132
	58,351 57,132

Annual Report for the Year Ended 30 June 2013

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Note 11 Non-current assets – Property, plant and equipment Offce equipment At cost Accumulated depreciation Plant and equipment At cost Accumulated depreciation *Reconciliation of movements:* Offce equipment Net book value at start of the year Additions Disposal Depreciation Net book value at end of the year Plant and equipment Net book value at start of the year Additions Disposal Depreciation Net book value at end of the year No items of property, plant and equipment have been pledged as security by the Company. Note 12 Non-current assets – Capitalised mineral exploration and evaluation expenditure In the exploration and evaluation phase: Capitalised exploration costs at the start of the year Acquisition costs capitalised during the year Exploration costs capitalised during the year Exploration costs written off during the year Exploration costs impaired during the year Capitalised exploration costs at the end of the year	2013 2012 $ $ 40,909 40,909 (23,872) (18,642)
	17,037 22,267
	21,254 21,254 (8,554) (6,022)
	12,700 15,232
	29,737 37,499
	22,267 58,268 – – – (25,591) (5,230) (10,410)
	17,037 22,267
	15,232 35,172 – 8,043 – (23,904) (2,532) (4,079)
	12,700 15,232
	29,737 37,499
	5,126,148 10,377,567 – – 280,087 456,953 – – (1,080,726) (5,708,372)
	4,325,509 5,126,148

The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

During the financial year it was decided by the Board and management to provide impairment all its capitalised exploration projects except Beyondie totalling $1,080,624 (2012: $5,708,372).

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued)

For the financial year ended 30 June 2013

For the fnancial year ended 30 June 2013
Note 13 Current liabilities (a) Trade and other payables Trade payables Sundry payables and accrued expenses (b) Employee benefts provision Employee leave liabilities	2013 2012 $ $ 14,953 9,773 29,640 30,010
	44,593 39,783
	– 5,669

Liabilities are not secured over the assets of the Company. Details of fair value and exposure to interest risk are included at Note 18.

Note 14 Issued capital

(a) Ordinary shares

The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia.

The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the shares respectively held by them.

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value. There is no limit to the authorised share capital of the Company.

(b) Share capital Fully paid ordinary shares *Issue* (c) Share movements during the year *price* At the beginning of the year Options exercised $0.20 Transfer from options reserve Share placement $0.20 Issued capital to acquire tenement $0.17 Share placement $0.03 Entitlement issue $0.03 Share placement $0.04 Issued capital in lieu of reduction in cash salary $0.04 Less: costs related to shares issued At the end of the year	2013 2012 2013 2012 No. No. $ $ 206,991,001 206,991,001 19,131,199 19,131,199
	206,991,001 80,309,529 19,131,199 15,112,849 – – – – – 11,813,667 – 354,410 – 92,123,196 – 2,763,696 – 20,244,609 – 850,274 – 2,500,000 – 102,500 – – – (52,530)
	206,991,001 206,991,001 19,131,199 19,131,199

(b)
Share capital
Fully paid ordinary shares
Issue
(c)
Share movements during the year
price
At the beginning of the year
Options exercised
$0.20
Transfer from options reserve
Share placement
$0.20
Issued capital to acquire tenement
$0.17
Share placement
$0.03
Entitlement issue
$0.03
Share placement
$0.04
Issued capital in lieu of
reduction in cash salary
$0.04
Less: costs related to shares issued
At the end of the year

2013
2012
2013
2012
No.
No.
$
$ 206,991,001
206,991,001
19,131,199
19,131,199

206,991,001
80,309,529
19,131,199
15,112,849
–
–
–
–
–
11,813,667
–
354,410
–
92,123,196
–
2,763,696
–
20,244,609
–
850,274
–
2,500,000
–
102,500
–
–
–
(52,530)

206,991,001
206,991,001
19,131,199
19,131,199

Information relating to options over unissued shares is set out in Note 15.

Annual Report for the Year Ended 30 June 2013

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Note 15 Options (a) Options on issue Issued option capital (b) Unlisted Option movements during the year At the beginning of the year Unlisted options issued (i) Unlisted options expired Unlisted options issued (ii) Unlisted options issued (iii) At the end of the year	2013 2012 2013 2012 No. No. $ $ 10,125,000 7,296,443 11,790 250,779
	7,296,443 5,421,443 250,779 217,010 – – 1,465 8,500 (7,171,443) (125,000) (241,742) (7,528) – 2,000,000 – 32,797 10,000,000 – 1,288 –
	10,125,000 7,296,443 11,790 250,779

(i) Unlisted options issued as a part of a shareholder approved, Director remuneration package for Mr Wolfgang Fischer. The dollar value shown is the amount expensed in relation to the options remuneration under Australian Accounting Standards.
(ii) Unlisted options issued pursuant to a consultancy agreement for professional services rendered in respect of securing International Natural Resources Limited as an investor in the Company.
(iii) Unlisted options issued as a part of a Director remuneration package for Dr Andrew Tunks upon his appointment as Director. The dollar value shown is the amount expensed in relation to the options remuneration under Australian Accounting Standards.

(c) Options on issue at the balance date The number of options outstanding as at 30 June 2013 is 10,125,000 (2012: 7,296,443). The terms of these options are as follows:

ws:
Number of options outstanding	Exercise price	Expiry date
125,000	$1.50	30 September 2013
5,000,000	$0.025	21 June 2017
5,000,000	$0.05	21 June 2018

(d) Subsequent to the balance date

No options were issued or exercised between the end of the financial year and the date of this report.

Reconciliation of movement of options over unissued shares during the period including weighted average exercise price (WAEP)

Options outstanding at the start of the year	2013 2012 WAEP WAEP No. (cents) No. (cents) 7,296,443 22.0 5,421,443 27.0
Unlisted options granted during the year Options exercised during the year Options expiring unexercised during the year Options outstanding at the end of the year	10,000,000 4.0 2,000,000 10.0 – – – – (7,171,443) 20.0 (125,000) 50.0
	10,125,000 53.0 7,296,443 22.0

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

For the fnancial year ended 30 June 2013
Note 16 Reserves and accumulated losses (a) Share-based payment reserve Balance at beginning of year Options issued to directors Options issued pursuant to consultancy agreement Options expired Balance at the end of the year The share-based payment reserve records items recognised as expenses on valuation of employee and consultant options. (b) Accumulated losses Accumulated losses: At the beginning of the year Loss for the year Options expired during the year Balance at the end of the year	2013 2012 $ $ 250,779 217,010 2,753 8,500 – 32,797 (241,742) (7,528)
	11,790 250,779
	(10,754,419) (4,391,512) (1,460,042) (6,370,435) 241,742 7,528
	(11,972,719) (10,754,419)

Note 17 Share based payments

(a) On 21 June 2013, the Company issued 10,000,000 unlisted options to Dr Andrew Tunks upon the appointment as director. The options consists of 5,000,000 unlisted options exercisable at 2.5 cents on or before 21 June 2017 and 5,000,000 unlisted options exercisable at 5 cents on or before 21 June 2018. All options vest on 21 June 2014 provided Dr Andrew Tunks is still employed by the Company.

Number of Options	5,000,000	5,000,000
Fair value at grant date1	$0.0054	$0.0051
Share price	$0.010	$0.010
Exercise price	$0.025	$0.05
Volatility factor	98.71%	98.71%
Expiry date of the options	21 June 2017	21 June 2018
Risk free interest rate2	3.14%	3.14%

1 The basis of measuring fair value of the options was the Black-Scholes Option Pricing Model

2 Based on the prevailing Commonwealth Government Bond Rate at date of issue to expiry of option

Included under employee benefits expense in the statement of comprehensive income is $2,753 which relates to equity-settled share-based payment transactions (2012: $111,000).

(b) No shares were granted to key management personnel for share-based payments during the financial year ended 30 June 2013. 2,500,000 ordinary shares were granted to key management personnel for share-based payments during the financial year ended the 30 June 2012 in lieu of a reduction in cash salary.

Annual Report for the Year Ended 30 June 2013

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Note 18 Financial instruments

Credit risk

The Directors do not consider that the Company’s financial assets are subject to anything more than a negligible level of credit risk, and as such no disclosures are made, Note 2(a).

Impairment losses

The Directors do not consider that any of the Company’s financial assets are subject to impairment at the reporting date. No impairment expense or reversal of impairment charge has occurred during the reporting period.

Liquidity risk

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements, Note 2(b):

2013	Carrying amount $ Contractual cash fows $ 6 months or less $ 6-12 months $ 1-2 years $ 2-5 years $ More than 5 years $
Trade payables	14,954 14,954 14,954 – – – –
	14,954 14,954 14,954 – – – –

2012 Trade payables	Carrying amount $ Contractual cash fows $ 6 months or less $ 6-12 months $ 1-2 years $ 2-5 years $ More than 5 years $ 9,773 9,773 9,773 – – – –
	9,773 9,773 9,773 – – – –

Interest rate risk

At the reporting date the interest profile of the Company’s interest-bearing financial instruments was:

Variable rate instruments Financial assets	Carrying amount ($) 2013 2012 $ $ 2,797,344 3,445,912

The weighted average effective interest rates for financial assets at 30 June 2013 is 4.19% (2012: 5.58%). The weighted average maturity period for these financial assets as at 30 June 2013 is nil months (2012: nil months).

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 18 Financial instruments (continued)

Interest rate risk (continued)

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

2013 Variable rate instruments	Proft or loss Equity 1% 1% 1% 1% increase decrease increase decrease $ $ $ $ 27,973 (27,973) 27,973 (27,973)

2012 Variable rate instruments	Proft or loss Equity 1% 1% 1% 1% increase decrease increase decrease $ $ $ $ 34,459 (34,459) 34,459 (34,459)

Fair values

Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet are as follows:

Cash and cash equivalents Trade receivables Trade payables – at amortised cost	2013 2012 Carrying Fair Carrying Fair amount value amount value $ $ $ $ 2,797,344 2,797,344 3,445,912 3,445,912 – – 6,320 6,320 (14,954) (14,954) (9,773) (9,773)
	2,782,390 2,782,390 3,442,459 3,442,459

The Company’s policy for recognition of fair values is disclosed at Note 1(r).

Note 19 Dividends

No dividends were paid or proposed during the financial year.

The Company has no franking credits available as at 30 June 2013 (2012: nil).

Annual Report for the Year Ended 30 June 2013

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Note 20 Key management personnel disclosures

(a) The following persons were Key management personnel for Emergent Resources Limited during the financial year: Jian-Hua Sang (Non-Executive Chairman, Non-Executive Director until 21 June 2013) Wolfgang Fischer (Non-Executive Director, Non-Executive Chairman until 21 June 2013) Patrick Burke (Non-Executive Director) (Appointed 1 April 2013) Andrew Tunks (Executive Director) (Appointed 21 June 2013) Sai Kit Wong (Non-Executive Director) (Appointed 21 June 2013) Former directors Nathan Lude (Non-Executive Director) (Resigned 29 November 2012) Francis De Souza (Non-Executive Director) (Resigned 1 April 2013)

Other Key management personal

There were no other persons employed by or contracted to the Company during the financial year, having responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly.

(b) Key management personnel compensation Short-term employee benefts Post-employment benefts Share-based payment Other benefts	2013 2012 $ $ 168,121 385,502 15,531 34,854 2,753 111,000 – –
	186,405 531,356

(c) Equity instrument disclosures relating to key management personnel

Unlisted Options provided as remuneration and shares issued on exercise of such options

On 21 June 2013, 10,000,000 unlisted options were issued to Andrew Tunks upon his appointment as director. No options were issued to other key management personnel during the year.

No shares have been issued to key management personnel on exercise of options during the year.

No shares were granted to key management personnel for share-based payments during the financial year ended 30 June 2013. 2,500,000 ordinary shares were granted to key management personnel for share-based payments during the financial year ended the 30 June 2012 in lieu of a reduction in cash salary.

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 20 Key management personnel disclosures (continued)

(c) Equity instrument disclosures relating to key management personnel (continued)

Option holdings

Key Management Personnel have the following interests in options over unissued shares of the Company.

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----- Start of picture text -----

Received Options Options
2013 Balance during the expired exercised Balance Vested Vested
at start year as during during at the end during and
Name of the year [1] remuneration the year the year of the year [1] the year [1] exercisable [2]
----- End of picture text -----

2013 Name Balance at start of theyear1 Received during the year as remuneration Options expired during theyear Options exercised during theyear Balance at the end of theyear1	Vested during theyear1 Vested and exercisable2

*Current Directors*
W Fischer 250,000 – 125,000 – 125,000	125,000 125,000
JH Sang – – – – –	– –
P Burke – – – – –	– –
A Tunks 10,000,000 – – – 10,000,000	– –
S K Wong – – – – –	– –
*Previous Directors*
F De Souza – – – – –	– –
N Lude – – – – –	– –

1 Option holding information for Key Management Personnel who were not Key Management Personnel for the whole year is only for that portion of the year during which they held a key management position. For the purpose of this table, options held at appointment are assumed to have been held at 1 July and options held at termination are assumed to be held at 30 June, with any acquisitions or disposals prior to appointment or after termination, not shown.

2 All options held by Directors in the above table that have vested, are exercisable.

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----- Start of picture text -----

Received Options Options
2012 Balance during the expired exercised Balance Vested Vested
at start year as during during at the end during and
Name of the year [1] remuneration the year the year of the year [1] the year [1] exercisable [2]
----- End of picture text -----

2012 Name Balance at start of theyear1 Received during the year as remuneration Options expired during theyear Options exercised during theyear Balance at the end of theyear1	Vested during theyear1 Vested and exercisable2

*Current Directors*
W Fischer 375,000 – 125,000 – 250,000	125,000 125,000
F De Souza – – – – –	– –
N Lude – – – – –	– –
*Previous Directors*
N Martin – – – – –	– –
S Hall – – – – –	– –
G Cowie – – – – –	– –

2 All options held by Directors in the above table that have vested, are exercisable.

Annual Report for the Year Ended 30 June 2013

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Note 20 Key management personnel disclosures (continued)

(c) Equity instrument disclosures relating to key management personnel (continued)

Share holdings

The number of shares in the Company held during the financial year by key management personnel of the Company, including their personally related parties are set out below. There were no shares granted during the reporting period as compensation.

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----- Start of picture text -----

2013 Received during
Balance at the year on Other changes Balance at the
Name start of the year [1] exercise of options during the year [2] end of the year [1]
----- End of picture text -----

*Current Directors*
W Fischer	4,750,667	–	–	4,750,667
S H Sang	20,244,609	–	20,000,000	40,244,609
P Burke	1,673,602	–	–	1,673,602
A Tunks	–	–	–	–
S K Wong	–	–	–	–
*Previous Directors*
F De Souza	786,000	–	–	786,000
N Lude	3,663,040	–	–	3,663,040

1 Shareholding information for Key Management Personnel who were not Key Management Personnel for the whole year is only for that portion of the year during which they held a key management position. For the purpose of this table, shares held at appointment are assumed to have been held at 1 July and shares held at termination are assumed to be held at 30 June, with any acquisitions or disposals prior to appointment or after termination, not shown.

2 Other changes during the year refer to shares purchased or sold during the financial year.

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----- Start of picture text -----

2012 Received during
Balance at the year on Other changes Balance at the
Name start of the year [1] exercise of options during the year [2] end of the year [1]
----- End of picture text -----

*Current Directors*
W Fischer	3,117,000	–	1,633,667	4,750,667
F De Souza	286,000	–	500,000	786,000
N Lude	721,520	–	2,941,520	3,663,040
*Previous Directors*
N Martin	–	–	–	–
S Hall	–	–	–	–
G Cowie	250,000	–	250,000	500,000

2 Other changes during the year refer to shares purchased or sold during the financial year.

(d) Loans made to key management personnel

No loans were made to key personnel, including personally related entities during the reporting period.

(e) Other transactions with key management personnel

There were no other transactions with key management personnel, other than as disclosed in the Remuneration Report .

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

Note 21 Remuneration of auditors Audit or review of the fnancial reports of the Company Balance at the end of the year	2013 2012 $ $ 25,680 25,250
	25,680 25,250

Note 22 Contingencies

(i) Contingent liabilities

There were no material contingent liabilities not provided for in the financial statements of the Company as at 30 June 2013 or 30 June 2012 other than:

Native Title and Aboriginal Heritage

Native title claims have been made with respect to areas which include tenements in which the Company has an interest. The Company is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to what extent the claims may significantly affect the Company or its projects. Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain areas in which the Company has an interest.

(ii) Contingent assets

There were no material contingent assets as at 30 June 2013 or 30 June 2012.

Note 23 Commitments

(a) Exploration

The Company has certain obligations to perform minimum exploration work on mineral leases held. These obligations may vary over time, depending on the Company’s exploration programmes and priorities. As at balance date, total exploration expenditure commitments on tenements held by the Company have not been provided for in the financial statements and which cover the following twelve month period amount to $375,250 (2012: $933,077). These obligations are also subject to variations by farm-out arrangements or sale of the relevant tenements. This commitment does not include the expenditure commitments which are the responsibility of the joint venture partners.

(b) Contractual Commitment

There are no material contractual commitments as at 30 June 2013 (2012: nil) other than those disclosed above in the Financial Statements.

Note 24 Related party transactions

There were no related party transactions during the year, other than disclosed at Note 20.

Annual Report for the Year Ended 30 June 2013

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Note 25 Interests in joint ventures

Joint venture agreements have been entered into with third parties. Details of joint venture agreements are disclosed below. Assets employed by these joint ventures and the Company’s expenditure in respect of them is brought to account initially as capitalised exploration and evaluation expenditure until a formal joint venture agreement is entered into. Thereafter, investment in joint ventures is recorded distinctly from capitalised exploration costs incurred on the company’s 100% owned projects.

Joint Venture and Exploration Agreement

De Grey Mining Limited – Beyondie Iron Agreement

Under an agreement entered into with De Grey Mining Limited on 1 May 2008, Emergent Resources Limited has rights to 80% of the iron ore, vanadium and manganese on EL52/1806 and EL52/2215. The Company will sole fund the tenements until it makes a decision to mine. De Grey Mining Limited may then contribute on its 20% interest basis or convert to a 2% net smelter royalty.

Note 26 Events occurring after the balance sheet date

n On 9 July 2013, the Company completed a share placement to a sophisticated investor to raise $260,000 by issued of 20,000,000 shares at 1.3 cents each.

Note 27 Reconciliation of loss after tax
to net cash infow from operating activities
Loss after tax
Non-cash items:
Gain on sale of assets
Equity Remuneration
Depreciation expense
Exploration costs written off
Changes in net assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in employee liabilities

2013
2012
$
$ (1,460,042)
(6,370,435)
–
(6,137)
2,753
143,798
7,762
14,489
1,170,699
5,708,372
200
(200)
968
3,098
(620)
(153,188)
(5,669)
(8,912)

(283,949)
(669,115)

No non-cash financing and investing activities.

Emergent Resources Limited

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Notes to the Consolidated Financial Statements (continued) For the financial year ended 30 June 2013

For the fnancial year ended 30 June 2013
Note 28 Earnings per share (a) Basic earnings per share Loss attributable to ordinary equity holders of the Company (b) Diluted earnings per share Loss attributable to ordinary equity holders of the Company (c) Loss used in calculation of basic and diluted loss per share Loss after tax from continuing operations (d) Weighted average number of shares used as the denominator Weighted average number of shares used as the denominator in calculating basic and dilutive loss per share	2013 2012 cents cents (0.71) (3.95)
	(0.71) (3.95)
	$ $ (1,460,042) (6,370,435)
	No. No. 206,991,001 160,925,428

At 30 June 2013 the Company had on issue 10,125,000 options (2012: 7,296,443) over ordinary shares that are not considered to be dilutive to its reported loss for the year.

Annual Report for the Year Ended 30 June 2013

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Directors’ Declaration

In the opinion of the Directors of Emergent Resources Limited (“the Company”):

(a) the financial statements and notes set out on pages 24 to 50 are in accordance with the Corporations Act 2001, including:
(i) complying with Australian Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) give a true and fair view of the financial position as at 30 June 2013 and of the performance for the year ended on that date of the Company; and
(iii) complying with International Financial Reporting standards as disclosed in Note 1.
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2013.

This declaration is made in accordance with a resolution of the Directors.

Signed at Perth this 24th day of September 2013

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Jian-Hua Sang Non-Executive Chairman

Emergent Resources Limited

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Independent Auditor’s Report To the Members of Emergent Resources Limited

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E [email protected] W www.grantthornton.com.au

Report on the financial report

We have audited the accompanying financial report of Emergent Resources Limited (the “Company”), which comprises the statement of financial position as at 30 June 2013, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the Directors’ Declaration of the Company.

Directors responsibility for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility includes such internal controls as the Directors determine are necessary to enable the preparation of the financial report to be free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Annual Report for the Year Ended 30 June 2013

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accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

a the financial report of Emergent Resources Limited is in accordance with the Corporations Act 2001, including:
i giving a true financial position as at 30 June 2013 and of its performance for the year ended on that date;
ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

Report on the remuneration report

We have audited the remuneration report included in pages 19 to 21 of the Directors’ Report for the year ended 30 June 2013. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Emergent Resources Limited for the year ended 30 June 2013, complies with section 300A of the Corporations Act 2001.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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P W Warr Partner - Audit & Assurance

Perth, 24 September 2013

Emergent Resources Limited

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ASX Additional Information

Pursuant to the Listing Rules of the Australian Securities Exchange Limited, the shareholder information set out below was applicable as at 23 September 2013

a. Distribution of Equity Securities

Distribution of Equity Securities
*Range*	*Listed Shares* *Number* *Securities* *of Holders* *Held*
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	50 21,693 111 363,498 159 1,386,302 470 19,567,123 193 205,652,385
	983 226,991,001

There are 613 shareholders holding unmarketable parcels represented by 41,667 shares.

b. Substantial Shareholders

An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below:

C.

out below:
*Shareholder Name*	*Issued Ordinary Shares* *Number* %
International Natural Resources Inc Advanced Endeavour Enterprises Limited Twenty Largest Shareholders *Shareholder*	44,244,609 17.73 20,000,000 8.81 *% of Issued* *Shares Held* *Capital*
International Natural Resources Inc Advanced Endeavour Enterprises Limited International Natural Resources Inc Mrs Katrina Banks-Smith Benfco Pty Ltd Benfco Pty Ltd Finook Pty Ltd Mr Ianaki Semerdziev R & K Boylan Nominees Pty Ltd Waboc Pty Ltd N & J Mitchell Holdings Pty Ltd Pandell Pty Ltd R & K Boylan Nominees Pty Ltd Pheakes Pty Ltd Whittingham Securities Pty Limited Advantage Management Pty Ltd Ms Therese Merle Mcmaster Ambergate Nominnees Pty Ltd Mt Wayne Daryl King + Mr Craig Allan King ,W D King Super Fund A/C> Citicorp Nominees Pty Ltd	20,244,609 8.92 20,000,000 8.81 20,000,000 8.81 6,580,973 2.90 5,999,462 2.64 5,170,000 2.28 5,040,342 2.22 4,685,434 2.06 4,357,223 1.92 4,016,667 1.77 3,840,273 1.69 3,818,820 1.68 3,751,324 1.65 3,333,333 1.47 3,000,000 1.32 2,800,000 1.23 2,706,270 1.19 2,500,000 1.10 2,440,000 1.07 2,269,472 1.00
	126,554,202 55.75

d. Voting Rights

In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote.

e. Restricted Securities

There are no restricted securities.

Annual Report for the Year Ended 30 June 2013

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Tenement Schedule

As at 23 September 2013

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----- Start of picture text -----

Tenement Status Registered Holder Emergent %
----- End of picture text -----

BEYONDIE NORTH
E52/2215	Granted	De Grey Mining Ltd	80%
BEYONDIE SOUTH
E52/1806	Granted	De Grey Mining Ltd	80%
EXTENSION
E52/2559	Granted	Emergent Resources Ltd	100%

Emergent Resources Limited

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This page has been left blank intentionally.

Annual Report for the Year Ended 30 June 201 23

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Level 1, 33 Ord Street West Perth, Western Australia 6005 www.emergentresources.com.au

AI assistant

FENIX RESOURCES LTD — Annual Report 2013

64910_rns_2013-10-24_baaba889-5fff-45f8-81bf-cd7c5e90d9d8.pdf

Corporate Directory

Directors

Company Secretary

Principal and Registered Office

Auditor

Share Registry

Stock Exchange Listing

ASX Code

Company Information

Chairman’s Letter

Review of Operations

BEYONDIE IRON PROJECT

E52/1806 and E52/2215 (EMG – 80% Iron Ore, Vanadium and Manganese EMG)

EXTENSION GOLD PROJECT

E52/2559 (100% EMG)

Review of Operations (continued)

ASSET REVIEW

Competent Persons Statement

Corporate Governance Statement

Introduction

Explanation for Departures from Best Practice Recommendations

Corporate Governance Council Recommendation 1 Lay Solid Foundations for Management and Oversight

Role of the Board of Directors

Corporate Governance Council Recommendation 1 (continued) Lay Solid Foundations for Management and Oversight

Board Processes

Evaluation of Senior Executive Performance

Corporate Governance Council Recommendation 2 Structure the Board to Add Value

Board Composition

Independent Chairman

Roles of Chairman and Chief Executive Officer

Nomination Committee

Corporate Governance Statement (continued)

Corporate Governance Council Recommendation 2 (continued) Structure the Board to Add Value

Evaluation of Board Performance

Education

Independent Professional Advice and Access to Information

Corporate Governance Council Recommendation 3 Promote Ethical and Responsible Decision Making

Code of Conduct

Guidelines for Trading in Company Securities

Diversity

Corporate Governance Council Recommendation 3 (continued) Promote Ethical and Responsible Decision Making

Diversity (continued)

Corporate Governance Statement (continued)

Corporate Governance Council Recommendation 4 Safeguarding Integrity in Financial Reporting

Audit Committee

Financial Reporting

Corporate Governance Council Recommendation 5 Make Timely and Balanced Disclosure

Continuous Disclosure

Corporate Governance Council Recommendation 6 Respect the Rights of Shareholders

Communications

Corporate Governance Council Recommendation 7 Recognise and Manage Risk

Risk Management Policy

Risk management and the internal control system

n Business risk management

n Internal controls

n Financial reporting

n Environment and safety

Risk Reporting

Corporate Governance Statement (continued)

Corporate Governance Council Recommendation 7 (continued) Recognise and Manage Risk

Chief Executive Officer and Chief Financial Officer Written Statement

Corporate Governance Council Recommendation 8 Remunerate Fairly and Responsibly

Remuneration Committee

Distinguish Between Executive and Non-Executive Remuneration

Directors’ Report

Directors

Jian-Hua Sang

Non-Executive Director effective 17 September 2012, appointed as Non-Executive Chairman effective 21 June 2013

Dr Andrew Tunks

Executive Director effective 21 June 2013

Sai Kit Wong

Non-Executive Director effective 21 June 2013

Wolfgang Fischer – BSc (Hons), FAICD, FausIMM

Non-Executive Chairman effective 22 December 2011,

resigned as Non-Executive Chairman and appointed as Non-Executive Director effective 21 June 2013

Directors’ Report (continued)

Directors (continued)

FENIX RESOURCES LTD Annual Report 2013