IONIC RARE EARTHS LIMITED - Annual Report 2015

ORO VERDE LIMITED A.B.N. 84 083 646 477

ANNUAL REPORT

30 JUNE 2015

ORO VERDE LIMITED CORPORATE DIRECTORY A.B.N. 84 083 646 477

This annual report covers the consolidated entity of Oro Verde Limited and its subsidiaries. The consolidated entity’s functional and presentation currency is AUD ($).

A description of the consolidated entity’s operations and of its principal activities is included in the review of operations and activities in the directors’ report.

Directors

W G Martinick - Non-Executive Chairman

T I Woolfe - Managing Director

B D Dickson - Finance Director

B L Farrell - Non-Executive Technical Director

A P Rovira - Non-Executive Director

Company Secretary

B D Dickson

Registered Office and Principal Place of Business

Level 1 30 Richardson Street West Perth, WA 6005 Telephone: 08 9481 2555 Fax: 08 9485 1290

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross, WA 6153

Auditors

Hewitt, Turner & Gelevitis Suite 4, 1[st] Floor 63 Shepperton Road Victoria Park, WA 6100

Bank

National Australia Bank Level 1, Gateway Building 177-179 Davy Street Booragoon, WA 6154

ORO VERDE LIMITED DIRECTORS’ REPORT

Contents	Page
DIRECTORS’ REPORT	3
DIRECTORS’ DECLARATION	17
AUDITOR’S INDEPENDENCE DECLARATION	18
STATEMENT OF COMPREHENSIVE INCOME	19
STATEMENT OF FINANCIAL POSITION	20
STATEMENT OF CASH FLOWS	21
STATEMENT OF CHANGES IN EQUITY	22
NOTES TO THE FINANCIAL STATEMENTS	23
INDEPENDENT AUDIT REPORT	54
CORPORATE GOVERNANCE STATEMENT	56
ASX ADDITIONAL INFORMATION	63

The information in this document that relates to earlier Exploration Results is extracted from reports as referenced throughout the document, all completed under Mr Trevor Woolfe as Competent Person and available to view on www.asx.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

The information in this document that relates to Historical Mineral Resources is extracted from the report entitled “Acquisition of High Grade Gold Project” created on 11 November 2014 and available to view on www.asx.com. The Company confirms that it is not in possession of any new information or data that materially impacts on the reliability of the estimates in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

ORO VERDE LIMITED DIRECTORS’ REPORT

DIRECTORS

The names and details of the directors of Oro Verde Limited in office during the financial year and until the date of this report are as follows. Directors were in office for the whole of the financial year unless otherwise stated.

W G Martinick B.Sc, Ph.D. FAusIMM. (Chairman)

Dr Wolf Martinick was appointed a director and chairman on 13 January 2003. He is an environmental scientist with over 40 years experience in mineral exploration and mining projects around the world, attending to environmental, water, land access and indigenous people issues. He has conducted due diligence on mining projects around the world on behalf of international financial institutions and resource companies for a variety of transactions including listings on international stock exchanges, mergers and debt financing. He is a Fellow of the Australian Institute of Mining and Metallurgy.

Dr Martinick is a founding director and former chairman of Weatherly International plc, an AIM listed company with copper mines in Namibia. Previously Dr Martinick was a founding director of Basin Minerals Limited, an ASX listed mineral exploration company that discovered a world-class mineral project in Victoria, Australia, that was acquired by Iluka Resources Limited in 2003. He is currently Chairman of ASX listed Sun Resources Limited and a director of Azure Minerals Limited.

T I Woolfe B.Sc (Hons) GradCert AppFin, MAusIMM, MAIG, GAICD (Managing Director)

Mr Trevor Woolfe was appointed Managing Director on 25 February 2015 and is an experienced and highly regarded industry professional. He is a geologist with over 20 years experience in the exploration and mining industry. He was the Managing Director of ASX listed Anchor Resources Ltd until Chinese interests acquired a majority interest in 2011 and previously held various senior roles with companies including CRA, Great Central Mines, Newcrest and Placer Dome. While living for four years in South America, Mr Woolfe led Placer Dome exploration teams in Chile and Brazil. Since 2012, he has provided consultancy services in various countries including Nicaragua. As a result, Mr Woolfe is fluent in Spanish, the official language of Nicaragua.

B D Dickson B.Bus, FCPA – ( Finance Director & Company Secretary) – Appointed 21 November 2014

Mr Brett Dickson has over 20 years experience in the financial management of companies, principally companies in early stage development of its resource or production, and offers broad financial management skills. He has been Company Secretary and Chief Financial Officer (CFO) for a number of successful resource companies listed on the ASX. Mr Dickson is also a director of Rox Resources Limited.

B L Farrell B.Sc (Hons Econ Geol), M.Sc, Ph.D, FAusIMM, MICA, CPGeol, MIMM, CEng.

(Technical Director)

Dr Brad Farrell was appointed a director on 8 August 2011. Dr Farrell has over 40 years experience in resource exploration and senior project management and evaluation. During this time he has managed numerous and extensive exploration programs within Australia and overseas for a variety of mineral commodities for both major and junior exploration companies. Some of these programs have resulted in significant discoveries, which are currently in production or will see future production. He is a Fellow of the Australian Institute of Mining and Metallurgy, a Chartered Professional Geologist of that body, Member of Mineral Industry Consultants Association, a Member of the Institution of Mining and Metallurgy and a Chartered Engineer of that body.

Dr Farrell was a founding director and the chairman of ASX listed companies, Sun Resources Limited and Basin Minerals Limited.

A P Rovira BSc (Hons), MAusIMM - (Non-Executive Director) - Appointed 21 November 2014

Mr Tony Rovira has over 30 years technical and management experience in the mining industry, as an exploration and mining geologist, and as a company executive at Board level. Since graduating from Flinders University in South Australia in 1983, Tony has worked for companies both large and small, including BHP, Barrack Mines, Pegasus Gold and Jubilee Mines.

ORO VERDE LIMITED DIRECTORS’ REPORT

From 1997-2003 Tony was the General Manager of Exploration with Jubilee Mines, during which time he led the team that discovered and developed the world class Cosmos and Cosmos Deeps nickel sulphide deposits in Western Australia. In the year 2000, the Association of Mining and Exploration Companies awarded Mr Rovira the “Prospector of the Year Award” for these discoveries.

Mr Rovira is also a director of Azure Minerals Limited.

G R O’Dea (Non-Executive Director) – resigned 21 November 2014

Mr Ross O’Dea was appointed a director on 7 March 2002 and Managing Director on 1 September 2007. He is a former Business Development Manager for The West Australian Newspaper with 35 years media experience in radio, television, press and outdoor advertising. Mr O’Dea was contracted to the TAB Western Australia as Manager, Media Services, a contract which concluded on 11 June 2004. As Managing Director from 1 September 2007 he was responsible for the overall performance of the Oro Verde Group until his resignation as Managing Director on 8 August 2011.

Mr O’Dea holds no other directorships in listed companies.

D H Ward Assoc. Admin., Assoc. Acctg., CTA, ACA. (Non-Executive Director) – resigned 21 November 2014

Mr David Ward was appointed a director on 22 July 2005. After service in the Australian Army, Mr Ward graduated from the WA Institute of Technology in Accounting and Business Administration, and trained as an Auditor and Tax Agent. Having established the “Tax Hut” tax and accounting centres in 1995, he practices in West Perth and participates in organisations providing family and community dispute resolution.

Mr Ward has no other directorships in listed companies.

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

As at the date of this report the interests of the directors in the securities of the company were:

W G Martinick T I Woolfe B D Dickson B L Farrell A P Rovira	Number of Ordinary Shares Number of Options over Ordinary Shares
	43,000,000 - 5,000,000 10,000,000 17,500,000 45,000,000 47,101,281 - 23,760,000 44,000,000

INTERESTS IN CONTRACTS OR PROPOSED CONTRACTS WITH THE COMPANY

During or since the end of the financial year, no director has had any interest in a contract or proposed contract with the company being an interest the nature of which has been declared by the director in accordance with Section 300(11)(d) of the Corporations Act 2001.

DIRECTORS’ MEETINGS

During the year 7 directors’ meetings were held. The number of meetings attended by each director was as follows:

ws:
	No. of meetings held while
	in office	Meetings attended
W G Martinick	7	7
T I Woolfe	1	1
B D Dickson	2	2
A P Rovira	2	2
B L Farrell	7	6
G R O’Dea	5	4
D H Ward	5	4

ORO VERDE LIMITED DIRECTORS’ REPORT

As at the date of this report, the company did not have audit, remuneration or nomination committees, as the directors believe the size of the company does not warrant their existence.

DIVIDENDS PAID OR PROPOSED

The company has not paid any dividends since the commencement of the financial year, and no dividends are proposed to be paid.

CORPORATE INFORMATION

The Financial Statements of Oro Verde Limited for the year ended 30 June 2015 were authorised for issue in accordance with a resolution of the directors on 15 September 2015. The group’s functional and presentation currency is AUD ($).

Oro Verde Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange.

Principal Activities

The principal activity during the year of the group was investment in the mining and resource sector.

The group’s business is conducted from operations located in Australia and more recently in Nicaragua through its 100% owned subsidiary Minera San Cristobal, SA.

Employees

Other than the Directors the group employed one person, based in Nicaragua at 30 June 2015 (2014: Nil).

OPERATING AND FINANCIAL REVIEW

Group Overview

Oro Verde Limited is a company limited by shares and is incorporated and domiciled in Australia.

The last year has seen significant change and transformation for Oro Verde Limited (“ Oro Verde ” “ OVL or “ the Company ”). It changed its focus from Chile to Nicaragua (Figure 1) with the acquisition of Goldcap Resources Limited (“ Goldcap ”), a mineral exploration company specifically established to take advantage of emerging opportunities in Central America with a focus on Nicaragua - a safe, stable and democratic country with a strongly growing economy.

In addition, following its decision to focus its activities in Nicaragua, a number of changes were made to Oro Verde’s Board and Management effective 21[st] November 2014:

Mr Trevor Woolfe was appointed as Chief Executive Officer of Oro Verde (and subsequently Managing Director in February 2015).
Mr Tony Rovira was appointed to the Board as a Non-executive Director.
Company Secretary, Mr Brett Dickson, joined the Board as an Executive Finance Director.
Executive Chairman and Managing Director, Dr Wolf Martinick, relinquished his role as Managing Director and moved to Non-executive Chairman.
Executive Technical Director, Dr Brad Farrell, remains as a Technical Director but in a Nonexecutive capacity.
Directors Mr Ross O’Dea and Mr David Ward both retired from the OVL Board.

On 11 November 2014, Oro Verde announced the signing of an Option to Purchase Agreement over the high grade Topacio Gold Project, located in southeastern Nicaragua and, as a result of positive due diligence, on 27 February 2015 the Company announced it had agreed to proceed with the Option to Purchase Agreement.

ORO VERDE LIMITED DIRECTORS’ REPORT

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Figure 1 Location of Nicaragua – Central America

The principal terms of the Option Agreement are:

a. The Company will commit to a minimum exploration expenditure of US$2,000,000 over 3 years;
b. There will be US$40,000 payable to the vendor each six months during the Agreement period (for a total of US$240,000);
c. The Company may exercise its Option to Purchase 100% of the project by making a payment of US$1,500,000, plus at the Vendor’s election, either a 2% NSR royalty or a payout of US$1/oz gold for JORC or NI43-101 compliant resources (measured and indicated);
d. Should Oro Verde commence mining operations before exercising the Option to Purchase, the Vendor will receive a 3% NSR until the Option is exercised; and
e. Oro Verde may withdraw from the Agreement at any time.

At the date of this report the Group is conducting exploration activities in Nicaragua and continues reviewing opportunities for both direct and indirect investment in the resources sector.

Operating Results

The group’s revenue was $10,415 and the loss was $1,571,229 for the financial year. Exploration expenses written off ($196,812) and share based payments ($707,900) account for approximately 58% of this year’s loss.

loss.
Operating revenue Operating profit/(loss)	2015 2014 $ $ 10,415 12,248
	(1,571,229) (2,467,510)

ORO VERDE LIMITED DIRECTORS’ REPORT

Year in Review

Review of Financial Position

During the year the Group had two significant capital raisings through the issue of fully paid shares. The first, in August 2014 raised $737,080 at a share price of $0.008 and the second in June 2015 which raised $500,117 at $0.006 (both net of expenses).

As a result of those raisings the directors believe that at the date of this report the Group has a sound capital structure and is in a position to progress its mineral properties.

At 30 June 2015 the cash balance of the group stood at $534,674.

Exploration

In August 2014, the Company announced its new focus on the under-explored historic gold mining centre of Nicaragua. The hub of Central America, Nicaragua has been a gold producer at least since the Spanish Conquest of the early 1500s. More recently, with a renewed reputation as one of the safest countries in Latin America, companies such as Canada’s B2Gold Corp – which last year acquired ASX company Papillon Resources – have been attracted to Nicaragua. B2Gold Corp is now producing gold at very low cost from two multi-million ounce gold mines (El Limon and La Libertad). Two other multi-million ounce gold projects are also being advanced or mined in the country, demonstrating the real potential for world class gold deposits within Nicaragua.

Oro Verde’s strengthened Board and Management team has a strong mining and exploration pedigree, excellent hands-on experience in Latin America and has fostered strong industry relationships and networks within Nicaragua.

Following on from the management changes, on 27 February 2015 the Company announced that it had made a significant acquisition by signing an option agreement with the right to acquire 100% of the advanced Topacio Gold Project that contains a high grade gold deposit with a resource of 340,000 ounces of gold. The Topacio Gold Project is located in southeastern Nicaragua (Figure 2).

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

San Isidro
Topacio
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Figure 2 Major Nicaraguan gold deposits and the location of the Topacio Gold Project

Topacio Gold Project (Nicaragua – OVL right to acquire 100%)

The 93 km[2] Topacio Gold Project contains a number of artisanal gold mine workings with the main gold showings of importance consisting of generally east-northeast striking and steeply dipping, one to three metre wide epithermal quartz veins, six of which were mined in the period from 1900 to 1917, with an estimated 160,000 tonnes extracted grading approximately 8 g/t gold and 80 g/t silver.

ORO VERDE LIMITED DIRECTORS’ REPORT

The project boasts a historical NI 43-101 (Canadian standard, similar to JORC) compliant Inferred Resource of:

2,716,176 tonnes at 3.9 g/t gold, containing 340,345 ounces of gold, at a 1.5 g/t gold cut-off[1]

National Instrument 43-101 (“NI 43-101”) is a national instrument for the Standards of Disclosure for Mineral Projects within Canada and as such this estimate is a foreign estimate and is not reported in accordance with the JORC Code. A competent person has not done sufficient work to classify the foreign estimate as mineral resources in accordance with the JORC code and it is uncertain that following evaluation and/or further exploration work that the foreign estimate will be able to be reported as mineral resources in accordance with the JORC code.

The Topacio Gold Project has significant upside potential being located on a large (93km[2] ) mining concession, the majority of which has seen little modern exploration. Similarities with other well known epithermal deposits, such as Gosowong (Newcrest - Indonesia), Pajingo and Cracow (both Evolution - Qld), highlight Topacio’s outstanding prospectivity to host a multi-million ounce deposit.

Exploration in the first half of 2015 has identified new gold target zones at Topacio, and achieved exceptional surface sample results including “bonanza” gold grades up to 92.9 g/t Au (or 3 ounces/tonne Au)[2 ] (Table 1). In addition, during the year a number of new targets with excellent gold mineralisation from surface sampling (see table), including visible panned gold, have been defined providing significant encouragement that additional resources can be delineated with a focused exploration program.

*Gold target*	*Max. Au g/t*	*Gold target*	*Max. Au g/t*

Celedonio	12.5	Mico West	23.9
Chicago	23.8	Mico NW	6.8
Dispute	92.9	Su Majestad	14.1
Dos Amigos	38.5	Topacio	12.3
Gallina	6.5	Topacio NE	52.4

Table 1 Topacio Gold Project – maximum gold results from key vein targets[2][,][3]

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Figure 3 Topacio Gold Project – Surface Sampling Gold Results[3]

1 Refer to ASX announcement dated 11 November 2014 “High Grade Gold Project Acquired”

2 Refer to ASX announcement dated 14 August 2015 “MD’s Letter to Shareholders”

3 Refer to ASX announcement dated 9 September 2015“High Grade Gold Results Continue for Topacio”

ORO VERDE LIMITED DIRECTORS’ REPORT

San Isidro Gold Project (Nicaragua - 100% OVL)

Oro Verde is the holder of a 2,520 hectare mining concession located adjacent to the 2.3 million ounce La India gold resource (Condor Gold plc) in northwestern Nicaragua (Figure 2). On 21 December 2014, Condor announced a positive PFS for its La India Gold Project.

As reported on 8 August 2014, the San Isidro Gold Project adjoins the eastern boundary of the La India Project. One of Condor’s deposits is the historical Cristalito gold mine on which a small, high grade gold deposit has been identified. Hosted within quartz veins and shear zones, this mineralised zone appears to trend northeasterly into the San Isidro property[4] .

Recently the Company finalised its environmental and community requirements and has commenced a reconnaissance mapping and sampling program.

Country Manager – Nicaragua

On 22 January 2015, Oro Verde reported that it had successfully attracted a high calibre Nicaraguan mining industry expert to the role of Country Manager[5] .

Mr David Turner has held roles ranging from Chief Mine Geologist and Exploration Manager through to General Manager and Exploration Director, with companies including BHP Minerals, Kinross Gold, Yamana Gold and more recently overseeing exploration at the operations of HEMCO in the highly productive Golden Triangle (Bonanza) district (Figure 2) in northeast Nicaragua.

Mr Turner brings an intimate understanding of the Nicaraguan mining and exploration system which, along with his fluency in the Spanish language, will be a distinct advantage to the strategy and objectives of Oro Verde.

LIKELY DEVELOPMENTS

The group will continue to investigate new exploration and development opportunities, particularly in the resources sector.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

During or since the financial year, the company has paid premiums in respect of a contract insuring all the directors of Oro Verde Limited against legal costs incurred in defending proceedings for conduct involving:

(a) a wilful breach of duty; or
(b) a contravention of sections 182 or 183 of the Corporations Act 2001 , as permitted by section
199B of the Corporations Act 2001 .

The total amount of insurance contract premiums paid was $10,950 (2014: $10,950).

ENVIRONMENTAL REGULATION AND PERFORMANCE

The company is subject to significant environmental regulation in respect of its exploration activities.

The company aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The directors of the company are not aware of any breach of environmental legislation for the year under review. The directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. The directors have assessed that the Company has no current reporting requirements, but may be required to report in the future.

PROCEEDINGS ON BEHALF OF COMPANY

No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to or intervened in any proceedings during the year.

4 Refer to ASX announcement dated 8 August 2014 “Oro Verde Expands into Nicaragua” 5 Refer to ASX announcement dated 22 January 2015 “Country Manager Appointed in Nicaragua”

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited)

This remuneration report outlines the director and executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, key management personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and includes the five executives in the Parent and the Group receiving the highest remuneration.

For the purposes of this report, the term ‘executive’ encompasses the chief executive and secretaries of the Parent and the Group.

Details of key management personnel

(i) Directors

W G Martinick Chairman (Non-Executive) T I Woolfe Managing Director – appointed 25 February 2015 B D Dickson Finance Director – appointed 21 November 2014 B L Farrell Director (Non-Executive) A P Rovira Director (Non-Executive) – appointed 21 November 2014 G R O’Dea Director (Non-Executive) – resigned 21 November 2014 D H Ward Director (Non-Executive) – resigned 21 November 2014

Remuneration philosophy

The Board of Directors is responsible for determining and reviewing compensation arrangements for the directors. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and other non-cash payments. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the company.

To assist in achieving these objectives, the Board links the nature and amount of executive directors’ and officers’ emoluments on an annual basis based on individual performance and market conditions.

Remuneration structure

In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration is separate and distinct.

Compensation of Directors and Executive Officer

(i) Compensation Policy

The Board of Directors of Oro Verde Limited is responsible for determining and reviewing compensation arrangements for the directors and the managing director.

(ii) Non-Executive Director Compensation

Objective

The Board seeks to set aggregate compensation at a level that provides the company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

Structure

The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the directors as agreed and reviewed annually. The Board may consider advice from external consultants as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process. The latest determination was in 2011 when shareholders approved an aggregate remuneration of $400,000 per year.

Non-executives directors have long been encouraged by the Board to hold shares in the company (purchased by the director on market). It is considered good governance for directors to have a stake in the company on which board they sit.

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited) (Continued)

(iii) Executive Compensation

Objective

The entity aims to reward executives with a level and mix of compensation commensurate with their position and responsibilities within the entity so as to:

align the interests of executives with those of shareholders; and
ensure total compensation is competitive by market standards.

Structure

The Board periodically assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and other non-cash benefits. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the company.

(iv) Fixed Compensation

Objective

Fixed compensation is reviewed annually by the Board. The process consists of a review of individual performance, relevant comparative compensation in the market and internally and, where appropriate, external advice on policies and practices.

Structure

Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash and other non-cash benefits.

(v) Variable Compensation

Objective

The objective is to link the achievement of the company’s targets with the compensation received by the executives charged with meeting those targets.

Currently, the company does not restrict executives from entering into arrangements to protect the value of unvested Long Term Incentives. However, under the Securities Dealing Policy, members of the Board are required to advise the Company Secretary of any shareholdings including any hedging arrangements.

Share-based compensation

Options or shares may be issued to directors and executives as part of their remuneration. The options or shares are not issued based on performance criteria, but are issued to the directors and executives of Oro Verde Limited to increase goal congruence between executives, directors and shareholders.

During the year 10,000,000 (2014: Nil) options were issued to key management personnel, details of the options are set out elsewhere in this report.

Structure

Actual payments granted to each KMP are determined by the Board who meet periodically to assess the achievements of the company’s targets. There are currently no targets established.

Employment contracts

Remuneration and other terms of employment for the following KMP personnel are formalised in service agreements, the terms of which are set out below:

Mr T I Woolfe , Managing Director:

Term of agreement – to 1 December 2016.
Base salary, exclusive of superannuation, of $250,000 to be reviewed annually by the remuneration committee.
Payment of termination benefit of $125,000 on early termination by the employer, other than for gross misconduct.

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited) (Continued)

Compensation of Key Management Personnel (Consolidated and Parent)

Compensation of each director and the executive officer of the parent and group are as follows:

	Short term	Short term	Post employment	Share based payments2	Total	Total options related	Total performance related
30 June 2015	Salaries and fees	Non Monetary Benefit1	Super- annuation	Shares
Directors W G Martinick T I Woolfe B D Dickson A P Rovira G R O’Dea D H Ward B L Farrell Total	$ 13,333 196,024 85,000 10,000 - - 10,000	1,564 1,564 1,564 1,564 1,565 1,565 1,564	$ - - - - - - -	$ - 41,200 - - - - -	$ 14,897 238,788 86,564 11,564 1,565 1,565 11,564	$ - 41,200 - - - - -	- 17.3% - - - - -
	314,357	10,950	-	41,200	366,507	41,200	11.2%

	Short term		Post employment	Share based payments	Total	Total options related	Total performance related
30 June 2014	Salaries and fees	Non Monetary Benefit1	Super- annuation	Shares
Directors W G Martinick G R O’Dea D H Ward B L Farrell Executive Officer B D Dickson Total	$ 170,000 37,500 37,500 181,406 70,000	$ 2,190 2,190 2,190 2,190 2,190	$ 15,723 3,468 3,468 3,468 -	$ - - - - -	$ 187,913 43,158 43,158 187,064 72,190	- - - - -	- - - - -
	496,406	10,950	26,127	-	533,483	-	-

The Non Monetary Benefit relates to the Directors’ Indemnity Insurance.
Mr Rovira and Dickson received share base payments prior to becoming directors and those payments are not included in remuneration. Further details of those share payments are disclosed in note 27.

Apart from directors acting in an executive capacity, being Mr Woolfe and Mr Dickson, no fees were paid to directors during the period to 28 February 2015. From 1 March 2015 directors’ fees are accruing and amounts due are shown above, but are not payable until the Company’s financial position is sufficiently strong to justify payment.

Compensation Options: Granted and Vested during the year.

2015	Granted Number Date Fair Value Per option Fair value $	Terms and conditions for each grant Exercise Price $ Expiry date First exercise date Last exercise date	Vested Number
T I Woolfe	5,000,000 27 Nov 14 0.456 22,800 5,000,000 27 Nov 14 0.368 18,400	$0.01 30 Sept 17 27 Nov 14 30 Sept 17 $0.05 30 Sept 19 27 Nov 14 30 Sept 19	5,000,000 5,000,000
Total	10,000,000 41,200		10,000,000

Value of Options granted as part of remuneration was calculated in accordance with AASB 2: Share Based Payments

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited) (Continued)

	Fair Value per options granted during the year	Value of options granted during the year	Value of options exercised during the year	Value of options lapsed during the year	Remuneration consisting of options for the year
	Cents	$	$	$	%
T I Woolfe	0.412	41,200	-	-	17.3

No options were granted or vested during the 2014 year.

There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There were neither forfeitures nor shares issued on exercise of Compensation Options during 2015 or 2014.

The Company’s remuneration policy prohibits directors and executives from entering into transactions or arrangements which limit the economic risk of participating in unvested entitlements.

Apart from the issue of options the company currently has no performance based remuneration component built into director and executive remuneration (2014: Nil).

Shareholdings of Key Management Personnel

2015	Balance 1July 14	Granted as Remuneration	On Exercise of Options	Net Change Other	Balance 30June 15
Specified Directors
W G Martinick	40,500,000	-	-	2,500,000	43,000,000
T I Woolfe	-	-	-	5,000,000	5,000,000
A P Rovira	-	-	-	23,760,000	23,760,000
G R O’Dea¹	1,861,976	-	-	-	1,861,976
Held byspouse and children of GR O’Dea¹	1,170,229	-	-	-	1,170,229
D H Ward¹	5,644,727	-	-	-	5,644,727
B L Farrell	42,101,281	-	-	5,000,000	47,101,281
B D Dickson	-	-	-	17,500,000	17,500,000
Total	91,278,213	-	-	53,760,000	145,038,213

Mr Ward and Mr O’Dea resigned on 21 November 2014. Their shareholding represents the balances held at that date.

2014	Balance 1July 13	Granted as Remuneration	On Exercise of Options	Net Change Other	Balance 30June 14
Specified Directors
W G Martinick	11,412,545	-	-	29,087,455	40,500,000
G R O’Dea	299,476	-	-	1,562,500	1,861,976
Held byspouse and children of GR O’Dea	760,614	-	-	409,615	1,170,229
D H Ward	981,266	-	-	4,663,461	5,644,727
B L Farrell	5,086,443	-	-	37,014,838	42,101,281
Specified Executives
B D Dickson	-	-	-	-	-
Total	18,540,344	-	-	72,737,869	91,278,213

Other Transactions

On 3[rd] October 2014 shareholders approved the issue of options and ratified the placement of shares to acquire Goldcap, a private mineral exploration company with a focus on Nicaragua. Consideration for the acquisition of Goldcap was:

$120,000 payable by the issue of 15,000,000 fully paid shares at $0.008 each;
Issue of 66,000,000 3 year options exercisable at 1.0 cent each; and
Issue of 66,000,000 5 year options exercisable at 5.0 cents each.

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited) (Continued)

Mr Brett Dickson and Mr Anthony Rovira were part of the consortium that sold Goldcap to the Company and both subsequently were appointed as directors. Shares and options issued to Mr Dickson and Mr Rovira pursuant to this transaction were:

B D Dickson A P Rovira	Fully paid shares Options exercisable at 1 cent Options exercisable at 5 cents
	5,000,000 22,000,000 22,000,000 5,000,000 22,000,000 22,000,000
	10,000,000 44,000,000 44,000,000

Company’s Performance

Company’s share price performance

The Company’s share price performance shown in the below graph for the year ended 30 June 2015 and is a reflection of the Company’s performance during the year.

The variable component of the executives’ remuneration, which at this stage only includes share options, is indirectly linked to the Company’s share price performance.

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Loss per share

Below is information on the Company’s loss per share for the previous four financial years and for the current year ended 30 June 2015.

	2015	2014	2013	2012	2011
Basic loss per share (cents)	(0.4 )	(1.4)	(5.2)	(10.2)	2.8

Voting and comments made at the company’s 2014 Annual General Meeting

Oro Verde received a unanimous “yes” vote on its remuneration report for the 2014 financial year. The company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

End of Remuneration Report (Audited)

ORO VERDE LIMITED DIRECTORS’ REPORT

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 additional Australian Stock Exchange information section of this annual report.

SHARE OPTIONS

At the date of this report, there were 149,500,000 (2014: 32,114,459) share options outstanding.

Issued Lapsed Balance at the beginning of the year Share option movements during the year Exercisable at 1 cents, on or before 30 September 2017 73,000,000 - Exercisable at 5 cents, on or before 30 September 2019 73,000,000 - Exercisable at 27 cents, on or before 31 December 2014 - (24,364,459) Exercisable at 4 cents, on or before 31 March 2016 - (4,250,000) Total options issued and lapsed in the year to 30 June 2014 146,000,000 (28,614,459) Total number of options outstanding as at 30 June 2015 and at the date of this report	Issued Lapsed 73,000,000 - 73,000,000 - - (24,364,459) - (4,250,000)	Total number of Options 32,114,459 73,000,000 73,000,000 (24,364,459) (4,250,000)
		117,385,541
		149,500,000

The balance is comprised the following:

Date Granted Expiry Date Exercise Price (cents) 28 November 2011 10 January 2016 20.0 7 October 2014 30 September 2017 1.0 27 November 2014 30 September 2017 1.0 31 March 2015 30 September 2017 1.0 7 October 2014 30 September 2017 5.0 27 November 2014 30 September 2017 5.0 31 March 2014 30 September 2017 5.0 15 October 2013 31 March 2016 4.0 Total number of options outstanding at the date of this report	Number of Options 2,500,000 66,000,000 5,000,000 2,000,000 66,000,000 5,000,000 2,000,000 1,000,000
	149,500,000

Date Granted
Expiry Date
Exercise Price (cents)
28 November 2011
10 January 2016
20.0
7 October 2014
30 September 2017
1.0
27 November 2014
30 September 2017
1.0
31 March 2015
30 September 2017
1.0
7 October 2014
30 September 2017
5.0
27 November 2014
30 September 2017
5.0
31 March 2014
30 September 2017
5.0
15 October 2013
31 March 2016
4.0
Total number of options outstanding at the date of this report

Number of
Options
2,500,000
66,000,000
5,000,000
2,000,000
66,000,000
5,000,000
2,000,000
1,000,000

149,500,000

Total number of options outstanding at the date of this report

No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to participate in any share issue of any other body corporate.

No options were exercised during the financial year and since the end of the financial year no options have been exercised.

NON AUDIT SERVICES

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the company and/or the Group are important.

Details of the amount paid or payable to the auditor (Hewitt, Turner & Gelevitis) for audit and non-audit services provided during the year are set out below.

The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

ORO VERDE LIMITED DIRECTORS’ REPORT

All non-audit services have been reviewed by the board to ensure they do not impact the impartiality and objectivity of the auditor
None of the services underline the general principals relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants .

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-audit firms.

• None of the services underline the general principals relating to auditor indep 110_Code of Ethics for Professional Accountants_. During the year the following fees were paid or payable for services provided entity, its related practices and non-audit firms.	endence as set out in APES by the auditor of the parent
1. Audit Services Hewitt, Turner & Gelevitis Audit and review of financial reports 2. Non audit Services Audit-related services Hewitt, Turner & Gelevitis Preparation of Investigating Accountants Report for Inclusion in Prospectus Total remuneration for non-audit services	Consolidated 2015 $ 2014 $ 31,517 32,048 - -
	31,517 32,048

AUDITOR’S INDEPENDENCE DECLARATION

We have obtained an independence declaration from our auditors, Hewitt, Turner & Gelevitis, as presented on page 18 of this Annual Report.

AUDITOR’S ROTATION

Hewitt Turner & Gelevitis has one partner who is a registered company auditor and as a result does not have another audit partner to rotate off assignment, consequently on 24 June 2013, and in accordance with section 324DAA of the Corporations Act, the directors of Oro Verde Limited granted approval for Mr Timothy Turner of Hewitt Turner & Gelevitis to play a significant role in the audit for 30 June 2014 and 30 June 2015. The years represent two successive years in addition to the 5 consecutive years otherwise allowed under the Corporations Act.

EVENTS AFTER REPORTING DATE

Since the end of the year 10,000,000 shares have been issued at $0.008 each for the provision of consultancy services.

No other matter or circumstance has arisen since the end of the financial year which significantly affected or may significantly affect the operations of the group, the results of those operations, or the state of affairs of the group in future financial years.

Signed in accordance with a resolution of the directors,

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W G Martinick Director Perth, 25 September 2015

ORO VERDE LIMITED DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Oro Verde Limited, I state that:

1) In the opinion of the directors:
(a) the financial statements, notes and additional disclosures included in the directors’ report designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of their performance for the year ended on that date; and
- (ii) complying with Australian Accounting Standards which, as stated in accounting policy Note 2 to the Financial Statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS), and Corporations Regulations 2001; and
(b) subject to achievement of the matters as set out in note 2(a), there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
2) This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2015.

On behalf of the Board

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W G Martinick Director Perth, 25 September 2015

AUDITOR’S INDEPENDENCE DECLARATION UNDER S307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ORO VERDE LIMITED AND CONTROLLED ENTITIES

I, declare that, to the best of my knowledge and belief, during the year ended 30 June 2015 there have been:

a. no contraventions of the auditor’s independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.

HEWITT TURNER & GELEVITIS

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....................................................... TIMOTHY TURNER REGISTERED COMPANY AUDITOR

Dated in Perth this 25th day of September 2015.

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ORO VERDE LIMITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 30 JUNE 2015

		CONSOLIDATED	CONSOLIDATED
	Notes	2015	2014
		$	$
Continuing operations
Revenue
Interest Received	3	10,415	12,248
Profit from sale of available-for-sale assets	3	-	6,268
Depreciation	9	(170)	-
Consultants		-	(188,906)
Directors’ fees (excluding executives)		(43,332)	(157,500)
Executives salaries, wages and consulting fees		(253,170)	(211,896)
Share based payments		(53,840)	(7,700)
Impairment of goodwill	18	(654,060)	-
Exploration expenses		(196,812)	-
Legal fees		(42,217)	(5,081)
Travel and accommodation		(123,274)	(40,142)
Administration expenses		(215,594)	(91,175)
Insurance		(13,970)	(14,981)
Promotion		(18,231)	(11,550)
Profit/(Loss) from continuing operations before income tax		(1,604,255)	(710,415)
Income tax credit/(expense)	5	-	-
Profit/(Loss) from continuing operations after income tax		(1,604,255)	(710,415)
Profit /Loss from discontinuing operations	19	33,026	(1,757,095)
Loss for the year		(1,571,229)	(2,467,510)
Other comprehensive income
Items that may be reclassified subsequently to profit and loss:
Exchange differences in translating foreign controlled entities		(11,254)	(44,306)
Changes to available-for-sale financial assets, net of tax		-	5,646
Total other comprehensive income net of tax		(11,254)	(38,660)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR		(1,582,483)	(2,506,170)
Earnings per share for loss from continuing operations attributable to the ordinary		equity holders
Basic earnings/(loss) per share (cents)	21	(0.46)	(0.39)
Diluted earnings/(loss) per share (cents)	21	(0.46)	(0.39)
Earnings per share for loss from discontinued operations attributable	to the ordinary equity holders
Basic and diluted earnings/(loss) per share (cents)	21	0.01	(0.97)
Total Earnings per share for loss attributable to the ordinary equity holders
Basic earnings/(loss) per share (cents)	21	(0.45)	(1.36)
Diluted earnings/(loss) per share (cents)	21	(0.45)	(1.36)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

ORO VERDE LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2015

Notes ASSETS Current assets Cash and cash equivalents 16 Receivables 6 Other 7 Total current assets Non-current assets Plant and equipment 9 Exploration & evaluation expenditure 10 Total non-current assets Total assets LIABILITIES Current liabilities Payables 12 Provisions 13 Total current liabilities Total liabilities Net assets EQUITY Issued capital 14 Reserves 15 Accumulated losses Total equity	CONSOLIDATED 2015 2014 $ $ 534,674 334,628 17,841 - 4,652 4,639
	557,167 339,267
	5,539 4,762 183,241 -
	188,780 4,762
	745,947 344,029
	148,952 86,571 - 23,077
	148,952 109,648

	148,952 109,648
	596,995 234,381
	19,487,646 18,250,449 4,945,942 4,249,296 (23,836,593) (22,265,364)
	596,995 234,381

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

ORO VERDE LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 JUNE 2015

Notes Cash flows from operating activities Payments to suppliers and employees Payments for exploration expenditure Interest received Net cash flows from/(used in) operating activities 16 Cash flows from investing activities Payment for plant and equipment Proceeds from sale of available-for sale assets Cash acquired through acquisition of subsidiary 18 Cash relinquished on disposal of subsidiary 19 Proceeds from disposal of subsidiary 19 Payment for project acquisition Net cash flows from investing activities Cash flows from financing activities Proceeds from issue of ordinary shares (net of transaction costs) Loan repayments Net cash flows from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 16	CONSOLIDATED 2015 2014 $ $ (671,307) (1,509,490) (196,812) (810,874) 10,415 12,247
	(857,704) (2,308,117)
	(5,708) - - 33,560 8,747 - (288) - 1 - (22,254) -
	(19,502) 33,560
	1,117,197 2,013,738 (40,000) (94,693)
	1,077,197 1,919,045
	199,991 (355,512) 334,628 720,458 55 (30,318)
	534,674 334,628

The Statement of Consolidated Cash Flows should be read in conjunction with the accompanying notes.

ORO VERDE LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2015

CONSOLIDATED

	Ordinary shares Convertible notes Reserve Available for sale Assets Reserve Share option reserve Foreign Currency Translation Reserve Accumulated losses Total $ $ $ $ $ $ $	Ordinary shares Convertible notes Reserve Available for sale Assets Reserve Share option reserve Foreign Currency Translation Reserve Accumulated losses Total $ $ $ $ $ $ $
Transactions with owners in their capacity as owners At 1 July 2014 18,250,449 136,403 - 4,102,201 10,692 (22,265,364) 234,381 Loss for the period - - - - - (1,571,229) (1,571,229) Other Comprehensive income - - - - (11,254) - (11,254) Total comprehensive loss for the period - - - - (11,254) (1,571,229) (1,582,483) Shares issued during the period 1,275,500 - - - - - 1,275,500 Transaction Costs (38,303) - - - - - (38,303) Share based payments - - - 707,900 - - 707,900 At 30 June 2015 19,487,646 136,403 - 4,810,101 (562) (23,836,593) 596,995 CONSOLIDATED Ordinary shares Convertible notes Reserve Available for sale Assets Reserve Share option reserve Foreign Currency Translation Reserve Accumulated losses Total $ $ $ $ $ $ $	18,250,449 136,403 - 4,102,201 10,692 (22,265,364) 234,381 - - - - - (1,571,229) (1,571,229) - - - - (11,254) - (11,254)
		19,487,646 136,403 - 4,810,101 (562) (23,836,593) 596,995
		CONSOLIDATED Ordinary shares Convertible notes Reserve Available for sale Assets Reserve Share option reserve Foreign Currency Translation Reserve Accumulated losses Total $ $ $ $ $ $ $
Transactions with owners in their capacity as owners At 1 July 2013 16,331,404 136,403 (5,646) 4,094,501 54,998 (19,797,854) 813,806 Loss for the period - - - - - (2,467,510) (2,467,510) Other Comprehensive income - - 5,646 - (44,306) - (38,660) Total comprehensive loss for the period - - 5,646 - (44,306) (2,467,510) (2,506,170) Shares issued during the period 2,013,738 - - - - - 2,013,738 Transaction Costs (94,693) - - - - - (94,693) Share based payments - - - 7,700 - - 7,700 At 30 June 2014 18,250,449 136,403 - 4,102,201 10,692 (22,265,364) 234,381		16,331,404 136,403 (5,646) 4,094,501 54,998 (19,797,854) 813,806 - - - - - (2,467,510) (2,467,510) - - 5,646 - (44,306) - (38,660)
		18,250,449 136,403 - 4,102,201 10,692 (22,265,364) 234,381

The Statement of Consolidated Changes in Equity should be read in conjunction with the accompanying notes.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

1. CORPORATE INFORMATION

The Consolidated Financial report of Oro Verde Limited for the year ended 30 June 2015 was authorised for issue in accordance with a resolution of the directors on 15 September 2015. The consolidated financial statements and notes represent those of Oro Verde Limited and its controlled entities (the “Group”). The consolidated entity’s functional and presentation currency is AUD ($). The separate financial statements of the parent entity, Oro Verde Limited, have not been presented within this financial report as permitted by the Corporations Act 2001.

Oro Verde Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange.

The nature of the operations and principal activities of the Group are described in the Directors’ Report.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The Financial report is a general-purpose Financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board. The Financial report has also been prepared on an accruals basis and is based on historical cost basis, except for certain available-for-sale financial assets, which have been measured at fair value. The Group is a for-profit entity for the purpose of preparing the financial statements.

Australian Accounting Standards set out accounting policies that the AASB has concluded that would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial reports and notes also comply with International Financial Reporting Standards.

Going Concern

This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

The Consolidated Entity has incurred a net loss after tax for the year ended 30 June 2015 of $1,571,229 (2014: $2,467,510) and experienced net cash outflows from operating activities of $857,704 (2014: $2,308,117). At 30 June 2015, the Consolidated Entity had net current assets of $408,215 (30 June 2014: $229,619).

The Directors believe there are sufficient funds to meet the Company’s working capital requirements and as at the date of this report the Consolidated Entity believes it can meet all liabilities as and when they fall due. However the Directors recognise that additional funding either through the issue of further shares, convertible notes or a combination of both will be required for the Consolidated Entity to continue to actively explore its mineral properties.

The Directors have reviewed the business outlook and the assets and liabilities of the Consolidated Entity and are of the opinion that the use of the going concern basis of accounting is appropriate as they believe the Company will continue to be successful in securing additional funds through debt or equity issues or partial sale of its mineral properties as and when the need to raise working capital arises.

Should the Directors not achieve the matters set out above, there is significant uncertainty whether the Consolidated Entity will continue as a going concern and therefore whether it will realise its assets and liabilities in the normal course of business.

The financial report does not include any adjustments that may be necessary if the Consolidated Entity is unable to continue as a going concern.

(b) New and amended standards adopted by the Group

The Group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 July 2014.

AASB 2013-3: Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets;
AASB 2013-4: Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting;
Interpretation 21: Accounting for Levies; and
AASB 2014-1: Amendments to Australian Accounting Standards.

The adoption of AASB 2013-3 had a small impact on the impairment disclosures and AASB 2014-1 has required additional disclosures in our segment note. Other than that, the adoption of these standards did not have any impact on the current period or any prior period and is not likely to affect future periods

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) New and amended standards adopted by the Group (Continued)

The Group also elected to adopt the following two standards early:

Amendments made to Australian Accounting Standards by AASB 2015-1 (Improvements 2012-2014 cycle); and
Amendments made to AASB 101 by AASB 2015-2 (Disclosure initiative).

As these amendments merely clarify the existing requirements, they do not affect the Group’s accounting policies or any of the disclosures.

(c) New Accounting Standards and Interpretations for Application in Future Years

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

ASSAB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period commencing 1 January 2018).

Nature of Change AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities and introduces new rules for hedge accounting. In December 2014, the AASB made further changes to classification and measurements rules and also introduced a new impairment model. The latest amendments now complete the new financial instruments standard.

Impact Following the changes approved by the AASB in December 2014, the group no longer expects any impact from the new classification, measurement and derecognition rules on the group’s financial assets and financial liabilities. While the group has yet to undertake a detailed assessment of the debt instruments classified as available-for-sale financial assets, it would appear that they would satisfy the conditions for classification as at fair value through other comprehensive income and hence there will be no change to the accounting for these assets.

There will also be no impact on the group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the group does not have any such liabilities.

The new hedging rule would not impact the group as the group does not have any hedging arrangements. The new impairment model is an expected credit loss model which may result in the earlier recognition of credit losses. The group has not yet assessed how its own impairment provisions would be affected by the new rules.

AASB 15 Revenue from Contracts with Customers (applicable for annual reporting period commencing 1 January 2017).

Nature of Change The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which covers contracts for good and services and AASB 111 which covers construction contracts. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer – so the notion of control replaces the existing notion of risks and rewards. The standard permits a modified retrospective approach for the adoption. Under this approach entities will recognise transitional adjustments in retained earnings on the date of initial recognition without resting the comparative period. They will only need to apply the new rules to contracts that are not completed as of the date of initial application.

Impact This is unlikely to impact the group as the group does not have any revenue from contracts with customers at this stage.

There are no other standards that are not yet effective and that would be expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(d)

Basis of consolidation

The parent entity and its subsidiaries are collectively referred to as the "Group". The parent of this Group is Oro Verde Limited. Entities (including structured entities) over which the parent (or the Group) directly or indirectly exercises control are called “subsidiaries". The consolidated financial statements incorporate the assets, liabilities and results of all subsidiaries. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns ' through its power over the entity. A list of the Group s subsidiaries is provided in Note 11.

The assets, liabilities and results of subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group companies are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.

Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are referred to as 'noncontrolling interests'. The Group recognises any non-controlling interests in subsidiaries on a case-by-case basis either at fair value or at the non-controlling interests' proportionate share of the subsidiary’s net assets. Noncontrolling interests are shown separately within the equity section of the statement of financial position and statement of profit or loss and other comprehensive income.

Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs in relation to the business combination are expensed to the statement of comprehensive income.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

(e) Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are described in Note 6 - Impairment of trade debtors.

(f) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Rendering of services

Revenue is recognised as the services are provided.

Sale of goods

Revenue from the sale of goods is recognised when there is persuasive evidence, usually in the form of an executed sales agreement at the time of delivery of the goods to the customer, indicating that there has been a transfer of risks and rewards to the customer.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(f) Revenue (continued)

Interest

Revenue is recognised as the interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Dividends

Revenue is recognised when the entity’s right to receive the payment is established.

(g) Borrowing costs

Borrowing costs are recognised as an expense when incurred.

(h)

Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as the lease income.

Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

(i) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at the bank and short-term deposits with an original maturity 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.

(j) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for impairment.

Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An impairment provision is raised when there is objective evidence that the group will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 90 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rates.

(k) Foreign currency translation

Both the functional and presentation currency of Oro Verde Limited and its Australian subsidiaries is Australian dollars (A$).

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.

All resulting exchange differences in the consolidated financial statements are taken to the income statement

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(k) Foreign currency translation (Continued)

Group companies

The financial results and position of foreign operations, whose functional currency is different from the Group’s presentation currency, are translated as follows:

Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
Income and expenses are translated at average exchange rates for the period; and
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed.

(l) Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the current period's taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period.

Deferred income tax is provided on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each end of the reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the reporting period.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(l) Income tax (continued)

Tax consolidation legislation

Oro Verde Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003.

The head entity, Oro Verde Limited and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.

(m) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(n) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Depreciation is calculated on a reducing balance basis over the estimated useful life of the asset as follows:

Office equipment and fittings - 2.5 to 5.0 years

(o) Investments and other financial assets

Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. 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 Group 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 group 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 market place.

Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified financial assets at fair value through profit or loss, held-to-maturity investments or loans and receivables. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

The fair values of investments that are actively traded in organised financial markets are determined by reference to quoted market bid prices at the close of business on the end of the reporting period. For investments with no active market, fair values are 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 making as much use of available and supportable market data as possible and keeping judgemental inputs to a minimum.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(p) Impairment of financial assets

Available-for-sale investments

If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost and its current value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the income statement. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument’s fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

(q) Impairment of non financial assets

At each end of the reporting period, the Group assesses whether there is any indication that an asset may be impaired.

Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Where the carrying amount of an asset or cash generating unit exceeds its recoverable amount the asset or cash generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(r) Trade and other payables

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.

(s) Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised .

(t) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(u) Share-based payment transactions

The Group provides benefits to directors, employees and consultants of the Group (with shareholders’ approval) in the form of share-based payment transactions, whereby directors, employees and consultants render services in exchange for options over shares (‘equity-settled transactions’).

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(u) Share-based payment transactions (Continued)

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an external valuer using a binomial model.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Oro Verde Limited (‘market conditions’).

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’).

The cumulative expense recognised for equity-settled transactions at each End of the reporting period until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(w) Employee leave benefits

(a) Short term employee benefits

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

The Group’s obligations for employees’ annual leave and long service leave entitlements are recognised as provisions in the statement of financial position.

(b) Long term employee benefits

The liability for long service leave and annual leave entitlements not expected to be settled wholly within 12 months are 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 end of the reporting period. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

The Group’s obligations for long term employee benefits are presented as non-current provisions in the statement of financial position, except where the Group does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisions.

(x) Contributed equity

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.

Effective 1 July 1998, the corporations legislation abolished the concepts of authorised capital and par value shares. Accordingly the company does not have authorised capital nor par value in respect of its issued capital.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(y) Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares:
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(z) Discontinued Operations

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale that represents a separate major line of business. The results of discontinued operations are presented separately in the income statement.

(aa) Associates

Associates are entities over which the Group has significant influence. Significant influence is the power to participate in the financial and operating decisions of the entity, but not control or joint control of their policies. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost. The Group’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition (refer note 8).

The group’s share of its associates post-acquisition profits or losses is recognised in the income statement and its share of post acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in the parent entity’s income statement, while in the consolidated financial statements they reduce the carrying value of the investment.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. When the associate subsequently makes profits, the Group will resume recognising its share of those profits once its share of the profits equals the share of losses not recognised.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure constancy with the policies adopted by the Group.

(ab) Comparative figures

When required by accounting standards comparative figures have been adjusted to conform to changes in the presentation for the current financial year.

(ac) Exploration and development expenditure

Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Where an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future.

Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(ad) Fair Value Assets and Liabilities

The Group measures some of 'the assets and liabilities it holds at fair value on either a recurring or nonrecurring basis, depending on the requirements of the applicable Accounting Standard (for the respective accounting policies of such assets and liabilities, refer to the latest annual financial statements). 'Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly (ie unforced) transaction between independent, knowledgeable and willing buyers and sellers operating in a market. "Market' is taken to mean either a market with the greatest volume and level at activity for such asset or liability, or a market that maximises the receipts from the sale of' an asset or minimises the payment made to transfer a liability after taking into account transaction costs and transport costs.

Valuation techniques

The Group selects and uses one or more valuation techniques to measure the fair values of a particular asset or liability. The Group selects a valuation technique that Is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches:

Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions).and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered "observable", whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered " " unobservable .

Fair value hierarchy

The Group adopts a 'fair value hierarchy" to categorise the fair value measurements derived from the valuation techniques into three levels (as described below). The purpose of this classification is to indicate the relative subjectivity of the fair values derived. This classification is made by prioritising the inputs used in each valuation technique on the basis of the extent to which such inputs are observable.

Level 1	Level 2	Level 3
Level 1 fair values are considered to be the best indication (and therefore the most reliable evidence) of fair value. Inputs used to measure Level 1 fair values are unadjusted quoted prices for identical assets /liabilities in active markets (eg Australian Securities Exchange) where transactions take place with sufficient frequency and volume to provide pricing information on an ongoing basis.	Inputs used to measure Level 2 fair values are inputs (other than quoted prices included in Level 1) that are observable either directly or indirectly. Level 2 inputs include: - quoted prices for similar assets/liabilities in active markets; - quoted prices for similar or identical assets/liabilities in non-active markets; - foreign exchange rates; - market interest rates; - yield curves observable at commonly quoted intervals; - implied volatilities; and - credit spreads.	Level 3 fair values use unobservable inputs specific to the particular asset or liability because observable inputs are not available for such asset or liability.

The Group would change the categorisation within the fair value hierarchy only in the following circumstances:

(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or 3) or vice versa; or

(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.

When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy (ie transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015		33
	2015	2014
	$	$
3. REVENUE
From continuing operations
Interest received	10,415	12,248
Other income
Gain on sale of available-for-sale assets	-	6,268
From discontinued operations
Profit on sale of subsidiary (refer to note 19)	33,026	-
4. EXPENSES AND LOSSES
Profit/(loss) from continuing operations before income tax includes the following	specific expenses
Depreciation on equipment	170	-
Salaries & wages expenses	253,170	211,896
Provision for employee entitlements	-	-
Operating lease rentals	19,666	15,035
Directors’ benefit expense (excluding executive directors)	43,332	157,500
Exploration expenditure	196,812	-
5. INCOME TAX
The major components of income tax expense are:
Income Statement
Current income tax benefit/(expense)	-	-
Deferred income tax benefit/(expense)	-	-
Income tax benefit/(expense) reported in the income statement	-	-
Tax (expense)/benefit relating to items of other comprehensive income
Available-for-sale investments	-	-
Income tax (expense)/benefit reported in equity	-	-
A reconciliation between tax expense and the product of accounting profit/(loss)
before income tax multiplied by the Group’s applicable income tax rate is as follows:
Accounting profit/(loss) before income tax	(1,571,229)	(2,467,510)
At the Group’s statutory income tax rate	(471,369)	(740,253)
Less: Share options expenses during the year	212,370	2,310
Exploration expenditure	59,044	210,968
Other expenditure not allowable for income tax purposes	24,047	73,621
Provision on receivables	-	49,273
	(175,908)	(404,081)
Current year tax losses not brought to account	175,908	404,081
Income tax (benefit)/expense reported in the consolidated income statement	-	-

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

5. INCOME TAX (Continued)

Deferred Income Tax Deferred income tax at 30 June relates to the following: Deferred tax liabilities Prepayments Total deferred tax liabilities Deferred tax assets Employee provision Accrued expenses Capital raising costs Tax assets/losses recognised /(not brought to account) Total deferred tax assets Net deferred tax liabilities/(asset)	2015 2014 $ $ (1,396) (1,392)
	(1,396) (1,392)
	- 6,923 6,000 5,190 53,232 23,239 (57,836) (33,960)
	1,396 1,392
	- -

Other than to offset deferred tax liabilities the Group has not recognised tax losses arising in Australia of $9,085,720 (2014: $9,117,808) that may be available for offset against future taxable profits of the companies in which the losses arose. The potential benefit of carried forward losses will only be obtained if assessable income is derived of a nature and, of an amount sufficient to enable the benefit from the deductions to be realised or the benefit can be utilised by the Company provided that :

(i) the provisions of deductibility imposed by law are complied with;
(ii) the group satisfies the continuity of ownership test from the period the losses were incurred to the time they are to be utilised; and
(iii) no change in tax legislation adversely affect the realisation or the benefit from the deductions.

Tax Consolidation

Oro Verde Limited and its 100% owned Australian subsidiaries have formed a tax consolidated group. Members of the group entered into a tax sharing arrangement in order to allocate the income tax expense to the wholly-owned subsidiaries on a pro-rata basis. The agreement provides for the allocation of income tax liabilities should the head entity default on its tax payment obligations. At the balance date, the possibility of default is remote.

Tax effect accounting by members of the tax consolidated group

The allocation of taxes under the tax sharing and funding agreement is recognised as an increase/decrease in the subsidiaries’ inter-company accounts with the tax consolidated group head company, Oro Verde Limited. The group has applied the group allocation approach in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group.

current taxes to allocate to members of the tax consolidated group.
6. RECEIVABLES (Current) Trade receivables Other receivables Less: Provision for impairment loss (a)	2015 2014 $ $ 17,841 - - 284,373 - (284,373)
	17,841 -

(a) Provision for impairment loss

In 2014 the Company’s 100% owned Chilean subsidiary in Green Mining Limitada has recorded $284,373 IVA receivable. IVA is the Chilean equivalent of GST. The IVA in Chile is only recoverable once mining operations commence and as at this stage mining operations are not probable, a full provision against the recoverable IVA was made. The Group disposed of its interest in Green Mining Limitada during the year ending 30 June 2015 hence the provision is no longer required.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015	35
6. RECEIVABLES (Current) (Continued) Movements in the provision for impairment loss were as follows: As at 1 July Charge for the year Amount no longer required upon disposal of subsidiary (note 19) Exchange rate adjustment on translation As at 30 June	2015 2014 $ $ (284,373) (148,828) - (164,242) 284,373
	- 28,697
	- (284,373)

As at 30 June, the ageing analysis of trade receivables is as follows:

				Total	0-30	31-60	31-60	61-90	91+ days	91+days
					days	days	days	days
						Other	PDNI*	PDNI*	PDNI*	CI*
30	June	2015	Consolidated	17,841	17,841	-	-	-	-	-
30	June	2014	Consolidated	-	-	-	-	-	-	-

Past due not impaired (‘PDNI’), Considered impaired (‘CI’)
(b) Fair value and credit risk

Details regarding the fair value and credit risk of current receivables are disclosed in note 25.

Details regarding foreign exchange and interest rate risk exposure are disclosed in note 25.

7. OTHER (Current)

Prepayments

4,652 4,639

8. OPERATING SEGMENT

The Group has based its operating segment on the internal reports that are reviewed and used by the Board of Directors (“Board”) (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Group does not have production and is only currently involved in exploration activities. As a consequence, activities in the operating segment are identified by the Board based on the manner in which resources are allocated and the nature of the resources provided.

Based on this criterion, the Board has determined that the Group has one operating segment, being exploration, and the segment operations and results are the same as the Groups results.

During the period the Company conducted its activities across two geographic locations, being Australia and Nicaragua, operations in Chile ceased in June 2014.

2015	Australia	Chile	Nicaragua	Total
	$	$	$	$
Revenues	9,763	-	652	10,415
Profit/(Loss)	(1,402,129)	33,026	(202,126)	(1,571,229)
Non-current assets	-	-	188,780	188,780
Total assets	514,833	-	231,114	745,947
Total liabilities	(103,084)	-	(45,868)	(148,952)

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

8. OPERATING SEGMENT (Continued)

2014	Australia	Chile	Nicaragua	Total
	$	$	$	$
Revenues	18,516	-	-	18,516
Loss	(710,416)	(1,757,094)	-	(2,467,510)
Non-current assets	-	4,762	-	4,762
Total assets	338,979	5,050	-	344,029
Total liabilities	(82,263)	(27,385)	-	(109,648)

9. PLANT AND EQUIPMENT

Year ended 30 June 2015 At 1 July 2014, net of accumulated depreciation and impairment Additions Relinquished on disposal of subsidiary Depreciation expense for the year Exchange differences At 30 June 2015, net of accumulated depreciation and impairment At 30 June 2015 Cost Accumulated depreciation and impairment Net carrying amount Year ended 30 June 2014 At 1 July 2013, net of accumulated depreciation and impairment Additions Sale Depreciation expense for the year Exchange differences At 30 June 2014, net of accumulated depreciation and impairment At 30 June 2014 Cost Accumulated depreciation and impairment Net carrying amount	Office equipment and fittings Total $ $ 4,762 4,762 5,708 5,708 (4,762) (4,762) (170) (170) 1 1
	5,539 5,539
	9,796 9,796 (4,257) (4,257)
	5,539 5,539
	7,685 7,685 - - - - (2,082) (2,082) (841) (841)
	4,762 4,762
	14,558 14,558 (9,796) (9,796)
	4,762 4,762

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

10. EXPLORATION AND EVALUATION EXPENDITURE At Cost Fair value on acquisition of subsidiary Carrying amount at the end of the financial year Carrying amount at the beginning of the financial year Additions Acquired on acquisition of subsidiary Exploration written off on areas to be relinquished Exchange differences Carrying amount at the end of the financial year Recovery of the capitalised amount is dependent upon:	2015 2014 $ $ 21,637 - 161,604 -
	183,241 -
	- 267,101 21,637 - 161,604 - - (201,534) - (65,567)
	183,241 -

(i) the continuance of the Group’s right to tenure of the area of interest;

(ii) the results of future exploration; and

(iii) the successful development and commercial exploitation, or alternatively sale.

11. INTEREST IN SUBSIDIARIES

The subsidiaries listed below have share capital consisting solely of ordinary shares. Each country of incorporation is also its principal place of business.

(Non current)	Country of	% equity	held by consolidated
Name of Subsidiary	Incorporation		entity
		2015	2014
E – Resources Pty Ltd	Australia	100	100
And its subsidiary
Ghazal Minerals Limited	Australia	100	100
Goldcap Resources Pty Limited	Australia	100	-
And its subsidiary
Minera San Cristobal, S.A.	Nicaragua	100	-
Green Mining Limitada	Chile	-	100
And its subsidiary
Oro Verde SPA	Chile	-	100

There are no significant restrictions over the Group’s ability to access or use assets and settle liabilities of the group.

12. PAYABLES (Current) Trade creditors and accruals 13. PROVISIONS (Current) Employee benefits Opening balance at 1 July Additional provision Amount used Balance at 30 June	2015 2014 $ $ 148,952 86,571
	- 23,077
	23,077 48,852 - - (23,077) (25,775)
	- 23,077

Other than directors as at 30 June 2015 the Group has one employee (2014: Nil )

Current leave obligations are expected to be settled within 12 months.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015	38
14. CONTRIBUTED EQUITY (a) Issued and paid up capital Fully paid ordinary shares Less: capital raising costs	2015 2014 $ $ 21,203,389 19,927,889 (1,715,743) (1,677,440)
	19,487,646 18,250,449

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

(b) Movements in ordinary share capital

Beginning of the financial year Issued during the year 7 Aug ’14 Issue at $0.008 (i) 14 Aug ’14 Issue at $0.008 (ii) 4 Jun ’15 Issue at $0.006 (ii) 24 June ’15 Issue at $0.006 (ii) 22 Aug ’13 Issue at $0.013 3 Sept ’13 Issue at $0.013 31 Dec ’13 Placement at $0.016 23 May ’14 Issue at $0.008 30 June ’14 Issue at $0.008 Cost of share issues End of the financial year	2015 2014 Number of shares $ Number of shares $
	267,156,737 18,250,449 87,582,417 16,331,404 15,000,000 120,000 - - 77,375,000 619,000 - - 41,666,669 250,000 - - 47,750,002 286,500 - - - - 81,533,518 1,059,936 - - 9,895,077 128,636 - - 15,000,000 240,000 - - 72,895,725 583,166 - - 250,000 2,000 - (38,303) - (94,693)
	448,948,408 19,487,646 267,156,737 18,250,449

(i) Shares issued as consideration for acquisition of subsidiary, Goldcap Resources Pty Ltd. Refer to Note 18.

(ii) Funds raised from the share placements during the 2015 year were used to progress the Group’s exploration activities and for general working capital.

(c) Movements in unlisted options on issue

At the date of this report, there were 149,500,000 (2014: 32,114,459) share options outstanding.

SHARE OPTIONS

At the date of this report, there were 149,500,000 (2014: 32,114,459) share options outstanding.

Issued Lapsed Balance at the beginning of the year Share option movements during the year Exercisable at 1 cents, on or before 30 September 2017 73,000,000 - Exercisable at 5 cents, on or before 30 September 2019 73,000,000 - Exercisable at 27 cents, on or before 31 December 2014 - (24,364,459) Exercisable at 4 cents, on or before 31 March 2016 - (4,250,000) Total options issued and lapsed in the year to 30 June 2015 146,000,000 (28,614,459) Total number of options outstanding as at 30 June 2015 and at the date of this report	Issued Lapsed 73,000,000 - 73,000,000 - - (24,364,459) - (4,250,000)	Total number of Options 32,114,459 73,000,000 73,000,000 (24,364,459) (4,250,000)
		117,385,541
		149,500,000

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

14. CONTRIBUTED EQUITY (Continued)

The balance is comprised of the following:

14. CONTRIBUTED EQUITY (Continued) The balance is comprised of the following:
Date Granted Expiry Date Exercise Price (cents) 28 November 2011 10 January 2016 20.0 7 October 2014 30 September 2017 1.0 27 November 2014 30 September 2017 1.0 31 March 2015 30 September 2017 1.0 7 October 2014 30 September 2017 5.0 27 November 2014 30 September 2017 5.0 31 March 2014 30 September 2017 5.0 15 October 2013 31 March 2016 4.0 Total number of options outstanding at the date of this report	Number of Options 2,500,000 66,000,000 5,000,000 2,000,000 66,000,000 5,000,000 2,000,000 1,000,000
	149,500,000

14. CONTRIBUTED EQUITY (Continued)
The balance is comprised of the following:

Number of
Options
2,500,000
66,000,000
5,000,000
2,000,000
66,000,000
5,000,000
2,000,000
1,000,000

149,500,000

Total number of options outstanding at the date of this report

(d) Staff shares issued

Apart from shares and options issued to Mr Rovira and Mr Dickson prior to them becoming directors and more fully disclosed in note 23 there were no shares issued to staff during the year (2014: Nil).

(e) Capital Management

When managing capital, management’s objective is to ensure the Group continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the Group.

The Group is not exposed to any externally imposed capital requirements.

15. RESERVES

Nature and purpose of reserves

Share option reserve

This reserve records the value of options issued to directors, employees and associates as part of their remuneration.

Convertible note equity reserve

This reserve records the equity portion attributable to the convertible notes at the time of issue.

Available-for-sale asset reserve

This reserve records fair value changes on available-for-sale investments. Amounts are recognised in profit and loss when the associated assets are sold or impaired.

Foreign currency translation reserve

This reserve is used to record exchange differences arising from the translation of foreign controlled subsidiaries.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

16. STATEMENT OF CASH FLOWS

16. STATEMENT OF CASH FLOWS
	2015	2014
	$	$
Reconciliation of the net profit/(loss) after tax to the net cash flows from operations
Net profit/(loss)	(1,571,229)	(2,467,510)
Depreciation of plant and equipment	170	2,082
Profit on sale of available-for-sale assets	-	(6,268)
Profit on sale of subsidiary	(33,025)	-
Impairment of goodwill	654,060	-
Share based payments	53,840	7,700
Exploration written off	-	201,534
Provision against receivable	-	164,242
Capitalised exploration written off	-	47,000
Changes in assets and liabilities
Trade receivables	(17,841)	(149,207)
Prepayments	(13)	1,103
Trade and other creditors	79,411	(85,211)
Employee entitlements	(23,077)	(23,582)
Net cash flows used in operating activities	(857,704)	(2,308,117)

(a) Reconciliation of cash

(a) Reconciliation of cash
Cash balance comprises: Cash at bank Short term deposit Closing cash balance	501,173 301,127 33,501 33,501
	534,674 334,628

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Short term deposits are made at various periods on call, depending on the immediate cash requirements of the Group and earn interest at the respective short term deposit rates. At 30 June 2015, the Group had a borrowing facility of $30,000 (2014: $30,000). The short term deposit is provided as security for the facility. This facility is unutilised at 30 June 2015.

The fair value of cash and cash equivalents is $534,764 (2014: $334,628).

The effective interest rate on cash at bank was 1.8% (2014: 2.4%).

(b) Non-Cash Financing and Investing activities

During the year the following securities were issued as consideration for the acquisition of Goldcap Resources Limited (refer note 18);

15,000,000 fully paid ordinary shares issued at $0.008 each;
66,000,000 options exercisable at $0.01 by 30 September 2017; and
66,000,000 options exercisable at $0.05 by 30 September 2019.

The issue of securities was based on arms length agreement between the directors of Oro Verde Limited and the shareholders of Goldcap Resources Limited.

17. EXPENDITURE COMMITMENTS

(a) Remuneration Commitments

17. EXPENDITURE COMMITMENTS (a) Remuneration Commitments	17. EXPENDITURE COMMITMENTS (a) Remuneration Commitments
Commitments for payment of salaries and other remuneration under employment contracts in existence at
reporting date but not recognised as liabilities, payable:
Not later than one year	250,000	-
Later than one year and not later than five years	125,000	-
	375,000	-

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

17. EXPENDITURE COMMITMENTS (Continued)

(b) Acquisition Commitments

T he Company has entered into an Option to complete a Purchase Agreement (“Agreement”) to acquire 100% of the Topacio project in Nicaragua over a 3 year period with the following material terms:

a. The Company will commit to a minimum exploration expenditure of US$2m spend over 3 years;
b. There will be US$40,000 payable to the vendor each six months during the Agreement period;
c. The Company may exercise its Option to Purchase by making a payment of US$1,500,000 plus, at the Vendor’s election, either a 2% NSR royalty or a payout of US$1/oz gold in JORC or NI43-101 compliant resources (measured and indicated);
d. Should Oro Verde commence mining operation before exercising the Option to Purchase, the Vendor will receive a NSR of 3% until the Option is exercised; and
e. Oro Verde may withdraw from the Agreement at any time.

18. BUSINESS COMBINATIONS

On 7 August 2014, Oro Verde Limited acquired 100% of the issued capital of Goldcap Resources Limited, a company focussed on exploration in Nicaragua. Through the acquisition of 100% of the issued capital of Goldcap Resources Limited, the Group has gained control of the company. The purchase was satisfied by the issue of 15,000,000 ordinary shares at a deemed $0.008, 66,000,000 options exercisable at 1 cent with a life of 3 years and 66,000,000 options exercisable at 5 cents with a life of 5 years (refer further to note 23 for transactions with key management personnel). The deemed value of $0.008 per share represented the market price of the shares at the date of acquisition.

Purchase consideration Equity issued – shares – options Total purchase consideration	$ 120,000 654,060
	774,060

The assets and liabilities recognised as a result of the acquisition are as follows:

Cash and cash equivalents Exploration projects Payables Goodwill -at cost (i) Identifiable assets acquired and liabilities assumed Goodwill - at cost (i) Impairment (i) Goodwill at written down value	Fair Value $ 8,747 161,604 (50,351) 654,060
	774,060
	654,060 (654,060)
	-

(i) The goodwill is attributable to the value of the share options issued which were awarded as an incentive for the vendors of Goldcap Resources Limited to continue to assist in adding value to the Group’s activities in Nicaragua. Refer further to note 27(c).

(a) Revenue and profit contribution

The acquired business contributed revenues of nil and a net loss of $203,321 to the group for the period from 7 August 2014 to 30 June 2015.

If the acquisition had occurred on 1 July 2014, consolidated revenue for the period would be unchanged at $10,415 and consolidated loss for the period would have been $1,572,425. These amounts have been calculated using the subsidiary’s results for the full period.

(b) Acquisition – related costs

There were no acquisition related costs.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

19. DISCONTINUED OPERATIONS

(a) Sale of Green Mining Limitada

As a result of the acquisition of Goldcap Resources Limited and the focus on Nicaragua, on 8 August 2014 the company reached agreement and sold Green Mining Limitada for US$1.

(b) Financial Performance and cash flow information.

Revenue Expenses Loss before income tax Income tax expense Profit/(Loss) after income tax of discontinued operations Gain on sale of the division before income tax Income tax expense Gain on sale of the division after income tax Profit/(Loss) from discontinued operations Net cash in/(outflow) from operating activities Net cash in/(out) flow from Investing activities Net cash in/(out) flow from financing activities Net decrease in cash used by the division (c) Details of the sale Consideration Less: carrying value of net assets/(liabilities) sold Cash Receivables Less impairment of receivable Plant and equipment Trade creditors Provision for employee entitlements Net liabilities sold Gain on sale before income tax Income tax expense Gain on sale after income tax expense	2015 $ 2014 $ - - - (1,757,095)
	- (1,757,095) - -
	- (1,757,095) 33,025 - - -
	33,025 -
	33,025 (1,757,095)
	- (1,526,236) (287) - - -
	(287) (1,526,236)
	1 288 - 284,373 (284,373) 4,762 - (10,689) - (27,385) -
	(33,024) - 33,025 - - -
	33,025 -

20. SUBSEQUENT EVENTS

Since the end of the financial period 10,000,000 shares have been issued at $0.008 each for the provision of consultancy services.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

21. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary Owners of the parent, adjusted to exclude any costs of servicing equity, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary Owners of the parent by the weighted average number of ordinary shares during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income / (loss) and share data used in the calculations of basic and diluted earnings per share:

(a) Basic and diluted earnings per share From continuing operations attributable to the ordinary Owners of the company From discontinued operations attributable to the ordinary Owners of the company (b) Reconciliations of earnings used in calculating earnings per share Profit/(Loss) attributable to the ordinary Owners of the company used in calculating basic and diluted earnings per share From continuing operations From discontinued operations Weighted average number of ordinary shares on issue used in the calculation of continuing and discontinued basic and diluted earnings per share	2015 2014 *Cents* *Cents* (0.46) (0.39)
	0.01 (0.97)
	$ $ (1,604,255) (710,415) 33,026 (1,757,095)
	Number Number 352,436,760 180,924,005

(c) Effect of dilutive securities

Options on issue at reporting date could potentially dilute basic earnings per share in the future. The effect in the current year is to decrease the loss per share hence they are considered anti-dilutive. Accordingly diluted loss per share has not been disclosed.

22. AUDITORS’ REMUNERATION

Amounts received or due and receivable by Hewitt, Turner & Gelevitis for: - an audit or review of the Financial statements - other services Remuneration of other auditors of subsidiaries: - an audit or review of financial report of subsidiaries	2015 2014 $ $ 31,517 32,048 - -
	31,517 32,048
	21,120 -

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

23. KEY MANAGEMENT PERSONNEL

(a) Details of Key Management Personnel:

W G Martinick Chairman (non-executive) T I Woolfe Managing Director - appointed 25 February 2015 B D Dickson Finance Director – appointed 21 November 2014 B L Farrell Director (non-executive) A P Rovira Director (non-executive) – appointed 21 November 2014 G R O’Dea Director (non-executive) - resigned 21 November 2014 D H Ward Director (non-executive) – resigned 21 November 2014

There were no other specified executives during the year.

(b) Employment contracts

At 30 June 2015 the Managing Director, Mr Woolfe was employed under contract with annual consulting fees of $250,000. The current employment contract expires on 1 December 2016.

(c) Compensation of Key Management Personnel

Compensation of each director and the executive officer of the parent and group are as follows:

	Short term	Short term	Post employment	Share based payments	Total	Total options related	Total performance related
30 June 2015	Salaries and fees	Non Monetary Benefit1	Super- annuation	Options
Directors W G Martinick T I Woolfe B D Dickson A P Rovira G R O’Dea D H Ward B L Farrell Total	$ 13,333 196,024 85,000 10,000 - - 10,000	1,564 1,564 1,564 1,564 1,565 1,565 1,564	$ - - - - - - -	$ - 41,200 - - - - -	$ 14,897 238,788 86,564 11,564 1,565 1,565 11,564	$ - 41,200 - - - - -	- 17.3% - - - - -
	314,357	10,950	-	41,200	366,507	41,200	11.2%

	Short term	Short term	Post employment	Share based payments2	Total	Total options related	Total performance related
30 June 2014	Salaries and fees	Non Monetary Benefit1	Super- annuation	Options
Directors W G Martinick G R O’Dea D H Ward B L Farrell Exec. Officer B D Dickson Total	$ 170,000 37,500 37,500 181,406 70,000	$ 2,190 2,190 2,190 2,190 2,190	$ 15,723 3,468 3,468 3,468 -	$ - - - - -	$ 187,913 43,158 43,158 187,064 72,190	- - - - -	- - - - -
	496,406	10,950	26,127	-	533,483	-	-

The Non Monetary Benefit relates to the Directors’ Indemnity Insurance.
Mr Rovira and Dickson received share based payments prior to becoming directors and those payments are not included in remuneration. Further details of those share payments are disclosed in note 27.

Apart from executive directors, being Mr Woolfe and Mr Dickson, no fees were paid to directors during the period to 28 February 2015. From 1 March 2015 directors’ fees are accruing, as disclosed above, but are not payable until the Company’s financial position is sufficiently strong to justify payment.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

23. KEY MANAGEMENT PERSONNEL (Continued)

(d) Shares issued on exercise of remuneration options

There were no shares issued on exercise of remuneration options.

(e) Option holdings of Key Management Personnel

2015 W G Martinick G R O’Dea D H Ward B L Farrell T I Woolfe A P Rovira Brett Dickson	Balance at beginning of year 1 July 2014	Granted as Remuneration	Options Exercised	Other1	Options Lapsed	Balance at end of year 30 June 2015	Vested at 30 June 2015	Vested at 30 June 2015
							Vested & Exercisable	Unvested
	7,500,000 500,000 150,000 7,500,000 - - 2,000,000	- - - - 10,000,000 - -	- - - - - - -	- - - - - 44,000,000 44,000,000	(7,500,000) (500,000) (150,000) (7,500,000) - - (1,000,000)	- - - - 10,000,000 44,000,000 45,000,000	- - - - 10,000,000 44,000,000 45,000,000	- - - - - - -
Total	17,650,000	10,000,000	-	88,000,000	(16,650,000)	99,000,000	99,000,000	-

Refer to note 23 (g) for further information

2014 Directors W G Martinick G R O’Dea D H Ward B L Farrell Executives Brett Dickson	Balance at beginning of year 1 July 2013	Granted as Remuneration	Options Exercised	Other	Options Lapsed	Balance at end of year 30 June 2014	Vested at 30 June 2014	Vested at 30 June 2014
							Vested & Exercisable	Unvested
	7,500,000 500,000 150,000 7,500,000 2,000,000	- - - - -	- - - - -	- - - - - -	- - - - -	7,500,000 500,000 150,000 7,500,000 2,000,000	- 500,000 150,000 - 2,000,000	7,500,000 - - 7,500,000 -
Total	17,650,000	-	-	-	-	17,650,000	2,650,000	15,000,000

(f) Shareholdings of Key Management Personnel

2015	Balance 1 July 14 Number	Granted as Remuneration Number	On Exercise of Options Number	Net Change Other Number	Balance 30 June 15 Number
Specified Directors
W G Martinick	40,500,000	-	-	2,500,000	43,000,000
T I Woolfe	-	-	-	5,000,000	5,000,000
A P Rovira	-	-	-	23,760,000	23,760,000
G R O’Dea¹	1,861,976	-	-	-	1,861,976
Held byspouse and children of GR O’Dea¹	1,170,229	-	-	-	1,170,229
D H Ward¹	5,644,727	-	-	-	5,644,727
B L Farrell	42,101,281	-	-	5,000,000	47,101,281
B D Dickson	-	-	-	17,500,000	17,500,000
Total	91,278,213	-	-	53,760,000	145,038,213

Mr Ward and Mr O’Dea resigned on 21 November 2014. Their shareholding represents the balances held at that date.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

23. KEY MANAGEMENT PERSONNEL (Continued)

(f) Shareholdings of Key Management Personnel (Continued)

2014	Balance 1 July 13 Number	Granted as Remuneration Number	On Exercise of Options Number	Net Change Other Number	Balance 30 June 14 Number
Specified Directors
W G Martinick	11,412,545	-	-	29,087,455	40,500,000
G R O’Dea	299,476	-	-	1,562,500	1,861,976
Held byspouse and children of GR O’Dea	760,614	-	-	409,615	1,170,229
D H Ward	981,266	-	-	4,663,461	5,644,727
B L Farrell	5,086,443	-	-	37,014,838	42,101,281
Specified Executives
B D Dickson	-	-	-	-	-
Total	18,540,344	-	-	72,737,869	91,278,213

(g) Other Transactions

$120,000 payable by the issue of 15,000,000 fully paid shares at $0.008 each;
Issue of 66,000,000 3 year options exercisable at 1.0 cent each; and
Issue of 66,000,000 5 year options exercisable at 5.0 cents each.

Mr Brett Dickson and Mr Anthony Rovira were part of the consortium that sold Goldcap to the Company and both subsequently were appointed as directors. Share and options issued to Mr Dickson and Mr Rovira pursuant to this transaction were:

B D Dickson A P Rovira	Fully paid shares Options exercisable at 1 cent Options exercisable at 5 cents
	Number $ Number $ Number $
	5,000,000 40,000 22,000,000 120,120 22,000,000 97,900 5,000,000 40,000 22,000,000 120,120 22,000,000 97,900
	10,000,000 80,000 44,000,000 240,240 44,000,000 195,800

(h) Loans to/from Key Management Personnel

There were no loans outstanding to or from key management personnel as at 30 June 2015 (2014: Nil).

(i) Other transactions and balances with Key Management Personnel

Services

Professional services, relating to accounting and taxation advice, of $21,700 (ex GST) (2014: Nil) were provided by Young & Wilkinson, a partnership associated with D H Ward on normal commercial terms and conditions, of which $Nil (inc. GST) remains outstanding at 30 June 2015 (2014: Nil).

Amounts due and unpaid at 30 June 2015 to Key Management Personnel disclosed in note 23(c) include:

1 Directors fees totalling $43,332;
2 Consulting fees to Shordean, a related party of TI woolfe, $20,833;and
3 Consulting fees to Coolform Investments Pty Ltd, a related party of B D Dickson, $5,000.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

24. RELATED PARTY DISCLOSURE

(a) Subsidiaries

The consolidated financial statements include the financial statement of Oro Verde Limited and the subsidiaries listed in the following table.

Name Country of incorporation Equity interest 2015 2014 % %	Investment 2015 2014 $ $
E-Resources Pty Ltd Australia 100 100 Ghazal Minerals Limited Australia 100 100 Green Mining Limitada Chile - 100 Goldcap Resources Australia 100 - and its 100% owned subsidiary Minera San Cristobal, S.A. Nicaragua 100 -	1 1 - - - 21,740 120,000 -
	120,001 21,741

(b) Ultimate parent

Oro Verde Limited is the ultimate parent entity.

(c) Key Management Personnel

Details relating to key management personnel, including remuneration, are included in note 23.

25. FINANCIAL INSTRUMENTS

(a) Financial Risk Management

The Group’s financial instruments comprise receivables, payables, finance leases, available for sale investments and cash.

The Group’s main risks arising from the financial instruments are:

(i) interest rate risk,
(ii) liquidity risk,
(iii) credit risk
(iv) foreign currency risk.

Risk Exposures and Responses

(i) Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will affect the Group’s income. The objective of interest rate risk management is to manage and control risk exposures within acceptable parameters, while optimising any return. As the Group has interest bearing assets, the Group’s income and operating cash flows are exposed to changes in market interest rates. The assets are short term interest bearing deposits. The Group does not have any policy in place and no financial instruments are employed to mitigate interest rate risks.

At balance date, the Group had the following financial assets exposed to Australian and Chilean variable interest rate risk:

*Australia* Financial assets Cash at bank *Nicaragua* Financial assets Cash at bank *Chile* Financial assets Cash at bank	2015 2014 $ $ 497,955 334,340
	36,719 -
	- 288

The Group has no interest bearing liabilities and is therefore not exposed to interest rate risks.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

25. FINANCIAL INSTRUMENTS (Continued)

(i) Interest Rate Risk (Continued)

The following sensitivity analysis is based on the interest rate risk exposures in existence at the end of the reporting period. The 1% sensitivity is based on reasonable possible change over the financial year using the observed range for the historic 2 years.

At 30 June, if interest rates had moved, as illustrated in the table below, with all variables held constant, post tax profit and equity would have been affected as follows:

Judgements of reasonably possible movements:	Post tax profit Higher/(Lower)	Post tax profit Higher/(Lower)	Equity Higher/(Lower)	Equity Higher/(Lower)
	2015	2014	2015	2014
	$	$	$	$
CONSOLIDATED
+1% (100 basis points)	5,347	3,346	5,349	3,346
-1% (100 basis points)	(5,347)	(3,346)	(5,349)	(3,346)

The movements in profit and equity are due to higher/lower interest costs from variable rate cash balances.

(ii) Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’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 Group’s reputation.

The table below reflects all contractually fixed pay-offs and receivables for settlement, repayments and interest resulting from recognised financial assets and liabilities. Undiscounted cash flows of financial liabilities are presented.

The Group has no derivative financial instruments.

The remaining contractual maturities of the Group’s financial liabilities are:

liabilities are presented. The Group has no derivative financial instruments. The remaining contractual maturities of the Group’s financial liabilities are:
6 months or less 6 – 12 months 1 – 5 years	2015 2014 $ $ 148,952 86,571 - - - -
	148,952 86,571

Maturity analysis of financial assets and liability based on management’s expectation

The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and (outflows). Leasing obligations, trade payables and other financial liabilities mainly originate from the financing of assets used in our ongoing operations such as property, plant and equipment and investments in working capital eg inventories and trade receivables. These assets are considered in the Group’s overall liquidity risk.

CONSOLIDATED Year ended 30 June 2015 Financial assets Cash & cash equivalents Trade & other receivables Financial liabilities Trade & other payables Net Maturity	<6 months 6 – 12 months 1 – 5 years > 5 years Total $ $ $ $ $ 534,674 - - - 534,674 17,841 - - - 17,841
	552,515 - - - 552,515
	(148,952) - - - (148,952)

	403,563 - - - 403,563

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

25. FINANCIAL INSTRUMENTS (Continued)

(ii) Liquidity Risk (Continued)

Year ended 30 June 2014 Financial assets Cash & cash equivalents Trade & other receivables Financial liabilities Trade & other payables Net Maturity	<6 months 6 – 12 months 1 – 5 years > 5 years Total $ $ $ $ $ 334,628 - - - 334,628 - - - - -
	334,628 - - - 334,628
	(86,571) - - - (86,571)
	(86,571) - - - (86,571)
	248,057 - - - 248,057

(iii) Credit Risk

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

The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of the financial assets of the Group, which comprises of cash and cash equivalents, trade and other receivables and available for sale financial assets.

The Group does not hold any credit derivatives to offset its exposure.

The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

The Group places its cash deposits with institutions with a credit rating of AA or better and only with major banks.

Fair value

The fair values of financial assets and liabilities approximate their carrying amounts shown in the statement of financial position due to their short term nature. The carrying amounts of financial assets and liabilities as described in the statement of financial position are as follows:

CONSOLIDATED	CARRYING AMOUNT	CARRYING AMOUNT	AGGREGATE NET FAIR	AGGREGATE NET FAIR
				VALUE
	2015	2014	2015	2014
	$	$	$	$
FINANCIAL ASSET
Cash	534,674	334,628	534,674	334,628
Receivables	17,841	-	17,841	-
Total financial assets	552,515	334,628	552,515	334,628
FINANCIAL LIABILITIES
Trade creditors and accruals and
other creditors	148,952	86,571	148,952	86,571
Total financial liabilities	148,952	86,571	148,952	86,571

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

25. FINANCIAL INSTRUMENTS (Continued)

(iii) Credit Risk (continued)

The following methods and assumptions are used to determine the net fair values of financial assets and liabilities:

Cash and cash equivalent: The carrying amount approximates fair value because of their short-term to maturity.

Receivables and payables: The carrying amount approximates fair value.

Available-for-sale financial assets: Quoted prices in active markets been used to determine the fair value of listed available-for-sale investments (Level 1). The fair value of these financial assets has been based on the closing quoted bid prices at reporting date, excluding transaction costs.

(iv) Foreign Currency Risk

Foreign currency risk is the risk that changes in foreign exchange rates will affect the Group’s income or the value of its holdings of financial instruments. The Group is exposed to currency risk on purchases that are denominated in a currency other than the respective functional currencies of Group entities, primarily the United Sates Dollar (USD), Nicaragua Cordoba (NiC) and Chilean Peso (CP). The currencies in which the transactions primarily are denominated are USD and NiC.

The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated future receipts or payments that are denominated in a foreign currency.

Group’s investments in its subsidiaries are not hedged as those currency positions are considered to be long term in nature.

Exposure to currency risk

The Group’s exposure to foreign currency risk at balance date, expressed in Australian dollars (AUD), was:

Cash Trade Receivables Trade Payables Gross Statement of Financial Position Exposure Forward exchange contracts Net Exposure	2015 20134 (AUD) (AUD) NiC CP 36,719 288 5,615 - (45,868) (27,385)
	(3,534) (27,097) - -
	(3,534) (27,097)

The following significant exchange rates applied during the year:

Net Exposure The following significant	exchange rates applied during	the year:		(3,534)
	Average rate		Reporting	date spot rate
	2015	2014	2015	2014
AUD/CP	504.4	488.5	486.3	520.0
AUD/NiC	22.1	23.2	20.6	24.5

Sensitivity analysis

Over the reporting period there have been significant movements in the Australian dollar when compared to other currencies, it is therefore considered reasonable to review sensitivities base on a 10% movement in the Australian dollar. A 10 percent movement of the Australian dollar against the Chilean Peso and Nicaraguan Cordoba at 30 June would have affected equity and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2014.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

25. FINANCIAL INSTRUMENTS (Continued)

(iv) Foreign Currency Risk (Continued)

25. FINANCIAL INSTRUMENTS (Continued) (iv) Foreign Currency Risk (Continued)
	Equity		Profit or loss
	$		$
30 June 2015
Chilean Peso		-	-
Nicaragua Cordoba	+/-	353	-
30 June 2014
Chilean Peso	+/- 2,710		-
Nicaragua Cordoba		-	-

26. PARENT ENTITY FINACIAL INFORMATION

(a) Summary Financial Information

The following information has been extracted from the books and records of the parent and has been prepared in accordance with Accounting Standards:

STATEMENT OF FINANCIAL POSITION ASSETS Current assets Total assets LIABILITIES Current liabilities Total liabilities EQUITY Issued capital Reserves Share-option Convertible note equity Available-for-sale assets Accumulated loses Total Equity STATEMENT OF COMPREHENSIVE INCOME Total profit/(loss) Total comprehensive income/(loss)	2015 2014 $ $ 514,643 338,810
	634,642 360,551
	103,083 82,263
	103,083 82,263
	19,487,646 18,250,449 4,810,101 4,102,201 136,403 136,403 - (23,902,591) (22,210,765)
	531,559 278,288
	(1,691,826) (2,241,164)
	(1,691,826) (2,240,199)

(b) Guarantees

Oro Verde Limited has not entered into any guarantees, in the current or previous financial year, in relation to the debts of its subsidiaries.

(c) Contingent liabilities

Oro Verde Limited did not have any contingent liabilities as at 30 June 2015 or 30 June 2014.

(d) Contracted commitments for the acquisition of property, plant or equipment

Oro Verde Limited did not have any commitments for the acquisition of property, plant or equipment.

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

27. SHARE BASED PAYMENTS

Details of each class of option issues are set out below.

(a) Employee and consultants option plan

The establishment of the Oro Verde Option Plan (“Plan”) was approved by shareholders at the 2011 Annual General Meeting. The plan is designed to provide long-term incentives for employees and certain contractors to deliver long term shareholder returns. Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in the plan or to receive guaranteed benefits. In addition, under the Plan, the Board determines the terms of the options including exercise price, expiry date and vesting conditions, if any.

Options granted under the plan carry no dividend or voting rights. When exercised, each option is convertible into an ordinary share of the company with full dividend and voting rights.

No options were issued under the plan in 2015 (2014: Nil) Set out below are summaries of options granted under the plan.

Grant Date	Expiry Date	Exercise Price (cents)	Value per option at grant date (cents)	Balance of the start of the year Number	Granted during the year Number	Exercised during the year Number	Lapsed during the year Number	Balance at end of the year Number	Vested and exercisable at end of the year Number
5 Apr ‘13	31 Mar ‘16	4.0	0.71	3,250,000	-	-	(3,250,000)	-	-
20 Dec ‘ 11	31 Dec ‘14	27.0	10.99	2,000,000	-	-	(2,000,000)	-	-
TOTAL				5,250,000	-	-	(5,250,000)	-	-
Weighted average exerciseprice				$0.13	-	-	$0.13

No options were exercised during the periods covered by the above table.

The weighted average remaining contractual life of share options outstanding at the end of the period was Nil years (2014: 1.3 years).

Total expenses arising from share-based payment transactions recognised during the period under the plan were as follows

Options issued to staff and officers under the plan

Consolidated	Consolidated
2015	2014
$	$
-	-

(b) Directors and executive options

A total of 14,000,000 options were issued to senior executives during 2015 (2014: Nil). Of those 10,000,000 were issued to Mr T Woolfe in November 2014 while he was Chief Executive Officer and before he became a director in February 2015. Set out below are summaries of options issued to senior executives in 2015.

executives	in 2015.
Grant Date	Expiry Date	Exercise Price (cents)	Value per option at grant date (cents)	Balance at the start of the year Number	Granted during the year Number	Exercised during the year Number	Lapsed during the year Number	Balance at end of the year Number	Vested and exercisable at end of the year Number
27 Nov ‘14	30 Sep‘17	1.0	0.46	-	5,000,000	-	-	5,000,000	5,000,000
27 Nov ‘14	30 Sep‘19	5.0	0.37	-	5,000,000	-	-	5,000,000	5,000,000
31 Mar ‘15	30 Sep‘17	1.0	0.35	-	2,000,000	-	-	2,000,000	2,000,000
31 Mar ‘15	30 Sep‘19	5.0	0.28	-	2,000,000	-	-	2,000,000	2,000,000
TOTAL					14,000,000	-	-	14,000,000	14,000,000
Weighted average exerciseprice

The weighted average remaining contractual life of share options outstanding at the end of the period was 3.2 years (2014: 0.5).

Fair value of director options granted

Options were granted for no consideration. During the 2015 financial year the weighted average fair value of the options granted was 0.38 cents. The price was calculated by using the Binominal Option valuation methodology applying the following input:

ORO VERDE LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015

27. SHARE BASED PAYMENTS (Continued)

(b) Directors and executive options (Continued)

(b) Directors and executive options (Continued)
	2015
Weighted average exercise price (cents)	3.0
Weighted average life of the option (years)	3.75
Weighted average underlying share price (cents)	0.77
Expected share price volatility (%)	100
Risk free interest rate (%)	2.32

Total expenses arising from share-based payment transactions to executives in their capacity as executives recognised during the period were as follows

Options issued to executives

	Consolidated	Consolidated
	2015	2014
	$	$
	53,840	-

(c) Contractor and other options

During 2015 132,000,000 options were issued as part consideration for the acquisition of Goldcap Resources Limited (refer note 18). Of those options 44,000,000 were issued to Brett Dickson who was Company Secretary of Oro Verde Limited at the time of issue and was elected a director on 21 November 2014 and 44,000,000 were issued to Anthony Rovira who was elected as a director on 21 November 2014.

Set out below are summaries of options issued to contractors, unrelated third parties and key management personnel for the acquisition of Goldcap Resources Limited.

Grant Date	Expiry Date	Exercise Price (cents)	Value per option at grant date (cents)	Balance at the start of the year	Granted during the year	Exercised during the year	Lapsed during the year	Balance at end of the year	Vested and exercisable at end of theyear
7 Oct ‘14	30 Sep‘17	1.0	0.55	-	66,000,000	-	-	66,000,000	66,000,000
7 Oct ‘14	30 Sep‘19	5.0	0.44	-	66,000,000	-	-	66,000,000	66,000,000
28 Nov ‘11	10 Jan‘16	20.0	15.76	2,500,000	-	-	-	2,500,000	2,500,000
2 Dec ‘11	31 Dec‘14	27.0	11.10	3,250,000	-	-	(3,250,000)	-	-
20 Dec ‘11	31 Dec‘14	27.0	10.99	500,000	-	-	(500,000)	-	-
16 Apr ‘12	31 Dec‘14	27.0	8.09	2,614,459	-	-	(2,614,459)	-	-
15 Oct ‘13	31 Mar‘16	4.0	0.38	2,000,000		-	(1,000,000)	1,000,000	1,000,000
TOTAL				10,864,459	132,000,000	-	(7,364,459)	135,500,000	135,500,000
Weighted average exerciseprice				$0.21	$0.03	-	$0.24	$0.03	$0.03

The weighted average remaining contractual life of share options outstanding at the end of the period was 3.2 years (2014: 1.0 years).

Fair value of options granted.

Options granted during the year were granted as part consideration for the acquisition of Goldcap Resources Limited. During the 2015 financial year the weighted average fair value of the options granted was 0.48 cents. The price was calculated by using the Binominal Option valuation methodology applying the following input.

following input.
	2015	2014
Weighted average exercise price (cents)	3.0	4.0
Weighted average life of the option (years)	3.98	2.46
Weighted average underlying share price (cents)	0.9	1.2
Expected share price volatility (%)	100	100
Risk free interest rate (%)	2.78	3.08

Total expenses arising from share-based payment transactions recognised during the period were as follows:

Options issued to contractors and others as consideration for the acquisition of Goldcap Resources Limited

Consolidated 2015 2014 $ $ 654,060 7,700

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INDEPENDENT AUDIT REPORT

TO THE MEMBERS OF ORO VERDE LIMITED AND CONTROLLED ENTITIES

Report on the Financial Report

We have audited the accompanying financial report, of Oro Verde Limited, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated 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 consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable to preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards (IFRS).

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we 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 entity’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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

INDEPENDENT AUDIT REPORT

TO THE MEMBERS OF ORO VERDE LIMITED AND CONTROLLED ENTITIES (continued)

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 Oro Verde Limited is in accordance with the Corporations Act 2001 , including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and
ii. complying Australian Accounting Standards and the Corporations Regulations 2001 ;

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(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Material Uncertainty Regarding Continuation as a Going Concern

Without modifying our opinion, we draw attention to note 2 to the financial report which indicates that the group incurred a net loss of $1,571,229 for the year ended 30 June 2015, and experienced net cash outflows from operating activities of $857,704. These conditions along with other matters as set out in Note 2 to the financial report indicate the existence of a material uncertainty which may cast doubt on the entity’s ability to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 10-14 of the directors’ report for the year ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with s300A 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

In our opinion the Remuneration Report of Oro Verde Limited for the year ended 30 June 2015, complies with s 300A of the Corporations Act 2001 .

HEWITT TURNER & GELEVITIS

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......................................................

TIMOTHY TURNER REGISTERED COMPANY AUDITOR

Signed at Perth this 25th day of September 2015.

ORO VERDE LIMITED CORPORATE GOVERNANCE STATEMENT 30 June 2015

Approach to Corporate Governance

Oro Verde Limited ACN 083 646 477 ( Company ) has established a corporate governance framework, the key features of which are set out in this statement. In establishing its corporate governance framework, the Company has referred to the recommendations set out in the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 3[rd] edition ( Principles & Recommendations ). The Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company's corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the "if not, why not" reporting regime, where, after due consideration, the Company's corporate governance practices do not follow a recommendation, the Board has explained it reasons for not following the recommendation and disclosed what, if any, alternative practices the Company has adopted instead of those in the recommendation.

The following governance-related documents can be found on the Company's website at www.oroverde.com.au, under the section marked "Corporate Governance":

Charters

Board Audit and Risk Committee Nomination Committee Remuneration Committee

Policies and Procedures

Process for Performance Evaluations Policy and Procedure for the Selection and (Re)Appointment of Directors Induction Program Diversity Policy (summary) Code of Conduct (summary) Policy on Continuous Disclosure (summary) Compliance Procedures (summary) Shareholder Communication and Investor Relations Policy Securities Trading Policy

The Company reports below on whether it has followed each of the recommendations during the 2014/2015 financial year ( Reporting Period ). This statement was approved by a resolution of the Board on and is current as at 25 September 2015.

Principle 1 – Lay solid foundations for management and oversight

Recommendation 1.1 - A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.

The Company has established the respective roles and responsibilities of its Board and management, and those matters expressly reserved to the Board and those delegated to management and has documented this in its Board Charter .

Recommendation 1.2 - A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

The company undertakes appropriate checks prior to appointing a director, or putting that person forward as a candidate to ensure that person is competent, experienced, and would not be impaired in any way from undertaking the duties of director. The company provides relevant information to shareholders for their consideration about the attributes of candidates together with whether the Board supports the appointment or re-election.

The Board appointed three directors during the Reporting Period, accordingly the checks referred to in the Company’s Policy and Procedure for the Selection and (Re)Appointment of Directors were utilised.

Recommendation 1.3 - A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

The Company has a written agreement with each director and senior executive setting out the terms of their appointment. The material terms of any employment, service or consultancy agreement the Company, or any of its child entities, has entered into with its Managing Director, any of its directors, and any other person or entity who is related party of the Managing Director or any of its directors has been disclosed in accordance with ASX Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure outlined in that rule).

Recommendation 1.4 - The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board as outlined in the Company’s Board Charter . The Company’s Secretary’s role is also outlined in the consultancy agreement between the Company Secretary and the Company.

Recommendation 1.5 - A listed entity should (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them, and either: (1) the respective proportions of men and women on the Board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.

The Company has a Diversity Policy. However, the Diversity Policy does not include requirements for the Board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the Company’s progress in achieving them. Nor has the Board set measurable objectives for achieving gender diversity. Given the Company’s stage of development as an exploration company, the number of employees in Australia and the nature of the labour market in Nicaragua, the Board considers that it is not practical to set measurable objectives for achieving gender diversity.

The respective proportions of men and women on the Board, in senior executive positions and across the whole organisation are set out in the following table. “Senior executive” for these purposes means a person who makes, or participates in the making of, decisions that affect the whole or a substantial part of the business or has the capacity to affect significantly the company’s financial standing. This therefore includes the Managing Director and the Company Secretary.

	Proportion of women
Whole organisation	1 out of 5(20%)
Senior executivepositions	0 out of 2(0%)
Board	0 out of 5(0%)

Recommendation 1.6 - A listed entity should (a) have and disclose a process for periodically evaluating the performance of the Board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

The Chair is responsible for evaluation of the Board and, when deemed appropriate, Board committees and individual directors. The evaluations are undertaken in accordance with the Company’s Process for Performance Evaluations , which is disclosed on the Company’s website.

During the Reporting Period an evaluation of the Board, its committees, and individual directors took place in accordance with the process disclosed.

Recommendation 1.7 - A listed entity should (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

The Managing Director is responsible for evaluating the performance of senior executives in accordance with the process disclosed in the Company’s Process for Performance Evaluations .

During the Reporting Period no review was undertaken as the only senior executive was appointed during the year.

The Chairman is responsible for evaluating the Managing Director. As the Managing Director was only recently appointed no evaluation was undertaken.

Principle 2 – Structure the board to add value

Recommendation 2.1 - The board of a listed entity should:

(a) have a nomination committee which:

(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director, and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

The Board has not established a separate Nomination Committee. The size and composition of the Board does not make the establishment of a separate Nomination Committee practical, and the Board believes that there would be no efficiencies or other benefits gained by establishing a separate Nomination Committee. Accordingly, the Board performs the role of the Nomination Committee.

The Board has adopted a Nomination Committee Charter which describes the role, composition, functions and responsibilities of the full Board in its capacity as the Nomination Committee. The Company’s Nomination Committee Charter is disclosed on the Company’s website.

Items that are usually required to be discussed by a Nomination Committee are marked as separate agenda items at Board meetings when required. When the Board convenes as the Nomination Committee it carries out those functions which are delegated to it in the Company’s Nomination Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Nomination Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.

The full Board did not officially convene as a Nomination Committee during the Reporting Period.

Recommendation 2.2 - A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

The mix of skills and diversity for which the Board is looking to achieve in membership of the Board is represented by the Board’s current composition, which includes the extensive geological experience, environmental management leadership, governance and strategy.

While the Company is at exploration stage, it does not wish to increase the size of the Board, and considers that the Board weighted towards technical experience is appropriate at this stage of the Company’s development. External consultants may be brought in with specialist knowledge to address areas where this is an attribute deficiency in the Board.

Recommendation 2.3 - A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director.

Details of the Board of directors, their appointment dated, length of service as independence status is as follows:

Director’s name	Appointment date	Length of service at reporting date	Independence status
W G Martinick	13 January2003	12years	Not-Independent Non-executive
B L Farrell	8 August 2011	4years	Independent Non-executive
T I Woolfe	25 February2015	1year	Not-independent Executive
B D Dickson	21 November 2014	1year	Not-independent Executive
A P Rovira	21 November 2014	1year	Independent Non-executive

The Board may determine that a director is independent notwithstanding the existence of an interest, position, association or relationship of the kind identified in the examples listed under Recommendation 2.3 of the ASX Principles and Recommendations.

Details of directors that the Board has declared as independent but which maintain an interest or relationship that could be perceived as impairing independence, and the reason as to the Board’s determination are as follows:

Director’s Name	Details of interest or relationship	Details of interest or relationship		Board reasoning	why	director	is
				independent
B L Farrell	An entity which Mr Farrell	controls		This holding aligns the	interests	of the director
	holds substantial holding	in	the	with those of the	shareholders and		is
	company			encouraged by the company.
A P Rovira	Mr Rovira holds a substantial	holding		This holding aligns the	interests	of the director
	in the company			with those of the	shareholders and		is
				encouraged by the company.

Recommendation 2.4 - A majority of the board of a listed entity should be independent directors.

The Board does not have a majority of directors who are independent. The Board considers that the current composition of the Board is adequate for the Company’s current size and operations, and includes an appropriate mix of skills and expertise relevant to the Company’s business.

Recommendation 2.5 - The Chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

The non-independent Chair of the Board is W G Martinick who is not also the current Managing Director. Mr Martinick is not independent by virtue of his previous executive role as Managing Director. While the Board recognises the importance of the need for the independence of the Chair, the Board currently considers that Mr Martinick is the most appropriate person for the position of Chairman given his industry experience, and the size and current activities of the Company. The Board also believes that Mr Martinick’s appointment as Chair is in line with shareholder expectations.

Recommendation 2.6 - A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.

New directors undertake an induction program coordinated by the Company Secretary that briefs and informs the director on all relevant aspects of the Company’s operations and background. A director development program is also available to ensure that directors can enhance their skills and remain abreast of important developments.

Principle 3 – Act ethically and responsibly

Recommendation 3.1 - A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.

The Company has established a Code of Conduct for its directors, senior executives and employees, which is disclosed on the Company’s website.

Principle 4 – Safeguard integrity in corporate reporting

Recommendation 4.1 - The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.

The Board has not established a separate Audit Committee, and therefore it is not structured in accordance with Recommendation 4.1. The Board believes that there would be no efficiencies gained by establishing a separate Audit Committee. Accordingly, the Board performs the role of Audit Committee. Items that are usually required to be discussed by an Audit Committee are marked as separate agenda items at Board meetings when required. When the Board convenes as the Audit Committee it carries out those functions which are delegated to it in the Company’s Audit Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Audit Committee by ensuring that the director with conflicting interests is not party to the relevant discussions. The independent directors are available to meet separately with the external auditor should this be considered necessary.

The full Board did not meet in its capacity as the Audit Committee during the Reporting Period.

The Company has established a Procedure for the Selection, Appointment and Rotation of its External Auditor. The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises, as recommended by the Audit Committee (or its equivalent). Candidates for the position of external auditor must demonstrate complete independence from the Company through the engagement period. The Board may otherwise select an external auditor based on criteria relevant to the Company's business and circumstances. The performance of the external auditor is reviewed on an annual basis by the Audit Committee (or its equivalent) and any recommendations are made to the Board.

The Company’s Audit Committee Charter and Procedure for Selection, Appointment and Rotation of External Auditor are disclosed on the Company’s website.

Recommendation 4.2 - The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

For the financial year ended 30 June 2015 and the half-year ended 31 December 2014, the company’s CEO and CFO provided the Board with the required declarations.

Recommendation 4.3 - A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

Under section 250RA of the Corporations Act, the Company’s auditor is required to attend the Company’s annual general meeting at which the audit report is considered, must arrange to be represented by a person who is a suitably qualified member of the audit team that conducted the audit and is in a position to answer questions about the audit. Each year, the Company writes to the Company’s auditor to inform them of the date of the Company’s annual general meeting. In accordance with section 250S of the Corporations Act, at the Company’s annual general meeting where the Company’s auditor or their representative is at the meeting, the Chair allows a reasonable opportunity for the members as a whole at the meeting to ask the auditor (or its representative) questions relevant to the conduct of the audit; the preparation and content of the auditor’s report; the accounting policies adopted by the Company in relation to the preparation of the financial statements; and the independence of the auditor in relation to the conduct of the audit. The Chair also allows a reasonable opportunity for the auditor (or their representative) to answer written questions submitted to the auditor under section 250PA of the Corporations Act.

A representative of the Company’s auditor, Hewitt, Turner & Gelevitis attended the Company’s annual general meeting held on 21 November 2014.

Principle 5 – Make timely and balanced disclosure

Recommendation 5.1 - A listed entity should (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.

The Company has established written policies and procedures for complying with its continuous disclosure obligations under the ASX Listing Rules. A summary of the Company’s Policy on Continuous Disclosure and Compliance Procedures are disclosed on the Company’s website.

Principle 6 – Respect the rights of security holders

Recommendation 6.1 - A listed entity should provide information about itself and its governance to investors via its website.

The Company provides information about itself and its governance to investors on its website at www.oroverde.com.au.

Recommendations 6.2 - A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.

The Company has designed and implemented an investor relations program to facilitate effective two-way communication with investors. The program is set out in the Company’s Shareholder Communication and Investor Relations Policy .

Recommendations 6.2 - A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.

The Company has in place a Shareholder Communication and Investor Relations Policy which outlines the policies and processes that it has in place to facilitate and encourage participation at meetings of shareholders.

Recommendation 6.4 - A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.

The company engages its share registry to manage the majority of communications with shareholders. Shareholders are encouraged to receive correspondence from the company electronically, thereby facilitating a more effective, efficient and environmentally friendly communication mechanism with shareholders. Shareholders not already receiving information electronically can elect to do so through the share registry, Security Transfer Registrars Pty Ltd Ltd at www.securitytransfers.com.au .

Principle 7 – Recognise and manage risk

Recommendations 7.1 - The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework

The Board has not established a separate Risk Committee, and therefore it is not structured in accordance with Recommendation 7.1. The Board believes that there would be no efficiencies gained by establishing a separate Risk Committee. Accordingly, the Board performs the role of Risk Committee.

The Board has adopted a Risk Management Policy and Risk Management Procedures. Under the Risk Management Policy, the Board oversees the processed by which risks are managed. This includes defining the Company’s risk appetite, monitoring of risk performance and those risks that may have a material impact to the business. Management is responsible for the implementation of the risk management and internal control system to manage the Company’s risk and to report to the Board whether those risks are being effectively managed.

The Company’s system to manage its material business risks includes the preparation of a risk register by management to identify the Company’s material business risks, analyse those risks, evaluate those risks (including assigning a risk owner to each risk) and treat those risks. Risks and their management are to be monitored and reviewed at least annually by senior management. The risk register is to be updated and a report submitted to the Managing Director. The Managing Director is to provide a risk report at least annually to the Board.

The Board has required management to design, implement and maintain risk management and internal control systems to manage the Company's material business risks.

A summary of the Company’s Risk Management Policy is disclosed on the Company’s website.

Recommendation 7.2 - The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.

The Board reviews the Company’s risk management framework annually to satisfy itself that it continues to be sound, to determine whether there have been any changes in the material business risks the Company faces and to ensure that the Company is operating within the risk appetite set by the Board. The Board carried out these reviews during the Reporting Period.

Recommendation 7.3 - A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.

The Company does not have an internal audit function. To evaluate and continually improve the effectiveness of the Company’s risk management and internal control processes, the Board relies on ongoing reporting and discussion of the management of material business risks as outlined in the Company’s Risk Management Policy.

Recommendation 7.4 - A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.

Refer to the company’s Annual Report for disclosures relating to the company’s material business risks (including any material exposure to economic, environmental or social sustainability risks). Refer to commentary at Recommendations 7.1 and 7.2 for information on the company’s risk management framework.

Principle 8 – Remunerate fairly and responsibly

Recommendation 8.1 - The board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.

The Board has not established a separate Remuneration Committee, and therefore it is not structured in accordance with Recommendation 8.1. The Board believes that there would be no efficiencies gained by establishing a separate Remuneration Committee. Accordingly, the Board performs the role of Remuneration Committee. Items that are usually required to be discussed by a Remuneration Committee are marked as separate agenda items at Board meetings when required. When the Board convenes as the Remuneration Committee it carries out those functions which are delegated to it in the Company’s Remuneration Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Remuneration Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.

The full Board did not meet in its capacity as the Remuneration Committee during the Reporting Period.

To assist the Board fulfil its function as the Remuneration Committee, the Board has adopted a Remuneration Committee Charter which describes the role, composition, functions and responsibilities of the full Board in its capacity as the Remuneration Committee.

The Company’s Remuneration Committee Charter is disclosed on the Company’s website.

Recommendation 8.2 - A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration Report” which forms of part of the Directors’ Report and commences at page 10 of the Company’s 2015 Annual Report. The Company has not adopted a policy regarding the deferral of performance-based remuneration and the reduction, cancellation or clawback of the performance-based remuneration in the event of serious misconduct or a material misstatement in the Company’s financial statements as other punitive measures, including dismissal, are available to be utilised by the Company.

Recommendation 8.3 - A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it.

The Company's Remuneration Committee Charter includes a statement of the Company's policy on prohibiting executives and directors who may receive equity based remuneration from entering into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the equity based remuneration.

ORO VERDE LIMITED ASX ADDITIONAL INFORMATION

Additional information required by the Australian Securities Exchange Ltd and not disclosed elsewhere in this report is as follows. The information is current as at 8 September 2015.

(a) Statement of shareholdings

(a) Statement	of shareholdings
			Ordinary Shares
Range	Names of 20 largest shareholders		Fully paid
		No of holders	No. of shares held	% held
100,001or more	Inkjar Pty Ltd Martinick Inv PL Bernes Nominess PL Rovira Anthony Paul Dickson BD & GF Molina Sergio Rios Wildglade PL Semerdziev Ianaki Rovira Ria Jonkarh Pty Ltd Sunranger Enterprises PL Tkocz Mark Andrew Pedroso Resources PL Mirpin PL Lewis CS + JL Teofilova Liliana Blu Bone PL Upsky Equity PL Toll John Henry LevyJacques	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	43,801,282 41,212,761 32,125,114 23,750,000 12,500,000 10,000,000 8,166,667 6,148,000 5,625,000 5,625,000 5,500,000 5,194,523 5,000,000 5,000,000 4,500,000 4,461,000 4,166,667 4,166,667 4,166,667 4,166,625	9.54 8.98 7.00 5.17 2.72 2.18 1.78 1.34 1.23 1.23 1.20 1.13 1.09 1.09 0.98 0.97 0.91 0.91 0.91 0.91
	Various	20 240	235,275,973 212,083,464	51.27% 46.20%
	Sub-total
10,001 - 100,000	Various	231	10,183,588	2.22
5,001 – 10,000	Various	91	712,334	0.16
1,001 – 5000	Various	230	584,765	0.13
1 – 1,000	Various	241	108,285	0.02
Total		1,053	458,948,408	100.00%
	Holdingan unmarketableparcel	715	4,606,123	1.28%

The Company has the following unquoted options on issue.

	No of holders	Number of options
10 January2016,20 cent options	8	2,500,000
31 March 2016,4 cent options	2	1,000,000
30 September 2017,1 cent options	8	73,000,000
30 September 2017,5 cent options	8	73,000,000

Restricted Securities

There are no restricted securities.

ORO VERDE LIMITED ASX ADDITIONAL INFORMATION

(b) Voting Rights

All ordinary shares carry one vote per share without restriction.

(c) Market buy-back

There is no current on-market buy-back of shares.

(d) Substantial Shareholders

As at 8 September 2015 , shareholders who have notified the company in accordance with section 671B of the Corporations Act 2001

Beneficial Owner	No of Shares
Dr Bradford Farrell	47,101,281
Dr Wolf Gerhard Martinick	43,000,000
John Kopcheff	32,791,782
Anthony Paul Rovira	20,000,000

Schedule of Mining Tenements Held

	Common	Type of	Concession
Project	Name	Concession	No.	Percentage Held
San Isidro	San Isidro	Exploration	1351	100%
Presillitas	Topacio	Exploration	39	0%1

Oro Verde Limited holds a right to aquire a 100% interest in this project.

AI assistant

IONIC RARE EARTHS LIMITED — Annual Report 2015

65151_rns_2015-09-24_b914e40f-c242-4a09-9a26-090d73dd94ec.pdf

ANNUAL REPORT

Directors

Company Secretary

Registered Office and Principal Place of Business

Share Registry

Auditors

Bank

DIRECTORS

W G Martinick B.Sc, Ph.D. FAusIMM. (Chairman)

T I Woolfe B.Sc (Hons) GradCert AppFin, MAusIMM, MAIG, GAICD (Managing Director)

B D Dickson B.Bus, FCPA – ( Finance Director & Company Secretary) – Appointed 21 November 2014

B L Farrell B.Sc (Hons Econ Geol), M.Sc, Ph.D, FAusIMM, MICA, CPGeol, MIMM, CEng.

(Technical Director)

A P Rovira BSc (Hons), MAusIMM - (Non-Executive Director) - Appointed 21 November 2014

ORO VERDE LIMITED DIRECTORS’ REPORT

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

INTERESTS IN CONTRACTS OR PROPOSED CONTRACTS WITH THE COMPANY

DIRECTORS’ MEETINGS

ORO VERDE LIMITED DIRECTORS’ REPORT

DIVIDENDS PAID OR PROPOSED

CORPORATE INFORMATION

Principal Activities

Employees

OPERATING AND FINANCIAL REVIEW

Group Overview

Operating Results

ORO VERDE LIMITED DIRECTORS’ REPORT

Year in Review

Review of Financial Position

Exploration

Topacio Gold Project (Nicaragua – OVL right to acquire 100%)

ORO VERDE LIMITED DIRECTORS’ REPORT

2,716,176 tonnes at 3.9 g/t gold, containing 340,345 ounces of gold, at a 1.5 g/t gold cut-off[1]

ORO VERDE LIMITED DIRECTORS’ REPORT

San Isidro Gold Project (Nicaragua - 100% OVL)

Country Manager – Nicaragua

LIKELY DEVELOPMENTS

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

ENVIRONMENTAL REGULATION AND PERFORMANCE

PROCEEDINGS ON BEHALF OF COMPANY

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited)

Details of key management personnel

(i) Directors

Remuneration philosophy

Remuneration structure

Compensation of Directors and Executive Officer

(i) Compensation Policy

REMUNERATION REPORT (Audited) (Continued)

(iii) Executive Compensation

Objective

Structure

(iv) Fixed Compensation

Objective

Structure

(v) Variable Compensation

Objective

Share-based compensation

Structure

Employment contracts

Mr T I Woolfe , Managing Director:

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited) (Continued)

Compensation of Key Management Personnel (Consolidated and Parent)

Compensation Options: Granted and Vested during the year.

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited) (Continued)

Shareholdings of Key Management Personnel

Other Transactions

ORO VERDE LIMITED DIRECTORS’ REPORT

REMUNERATION REPORT (Audited) (Continued)

Company’s Performance

Company’s share price performance

Loss per share

Voting and comments made at the company’s 2014 Annual General Meeting

End of Remuneration Report (Audited)

CORPORATE GOVERNANCE

IONIC RARE EARTHS LIMITED Annual Report 2015