LOTUS RESOURCES LIMITED - Annual Report 2017

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ABN 38 119 992 175

A N N U A L R E P O R T for the year ended 30 June 2017

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C O R P O R A T E D I R E C T O R Y

Directors	Mr Jie Chen Non-Executive Director
	Mr Gang Xu Managing Director
	Mr Keong Chan Non-Executive Director
	Mr Tim Kestell Non-Executive Director
Company Secretary	Mr. Keong Chan
Principal Place of Business and	Suite 8, 1297 Hay Street
Registered Office	West Perth, Western Australia, 6005
	Telephone: +61 8 9322 6009
	Facsimile: +61 8 9322 6128
Website Address	www.rivaresources.com.au
Auditor	RSM Australia Partners
	Level 32, Exchange Tower
	2 The Esplanade
	Perth WA 6000
Solicitor	Steinepreis Paganin
	Level 4, Next Building
	16 Milligan Street
	Perth, Western Australia, 6000
Share Registry	Computershare Investor Services Pty Ltd
	Level 2, Reserve Bank Building
	45 St George's Terrace
	Perth, Western Australia, 6000
	Telephone: + 61 8 9323 2000
	Facsimile: + 61 8 9323 2033
Securities Exchange	ASX Limited
	Level 40, Central
	Park
	152-158 St
	Georges Terrace
	Perth, Western Australia, 6000
	ASX Code: RIR

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C O N T E N T S

	PAGE
Corporate Directory
Directors' Report	4
Auditor’s Independence Declaration	11
Audited Remuneration Report	16
Corporate Governance Statement	22
Financial Statements	29
Directors' Declaration	59
Independent Auditor’s Report	60
ASX Additional Information	64

D I R E C T O R S ’ R E P O R T

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The Directors present their report together with the financial report of Riva Resources Ltd (the Company or Riva Resources ) for the year ended 30 June 2017 and the auditor’s report thereon.

DIRECTORS

The Directors of the Company at any time during or since the end of the financial year are:

Mr Jie Chen

Non-Executive Director

Special Responsibilities: Member of the Nomination and Remuneration Committee Chair of the Audit and Risk Committee

Mr Chen has over 30 years of operational and management experience in the mining industry in the People’s Republic of China ( PRC ). He started his mining and management career in 1979 with a large China state-owned coal mining enterprise in the PRC. Mr Chen was the former chairman of the Shandong Taishan Sunlight Group Company Limited ( Shandong Group ) since 2002. Under his leadership, the Shandong Group formed three vertically integrated businesses in coal, iron ore mining, processing and manufacturing with operations in Shandong, Guizhou, Ningxia and Xinjiang. The coal mine under his management holds a safety record of over 5,000 days with no fatality.

Mr Chen has a Masters degree in economics and is currently working on a doctorate degree in mine engineering with the China University of Mining and Technology. He has received numerous distinguished awards at provincial and national levels for his achievements in entrepreneurship and leadership including being one of the 10 excellent entrepreneurs in Shandong Province, top 20 best mine managers in the PRC and PRC’s excellent entrepreneur.

Mr Jonathan King

Managing Director – Appointed 14 September 2016, resigned 7 June 2017

Mr King is a mining executive with more than 25 years’ experience in the mining industry in various exploration and technical roles with responsibility from project generation to project acquisition through to exploration, evaluation drilling and production, predominantly in iron ore, base metals and gold. Jonathan received an honours degree in Geology from Curtin University (WA) and has worked in research (CSIRO and UWA), and in exploration, operational, and consulting roles for companies, including Placer Dome, Barrick Gold, Rio Tinto, Robe River Mining and Associates, Homestake Mining, Gold Fields Australasia, St Ives Gold Mining Company, BC Iron, Dacian Gold Limited, Gondwana Resources, Harmony Gold, Emergent Resources, Troy Resources, Dampier Gold, and Great Central Mines. Jonathan was a founding director of Paringa Resources Limited and also served as Technical Director of Conto Resources Limited. Jonathan has worked in Korea, Fiji, China, Africa, Indonesia, USA, Mexico, Brazil, Colombia, Peru and Australia.

Mr Gang Xu

Managing Director

Special Responsibilities: Managing Director till 13 September 2016, and from 8 June 2017 Member of the Audit and Risk Committee

Mr Xu is a geologist with over 20 years’ experience in the mining and energy industry. He spent 9 years as a senior exploration geologist with the China National Nuclear Corporation (CNNC) which explored for uranium in eastern and northern China. Mr Xu was also the Finance and Marketing Manager for Sino Gold Limited which developed the first international standard mining operation in the PRC. In addition to his technical skills and experience in exploration and mining, he has significant diverse experience in business research, marketing and finance.

Mr Xu completed his Masters of Business Administration in the United States in 1997. He also completed his Masters of Geology in the PRC. He is a member of AusIMM.

D I R E C T O R S ’ R E P O R T ( c o n t ’ d )

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Mr Keong Chan

Non-Executive Director

Special Responsibilities: Chairman of the Nomination and Remuneration Committee Member of the Audit and Risk Committee

Mr. Chan holds a Bachelor of Commerce from the University of Western Australia and a Master of International Customs Law and Administration from the University of Canberra.

Mr Joel Fishlock

Non-Executive Director – appointed 15 August 2016, resigned 10 October 2016

Joel Fishlock is an adviser at Morgans, Australia's largest national full-service retail stockbroking and wealth management firm. He has worked in investment banking both domestically and internationally for the past 9 years advising on capital raisings, corporate advice and portfolio management. Mr. Fishlock has advised and funded numerous ASX and international companies from early stage seed capital, through to IPO across a range of sectors including resources, energy and technology.

Joel is a registered ASIC compliant (RG 146) Securities Adviser. He also holds a Diploma of Financial Services (Financial Planning) - KAPLAN and is currently completing a Masters in Applied Finance and Investment.

Mr Tim Kestell

Non-Executive Director – appointed 7 September 2017

Mr Kestell has over 20 years’ experience in Capital markets including working for Australian stockbrokers Euroz Securities and Patersons. In the past 14 years Mr Kestell has played a key role in floating and or re-capitalising publicly listed companies, he is currently a director of Neon Capital Limited and Blue Capital Limited.

COMPANY SECRETARY

Mr Keong Chan

Mr. Chan has provided advice to a number of companies on corporate matters in relation to capital raisings, IPOs, back door listings, mergers and acquisitions, takeovers/divestments and has sat on or acted as an advisor to a number of ASX listed boards. Mr. Chan holds a Bachelor of Commerce from the University of Western Australia and a Master of International Customs Law and Administration from the University of Canberra.

D I R E C T O R S ’ R E P O R T ( c o n t ’ d )

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DIRECTORSHIPS IN OTHER LISTED ENTITIES

Directorships of other listed entities held by directors of the Company during the last 3 years immediately before the end of the financial year are as follows:

		Period of	directorship
Director	Company	From	To
Mr J Chen	Nil	-	-
Mr G Xu	Nil	-	-
Mr K Chan	Soil Sub Technologies Ltd	07/01/2010	07/07/2016
	Augend Ltd	09/06/2016	Current
	Ishine Intl Resources Ltd	15/11/2016	Current
Mr J Fishlock*	Nil	-	-
Mr Jonathan King**	Nil	-	-

Appointed 15 August 2016, resigned 10 October 2016
** Appointed 14 September 2016, resigned 7 June 2017

DIRECTORS’ INTERESTS

The relevant interest of each director in the securities of the Company at the date of this report is as follows:

Director	Ordinary shares	Options
Mr J Chen	-	-
Mr G Xu	31,192,413	5,000,000
Mr K Chan	-	5,000,000
Mr J Fishlock*	-	-
Mr Jonathan King**	-	-
Mr Tim Kestell***	102,879,315	-

Appointed 15 August 2016, resigned 10 October 2016
** Appointed 14 September 2016, resigned 7 June 2017
*** Appointed 7 September 2017

D I R E C T O R S ’ R E P O R T ( c o n t ’ d )

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DIRECTORS’ MEETINGS

The number of directors’ meetings (including meetings of committees of directors) and the number of meetings attended by each of the directors of the Company during the financial year are:

			Nomination and	Nomination and
			Remuneration Committee		Audit and Risk
	Board	Meetings		Meetings	Committee Meetings
Director	Held	Attended	Held	Attended	Held	Attended
Mr J Chen	2	1	-	-	-	-
Mr G Xu	2	2	-	-	-	-
Mr K Chan	2	2	-	-	-	-
Mr J Fishlock*	2	1	-	-	-	-
Mr Jonathan King**	2	2	-	-	-	-

Appointed 15 August 2016, resigned 10 October 2016
** Appointed 14 September 2016, resigned 7 June 2017

Committee membership

As at the date of the report, the Company had a Nomination and Remuneration Committee and an Audit and Risk Committee of the Board of Directors:

Members acting on the committees of the Board during the financial year were:

Nomination and Remuneration Committee	Audit and Risk Committee
Mr K Chan (Chairman)	Mr J Chen (Chairman)
Mr J Chen	Mr K Chan
	Mr G Xu

PRINCIPAL ACTIVITY

The principal activity of the Company during the year was the development of interests in exploration projects in the resource industry in Australia.

D I R E C T O R S ’ R E P O R T ( c o n t ’ d )

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SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

The Company’s net assets increased by $2,526,927 to $3,101,500 during the financial year. The increase in net assets principally relates to the capital raised during the year.

RESULTS

The Company incurred a loss of $5,073,706 for the financial year after income tax (2016: loss of $6,873,784). This loss included the incurrence of $805,239 (2016: $106,838) in exploration expenditure in accordance with the Company’s accounting policies, and corporate and administrative costs of $1,096,725 (2016: $488,097).

REVIEW OF ACTIVITIES

During the year, the Company focused its activities in development of interests in exploration projects in the resource industry in Australia.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The Company will continue to pursue its main objective of developing interests in exploration projects. The Company also expects to pursue other acquisition and joint venture opportunities.

Further information about likely developments in the operations of the Company and the expected results of those operations in future financial years have not been included in this report because disclosure of such information would likely result in unreasonable prejudice to the Company.

DIVIDENDS

No dividend has been declared or paid by the Company to the date of this report.

ENVIRONMENTAL REGULATION

Riva Resources’ exploration and mining activities are governed by a range of environmental legislation and regulations. The National Greenhouse and Energy Reporting Act 2007 require the entity to report its annual greenhouse gas emissions and energy use.

As the Company is still in the development phase of its interests in exploration projects, Riva Resources is not yet subject to the public reporting requirements of environmental legislation and regulations. To the best of the directors’ knowledge, the Company has adequate systems in place to ensure compliance with the requirements of the applicable environmental legislation and is not aware of any breach of those requirements during the financial year and up to the date of the Directors’ Report.

EVENTS OCCURRING AFTER THE REPORTING PERIOD

In August 2017, the Company sold its interest in Rocklea Iron Ore Project to an unrelated third party, WA Iron Pty Ltd for the consideration of $150,000 (excl. GST) cash payment and 1% royalty on FOB revenue of any iron ore mined from the Project and sold or otherwise disposed of by the Buyer. The Project is not considered to be core to the Company’s portfolio of assets, and the Board decided to dispose of the project to better focus on existing projects & new opportunities.

Tim Kestell joined the Board as a non-executive director, effective 7 September 2017. Mr. Kestell has over 20 years’ experience in capital markets including working for Australian stockbrokers Euroz Securities and Patersons. In the past 14 years he has played a key role in floating and re-capitalising publicly listed companies. He’s currently a director of Neon Capital Ltd and Blue Capital Ltd.

Mr Jie Chen, a current non-executive director of the Company, tendered his resignation effective 1 November 2017.

Other than the above, there has no other events other than disclosed above arisen in the interval between the end of the year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

D I R E C T O R S ’ R E P O R T ( c o n t ’ d )

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OPTIONS

Options granted

There were 25 million incentive options granted during the year at an exercise price of $0.03 for each. No other options expired since the end of the year.

Options expired

10 million incentive options expired during the year. No other options expired since the end of the year.

The balances of options on issue at the date of this report are comprised of the following:

Number	Grant Date	Exercise Price	Expiry Date
Unlisted Options
10,000,000	30 November 2016	$0.03	31 December 2019
5,000,000	23 December 2016	$0.03	31 December 2019
15,000,000

INDEMNIFICATION OF OFFICERS AND AUDITORS

Indemnification

The Company has agreed to indemnify the current Directors and Company Secretary of the Company against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as directors and company secretary of the Company, except where the liability arises out of conduct involving a lack of good faith.

The agreement stipulates that the Company will meet to the maximum extent permitted by law, the full amount of any such liabilities, including costs and expenses.

Insurance Premiums

The Company paid a premium during the year in respect of a director and officer liability insurance policy, insuring the directors of the Company, the company secretary, and all executive officers of the Company against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The directors have not included details of the nature of the liabilities covered in respect of the directors’ and officers’ liability and legal expenses’ insurance contracts, as such disclosure is prohibited under the terms of the contract.

Proceedings on behalf of the Company

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

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

D I R E C T O R S ’ R E P O R T ( c o n t ’ d )

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NON-AUDIT SERVICES

Details of amounts paid or payable to the Company’s auditor, RSM Australia Partners ( RSM ), for audit and non-audit services provided during the year are set out in note 4.

The Board and the Audit and Risk Committee are satisfied that the provision of the non-audit services is compatible with 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 did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

(a) all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor
(b) none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants .

REMUNERATION REPORT

The Remuneration Report sets out on pages 16 to 21 forms part of the Directors’ Report and signed as part of it.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 11 and forms part of the Directors’ Report.

AUDITOR

RSM Australia Partners continues in office in accordance with Section 327 of the Corporations Act 2001 .

Dated at Perth, Western Australia this 29[th] day of September 2017.

Signed in accordance with a resolution of the directors:

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Mr Keong Chan Director

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RSM Australia Partners

Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111

www.rsm.com.au

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Riva Resources Limited for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

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Perth, WA Dated: 29 September 2017

RSM AUSTRALIA PARTNERS

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TUTU PHONG Partner

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each memb er of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036

Liability limited by a scheme approved under Professional Standards Legislation

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R E V I E W O F A C T I V I T I E S

Overview

Riva Resources is an exploration company controlling a portfolio of tenements in Western Australia.

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Pilbara Iron Project- Rocklea Deposits (RIR: 100%)

The Pilbara Iron Project is Riva Resources’s most advanced project, comprising the Rocklea Channel Iron Deposit (CID) in the central Pilbara Iron Ore Province of Western Australia.

The Rocklea Deposit is located 33km SW of the mining town of Tom Price. It is situated on the eastern margin of the Rocklea Dome where Archaean age Fortescue Group Formations dip to the east and are overlain by Tertiary age CID and other Cainozoic deposits of sand and gravels. The CID comprises goethitic and hematitic detrital deposits of the Tertiary Robe Pisolites. Riva Resources acquired the Rocklea Project in 2010, and its southern extension in 2012.

A number of studies have been completed and negotiations in process with regards to development of the Pilbara Iron Project. A Mining Proposal for a Rocklea Early Tonnes mining operation, incorporating a mine planning study, an environmental management plan and a mine closure plan was submitted to the Department of Mines & Petroleum in 2014. This proposal has been

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reviewed and Riva Resources followed up a number of DMP queries for further information.

Following a review, the mining lease 47/1471 was reduced in size, and an application for a retention licence was submitted to the DMP.

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R E V I E W O F A C T I V I T I E S

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Proposed Mine Plan
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Ashburton Project (RIR: 7.2%)

The Ashbburton Project is located in the Ashburton Basin, and is 10 to 40km from rail and other infrastructure associated with the Paraburdoo iron ore operations of Rio Tinto Limited.

Field reconnaissance demonstrated a paucity of outcrop over E08/2211 and E08/2209. These tenements host the greatest thicknesses and areal extent of Cainozoic sediments, which potentially fill palaeochannels presently incised by Turee Creek as it flows south into Ashburton River. The braided drainages of Turee Creek and Seven Mile Creek drain the ranges of the Brockman Iron Formation near Paraburdoo, as such these palaeochannels may host detrital and/or CID mineralisation.

Elevated alluvial gravel beds are evident with the ground surface dominated in parts by iron (hematite) gravels. Small outcrops were rarely observed, the most interesting a foliated, ferruginised sediment and ironstones- possibly shear or gossan in the basement sediment. This outcrop returned up to 51% Fe, 555ppm Zn and 292ppm Ni (2007-2010 sampling) and may be associated with mantle tapping structures, namely the Barings Down Fault which transects E08/2211 (identified by a 2011 regional seismic survey).

g programme on E08/2211 & E47/2417 was

delayed awaiting access via Rio Tinto’s service road. Further exploration strategies have subsequently been developed to investigate potential base metal and gold targets, greatly enhanced by recent DMP releases of seismic data in 2012 and a regional EM survey over the project area in 2014.

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In April 2013 Riva Resources entered into a JV agreement with Shandong Energy Australia Pty Ltd and Shandong Lunan Geo-Engineering Exploration Institute. The JV Partners are required to spend $300,000 on exploration on the Ashburton Project to acquire 30% participating interest in the tenements (Stage One Expenditure) and have the option to acquire an additional 20% participating interest in the JV by spending an additional amount of $700,000 on exploration on the Ashburton Project (Stage Two Expenditure). The JV Partners have fulfilled the Stage One and Two expenditure commitments to earn a 50% participating interest in the JV.

Further, the JV partners have the option to spend an additional $1,000,000 on exploration on the Ashburton project to acquire an additional 15% participating interest in the JV (Stage three expenditure).

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R E V I E W O F A C T I V I T I E S

A supplementary agreement was signed with the JV partners on 28 October 2015. Under the supplementary agreement:

Shandong Energy & Lunan will fund an additional $187,598 expenditure on the Ashburton project to earn an additional 2.8% participating interest.
Stage three expenditure is removed.

Petroleum Project (RIR: 100%)

Considering the current market condition and the Company’s focus, Riva Resources has submitted a written withdrawal notice to DMP on 25 June 2016 for the Application. On 4 July, DMP confirmed tha DLE’s application STP-EPA-0123 has been withdrawn effective 25 June 2016.

Tabac Project (RIR: 100%)

The Tabac Project is located on the Goldfields Highway 30km west of Wiluna and 135km east of Meekatharra in the Northern Goldfields Region of Western Australia. The Project sits adjacent to the Paroo Station Mine and camp (previously known as the Magellan Lead Mine), which is on care and maintenance.

The Project consists of two exploration licence applications, 53/1891 & 53/1895 (ELA’s), covering a combined area of 111.5km[2] .

The Project is located within the Yerrida Basin (referred to previously as the Glengarry Sub-basin), which lies on the northern margin of the Archean Yilgarn Block, and forms as part of the Capricorn Orogen. The Yerrida Basin represents an intracratonic sag basin containing siliciclastic rocks and evaporites of the Windplain Group overlain unconformably by siliciclastics and mafic extrusive and intrusive rocks of the Mooloogool Group. Within the Project area, outliers of the Yelma Formation of the Earaheedy Group unconformably lie over rocks of the Yerrida Basin.

The Windplain Group includes the Juderina Formation, which crops out in the southern third of the Project. The Juderina Formation comprises of siliciclastics (deposited as continental “red beds” or haematite-rich sandstones and siltstone), evaporates, argillites, and locally turbidites. It includes the chertified stromatolitic carbonate and evaporitic sedimentary units of the Bubble Well Member, which is the likely mineralised host at Tabac.

The depositional environment for the Windplain Group is thought to be a shallow epicontinental (or inland) sea, locally with sabkha (salt flat) environments.

Archean rocks of the adjacent Joyner’s Find Greenstone Belt formed a number of basement highs (or coastal headlands) during the shelf sedimentation phase. Sediments deposited west of the headlands predominantly comprise shales, whereas those deposited between or east of the headlands are mainly composed of carbonates.

Within the southern parts of the Yerrida Basin, sediments are commonly flat-lying. Any folding is very gentle, and where described comprises north-northwest and northeast open folds. The overlying Earaheedy Group sediments appear to have undergone relatively minor structural deformation.

The palaeoenvironment at Tabac, including the types of rocks deposited (evaporites and carbonates), their age (Proterozoic), site of deposition (platform sediments), and the broader geological context of a developing fold and thrust belt, is analogous to Zambian Copperbelt and/or Kuferschiefer-style mineralisation.

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R E V I E W O F A C T I V I T I E S

Riva Resources Tenement Schedule	Riva Resources Tenement Schedule	Riva Resources Tenement Schedule	Riva Resources Tenement Schedule	Riva Resources Tenement Schedule	Riva Resources Tenement Schedule	Riva Resources Tenement Schedule
Project	Tenement	Area (km2)	Status	Registered Holder	Ownership	Grant Date
MINERAL PROJECTS
Pilbara Region
Ashburton	E08/2211-I	167.0	Granted	Riva Resources Ltd^	47.2%	28/07/2011
	E08/2210-I	145.1	Granted	Riva Resources Ltd^	47.2%	02/03/2012
	E08/2209-I	132.2	Granted	Riva Resources Ltd^	47.2%	02/03/2012
	E47/2417-I	63.1	Granted	Riva Resources Ltd^	47.2%	02/12/2011
Rocklea	E47/952-I	78.7	Granted	Riva Resources Ltd	100%	21/01/2008
	P47/1429-I	0.7	Granted	Riva Resources Ltd	100%	10/09/2009
	R47/8-I	6.077	Granted	Riva Resources Ltd	100%	06/11/2015
Tabac	E53/1891		Granted	Riva Resources Ltd	100%	13/1/17
	E53/1895		Granted	Riva Resources Ltd	100%	1/3/17

^ Shandong Energy/Lunan JV

A U D I T E D R E M U N E R A T I O N R E P O R T

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This Remuneration Report outlines the director and executive remuneration arrangements of the Company in accordance with the requirements of the Corporations Act 2001 (the Act) and its Regulations.

For the purposes of this report, key management personnel of the Company are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

KEY MANAGEMENT PERSONNEL

The following were key management personnel of the Company at any time during the financial year and unless otherwise indicated were key management personnel for the entire financial year:

Name	Position held
Mr J Chen	Executive Chairman
Mr G Xu	Managing Director
Mr Jonathan King	Managing Director- Resigned 7 June 2017
Mr Keong Chan	Non-Executive Director & Company Secretary
Mr Joel Fishlock	Non-Executive Director – Resigned 10 October 2016

NOMINATION & REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing remuneration policies for the directors and executives. If necessary, the Nomination and Remuneration Committee obtains independent advice on the appropriateness of remuneration packages given trends in comparable companies and in accordance with the objectives of the Company. No advice was obtained during the year.

Further information on the Nomination and Remuneration Committee’s role, responsibilities and membership is set out in the section entitled Corporate Governance Statement in this Annual Report.

PRINCIPLES OF REMUNERATION

The remuneration structures explained below are competitively set to attract and retain suitably qualified and experienced candidates, reward the achievement of strategic objectives and achieve the broader outcome of creation of value for shareholders. The remuneration structures take into account:

the capability and experience of the key management personnel;
the key management personnel’s ability to control the achievement of strategic objectives;
the Company’s performance including:
the growth in share price; and
the amount of incentives within each key management person’s compensation.

Given the evaluation and developmental nature of the Company’s principal activity, the overall level of compensation does not have regard to the earnings of the Company.

REMUNERATION STRUCTURE

In accordance with best practice corporate governance, the structure of non-executive directors’ remuneration is clearly distinguished from that of executives.

Non-executive director remuneration

The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. Total remuneration for all non-executive directors, last voted upon by shareholders at the 2007 General Meeting, is not to exceed $500,000 per annum. Directors’ fees cover all main board activities and membership of committees.

Non-executive directors may receive performance related compensation.

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A U D I T E D R E M U N E R A T I O N R E P O R T ( c o n t ’ d )

REMUNERATION STRUCTURE (cont’d)

Non-executive director remuneration (cont’d)

Non-executive directors do not receive any retirement benefits, other than statutory superannuation.

Executive remuneration

Remuneration for executives is set out in employment agreements. Details of these employment agreements are provided below.

Executive directors may receive performance related compensation but do not receive any retirement benefits, other than statutory superannuation.

Fixed remuneration

Fixed remuneration consists of base compensation (which is calculated on a total cost basis and includes any FBT charges related to employee benefits including motor vehicles) as well as employer contributions to superannuation funds.

Fixed remuneration is reviewed annually by the Nomination and Remuneration Committee through a process that considers individual and overall performance of the Company. As noted above, the Nomination and Remuneration Committee has access to external advice independent of management.

Short-term and Long-term incentive

The Company does not have any short-term and long-term incentive plans.

A U D I T E D R E M U N E R A T I O N R E P O R T ( c o n t ’ d )

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REMUNERATION STRUCTURE (cont’d)

Consequences of performance on shareholder wealth (cont’d)

Due to the Company currently being in an evaluation and developmental phase, the Company’s earnings is not considered to be a principle performance indicator. However, the overall level of key management personnel remuneration takes into account the achievement of strategic objectives, service criteria and growth in share price.

There were no performance related remuneration transactions during the financial year (2016: nil).

EMPLOYMENT AND CONSULTANCY AGREEMENTS

The Company has entered into an employment agreement with its directors. The employment agreements outline the components of remuneration paid to the directors and are reviewed on an annual basis.

During the financial year ended 30 June 2017, the following base salary applies:

Name	Base Salary/fees(p.a)	Term of Agreement	Notice Period
Mr G Xu	$36,000	No fixed term	3 month
Mr J Chen	$21,918	No fixed term	3 month
Mr J King (i)	$210,000	No fixed term	3 month
Mr K Chan	$84,000	No fixed term	3 month
Ms JFishlock(ii)	$36,000	Nofixed term	3month

(i) Appointed 14 Sept 2016, Resigned 7 June 2017

(ii) Appointed 15 Aug 2016, Resigned 10 Oct 2016

Directors have no entitlement to termination payment in the event of removal for misconduct.

No remuneration consultants have been used during the year.

Employment and consultancy agreements details

The Company has entered into a consultancy agreement with Xu and Liu Pty Ltd with Mr Gang Xu to act as the Company’s Managing Director. Under the agreement, Xu and Liu Pty Ltd was paid $120,000 per annum (GST exclusive) plus 9.5% superannuation effective from 1 July 2015. Subsequent to a review of Mr Xu’s contract in July 2016, his consultancy fee was reduced to $5,000 per month (GST exclusive) plus 9.5% superannuation for the 3 months ending 31 October 2016, and further reduced to $3,000 per month (GST exclusive) plus 9.5% superannuation effective from 1 November 2016. Mr Xu is a director and a beneficiary of Xu and Liu Pty Ltd. The consultancy agreement can be terminated with a 3 months’ notice.

The Company appointed Mr K Chan as a Non-executive Director and Company Secretary on 1 December 2015. Mr Chan’s monthly salary was $2,500 per month, which was increased to $7,000 per month effective August 2016, subsequent to a review of his contract. The consultancy agreement can be terminated with a 3 months’ notice.

The Executive Chairman of the Company, Mr Jie Chen’s annual base salary was reduced from $54,795 p.a. to $21,918 plus 9.5% superannuation effective from 1 August 2016. The consultancy agreement can be terminated with a 3 months’ notice.

The Company appointed Mr Jonathan King in the capacity of Managing Director, effective from 14 September 2016. Mr King was paid a salary of $210,000 per year plus superannuation and resigned effective 7 June 2017.

The Company appointed Mr Joel Fishlock in the capacity of Non-executive Director, effective from 15 August 2016. Mr Fishlock was paid a salary of $36,000 per year and resigned effective 10 October 2016.

A U D I T E D R E M U N E R A T I O N R E P O R T ( c o n t ’ d )

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REMUNERATION OF KEY MANAGEMENT PERSONNEL

Details of the nature and amount of each major element of the remuneration of each key management person of the Company are:

				POST-	SHARE-
		SHORT TERM		EMPLOYM	BASED
				ENT	PAYMENTS
		Salary & fees $ Non- Monetary $		Superannuat ion $	Options $	Total $	Fixed Remuneration %	Performance Based Remuneration %
Directors
Non-executive
Mr K Chan	2017	79,500	-	-	35,647	115,147	69%	31%
	2016	17,500	-	-	-	17,500	100%	-
Mr Van Uffelen (i)	2017	-	-	-	-	-	-	-
	2016	7,500	-	-	-	7,500	100%	-
MrJoel Fishlock (ii)	2017	9,000	-	-	-	9,000	100%	-
	2016	-	-	-	-	-	-	-
Executive
Mr J Chen	2017	24,658	-	2,342	-	27,000	100%	-
	2016	54,795	-	5,205	-	60,000	100%	-
Mr G Xu	2017	49,000	-	4,655	35,647	89,302	60%	40%
	2016	120,000	-	11,400	-	131,400	100%	-
Mr J King (iii)	2017	220,892	-	20,485	71,294	312,671	77%	23%
	2016	-	-	-	-	-	-	-
Ms N Liang (iv)	2017	-	-	-	-	-	-	-
	2016	28,000	-	-	-	28,000	100%	-
*Total, all* *directors*	2017	383,050	-	27,482	142,588	553,120
*and executive*	2016	227,795	-	16,605	-	244,400

(i) Resigned 31 December 2015. (ii) Appointed 15 Aug 2016, resigned 10 Oct 2016.

(iii) Appointed 14 Sept 2016, resigned 7 June 2017

(iv) Resigned 1 December 2015

USE OF REMUNERATION CONSULTANTS

During the year, the Company did not use any remuneration consultants.

VOTING AND COMMENTS MADE AT THE COMPANY’S 2016 ANNUAL GENERAL MEETING

Riva Resources Ltd received 100% of “yes” votes on its remuneration report for the 2016 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

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A U D I T E D R E M U N E R A T I O N R E P O R T ( c o n t ’ d )

OPTIONS HOLDINGS OF KEY MANAGEMENT PERSONNEL

2017	Held at 1 July 2016 Granted as compensation	Exercised Other changes	Held at date of resignation Held at 30 June 2017	Vested during the year Vested and exercisable at 30 June 2017
Mr J Chen Mr G Xu Mr J King (iii) Mr K Chan Mr J Fishlock (ii)	- - - 5,000,000 - 10,000,000 - 5,000,000 - -	- - - - - - - - - -		- - - 5,000,000 - - - 5,000,000 - -
			- -
			- 5,000,000
			(10,000,000) -
			- 5,000,000
			- -
2016	Held at 1 July 2015 Granted as compensation	Exercised Other changes	Held at date of resignation Held at 30 June 2016	Vested during the year Vested and exercisable at 30 June 2016
Directors Mr J Chen Mr G Xu Mr M van Uffelen (i) Mr K Chan Ms Nancy Liang (iv)	- - - - - - - -	- - - - - - - -		- - - - - - - -

			- -
			- -
			- -

			- -

(i) Resigned 31 December 2015.

(ii) Appointed 15 Aug 2016, resigned 10 Oct 2016.

(iii) Appointed 14 Sept 2016, resigned 7 June 2017 (iv) Resigned 1 December 2015

SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL

		Held at date		Received		Held at date	Held at
	Held at	of		on exercise	Other	of	30 June
2017	1 July2016	appointment	Purchases	of options	changes	resignation	2017
Mr J Chen	-	-	-	-	-	-	-
Mr G Xu	13,596,207	-	14,343,900	-	-	-	27,940,107
Mr J King (iii)	-	-	-	-	-	-	-
Mr K Chan	-	-	-	-	-	-	-
Mr J Fishlock(ii)	-	-	-	-	-	-	-
		Held at date		Received		Held at date	Held at
	Held at	of		on exercise	Other	of	30 June
2016	1July2015	appointment	Purchases	ofoptions	changes	resignation	2016
Mr J Chen	-	-	-	-	-	-	-
Mr G Xu	13,596,207	-	-	-	-	-	13,596,207
Mr M van Uffelen (i)	-	-	-	-	-	-	-
Mr K Chan	-	-	-	-	-	-	-
Ms Nancy Liang (iv)	-	-	-	-	-	-	-

(i) Resigned 31 December 2015. (ii) Appointed 15 Aug 2016, resigned 10 Oct 2016.

(iii) Appointed 14 Sept 2016, resigned 7 June 2017

(iv) Resigned 1 December 2015

A U D I T E D R E M U N E R A T I O N R E P O R T ( c o n t ’ d )

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Equity-based compensation

The company issued a total of 20 million incentive options as per the above table, at an exercise price of $0.03 for each. All options were granted over unissued fully paid ordinary shares in the company. Options vested immediately upon the grant date of the options. Options are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such options other than on their potential exercise.

Other transactions with key management personnel

There were no other transactions with key management personnel during the year.

Amounts owed to key management personnel

Amounts owed to Director, Mr Jie Chen, as director fee as of reporting date is $521.

Loan with key management personnel

There is no loan with key management personnel transactions during the year.

[This is the end of the audited remuneration report.]

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C O R P O R A T E G O V E R N A N C E S T A T E M E N T

The Board and management of Riva Resources Limited ( Riva Resources or the Company ) recognise their duties and obligations to shareholders and other stakeholders to implement and maintain a robust system of corporate governance. The Company believes that the adoption of good corporate governance adds value to stakeholders and enhances investor confidence.

The Company acknowledges the ASXCGC Principles and Recommendations (ASXCGP) have been revised under Edition 3 and notes that as this Report outlines the Company’s corporate governance framework in place for the year ended 30 June 2017, it is reporting against Edition 2. The Company is currently in the process of reviewing its corporate governance framework in light of Edition 3 additions and modifications.

The Company’s corporate governance policies are available on the Company’s website: https://rivaresources.com.au/.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Board Charter

The Board is accountable to shareholders for the performance of the Company. The Board operates under a Board Charter that details its functions, responsibilities and powers and those delegated to management.

On appointment, non-executive directors receive formal letters of appointment setting out the terms and conditions of appointment. The formal letter of appointment covers the matters referred to in the guidance and commentary for Recommendation 1.1. Executive directors are employed pursuant to employment agreements.

Evaluation of the performance of senior executives

The performance of senior executives is evaluated in accordance with the Performance Evaluation Process. A performance evaluation for senior executives has taken place in the reporting period and was carried out in accordance with the process disclosed.

The Board Charter and Performance Evaluation Process are available on the Riva Resources website.

PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE

Composition of the Board

The Board currently consists of a managing director and two non-executive directors. Details of their skills, experience and expertise and the period of office held by each director have been included in the Directors’ Report. The number of board meetings and the attendance of the directors are set out in the Directors’ Report.

The roles of Chairman and the Managing Director are not exercised by the same individual. The Board Charter summarises the roles and responsibilities of the Chairman, Mr Chen and the Managing Director, Mr Xu.

Independence of non-executive directors and the Chairman of the Board

The Board has assessed the independence of the non-executive directors and the Chairman using defined criteria of independence and materiality consistent with the guidance and commentary for Recommendation 2.1.

The Chairman, as well as the majority of the Board (with the only exception of executive director Gang Xu) are assessed to be independent directors.

C O R P O R A T E G O V E R N A N C E S T A T E M E N T ( c o n t ’ d )

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Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of three members and is chaired by Mr van Uffelen (to 31 December 2015), Mr Chan (from 1 January 2016).

The Nomination and Remuneration Committee Charter sets out its role, responsibilities and membership requirements. The Charter reflects the matters set out in the commentary and guidance for Recommendation 2.4.

For information on the skills, experience and expertise of the Nomination and Remuneration Committee members, refer to the Directors’ Report.

Details of the members and their attendance at meetings of the Nomination and Remuneration Committee are included in the Directors’ Report.

In accordance with Recommendation 2.4 the Nomination and Remuneration Committee consist of a majority of independent directors.

Board renewal and succession planning

The appointment of directors is governed by the Company’s Constitution and the Appointment and Selection of New Directors policy. In accordance with the Constitution of the Company, no director except a managing director shall hold office for a continuous period in excess of three years or past the third annual general meeting following the director's appointment, whichever is the longer, without submitting for re-election.

The Company has not adopted a policy in relation to the retirement or tenure of directors.

The appointment of the company secretary is a matter for the Board. Information on the skills, experience and qualifications of the company secretary can be found in the Directors’ Report.

Evaluation of the performance of the Board, its committees and individual directors

The performance of the Board, its committees and individual directors are evaluated in accordance with the Performance Evaluation Process. Performance evaluations of the Board, the Nomination and Remuneration Committee, the Audit and Risk Committee and individual directors have taken place in the reporting period and were carried out in accordance with the process disclosed.

Induction and education

When appointed to the Board, a new director will receive an induction appropriate to their experience. Directors may participate in continuing education to update and enhance their skills and knowledge from time to time, as considered appropriate.

Access to information and advice

Directors are entitled to request and receive such additional information as they consider necessary to support informed decision-making. The Board also has a policy under which individual directors and Board committees may obtain independent professional advice at the Company’s expense in relation to the execution of their duties, after consultation with the Chairman.

The Company’s Constitution, Nomination and Remuneration Committee Charter and the policy for Appointment and Selection of New Directors are available on the Riva Resources website.

PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING

Code of Conduct

The Code of Conduct applies to all directors and officers of the Company. It sets out Riva Resources’s commitment to successfully conducting the business in accordance with all applicable laws and regulations while demonstrating and promoting the highest ethical standards. The Code of Conduct reflects the matters set out in the commentary and guidance for Recommendation 3.1.

C O R P O R A T E G O V E R N A N C E S T A T E M E N T ( c o n t ’ d )

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Diversity Policy

The Board has adopted a Diversity Policy which sets out the Company’s aims and practices in relation to recognising and respecting diversity in employment. The Policy reinforces the Company’s commitment to actively managing diversity as a means of enhancing the Company’s performance by recognising and utilising the contributions of diverse skills and talent from its employees.

The Diversity Policy reflects the matters set out in the commentary and guidance for Recommendation 3.2.

Gender Diversity

The Board is responsible for establishing and monitoring on an annual basis the achievement against gender diversity objectives and strategies, including the representation of women at all levels of the organisation.

The proportion of women within the whole organisation as at the date of this report is as follows:

	%
Women employees in the whole organisation		0%
Women in Senior Executive positions		0%
Women on the Board of Directors		0%

The Board acknowledges the absence of female participation on the Board of Directors. However, as noted above, the Board has determined that the composition of the current Board represents the best mix of Directors that have an appropriate range of qualifications and expertise, can understand and competently deal with current and emerging business issues and can effectively review and challenge the performance of management.

The Company is at variance with Recommendation 3.3 in that it has not set or disclosed measurable objectives for achieving gender diversity in accordance with its Diversity Policy. Due to the size of the Company, the Board does not deem it practical to limit the Company to specific targets for gender diversity as it operates in a very competitive labour market where positions are sometimes difficult to fill. However, every candidate suitably qualified for a position has an equal opportunity of appointment regardless of gender, age, ethnicity or cultural background.

The Code of Conduct and Diversity Policy are available on the Riva Resources website.

PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

Audit and Risk Committee

The Audit and Risk Committee consists of three members, and is chaired by Mr J Chen.

The Audit and Risk Committee Charter sets out its role, responsibilities and membership requirements. The Charter reflects the matters set out in the commentary and guidance for Recommendation 4.3. For information on the skills, experience and expertise of the Audit and Risk Committee members, refer to the Directors’ Report. Details of the members and their attendance at meetings of the Audit and Risk Committee are included in the Directors’ Report.

The Company is at variance with Recommendation 4.2 in that the Audit and Risk Committee does not consist only of non-executive directors. The Board considers that this composition is appropriate given the current size of the Company. Furthermore, the Board considers that the Audit and Risk Committee is of a sufficient size and possesses sufficient technical expertise to discharge its mandate effectively.

External auditor

Consistent with its Charter, the Audit and Risk Committee reviews the external auditor’s terms of engagement and audit plan, and assesses the independence of the external auditor. The current practice, subject to amendment in the event of legislative change, is for the rotation of the engagement partner to occur every five years.

The Company’s independent external auditor is RSM Australia Partners (RSM). The appointment of RSM was ratified by members at the Annual General Meeting held on 26 November 2015. The Audit and Risk Committee Charter is available on the Riva Resources website.

C O R P O R A T E G O V E R N A N C E S T A T E M E N T ( c o n t ’ d )

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PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE

The Continuous Disclosure Policy sets out the key obligations of the directors and employees in relation to continuous disclosure as well as the Company’s obligations under the Listing Rules and the Corporations Act. The Policy also provides procedures for internal notification and external disclosure, as well as procedures for promoting understanding of compliance with the disclosure requirements for monitoring compliance.

The Policy reflects the matters set out in the commentary and guidance for Recommendation 5.1.

The Continuous Disclosure Policy is available on the Riva Resources website.

PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS

The Shareholder Communications Policy sets out the Company’s aims and practices in respect of communicating with both current and prospective shareholders. The Policy reinforces the Company’s commitment to promoting investor confidence by requiring:

compliance with the continuous disclosure obligations;
compliance with insider trading laws;
compliance with financial reporting obligations;
compliance with shareholder meeting requirements, including the provision of an opportunity for shareholders and other stakeholders to hear from and put questions to the Board, management and auditor of the Company;
communication with shareholders in a clear, regular, timely and transparent manner; and
response to shareholder queries in a prompt and courteous manner.

The Policy reflects the matters set out in the commentary and guidance for Recommendation 6.1.

The Shareholder Communications Policy is available on the Riva Resources website.

PRINCIPLE 7: RECOGNISE AND MANAGE RISK

Risk Management Policy

Riva Resources recognises that risk is inherent to any business activity and that managing risk effectively is critical to the immediate and future success of the Company. As a result, the Board has adopted a Risk Management Policy which sets out the Company’s system of risk oversight, management of material business risks and internal control.

Risk oversight

Riva Resources’s risk management framework is supported by the Board of Directors, management and the Audit and Risk Committee. The Board is responsible for approving and reviewing the Company’s risk management strategy and policy. Management are responsible for monitoring that appropriate processes and controls are in place to effectively and efficiently manage risk. The Audit and Risk Committee also has delegated responsibilities in relation to risk management and the financial reporting process as set out in the Audit and Risk Committee Charter. Further detail regarding the Audit and Risk Committee can be found above at Principle 4: Safeguarding integrity in financial reporting.

Reporting and assurance

When considering the Audit and Risk Committee’s review of financial reports, the Board receives a written statement declaration in accordance with section 295A of the Corporations Act , signed by the Managing Director and Chief Financial Officer, that the Company’s financial reports give a true and fair view, in all material respects with, of the Company’s financial position and comply in all material respects with relevant accounting standards. This statement also confirms that the Company’s financial reports are founded on a sound system of risk management and internal control and that the system is operating effectively in relation to financial reporting risks.

Similarly, in a separate written statement the Managing Director and the Chairman of the Audit and Risk Committee also confirm to the Board that the Company’s risk management and internal control systems are operating effectively in relation to material business risks for the period, and that nothing has occurred since period-end that would materially change the position.

The Risk Management Policy is available on the Riva Resources website.

C O R P O R A T E G O V E R N A N C E S T A T E M E N T ( c o n t ’ d )

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PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY

Nomination and Remuneration Committee

The Nomination and Remuneration Committee has delegated responsibilities in relation to the Company’s remuneration policies as set out in the Nomination and Remuneration Committee Charter. The Charter reflects the matters set out in the commentary and guidance for Recommendation 8.1. Further detail regarding the Nomination and Remuneration Committee can be found above at Principle 2: Structure the board to add value.

Non-executive directors’ remuneration policy

The structure of non-executive directors’ remuneration is clearly distinguished from that of executives. Remuneration for non-executive directors is fixed. Total remuneration for all non-executive directors, last voted upon by shareholders at the 2007 General Meeting, is not to exceed $500,000 per annum.

There is currently no performance related compensation for non-executive directors in place.

Neither the non-executive directors nor the executives of the Company receive any retirement benefits, other than superannuation.

Executive directors’ remuneration policy

As noted previously, executive directors are employed pursuant to employment agreements. Summaries of these employment agreements are set out in the Remuneration Report.

Further details regarding the remuneration arrangements of the Company are set out in the Remuneration Report.

The checklist below summarises the Company’s compliance with the Recommendations.

		Comply	Reference/
	Requirement	Yes/ No	Explanation
Pr 1	Lay solid foundations for management and oversight
Rec 1.1	Companies should establish the functions reserved to the board	Yes	Website &
	and those delegated to senior executives and disclose the		Page 22
	functions.
Rec 1.2	Companies should disclose the process for evaluating the	Yes	Website &
	performance of senior executives.		Page 22
Rec 1.3	Companies should provide the information indicated in the Guide	Yes	Website &
	to reporting to Principle 1.		Page 22
Pr 2	Structure the board to add value
Rec 2.1	A majority of the board should be independent directors.	Yes	Website &
			Page 22
Rec 2.2	The chairman should be an independent director.	Yes	Website &
			Page 22
Rec 2.3	The roles of chairman and chief executive officer should not be	Yes	Website &
	exercised by the same individual.		Page 22
Rec 2.4	The board should establish a nomination committee.	Yes	Website &
			Page 23
Rec 2.5	Companies should disclose the process for evaluating the	Yes	Website &
	performance of the board, its committees and individual directors.		Page 23
Rec 2.6	Companies should provide the information indicated in the Guide	Yes	Website &
	to reporting to Principle 2.		Page 23

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C O R P O R A T E G O V E R N A N C E S T A T E M E N T ( c o n t ’ d )

		Comply	Reference/
	Requirement	Yes/ No	Explanation
Pr 3	Promote ethical and responsible decision making
Rec 3.1	Companies should establish a code of conduct and disclose the	Yes	Website &
	code or a summary of the code as to:		Page 23
	 the practices necessary to maintain confidence in the
	company’s integrity;
	 the practices necessary to take into account their legal
	obligations and the reasonable expectations of their
	stakeholders; and
	 the responsibility and accountability of individuals for
	reporting and investigating reports of unethical practices.
Rec 3.2	Companies should establish a policy concerning diversity and	Yes	Website &
	disclose the policy or a summary of that policy. The policy should		Page 24
	include requirements for the Board to establish measurable
	objectives for achieving gender diversity for the Board to assess
	annually both the objectives and progress in achieving them.
Rec 3.3	Companies should disclose in each annual report the measurable	No	Website &
	objectives for achieving gender diversity set by the Board in		Page 24
	accordance with the Diversity Policy and progress towards
	achieving them.
Rec 3.4	Companies should disclose in each annual report the proportion	Yes	Website &
	of women employees in the whole organisation, women in senior		Page 24
	executive positions and women on the Board.
Rec 3.5	Companies should provide the information indicated in the Guide	Yes	Website &
	to reporting on Principle 3.		Page 24
Pr 4	Safeguard integrity in financial reporting
Rec 4.1	The board should establish an audit committee.	Yes	Website &
			Page 24
Rec 4.2	The audit committee should be structured so that it:		Website &
	 consists only of non-executive directors;	No	Page 24
	 consists of a majority of independent directors;	No
	 is chaired by an independent chair, who is not the chair	No
	of the board; and
	 has at least three members.	Yes
Rec 4.3	The audit committee should have a formal charter.	Yes	Website &
			Page 24
Rec 4.4	Companies should provide the information indicated in the Guide	Yes	Website &
	to reporting on Principle 4.		Page 24
Pr 5	Make timely and balanced disclosure
Rec 5.1	Companies should establish written policies designed to ensure	Yes	Website &
	compliance with ASX Listing Rule disclosure requirements and to		Page 25
	ensure accountability at a senior level for that compliance and
	disclose those policies or a summary of those policies.
Rec 5.2	Companies should provide the information indicated in the Guide	Yes	Website &
	to reporting on Principle 5.		Page 25
Pr 6	Respect the rights of shareholders
Rec 6.1	Companies should design a communications policy for promoting	Yes	Website &
	effective communication with shareholders and encouraging their		Page 25
	participation at general meetings and disclose their policy or a
	summary of that policy.
Rec 6.2	Company should provide the information indicated in the Guide to	Yes	Website &
	reporting on Principle 6.		Page 25

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C O R P O R A T E G O V E R N A N C E S T A T E M E N T ( c o n t ’ d )

		Comply	Reference/
	Requirement	Yes/ No	Explanation
Pr 7	Recognise and manage risk
Rec 7.1	Companies should establish policies for the oversight and	Yes	Website &
	management of material business risks and disclose a summary		Page 25
	of those policies.
Rec 7.2	The board should require management to design and implement	Yes	Website &
	the risk management and internal control system to manage the		Page 25
	company’s material business risks and report to it on whether
	those risks are being managed effectively. The board should
	disclose that management has reported to it as to the
	effectiveness of the company’s management of its material
	business risks.
Rec 7.3	The board should disclose whether it has received assurance from	Yes	Website &
	the chief executive officer (or equivalent) and the chief financial		Page 25
	officer (or equivalent) that the declaration provided in accordance
	with section 295A of the Corporations Act is founded on a sound
	system of risk management and internal control and that the
	system is operating effectively in all material respects in relation
	to financial reporting risks.
Rec 7.4	Companies should provide the information indicated in the Guide	Yes	Website &
	to reporting on Principle 7.		Page 25
Pr 8	Remunerate fairly and responsibly
Rec 8.1	The board should establish a remuneration committee.	Yes	Website &
			Page 26
Rec 8.2	The remuneration committee should be structured so that it:	Yes	Website &
	 consists of a majority of independent directors;		Page 26
	 is chaired by an independent chair; and
	 has at least three members.
Rec 8.3	Companies should clearly distinguish the structure of non-	Yes	Website &
	executive directors’ remuneration from that of executive directors		Page 26
	and senior executives.
Rec 8.4	Companies should provide the information indicated in the Guide	Yes	Website &
	to reporting on Principle 8.		Page 26

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S T A T E M E N T O F P R O F I T O R L O S S A N D O T H E R C O M P R E H E N S I V E I N C O M E for the year ended 30 June 2017

		Consolidated	Parent
	Note	2017	2016
		$	$
Revenue from continuing operations	3	11,835	12,306
Other income	3	16,423	8,114
Corporate and administrative expenses	3	(1,096,725)	(488,097)
Exploration and evaluation salary and general expenses		(805,239)	(106,838)
Exploration and evaluation assets written off	10	(3,200,000)	(6,299,271)
Net realised gain on foreign currency exchange		-	2
Loss before income tax		(5,073,706)	(6,873,784)
Income tax expense	5	-	-
Loss after income tax		(5,073,706)	(6,873,784)
*Other Comprehensive Income*
Other Comprehensive Income for the year, net of tax		-	-
Total Comprehensive Loss for the year attributable to owners of
Riva Resources Ltd		(5,073,706)	(6,873,784)
Loss per share for the year attributable to the members of Riva
Resources Ltd
Basic and diluted loss per share (cents)	17	(0.90)	(3.33)

The statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

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S T A T E M E N T O F F I N A N C I A L P O S I T I O N as at 30 June 2017

		Consolidated	Parent
	Note	2017	2016
		$	$
CURRENT ASSETS
Cash and cash equivalents	6	2,226,174	262,985
Trade and other receivables	7	82,489	10,462
Other assets	8	-	9,914
Total Current Assets		2,308,663	283,361
NON CURRENT ASSETS
Plant and equipment	9	26,214	45,391
Exploration and evaluation assets	10	785,745	437,042
Total Non Current Assets		811,959	482,433
TOTAL ASSETS		3,120,622	765,794
CURRENT LIABILITIES
Trade and other payables	11	19,122	191,221
Provisions		-	-
Total Current Liabilities		19,122	191,221
TOTAL LIABILITIES		19,122	191,221
NET ASSETS		3,101,500	574,573
EQUITY
Contributed equity	12	33,148,376	25,728,920
Reserves	13	274,677	93,500
Accumulated losses	14	(30,321,553)	(25,247,847)
TOTAL EQUITY		3,101,500	574,573

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

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S T A T E M E N T O F C H A N G E S I N E Q U I T Y for the year ended 30 June 2017

Consolidated 2017 Balance at 1 July 2016 Other Comprehensive Income and losses for the year Loss for the year Total comprehensive loss for the year Transactions with equity holders in their capacity as equity holders Balance at 30 June 2017 Parent 2016 Balance at 1 July 2015 Other Comprehensive Income and losses for the year Loss for the year Total comprehensive loss for the year Transactions with equity holders in their capacity as equity holders Balance at 30 June 2016	Contributed Equity Share Based Payment Reserve Option Premium Reserve Accumulated Losses Total Equity $ $ $ $ $ 25,728,920 46,040 47,460 (25,247,847) 574,573 - - - (5,073,706) (5,073,706) - - - (5,073,706) (5,073,706) 7,419,456 - 181,177 - 7,600,633 33,148,376 46,040 228,637 (30,321,553) 3,101,500 Contributed Equity Share Based Payment Reserve Option Premium Reserve Accumulated Losses Total Equity $ $ $ $ $ 25,728,920 46,040 47,460 (18,374,063) 7,448,357 - - - (6,873,784) (6,873,784)
	- - - (6,873,784) (6,873,784) - - - - -
	25,728,920 46,040 47,460 (25,247,847) 574,573

Consolidated
2017
Balance at 1 July 2016
Other Comprehensive
Income and losses for the
year
Loss for the year
Total comprehensive loss
for the year
Transactions with equity
holders in their capacity
as equity holders
Balance at 30 June 2017
Parent
2016
Balance at 1 July 2015
Other Comprehensive
Income and losses for the
year
Loss for the year
Total comprehensive loss
for the year
Transactions with equity
holders in their capacity
as equity holders
Balance at 30 June 2016

Contributed
Equity
Share
Based
Payment
Reserve
Option
Premium
Reserve
Accumulated
Losses
Total
Equity
$
$
$
$
$
25,728,920
46,040
47,460
(25,247,847)
574,573
-
-
-
(5,073,706)
(5,073,706)
-
-
-
(5,073,706)
(5,073,706)
7,419,456
-
181,177
-
7,600,633
33,148,376
46,040
228,637
(30,321,553)
3,101,500
Contributed
Equity
Share
Based
Payment
Reserve
Option
Premium
Reserve
Accumulated
Losses
Total
Equity
$
$
$
$
$
25,728,920
46,040
47,460
(18,374,063)
7,448,357
-
-
-
(6,873,784)
(6,873,784)

-
-
-
(6,873,784)
(6,873,784)
-
-
-
-
-

25,728,920
46,040
47,460
(25,247,847)
574,573

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

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S T A T E M E N T O F C A S H F L O W S

for the year ended 30 June 2017

		Consolidated	Parent
	Note	2017	2016
		$	$
Cash flows from operating activities
Interest received		14,037	10,104
Payments to suppliers and employees		(1,912,490)	(398,606)
Net cash outflow from operating activities	20	(1,898,453)	(388,502)
Cash flows from investing activities
Payments for plant and equipment		(9,112)	(2,135)
Payments for exploration expenditure – acquisition costs		(100,000)	-
Payments for exploration expenditure – capitalised costs		(148,703)	(55,462)
Net cash outflow from investing activities		(257,815)	(57,597)
Cash flows from financing activities
Proceeds from issue of shares		4,233,932	-
Share issue transaction costs		(114,475)	-
Net cash inflow from investing activities		4,119,457	-
Net increase/(decrease) in cash held		1,963,189	(446,099)
Cash and cash equivalents at the beginning of the financial year		262,985	709,082
Effect of exchange rate changes on cash and cash equivalents		-	2
Cash and cash equivalents at the end of the year	6	2,226,174	262,985

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

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

This financial report includes the financial statements and notes of Riva Resources Limited and controlled entities (“Consolidated Entity” or the “Group”). The separate financial statements and notes of Riva Resources Limited as an individual parent entity (“Company”) have not been presented within this financial report as permitted by the Corporations Act 2001 .

The financial report was authorised for issue on 29 September 2017 by the Directors of the Company.

Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001 .

The financial report covers Riva Resources Limited and its subsidiaries, and has been prepared in Australian dollars. Riva Resources Limited is a listed public company, incorporated and domiciled in Australia.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Parent entity information

In accordance with the Corporations Act 2001 , these financial statements present the results of the Consolidated Entity only. Supplementary information about the parent entity is disclosed in Note 23.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Riva Resources Limited as at 30 June 2017 and the results of all subsidiaries for the year then ended.

Subsidiaries are all those entities over which the Company has control. The Company controls an entity when they are 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated Entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Consolidated Entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of comprehensive income, statement of financial position and statement of changes in equity. Losses incurred by the Consolidated Entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.

Where the Company loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Company recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable under

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are outlined below:

Exploration expenditure

Exploration and evaluation costs have been capitalised on the basis that the Company will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made.

New, revised or amending Accounting Standards and Interpretations adopted

The Company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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Summary of Significant Accounting Policies

Foreign currency

Functional and presentation currency

Both the functional and presentation currency of Riva Resources Ltd is Australian Dollars ($).

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Segment reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start up operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the level of segment information presented to the Board of Directors.

Operating segments have been identified based on the information provided to the chief operating decision makers – being the Board of Directors.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.

Trade and other receivables

Trade receivables are recognised initially at fair value and subsequently at amortised cost less any impairment losses recognised. Collectability of trade receivables is reviewed on an ongoing basis. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the Company will not be able to collect all amounts due.

Revenue recognition

Revenue represents interest received and reimbursements of exploration expenditures. Interest income is recognised as it accrues.

Interest

Interest revenue is recognised as interest accrues using the effective interest method.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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Earnings per share

Basic earnings per share is calculated by dividing the net earnings attributable to members of the company for the reporting period by the weighted average number of ordinary shares of the Company.

Financial instruments

Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Company’s contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Company commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Company’s obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and call deposits greater than 3 months are classified as held to maturity investments and valued at amortised costs.

Share capital

Incremental costs directly attributable to issue of ordinary shares and share options are recognised as a deduction from equity, net of any related income tax benefit.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company’s management has the positive intention and ability to hold to maturity. If the Company were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the reporting date, which are classified as current assets.

Exploration and evaluation expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

Plant and equipment

Recognition and measurement

Items of plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset.

Subsequent costs

The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of day-to-day servicing of plant and equipment are recognised in profit or loss as incurred.

Depreciation

Items of plant and equipment are depreciated using the diminishing value method over their estimated useful lives of each part of an item of plant and equipment. The depreciation rates used for each class of asset for the current period are as follows:

	Plant and Equipment	33%
	Fixtures and Fittings	33%
	Motor Vehicles	25%

Depreciation methods, useful lives and residual values are reassessed at the reporting date.

Impairment

Financial assets

A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised.

Non-financial assets

The carrying amounts of the non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, recoverable amount is estimated at each reporting date.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

Income tax

Deferred income tax is provided on all temporary differences at the reporting date 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:

(a) except where the deferred income tax liability 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; and
(b) in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets 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 assets and unused tax losses can be utilised:

(a) except where 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; and
(b) in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each reporting date 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.

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 reporting date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of profit or loss and other comprehensive income.

Riva Resources Ltd has unused tax losses. However, no deferred tax balances have been recognised, as it is considered that asset recognition criteria have not been met at this time.

Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax ( GST ), except where the amount of GST incurred is not recoverable from the Australian Tax Office ( ATO ). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

Leases

Leases of plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term liabilities. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and the lease term.

Trade and other payables

Liabilities are initially recognised at fair value and subsequently measured at cost for amounts to be paid in the future for goods or services received, whether or not billed to the Company. Trade accounts payable are normally settled within 60 days.

Loans and borrowings

Loans are recognised at their principal amount, subject to set-off arrangements. Borrowing costs are recognised as an expense when incurred.

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.

Share-based payment transactions

The grant date fair value of options granted to employees (including key management personnel) is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the actual number of share options for which the related service and non-market vesting conditions are met.

Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are account for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Company.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June 2017. The Company’s assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Company, are set out below.

AASB 9 Financial Instruments

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ( OCI ). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ( ECL ) model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The Company will adopt this standard from 1 July 2018 and has assessed on the impact to the subsequent years financial statements which will be insignificant.

AASB 15 Revenue from Contracts with Customers

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The Company will adopt this standard from 1 July 2018. As the Company does not have any revenue contracts it is expected the impact will be insignificant.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

New accounting standards and interpretations (cont’d)

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured as the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to shortterm leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The Company will adopt this standard from 1 July 2019. The Company does not have significant operating leases with a term 12 months or longer. Therefore it is expected the impact will be insignificant.

2. FINANCIAL RISK MANAGEMENT

Overview

The Company has exposure to the following risks from their use of financial instruments:

credit risk
liquidity risk
market risk

This note presents information about the Company’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital. There has been no change from prior year in relation to all of the exposures. Further quantitative disclosures are included in Note 15.

The Company’s risk management framework is supported by the Board, management and the Audit and Risk Committee. The Board is responsible for approving and reviewing the Company’s risk management strategy and policy. Management are responsible for monitoring that appropriate processes and controls are in place to effectively and efficiently manage risk. The Audit and Risk Committee is responsible for identifying, monitoring and managing significant business risks faced by the Company and considering the effectiveness of its internal control system. Management and the Audit and Risk Committee report to the Board.

The Board has established an overall Risk Management Policy which sets out the Company’s system of risk oversight, management of material business risks and internal control.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

2. FINANCIAL RISK MANAGEMENT (cont’d)

Financial risk management objectives

The overall financial risk management strategy focuses on the unpredictability of the finance markets and seeks to minimise the potential adverse effects on financial performance and protect future financial security.

Credit risk

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s cash and cash equivalents. For the Company it arises from receivables due from subsidiaries.

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

Liquidity risk

Liquidity risk arises from the financial liabilities of the Company and the Company’s subsequent ability to meet their obligations to repay their financial liabilities as and when they fall due.

Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Board has determined an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and continuously monitoring budgeted and actual cash flows and matching the maturity profiles of financial assets, expenditure commitments and liabilities.

Market risk

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

Foreign currency risk

The company is not materially exposed to foreign currency risk.

Interest rate risk

The Company’s exposure to interest rates primarily relates to the Company’s cash and cash equivalents and held to maturity investments. The Company manages market risk by monitoring levels of exposure to interest rate risk and assessing market forecasts for interest rates.

Other market price risk

The Company is involved in the exploration and development of mining tenements for minerals. Should the Company successfully progress to a producer, revenues associated with mineral sales, and the ability to raise funds through equity and debt, will have some dependence upon commodity prices.

Fair value measurements

The fair values of financial assets and liabilities are determined in accordance with generally accepted pricing models based on estimated future cash flows. The Directors consider that the carrying amounts of financial assets and financial liabilities recorded in the financial statements approximate their fair values.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

3. REVENUE, INCOME AND EXPENSES (a) Revenue Interest income (b) Other income Other (c) Employee benefits expense Wages and salaries Superannuation Other employee benefits expense (d) Depreciation included in statement of profit or loss and other comprehensive income Office Plant & Equipment Motor vehicles (e) Minimum lease payment Rent and outgoings 4. AUDITOR’S REMUNERATION The following amounts were paid or payable for services provided by the related practices. Audit services: RSM Australia Partners - audit and review of financial reports	Consolidated 2017 $ Parent 2016 $ 11,835 12,306 16,423 8,114 28,258 79,647 17,915 12,126 6,860 - 53,033 91,773 1,214 532 25,384 25,453 26,598 25,985 77,144 84,946 77,144 84,946 auditors of the Company and its 20,500 17,000 20,500 17,000	Consolidated 2017 $ Parent 2016 $ 11,835 12,306 16,423 8,114 28,258 79,647 17,915 12,126 6,860 - 53,033 91,773 1,214 532 25,384 25,453 26,598 25,985 77,144 84,946 77,144 84,946 auditors of the Company and its 20,500 17,000 20,500 17,000
		20,500 17,000

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

5. TAXATION

(a) Income tax expense (b) Numerical reconciliation between tax expense and pre-tax net loss Loss before income tax expense Income tax benefit calculated at rates noted in (d) below Tax effect on amounts which are not tax deductible: Section 40-880 deduction Non-deductible expenses Deferred tax asset not brought to account	- -
	(5,073,706) (6,873,784) (1,395,269) (1,959,028) - - 881,529 1,796,509 513,740 162,519
	- -

(c) Deferred tax assets not brought to account Unused tax losses Timing differences Capital raising costs in equity Exploration expenditure Deferred tax assets not brought to account	Consolidated 2017 $ Parent 2016 $ 7,704,258 7,332,408 3,575 2,507 - - (216,080) (124,557)
	7,491,753 7,210,358

(d) Tax Rates

The potential tax benefit in respect of tax losses not brought into account has been calculated at 27.5% (2016: 28.5%).

6. CASH AND CASH EQUIVALENTS

Cash at bank and on hand Term deposits*	2,111,086 147,897 115,088 115,088
	2,226,174 262,985

$95,000 (2016: $95,000) is secured over the bank guarantee given by the bank.

The Company’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 15.

7. TRADE AND OTHER RECEIVABLES

Sundry receivables	82,489 10,462
	82,489 10,462

The Company’s exposure to credit risk related to trade and other receivables is disclosed in Note 15.

As at 30 June 2017, trade and other receivables do not contain impaired assets and are not past due.

Due to their short-term nature, the carrying amounts of trade and other receivables is assumed to approximate their fair value.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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8. OTHER ASSETS

Current

Prepaid expenses Accrued income 9. PLANT AND EQUIPMENT At 30 June 2017 (Consolidated) Cost Accumulated depreciation Net carrying amount Year ended 30 June 2017 (Consolidated) At 1 July 2016, net of accumulated depreciation Additions Disposals Depreciation charge for the year At 30 June 2017, net of accumulated depreciation At 30 June 2016 (Parent) Cost Accumulated depreciation Net carrying amount Year ended 30 June 2016 (Parent) At 1 July 2015, net of accumulated depreciation Additions Disposals Depreciation charge for the year At 30 June 2016, net of accumulated depreciation	- 7,712 - 2,202 - 9,914 Furniture & Fixtures Plant & Equipment Motor Vehicles Total $ 73,579 9,354 127,536 210,469 (65,656) (9,354) (109,245) (184,255)	- 7,712 - 2,202
		- 9,914
	7,923 - 18,291 26,214
	1,716 - 43,675 45,391 9,112 - - 9,112 (1,691) - - (1,691) (1,214) - (25,384) (26,598)
	7,923 - 18,291 26,214
	66,011 9,354 127,536 202,901 (64,295) (9,354) (83,861) (157,510)
	1,716 - 43,675 45,391
	113 - 69,128 69,241 2,135 - - 2,135 - - - - (532) - (25,453) (25,985)
	1,716 - 43,675 45,391

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

10. EXPLORATION AND EVALUATION ASSETS Exploration, evaluation and development expenditure carried forward in respect of areas of interest (net of amounts written off) Reconciliation Carrying amount at the beginning of the year Exploration and evaluation expenditure Offset JV Partner contribution Capitalised expenditure written off Carrying amount at the end of the year	Consolidated 2017 $ Parent 2016 $ 785,745 437,042
	437,042 6,680,851 3,548,703 149,261 - (93,799) (3,200,000)(ii) (6,299,271)(i)
	785,745 437,042

The ultimate recoupment of exploration and evaluation expenditure is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas. Exploration and evaluation expenditure immediately expensed in profit or loss for the financial year amounted to $805,239 (2016: $106,838).

(i) The basis for write off is that the period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed.

(ii) The basis for write off is due to the outcome of the drilling results is lower than expectations.

11. TRADE AND OTHER PAYABLES Trade creditors Other creditors and accruals	5,417 175,354 13,705 15,867
	19,122 191,221

The Company’s exposure to credit and liquidity risks related to trade and other payables are disclosed in Note 15.

Due to their short-term nature, the carrying amounts of trade and other payables is assumed to approximate their fair value

12. ISSUED CAPITAL

Fully paid ordinary shares Movements during the year: Opening balance Shares issued via placement of shares Shares issued for acquisition of Tabac project* Share issue costs Closing balance	2017 Number of Shares 206,426,374 381,501,374 150,000,000 - 737,927,748	2016 Number of Shares 206,426,374 - - - 206,426,374	33,148,376 25,728,920	33,148,376 25,728,920
				2017 2016 $ $ 25,728,920 25,728,920 4,233,932 - 3,300,000 - (114,476) - 33,148,376 25,728,920

Fully paid ordinary shares

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

12. ISSUED CAPITAL (CONTINUED)

This is as part consideration for the purchase of the Tabac project which shares were valued at $0.022 per share at acquisition date.

Ordinary shares entitle the holder to participate in dividends and the proceeds from 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 securities present at a shareholder meeting in person or by proxy is, entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

	No.	Consolidated	No.	Parent
		2017		2016
13. RESERVES		$		$
Share based payments reserve
Balance at beginning of the year	-	46,040	-	46,040
Share based payments	-	-	-	-
Balance at end of the year	-	46,040	-	46,040
Option premium reserve
Balance at beginning of the year	-	47,460	-	47,460
Options issued*	25,000,000	181,177	-	-
Options expired(1)	(10,000,000)	-	-	-
Balance at end of the year	15,000,000	228,637	-	47,460
TOTAL RESERVES	15,000,000	274,677	-	93,500

(1) Options expired on resignation of the director, Jonathan King on 7 June 2017

*The company issued a total of 25 million incentive options with a total fair value of $181,177 recognised as share based payment expense. All options were granted over unissued fully paid ordinary shares in the company.

On 30 November 2016, 20,000,000 options were granted to the directors, Keong Chan, Gang Xu and Jonathan King as incentive options. The options were officially issued on 8 December 2016.

On 23 December 2016, 5,000,000 options were granted to an unrelated party as incentive options for introduction of the Tabac project. The options were officially issued on 23 December 2016.

Details of the options granted to the directors are as shown below.

Grant Date	Number of Options	Exercisable Date	Expiry Date	Exercise Price
				$
30 November 2016	20,000,000	8 December 2016	31 December 2019	$0.03
Grant Date	Number of Options	Exercisable Date	Expiry Date	Exercise Price
				$
23 December 2016	5,000,000	23 December 2016	31 December 2019	$0.03

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

13. RESERVES (CONTINUED)

The value attributed to share options issued is an estimate calculated using an appropriate mathematical formula based on an option pricing model. The choice of model and the resultant option value require assumptions to be made in relation to the likelihood and timing of the conversion of the options to shares and the value of volatility of the price of the underlying shares.

The Black-Scholes Model was used to determine the estimated fair value of options granted during the year ended 30 June 2017. The following assumptions were used:

No. of options	20,000,000
Grant Date	30 November 2016
Expiry Date	31 December 2019
Share price at grant ($)	0.016
Exercise Price ($)	0.03
Expected volatility (%)	90
Risk-free interest rate (%)	1.91
Option life (years)	3.08
Option value per option ($)	0.0071

No. of options	5,000,000
Grant Date	23 December 2016
Expiry Date	31 December 2019
Share price at grant ($)	0.017
Exercise Price ($)	0.03
Expected volatility (%)	90
Risk-free interest rate (%)	2.07
Option life (years)	3.02
Option value per option ($)	0.0077

The weighted average price exercise price of the options are $0.03.

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

13. RESERVES (CONTINUED)

Performance shares

On 7 December 2016, the completion date, the Company completed the acquisition of the Tabac project. As part of the purchase consideration, 62,500,000 performance shares were issued to the shareholders of Westview Resources Pty Ltd. The performance shares were valued at nil as the probability of performance hurdles being met was assessed as less than probable. Refer note 22 for details of the acquisition.

Details of performance shares and performance hurdles

(i) Class A - 31,250,000 performance shares: the achievement of an Inferred Mineral Resource in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 Edition) (JORC Code) (including cumulative production) of not less than 50,000 tonnes contained Cobalt at a minimum grade of 0.3% Cobalt within the Tenements; and

(ii) Class B - 31,250,000 performance shares: the achievement of an Inferred Mineral Resource in accordance with the JORC Code (including cumulative production) of not less than 100,000 tonnes contained Cobalt at a minimum grade of 0.3% Cobalt within the Tenements.

Share- based payments reserve

This reserve is used to record the value of equity-settled share-based payments provided to employees and directors as part of their remuneration.

Option premium reserve

This reserve comprises of monies raised from issue of 47,460,245 options at $0.001 per option during the share and option entitlement issue in February 2011 and 25 million incentive options issued during the year.

14. ACCUMULATED LOSSES

Accumulated losses at the beginning of the year Loss for the year Accumulated losses at the end of the year	(25,247,847) (18,374,063) (5,073,706) (6,873,784)
	(30,321,553) (25,247,847)

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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15. FINANCIAL INSTRUMENTS DISCLOSURE

For financial risk exposure and management objectives please refer to note 2.

Credit risk

Exposure to credit risk

The carrying amount of the Company’s financial assets represents the maximum credit exposure. The Company’s maximum exposure to credit risk at the reporting date was:

Cash and cash equivalents Trade and other receivables	Carrying Amount Consolidated 2017 $ Parent 2016 $ 2,226,174 262,985 82,489 10,462
	2,308,663 273,447

The credit quality is assessed and monitored as follows:

Equivalent S&P Rating¹ Internally Rated²

Credit quality of financial assets At 30 June 2017 Cash and cash equivalents Trade and other receivables – current At 30 June 2016 Cash and cash equivalents Trade and other receivables – current	AA- and above BBB and Below No Default Total 2,226,174 - - 2,226,174 - - 82,489 82,489
	2,226,174 - 82,489 2,308,663
	262,985 - - 262,985 - - 10,462 10,462
	262,985 - 10,462 273,447

The equivalent S&P rating of the financial assets represents that rating of the counterparty with whom the financial asset is held rather than the rating of the financial asset itself.
Trade and other receivables consist of security bonds and deposits.

Allowance for impairment loss

A provision for impairment loss is recognised when there is objective evidence that an individual receivable is impaired.

Balance within trade and other receivables do not contain impaired assets and are not past due. It is expected that these other balances will be received when due.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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15. FINANCIAL INSTRUMENTS DISCLOSURE (cont’d)

Liquidity risk

The following are the contractual maturities of financial liabilities on an undiscounted basis, including estimated interest payments. Cash flows for assets and liabilities without fixed amount or timing are based on conditions existing at year end.

Consolidated 30 June 2017 Financial Liabilities Trade and other payables Parent 30 June 2016 Financial Liabilities Trade and other payables Interest rate risk	Carrying amount Contractual cash flows 1 year 2-5 years >5 years 19,122 (19,122) (19,122) - -
	19,122 (19,122) (19,122) - -
	Carrying amount Contractual cash flows 1 year 2-5 years >5 years 191,221 (191,221) (191,221) - -
	191,221 (191,221) (191,221) - -

Profile

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

Variable rate instruments Financial assets Financial liabilities	Carrying Amount Consolidated 2017 $ Parent 2016 $ 2,226,174 262,985 - -
	2,226,174 262,985

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. The Board assessed a 100 basis point movement as being reasonably possible based on short term historical movements. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2017 and 2016.

Financial instruments with interest rate Financial assets Financial liabilities Financial instruments with interest rate Financial assets Financial liabilities	Consolidated 2017 +100 basis points -100 basis points Profit $ Equity $ Profit $ Equity $ 22,262 22,262 (22,262) (22,262) - - - -
	Parent 2016 +100 basis points -100 basis points Profit $ Equity $ Profit $ Equity $ 2,630 2,630 (2630) (2630) - - - -

The weighted average effective interest rate on variable rate instruments was 0.64% (2016: 1.37%).

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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16. COMMITMENTS

Operating lease commitment

The Company leases its offices in West Perth, Western Australia. The lease is for 2 years from December 2016.

Future minimum rentals payable under the non-cancellable operating lease as at 30 June are as follows:

Not longer than 1 year Longer than 1 year and not longer than 5 years Longer than 5 years	Consolidated 2017 $ Parent 2016 $ 53,080 25,967 22,117 - - -
	75,197 25,967

Exploration Project commitments

The Company has certain obligations to perform minimum exploration work on mineral leases held. These obligations may vary over time, depending on the Company’s exploration program and priorities. These obligations are also subject to variations by negotiation, joint venturing or relinquishing some of the relevant tenements. The total exploration minimum expenditure commitments of the Company amounts to $231,000 per annum, these commitments are not reflected in the financial statements.

17. LOSS PER SHARE

a. Reconciliation of earnings to profit or loss: Loss Loss used to calculate basic EPS Loss used in the calculation of dilutive EPS b. Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Weighted average number of dilutive options outstanding Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS	Consolidated 2017 $ Parent 2016 $ (5,073,706) (6,873,784)
	(5,073,706) (6,873,784)
	(5,073,706) (6,873,784)
	No. No. 561,376,975 206,426,374 - -
	561,376,975 206,426,374

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

18. SEGMENT REPORTING

The Company has identified its operating segments based on the internal reports that are used by the Board of Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The operating segments are identified by the Board of Directors based on the phase of operation within the mining industry. For management purposes, the Company has organised its operations into two reportable segments on the basis of stage of development as follows:

Development assets; and
Exploration and evaluation assets, which includes assets that are associated with the determination and assessment of the existence of commercial economic reserves.

The Board of Directors as a whole will regularly review the identified segments in order to allocate resources to the segment and to assess its performance.

During the year ended 30 June 2017 and 2016, the Company had no development assets. The Board of Directors considers that it has only operated in one segment, being mineral exploration within Australia.

Where applicable, corporate costs, finance costs, interest revenue and foreign currency gains and losses are not allocated to segments as they are not considered part of the core operations of the segments and are managed on a Company basis.

The Company is domiciled in Australia. No revenue is generated from external customers during the year ended 30 June 2017 and 2016.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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19. RELATED PARTY DISCLOSURES

(a) Ultimate parent

Riva Resources Ltd is the ultimate Australian parent entity.

(b) Subsidiaries

Interests in subsidiaries are set out in note 24.

(c) Key management personnel compensation

Compensation

The aggregate compensation made to directors and other members of key management personnel of the Company is set out below:

Short-term employee benefits Post-employment benefits Share based payment	2017 $ 2016 $ 383,050 227,795 27,482 16,605 142,588 -
	553,120 244,400

(d) Other transactions with key management personnel

There were no other transactions with key management personnel during the 2017 and 2016 financial year.

(e) Amounts owed to key management personnel

Amounts owed to Director, Mr Jie Chen, as director fee as of reporting date is $521 (2016:$950).

(f) Loan with key management personnel

There is no loan with key management personnel transactions during the 2017 and 2016 financial year.

RECONCILIATION OF CASH FLOWS USED IN OPERATING ACTIVITIES Cash flows from operating activities Loss for the year Adjustments for: Depreciation Write off of fixed asset Share based expenditure Write off of exploration and evaluation asset Foreign exchange gain Operating loss before changes in working capital and provisions Change in: Trade and other receivables Trade and other payables Prepayments Provisions Net cash used in operating activities	2017 $ 2016 $ (5,073,706) (6,873,784) 26,598 25,985 1,691 - 181,177 - 3,200,000 6,299,271 - (2)
	(1,664,240) (548,530) (71,880) (2,202) (172,247) 161,731 9,914 499 - -
	(1,898,453) (388,502)

RECONCILIATION OF CASH FLOWS USED IN OPERATING ACTIVITIES
Cash flows from operating activities
Loss for the year
Adjustments for:
Depreciation
Write off of fixed asset
Share based expenditure
Write off of exploration and evaluation asset
Foreign exchange gain
Operating loss before changes in working capital and provisions
Change in:
Trade and other receivables
Trade and other payables
Prepayments
Provisions
Net cash used in operating activities

2017
$
2016
$
(5,073,706)
(6,873,784)
26,598
25,985
1,691
-
181,177
-
3,200,000
6,299,271
-
(2)

(1,664,240)
(548,530)
(71,880)
(2,202)
(172,247)
161,731
9,914
499
-
-

(1,898,453)
(388,502)

20. RECONCILIATION OF CASH FLOWS USED IN OPERATING ACTIVITIES

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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21. CONTINGENT LIABILITIES

Bank Guarantee

The Company has given bank guarantee of $95,000 (2016:$95,000) to landlord and department of mine and petroleum tenement bond.

Tabac Project

On 7 December 2016, the Company completed the acquisition of the Tabac project. As part of the purchase consideration, 62,500,000 performance shares were issued to the shareholders of Westview Resources Pty Ltd which shall convert to shares in the Company based on the achievement of the performance hurdles. It also assumed a contingent liability for royalty payable.

Performance shares

(i) Class A - 31,250,000 performance shares shall convert to shares in the Company based on the achievement of an Inferred Mineral Resource in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 Edition) (JORC Code) (including cumulative production) of not less than 50,000 tonnes contained Cobalt at a minimum grade of 0.3% Cobalt within the Tenements; and
(ii) Class B - 31,250,000 performance shares: shall convert to shares in the Company based on the achievement of an Inferred Mineral Resource in accordance with the JORC Code (including cumulative production) of not less than 100,000 tonnes contained Cobalt at a minimum grade of 0.3% Cobalt within the Tenements.

Royalty

2% net smelter return royalty is payable on the gross sales of all future metals obtained from the tenements acquired and sold on an arm’s length basis.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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22. ACQUISITION OF TABAC PROJECT

On 7 December 2016, the completion date, Riva Resources Limited completed the acquisition of Westview Resources Pty Ltd (Westview). The only asset held by Westview are the tenements relating to the Tabac Project. Upon completion of the acquisition, Riva Resources;

Issued to the shareholders of Westview 150,000,000 fully paid ordinary shares of Riva Resources, and 62,500,000 Performance Shares;
Paid $50,000 as a non-refundable option fee and $50,000 as a cash payment; and
Obtained a contingent liability for 2% net smelter return royalty on the gross sales of all future metals obtained from Tenements and sold on an arm’s length basis.

Details of the purchase consideration and the net assets acquired are as follows:

Purchase consideration paid by Riva Resources Limited to acquire Westview: Cash paid Ordinary Shares Performance Shares Total purchase consideration*	2017 $ 100,000 3,300,000 -
	3,400,000

The performance shares were valued at nil as the probability of performance hurdles being met was assessed as less than probable. Refer to note 13 for details of performance shares and performance hurdles.

The fair value of assets and liabilities recognised as a result of the acquisition are $3,400,000 and Nil, respectively.

Exploration asset Liabilities Net assets acquired	Fair value $ 3,400,000 -
	3,400,000

23. PARENT ENTITY DISCLOSURES

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Loss after income tax Total comprehensive loss	2017 $ (5,073,707)	2016 $ (6,873,784)
	(5,073,707)	(6,873,784)

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

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23. PARENT ENTITY DISCLOSURES (CONT’D)

Statement of financial position

Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Reserves Retained profits Total equity	2017 $ 2,245,478 3,120,686 19,185 19,185 33,148,376 274,677 (30,321,553) 3,101,500	2016 $ 283,361
		765,794
		191,221
		191,221
		25,728,920 93,500 (25,247,847)
		574,573

24. INTEREST IN SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following whollyowned subsidiaries in accordance with the accounting policy described in note 1:

Name	Principal place of business	Ownership	interest
	/ Country of incorporation	2017	2016
		%	%
Westview Resources Pty Ltd	Australia	100.00%	0.00%

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )

25. EVENTS OCCURING AFTER THE REPORTING DATE

Tim Kestell joined the Board as a non-executive director, effective 7 September 2017. Mr. Kestell has over 20 years’ experience in capital markets including working for Australian stockbrokers Euroz Securities and Patersons. In the past 14 years he has played a key role in floating and re-capitalising publicly listed companies. He is currently a director of Neon Capital Ltd and Blue Capital Ltd.

Mr Jie Chen, a current non-executive director of the Company, tendered his resignation effective 1 November 2017.

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D I R E C T O R S ’ D E C L A R A T I O N

In the directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as stated in Note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the Consolidated Entity's financial position as at 30 June 2017 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the directors

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Mr Keong Chan Director

Dated at Perth, Western Australia this 29[th] day of September 2017.

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RSM Australia Partners

Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111

www.rsm.com.au

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RIVA RESOURCES LIMITED

Opinion

We have audited the financial report of Riva Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

(i) Giving a true and fair view of the Group's financial position as at 30 June 2017 and of its financial performance for the year then ended; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.

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

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners ABN 36 965 185 036

Liability limited by a scheme approved under Professional Standards Legislation

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Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter How our audit addressed this matter

Measurement and Recognition for Acquisition of Subsidiary Refer to Note 22 in the financial statements

During the year, the Company acquired a 100% interest of Westview Resources Pty Ltd for the purchase consideration of $3,400,000 via the issue of 150,000,000 fully paid ordinary shares of the Company. The Company also issued 62,500,000 Performance Shares and paid $50,000 as a nonrefundable option fee and $50,000 as a cash payment.

The accounting for this acquisition is considered to be a key audit matter because it involved the exercise of judgment in relation to:

Determining whether the transaction is a business combination or an asset acquisition, based on whether the definition of a business in AASB 3 Business Combinations was met;
Determining the fair value of the consideration paid, including the Performance Shares and royalty rights; and
Determining the acquisition date.

Our audit procedures in relation to the acquisition of Westview Resources Pty Ltd included:

Reviewing the Binding Term Sheets to understand the transaction and the related accounting considerations;
Evaluating the management determination that the acquisition did not meet the definition of a business within AASB 3 Business Combinations and therefore was an asset acquisition as opposed to a business combination;
Assessing management’s determination of the fair value of the consideration paid, in particular, the likelihood of the milestones relating to the achievement of an Inferred Mineral Resource being met for each class of performance share issued; and
Assessing the appropriateness of the disclosures in the financial report in respect of the acquisition.

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Carrying Value of Exploration and Evaluation Assets Refer to Note 10 in the financial statements

At 30 June 2017, the Group has capitalised exploration and evaluation expenditure with a carrying value of $785,745, relating to the Tabac Project and Ashburton Project, net of an impairment loss recognised in the year ended 30 June 2017 of $3,200,000 relating to the Tabac Project.

We determined this to be a key audit matter due to the significant management judgments involved in assessing the carrying value of the asset including:

Determination of whether expenditure can be associated with finding specific mineral resources and the basis on which that expenditure is allocated to an area of interest;
Determination of whether exploration activities have progressed to the stage at which the existence of an economically recoverable mineral reserve may be assessed; and
Assessing whether any indicators of impairment are present and, if so, judgments applied to determine and quantify any impairment loss.

Our audit procedures in relation to the carrying value of exploration and evaluation assets included:

Obtaining evidence that the Group has valid rights to explore in the specific area;
Reviewing and enquiring with management the basis on which they have determined that the exploration and evaluation of mineral resources has not yet reached the stage where it can be concluded that no commercially viable quantities of mineral resources exists;
Agreeing a sample of additions to exploration and evaluation expenditure asset during the year to supporting documentation and ensuring that the amounts were capital in nature and relate to the area of interest;
Enquiring with management and reviewing the budget to test that the Group will incur substantive expenditure on further exploration for and evaluation of mineral resources in the specific area;
Critically assessing and evaluating management’s assessment that no indicators of impairment existed in relation to the Ashburton Project; and
Critically assessing and evaluating management’s assessment that the Tabac Project be impaired by $3,200,000 and the appropriate carrying value of this asset at reporting date is $200,000.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2017, but does not include the financial report and the auditor's report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor's report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 16 to 21 for the year ended 30 June 2017.

In our opinion, the Remuneration Report of Riva Resources Limited, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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Perth, WA Dated: 29 September 2017

RSM AUSTRALIA PARTNERS

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TUTU PHONG Partner

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A S X A D D I T I O N A L I N F O R M A T I O N

Additional information required by Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 18 September 2017.

(a) Twenty largest shareholders

The names of the twenty largest holders of quoted ordinary shares are:

Rank	Name	Units	% of Units
1.	NEW AGE GROUP CO LIMITED	116,770,384	15.82
2.	BLUE CAPITAL LIMITED	50,939,657	6.90
3.	NEON CAPITAL LTD	49,764,658	6.74
4.	MR ANDREW NEIL TAYLOR	41,041,667	5.56
5.	ASHANG INDUSTRY (HONG KONG) CO LIMITED	27,250,000	3.69
6.	MR ROBERT ANDREW JEWSON	26,708,333	3.62
7.	MR PETER ROMEO GIANNI	20,520,833	2.78
8.	J P MORGAN NOMINEES AUSTRALIA LIMITED	19,702,001	2.67
9.	MR GANG XU + MRS QIONG LIU A/C>	16,020,000	2.17
10.	SILKTREE INVESTMENTS PTY LTD VASSILEFF S/F A/C>	15,000,000	2.03
11.	CHARLES EDWARD MALET	12,500,000	1.69
12.	CHEN & XING PTY LTD	11,172,411	1.51
13.	MUITO DINHEIRO PTY LTD	10,000,000	1.36
14.	BNP PARIBAS NOMINEES PTY LTD RETAILCLIENT DRP>	6,662,005	0.90
15.	PROSPER WA PTY LTD	6,661,500	0.90
16.	MR DOMINIC VIRGARA	6,500,000	0.88
17.	MR JARRAD MOORE	6,300,000	0.85
18.	MR PAUL KILDERRY	6,078,676	0.82
19.	SILKTREE INVESTMENTS PTY LTD VASSILEFF S/F A/C>	5,021,547	0.68
20.	RENFENG ZHANG	5,000,000	0.68
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)		459,613,672	62.28
Total Remaining Holders Balance		278,314,076	37.72

(b) Distribution of equity security holders

Analysis of numbers of equity security holders by size of holding:

Range	Total holders	Units	% of Issued Capital
1 - 1,000	27	6,273	0.00
1,001 - 5,000	14	40,354	0.01
5,001 - 10,000	426	4,244,033	0.58
10,001 - 100,000	402	20,899,327	2.83
100,001 - 9,999,999,999	479	712,737,761	96.59
Rounding			-0.01
Total	1,348	737,927,748	100.00

A S X A D D I T I O N A L I N F O R M A T I O N

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(c) Substantial Shareholders

The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are:

Name	Units	% of Units
NEW AGE GROUP CO LIMITED	116,770,384	15.82
BLUE CAPITAL LIMITED	50,939,657	6.90
NEON CAPITAL LTD	49,764,658	6.74
MR ANDREW NEIL TAYLOR	41,041,667	5.56

(d) Restricted Securities

There are no restricted securities as at 30 September 2017

(e) Unmarketable Parcels

There were no holdings of less than a marketable parcel of ordinary shares.

(f) Voting Rights

The voting rights attaching to ordinary shares are:

On a show of hands, every member present in person or by proxy shall have one vote, and upon a poll, each share shall have one vote.

Options do not carry any voting rights.

(g) On Market Buy Back

There is no current on market buy-back.

(h) Interest in Mining Tenements

As at the date of this report, there is no change to the tenement schedule listed on page 15 of the review of operations.

AI assistant

LOTUS RESOURCES LIMITED — Annual Report 2017

65254_rns_2017-09-28_d9ea0f42-3725-4e18-bca9-f30fcd376794.pdf

C O R P O R A T E D I R E C T O R Y

C O N T E N T S

DIRECTORS

Mr Jie Chen

Mr Jonathan King

Mr Gang Xu

Mr Keong Chan

Mr Joel Fishlock

Mr Tim Kestell

COMPANY SECRETARY

Mr Keong Chan

DIRECTORSHIPS IN OTHER LISTED ENTITIES

DIRECTORS’ INTERESTS

DIRECTORS’ MEETINGS

Committee membership

PRINCIPAL ACTIVITY

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

RESULTS

REVIEW OF ACTIVITIES

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

DIVIDENDS

ENVIRONMENTAL REGULATION

EVENTS OCCURRING AFTER THE REPORTING PERIOD

OPTIONS

Options granted

Options expired

INDEMNIFICATION OF OFFICERS AND AUDITORS

Indemnification

Insurance Premiums

Proceedings on behalf of the Company

NON-AUDIT SERVICES

REMUNERATION REPORT

AUDITOR’S INDEPENDENCE DECLARATION

AUDITOR

RSM Australia Partners

AUDITOR’S INDEPENDENCE DECLARATION

RSM AUSTRALIA PARTNERS

R E V I E W O F A C T I V I T I E S

Overview

Pilbara Iron Project- Rocklea Deposits (RIR: 100%)

Ashburton Project (RIR: 7.2%)

g programme on E08/2211 & E47/2417 was

R E V I E W O F A C T I V I T I E S

Petroleum Project (RIR: 100%)

Tabac Project (RIR: 100%)

R E V I E W O F A C T I V I T I E S

KEY MANAGEMENT PERSONNEL

NOMINATION & REMUNERATION COMMITTEE

PRINCIPLES OF REMUNERATION

REMUNERATION STRUCTURE

Non-executive director remuneration

A U D I T E D R E M U N E R A T I O N R E P O R T ( c o n t ’ d )

REMUNERATION STRUCTURE (cont’d)

Non-executive director remuneration (cont’d)

Executive remuneration

Fixed remuneration

Short-term and Long-term incentive

REMUNERATION STRUCTURE (cont’d)

Consequences of performance on shareholder wealth (cont’d)

EMPLOYMENT AND CONSULTANCY AGREEMENTS

Employment and consultancy agreements details

REMUNERATION OF KEY MANAGEMENT PERSONNEL

USE OF REMUNERATION CONSULTANTS

VOTING AND COMMENTS MADE AT THE COMPANY’S 2016 ANNUAL GENERAL MEETING

A U D I T E D R E M U N E R A T I O N R E P O R T ( c o n t ’ d )

OPTIONS HOLDINGS OF KEY MANAGEMENT PERSONNEL

SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL

Equity-based compensation

Other transactions with key management personnel

Amounts owed to key management personnel

Loan with key management personnel

[This is the end of the audited remuneration report.]

C O R P O R A T E G O V E R N A N C E S T A T E M E N T

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Board Charter

Evaluation of the performance of senior executives

PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE

LOTUS RESOURCES LIMITED Annual Report 2017