STREAMPLAY STUDIO LIMITED - Annual Report 2014

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Gippsland Limited and its Controlled Entities ABN 31 004 766 376

Annual Financial Report

30 June 2014

Contents	Contents
DIRECTORS' REPORT .............................................................................................................................................................. 1
AUDITOR’S INDEPENDENCE DECLARATION .......................................................................................................................... 11
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .................................................. 12
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................................................ 13
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................................................................................... 14
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................................................... 15
NOTES TO THE FINANCIAL STATEMENTS .............................................................................................................................. 16
1	CORPORATE INFORMATION .......................................................................................................................................... 16
2	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ..................................................................................................... 16
3	REVENUES, OTHER INCOME AND EXPENSES.................................................................................................................. 32
4	INCOME TAX ................................................................................................................................................................. 32
5	EARNINGS PER SHARE ................................................................................................................................................... 33
6	CASH AND CASH EQUIVALENTS ..................................................................................................................................... 34
7	TRADE AND OTHER RECEIVABLES (CURRENT) ................................................................................................................ 35
8	INVENTORIES ................................................................................................................................................................ 36
9	OTHER ASSETS............................................................................................................................................................... 36
10	PROPERTY, PLANT AND EQUIPMENT............................................................................................................................. 36
11	EXPLORATION AND EVALUATION EXPENDITURE ........................................................................................................... 37
12	MINE PROPERTIES ......................................................................................................................................................... 38
13	TRADE AND OTHER PAYABLES (CURRENT) .................................................................................................................... 38
14	PROVISIONS (CURRENT) ................................................................................................................................................ 38
15	LOANS AND BORROWINGS (CURRENT) ......................................................................................................................... 38
16	NON-CONTROLLING INTEREST ...................................................................................................................................... 39
17	CONTRIBUTED EQUITY .................................................................................................................................................. 39
18	RESERVES AND ACCUMULATED LOSSES ........................................................................................................................ 40
19	INTERESTS IN CONTROLLED ENTITIES ............................................................................................................................ 40
20	INTERESTS IN JOINT OPERATIONS AND BUSINESS UNDERTAKINGS ............................................................................... 41
21	EXPENDITURE COMMITMENTS ..................................................................................................................................... 41
22	SHARE BASED PAYMENT PLANS .................................................................................................................................... 42
23	CONTINGENT LIABILITIES AND CONTINGENT ASSETS .................................................................................................... 43
24	SUBSEQUENT EVENTS ................................................................................................................................................... 44
25	REMUNERATION OF AUDITORS ..................................................................................................................................... 44
26	RELATED PARTY DISCLOSURE ........................................................................................................................................ 45
27	KEY MANAGEMENT PERSONNEL COMPENSATION ........................................................................................................ 46
28	SEGMENT INFORMATION .............................................................................................................................................. 46
29	FINANCIAL INSTRUMENTS ............................................................................................................................................. 48
30	PARENT ENTITY INFORMATION ..................................................................................................................................... 53
DIRECTORS’ DECLARATION .................................................................................................................................................. 54
INDEPENDENT AUDITOR'S REPORT ...................................................................................................................................... 55

DIRECTORS’ REPORT

Your Directors present their report with respect to the results of Gippsland Limited ("Gippsland" or "the Company") and its controlled entities (”the Group”) for the year ended 30 June 2014 ("the Balance Date") and the state of affairs of the Company and the Group at Balance Date.

DIRECTORS

The names of the Directors in office at any time during or since the end of the year are as below. Directors were in office for this entire period unless otherwise stated.

Mr Ian Jeffrey Gandel Mr Michael Benjamin Rosenstreich (appointed 24 March 2014) Mr Jon Starink Mr John Damian Kenny

Names, qualifications, experience and special responsibilities

Ian Jeffrey Gandel - Chairman (Non-executive) LLB, BEc, FCPA, FAICD

Mr Gandel was appointed Director and non-executive chairman on 24 June 2009. He is also Chairman of the Company's Remuneration Committee and a member of the Audit Committee.

Mr Gandel is a Melbourne businessman with extensive experience in retail management and retail property. He has had an involvement in the construction and leasing of Gandel shopping centres and has been a director of Gandel Retail Trust. He has previously been involved in the Priceline retail chain and the CEO chain of serviced offices.

Mr Gandel has been an investor in the mining industry since 1994, and is currently a substantial shareholder of a number of publicly listed Australian companies and is involved in exploration in his own right in Victoria, New South Wales and Western Australia.

During the past three years Mr Gandel has served as a Director of the following listed companies: Alliance Resources Limited – Appointed 15 October 2003 Alkane Resources Ltd – Appointed 25 July 2006 Octagonal Resources Ltd* - Appointed 10 November 2010

Michael Benjamin Rosenstreich – Managing Director BSC (Hons), MEE, FAusIMM, MAICD

Mr Rosenstreich was appointed Managing Director on 24 March 2014.

Mr Rosenstreich has a technical background and has worked in corporate finance and management of listed companies over the past 30 years including:

13 years as an exploration and mine geologist in senior roles;
6 years as a resource financier with NM Rothschild & Sons;
2 years as a technical consultant with Snowden and independently; and
9 years through to 2013 as Managing Director of ASX listed Bass Metals from pre IPO stage through exploration success and culminating in over 5 years of base and precious metals production.

During the past three years Mr Rosenstreich has served as a Director of the following listed companies: Bass Metals Ltd – Appointed 15 December 2004; Ceased 4 October 2013

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

DIRECTORS’ REPORT

Jon Starink – Director (Executive)

BSC (Hons), BChemE(Hons), MApplSc, FAusIMM, FIEAust, FIChemE, MRACI, MTMS, CPEng, CChem, CSci

Mr Starink was appointed Director on 8 May 2007. He is also a member of the Audit Committee and Remuneration Committee.

Mr Starink is a Chartered Professional Engineer, a Chartered Scientist and a Chartered Industrial Chemist, a Fellow of the Institution of Engineers Australia, a Fellow of the Australasian Institute of Mining and Metallurgy, a Fellow of the Institution of Chemical Engineers, a Member of The Metallurgical Society and a Member of the Royal Australian Chemical Institute.

Mr Starink has over 30 years experience in the mining industry in the role of both Executive and Non-Executive Director. His extensive practical and operational experience includes engineering design and project management; mining exploration management; science and engineering research development and process innovation development.

Mr Starink served in senior technical and engineering roles with the Sons of Gwalia Ltd Greenbushes tantalum-tin project for 10 years where he was directly responsible for process development, project design and construction management for the tin smelter and tantalum extraction projects.

During the past three years Mr Starink has served as a Director of the following listed company: Macarthur Minerals Limited* – Appointed 28 June 2011

John Damian Kenny – Director (Non-executive)

B Com (Hons), LLB

Mr Kenny was appointed Director on 2 September 1999. He is also a member of the Company's Remuneration Committee and is Chairman of the Company's Audit Committee.

Mr Kenny is a corporate and resources lawyer with a specialised interest in venture capital, initial public offerings and mergers and acquisitions. He has extensive experience in public equity fundraisings and the pricing of equity, debt and derivative securities.

During the past three years Mr Kenny has served as a Director of the following listed companies: The ARK Fund Limited* - Appointed 18 June 2003

Indus Coal Limited - Appointed 13 September 2011; Resigned 7 February 2014 Sun Resources Limited - Appointed 1 March 2012; Resigned 19 November 2013 Winchester Energy Limited – Appointed 17 March 2014

denotes current directorship

Interest in Shares and Options of the Company and related bodies corporate

As at the date of this report, the interest of the directors in the shares and options of Gippsland Limited were:

	Number of Ordinary	Number of Options
	Shares	over Ordinary Shares
IJ Gandel	586,788,200	-
MB Rosenstreich	-	-
JD Kenny	5,165,819	-
J Starink	3,085,715	-

OPTIONS

At the date of this report, there were no options on issue.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

DIRECTORS’ REPORT

COMPANY SECRETARY

The following person held the position of company secretary at the end of the financial year:

Rowan St John Caren BCom, CA

Mr Caren was appointed Company Secretary on 15 August 2006.

Mr Caren was employed by the chartered accountancy firm PricewaterhouseCoopers in Australia and overseas for six years and has been directly involved in the minerals exploration industry for a further 18 years. He also provides company secretarial and corporate advisory services to several exploration companies and is a member of the Institute of Chartered Accountants in Australia.

MEETINGS OF DIRECTORS

During the financial year, 6 meetings of directors were held. Attendances by each director during the year were as follows:

	Directors'	Meetings	Audit	Committee	Remuneration	Committee
	Eligible to	Attended	Eligible to	Attended	Eligible to	Attended
	Attend		Attend		Attend
IJ Gandel	6	6	3	3	-	-
MB Rosenstreich	1	1	-	-	-	-
JD Kenny	6	5	3	2	-	-
J Starink	6	6	3	2	-	-

PRINCIPAL ACTIVITIES

The principal activities of the entities within the Group during the year were exploration and development of commercially and economically viable mineral resources. There were no significant changes in the nature of the Group's principal activity during the year.

CONSOLIDATED RESULTS

The consolidated operating loss of the Group after providing for income tax amounted to $5,849,058 (2013: loss of $7,999,617).

Review of Operations

During the year the Company continued to focus on the development of the Abu Dabbab Tantalum-Tin-Feldspar Project (the Project) and production at the Alluvial Tin Project located on the same licences in Egypt. Gippsland has a 50% interest in the Exploitation Licences underlying both these projects through its 50% shareholding in the Egyptian registered joint venture company Tantalum Egypt JSC (TE JSC). The other 50% is held by the Government of Egypt through the Ministry of Petroleum and Minerals. The following activities were undertaken in relation to TE JSC:

Completed an advanced and comprehensive project review examining various financing opportunities for the development of the Project. This review process highlighted significant opportunities for TE JSC to significantly reduce its direct capital costs by outsourcing to contractors mining and crushing operations, the provision of utilities including desalinated water and power and services including camp services.
The Company, which is responsible for the procurement of project development funding, implemented an investment strategy to attract funds for the completion of the 2014 Abu Dabbab definitive feasibility study and initial site work. The investment opportunity is being marketed to selected investment groups in the Gulf region.
During the year, TE JSC sold approximately 101 tonnes of contained tin in concentrates from the Alluvial Tin Project and received total gross proceeds (before deduction of toll treatment charges) of US$2,155,275. During the second half of the year, tin operations were suspended due to ongoing technical problems and further delays in relation to TE JSC’s permits to export product and import spare parts. The import and export permits were reinstated in May,

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

DIRECTORS’ REPORT

however, the alluvial mining and processing operations were decommissioned in September 2014 due to technical and productivity issues.

In addition, the Company’s operations included:
In Eritrea, the area of the Adobha Exploration Licence was reduced by 50% to a retained area of 1,056 km[2] in compliance with the requirements of the third year of the licence. The area of the Gerasi South Exploration Licence remains at 100 km[2] . The exploration office in Eritrea was closed during the year in order for the Company to focus on its project in Egypt. The Company retains the exploration licences and is represented in Eritrea by its Country Manager.

Financial Position

The net assets of the Group have decreased by $6,067,047 to $1,074,338 at 30 June 2014 due largely to the following factors:
impairment of the mine properties in relation to the Group’s Alluvial Tin Project totalling $969,711;
impairment of the plant and equipment in relation to the Group’s Alluvial Tin Project totalling $850,071;
under performance of the Group’s Alluvial Tin Project resulting in cost of sales exceeding revenue by $994,281; and
funding for operations and working capital provided as loans from Gandel Metals Pty Ltd totalling $2,572,016.

As at Reporting Date the group had a working capital deficit of $3,788,750 (2013: deficit of $411,843).

DIVIDENDS

No dividends were declared or paid during the financial year.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

The following significant changes in the state of affairs of the Company occurred during the financial year:

a) Mr MB Rosenstreich was appointed Managing Director of the company on 24 March 2014; and
b) Loan funding received from Gandel Metals Pty Ltd, a company associated with Mr Ian Gandel, during the year totalled $2,572,016.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

Gandel Metals Pty Ltd, a company associated with Mr Ian Gandel, has entered into agreements to provide loan funding to Gippsland for a total of $620,000 for working capital.

The terms of the agreements are as follows:

(a) the interest rate for the loans is equal to the ANZ facility interest rate, as varied (currently 5.33%);

(b) the loans are unsecured; and

(c) the loans are repayable the earlier of:
1 November 2014; and
5 business days after completion of a capital raising by Gippsland for an amount equal to or greater than $500,000 more than the overall level of indebtedness to Gandel Metals at the time each loan agreement was entered into (currently the overall level of indebtedness to Gandel Metals is $3,192,000).

In August 2014, the Board of TEJSC approved and signed a non-binding agreement with a major smelting company for toll smelting the tantalum-tin concentrates planned to be produced from the Abu Dabbab Tantalum-Tin-Feldspar Project.

On 10 September 2014, the Company ceased operations at its Alluvial Tin Project joint venture in Egypt.

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

DIRECTORS’ REPORT

FUTURE DEVELOPMENTS

The consolidated entity’s activities will continue to focus on securing finance, completing the feasibility study and commencing development of the Abu Dabbab Tantalum-Tin-Feldspar Project.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group's operations are not currently subject to any significant environmental regulations under either Australian, Eritrean or Egyptian legislation. However, the board is committed to achieving a high standard of environmental performance, and regular monitoring of potential environmental exposures is undertaken by management. The board considers that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Group.

An environmental and social impact assessment was updated during the 2012 financial year for the Abu Dabbab Project in Egypt.

The Group is required to carry out its activities in accordance with the Mining Laws and regulations in the areas in which it undertakes its exploration activities.

INDEMNITY AND INSURANCE OF OFFICERS

During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay an insurance premium as follows:

The Company has paid premiums to insure any director or officer of Gippsland Limited against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the premium is $12,047 (2013: $13,051).
The Company has entered into “Deeds of Indemnity, Access and Insurance” with directors and officers in which the Company agrees to indemnify the directors and officers in respect of certain liabilities incurred by the director or officer while acting in their capacity for the Company and to insure the director or officer against certain risks they are exposed to as a director or officer of the Company.

PROCEEDINGS ON BEHALF OF 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 intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. No proceedings have been brought or intervened in or on behalf of the Company with leave of the court under section 237 of the Corporations Act 2001.

NON-AUDIT SERVICES

No non-audit services were provided by the Company’s current auditor, Deloitte Touche Tomatsu (“Deloitte”).

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 for the year ended 30 June 2014 has been received and can be found on page 11 of the directors’ report.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

DIRECTORS’ REPORT

REMUNERATION REPORT (Audited)

This report details the nature and amount of remuneration for each director of Gippsland Limited.

Remuneration Policy

The remuneration policy of Gippsland Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives. The board of Gippsland Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group, as well as create goal congruence between directors, executives and shareholders.

The board's policy for determining the nature and amount of remuneration for board members and senior executives of the Group is as follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, is developed and approved by the board after seeking professional advice from independent external consultants as required. In the years presented, no external consultants have been used.
All executives receive a base salary (which is based on factors such as length of service and experience).
The board reviews executive packages annually by reference to the Group's performance, executive performance and comparable information from industry sectors.

The board policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. In the current year, no advice was sought. The maximum aggregate amount of fees that can be paid to non-executive directors is currently fixed at $250,000 with any change in this amount subject to approval by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the Group. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company and are able to participate in the option plan.

No relationship exists between the remuneration policy and the Company’s performance.

At the Company’s most recent Annual General Meeting, the remuneration report for the year ended 30 June 2013 was passed with a greater than 75% vote in favour.

The tables below set out summary information about the consolidated entity’s earnings and movements in shareholder wealth for the five years to 30 June 2014:

	30 June 2014 $	30 June 2013 $	30 June 2012 $	30 June 2011 $	30 June 2010 $
Revenue	2,181,072	8,228	90,820	82,938	64,440
Netprofit/(loss)before tax	(5,849,058)	(7,999,617)	799,359	(2,630,645)	(2,894,769)
Netprofit/(loss)after tax	(5,849,058)	(7,999,617)	799,359	(2,630,645)	(2,894,769)

	30 June 2014	30 June 2013	30 June 2012	30 June 2011	30 June 2010
Shareprice at start ofyear	$0.007	$0.009	$0.032	$0.030	$0.044
Shareprice at end ofyear	$0.003	$0.007	$0.009	$0.032	$0.030
Basic/diluted earnings/(loss) per share	(0.43)cps	(0.67)cps	0.10 cps	(0.43)cps	(0.58)cps

Details of key management personnel

(i) Directors

IJ Gandel - Chairman (Non-Executive) MB Rosenstreich - Managing Director (Appointed 24 March 2014) J Starink - Executive Director J Kenny - Non-Executive Director

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

DIRECTORS’ REPORT

(ii) Executives

A Ayyash - Regional Manager - Middle East and North Africa

Non-Executive Director Remuneration

IJ Gandel - Chairman (Non-Executive)

Remuneration: $80,000 per annum.
Details of remuneration entitlement on termination: Payment of fees up to the date of termination.
J Kenny - Non-Executive Director
Remuneration: $40,000 per annum.
Details of remuneration entitlement on termination: Payment of fees up to the date of termination.

Employment Contracts

MB Rosenstreich – Managing Director

Term of agreement: 24 March 2014 until terminated in accordance with the agreement.
Remuneration: $211,200 per annum for 4 days work per week.
Period of notice for termination/resignation: Two months written notice by either party.
Details of remuneration entitlement on termination: Payment of fees up to the date of termination or payment of two months fees in lieu of notice
J Starink - Executive Director
Term of agreement: 8 May 2007 until terminated in accordance with the agreement.
Remuneration: $150,000 per annum for 2.5 days work per week plus additional fees based on hours worked above the base hours as determined by the Remuneration Committee.
Period of notice for termination/resignation: Three months written notice by either party.
Details of remuneration entitlement on termination: Payment of consulting fees up to the date of termination or payment of three month’s salary in lieu of notice.

A Ayyash - Regional Manager - Middle East and North Africa

Term of agreement: 1 October 2010 until terminated in accordance with the agreement.
Remuneration: $188,600 salary and allowances per annum.
Period of notice for termination/resignation: Two months written notice by the Company or three months written notice by the Executive.
Details of remuneration entitlement on termination: Payment of salary and employee entitlements up to the date of termination and one month’s salary for each year worked by the Executive.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

DIRECTORS’ REPORT

Remuneration of key management personnel

Table 1: Remuneration for the year ended 30 June 2014

Key Management Personnel Non-Executive Directors Mr IJ Gandel Mr JD Kenny Sub-total Executive Directors Mr MB Rosenstreich Mr J Starink Sub-total Other key management personnel Mr A Ayyash Sub-total Total**	Short-term Benefits Cash, salary and commissions $ Share-based Payment Shares $ Post- employment Benefits Superannuation $ Total $ Remuneration consisting of options for the year % 80,000 - - 80,000 0.00% 40,000 - - 40,000 0.00%
	120,000 - - 120,000 102,360 - - 102,360 0.00% 150,000 - - 150,000 0.00%
	252,360 - - 252,360 200,241 - - 200,241 0.00%
	200,241 - - 200,241
	572,601 - - 572,601

These amounts have not been paid pending an improvement in the Company’s financial position.

** This amount includes consulting fees of $70,200 paid to Mr Rosenstreich during the period prior to his appointment as a director of the Company.

Table 2: Remuneration for the year ended 30 June 2013

Key Management Personnel Non-Executive Directors Mr IJ Gandel Mr JD Kenny Sub-total Executive Directors Mr J Starink Mr JSF Dunlop (resigned 12/7/14) Sub-total Other key management personnel Mr A Ayyash Dr JM Chisholm Sub-total Total*	Short-term Benefits Cash, salary and commissions $ Share-based Payment Shares $ Post- employment Benefits Superannuation $ Total $ Remuneration consisting of options for the year % 80,000 - - 80,000 0.00% 40,000 - - 40,000 0.00%
	120,000 - - 120,000 300,000 - - 300,000 0.00% - 50,000 - 50,000 100.00%
	300,000 50,000 - 350,000 188,600 - - 188,600 0.00% 197,400 - - 197,400 0.00%
	386,000 - - 386,000
	806,000 50,000 - 856,000

* Dr Chisholm was not considered a KMP for the 2013-14 year

Compensation Options: Granted and vested during the year (consolidated)

There were no options granted to Directors or other Key Management Personnel during 2013 or 2014.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

DIRECTORS’ REPORT

Table 3: Shares issued on exercise of compensation options (consolidated)

30 June 2014
	Shares issued	Paid per share	Unpaid per share
	No.	$	$
Directors
Nil	-	-	-
30 June 2013
	Shares issued	Paid per share	Unpaid per share
	No.	$	$
Directors
Nil	-	-	-

Share-based payment arrangements in existence

There were no share-based payment arrangements in existence in relation to directors and senior management during the financial year.

During the financial year:

There were no grants of share-based payment compensation to directors or senior management.
No directors or senior management exercised options that were granted to them as part of their compensation.

Option holdings of key management personnel (consolidated)

There are no options held in Gippsland Limited by key management personnel.

Table 4: Shareholdings of key management personnel (consolidated)

Shares held in Gippsland Limited (number) by key management personnel are:

30 June 2014	Balance 1.7.2013 Granted as remuneration On exercise of Options Net Change Other Balance 30.6.2014 Ord Ord Ord Ord Ord*
Directors Mr IJ Gandel Mr JD Kenny Mr J Starink Executives Mr A Ayyash 30 June 2013	586,788,200 - - - 586,788,200 5,165,819 - - - 5,165,819 3,085,715 - - - 3,085,715 974,784 - - - 974,784
	596,014,518 - - - 596,014,518

	Balance 1.7.2012 Granted as remuneration On exercise of Options Net Change Other Balance 30.6.2013 Ord Ord Ord Ord Ord*
Directors Mr IJ Gandel Mr JD Kenny Mr J Starink Mr JSF Dunlop (resigned 12 July 2012) Executives Mr A Ayyash Dr JM Chisholm	328,601,392 - - 258,186,808 586,788,200 2,892,858 - - 2,272,961 5,165,819 2,160,000 - - 925,715 3,085,715 1,200,000 5,000,000 - 514,286 6,714,286 974,784 - - - 974,784 2,790,370 - - 697,593 3,487,963
	338,619,404 5,000,000 - 262,597,363 606,216,767

Net change refers to shares purchased or sold during the financial year.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

DIRECTORS’ REPORT

Related party transactions with key management personnel

Related party transactions with key management personnel, other than those already disclosed in this remuneration report, are as follows:

are as follows:
	*2014*	*2013*
	$	$
Gandel Metals Pty Limited – a company associated with Mr IJ
Gandel provided loan funds to Gippsland. The interest rates for
the loans is 5.33%, the loans are unsecured and are outstanding at
the balance date (Refer to Note 15).	2,572,016	-
Gandel Metals Pty Limited – a company associated with Mr IJ
Gandel received interest on its loan funds to Gippsland. The
interest rate for the loan is 5.33%, the loans were unsecured and
are outstanding at the balance date.	50,341	-
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandel
provided loan funds to Gippsland. The interest rate for the loans
was 7.14% (2013), the loans were unsecured and both loans have
been repaid.	-	1,200,000
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandel
was repaid loan funds by Gippsland. The interest rate for the
loans was 7.14% (2013) and the loans were unsecured.	-	1,200,000
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandel
received interest on its loan funds to Gippsland up to the date of
repayment of the loan by Gippsland Ltd. The interest rate for the
loans was 7.14% (2013), the loans were unsecured and both loans
have been repaid.	-	9,215

[END OF REMUNERATION REPORT]

Signed in accordance with a resolution of the Board of Directors.

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MB ROSENSTREICH Managing Director

Dated this 30[th] day of September 2014.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

The Board of Directors Gippsland Limited Suite 12 186 Hay Street SUBIACO WA 6008

Tel: +61 8 9365 7000 Fax: +61 9365 7001 www.deloitte.com.au

30 September 2014

Dear Board Members

Gippsland Limited

In accordance with section 307C of the Corporations Act 2001 , I am pleased to provide the following declaration of independence to the directors of Gippsland Limited

As lead audit partner for the audit of the financial statements of Gippsland Limited for the financial year ended 30 June 2014, 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.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Chris Nicoloff Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2014

*Note*	*2014* *2013* $ $
Revenue 3(a) Finance revenue 3(a) Other Income 3(b) Total Income Cost of sales Other gains and losses 3(c) Administration expense 3(d) Employee benefits expense 3(e) Foreign exchange gain/(losses) Share based payment expense 3(e) Project evaluation expense Depreciation and amortisation expense Impairment of exploration and evaluation expenditure 11 Impairment of mine properties 12 Impairment of property plant and equipment 10 Impairment of inventories 8 Finance costs Total expenses Loss before income tax Income tax expense 4 Loss after income tax Other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange rate differences on translating foreign operations Total other comprehensive income Total comprehensive loss for the period Loss is attributable to: Members of the parent Non-controlling interest Total comprehensive loss is attributable to: Members of the parent Non-controlling interest Basic earnings/(loss) per share (cents per share) 5 Diluted earnings/(loss) per share (cents per share) 5	2,146,298 - 1,001 8,228 33,773 -
	2,181,072 8,228
	(3,140,579) - - (1,348,318) (741,955) (1,454,254) (1,175,831) (1,041,773) 7,250 (7,136) - (50,000) (673,528) (364,283) (159,354) (86,836) (213,973) (3,645,635) (969,711) - (850,071) - (55,510) - (56,868) (9,610)
	(8,030,130) (8,007,845) (5,849,058) (7,999,617) - -
	(5,849,058) (7,999,617) (217,989) (69,416)
	(217,989) (69,416)

	(6,067,047) (8,069,033)
	(3,851,672) (7,818,715) (1,997,386) (180,902)
	(5,849,058) (7,999,617)
	(4,283,157) (7,959,875) (1,783,890) (109,158)
	(6,067,047) (8,069,033)
	(0.43) (0.67) (0.43) (0.67)

The accompanying notes form an integral part of this Consolidated Statement of Profit or Loss and Other Comprehensive Income.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

*Note*	*2014* *2013* $ $
ASSETS Current Assets Cash and cash equivalents 6 Trade and other receivables 7 Inventories 8 Other assets 9 Total Current Assets Non-Current Assets Property, plant and equipment 10 Exploration and evaluation 11 Mine properties 12 Total Non-Current assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 13 Provisions 14 Loans and borrowings 15 Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Equity attributable to equity holders of the parent Contributed equity 17(a) Reserves 18(a) Accumulated losses 18(b) Non-controlling interest 16 TOTAL EQUITY	276,698 586,883 26,683 313,424 68,967 94,976 46,346 55,990
	418,694 1,051,273
	1,030,053 1,938,858 3,833,035 4,040,894 - 1,573,476
	4,863,088 7,553,228
	5,281,782 8,604,501
	1,521,041 1,355,268 114,387 107,848 2,572,016 -
	4,207,444 1,463,116
	4,207,444 1,463,116
	1,074,338 7,141,385
	48,530,322 48,530,322 (1,689,406) (1,257,921) (41,816,060) (37,964,388) (3,950,518) (2,166,628)
	1,074,338 7,141,385

The accompanying notes form an integral part of this Consolidated Statement of Financial Position.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2014

*Note*	*2014* *2013* $ $
Cash flows from operating activities Receipts from sale of alluvial tin Payments to suppliers and employees Payments for project evaluation Interest received Finance costs Other receipts Net cash flows (used in) operating activities 6 Cash flows from investing activities Receipts from sale of alluvial tin Payments for exploration and evaluation Payments for mine properties Payments for plant and equipment Loans repaid by other entities Proceeds from sale of financial assets Net cash flows (used in) investing activities Cash flows from financing activities Proceeds from issue of fully paid shares 17(b) Payment of transaction costs 17(b) Proceeds from borrowings Repayment of borrowing Net cash flows from financing activities Net (decrease)/increase in cash and cash equivalents held Net foreign exchange differences Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 6	2,123,180 - (4,172,137) (2,062,546) (337,578) (364,283) 1,073 8,465 (36,252) (9,610) 33,773 -
	(2,387,941) (2,427,974)
	- 1,052,798 (374,203) (1,401,717) - (1,790,348) (115,525) (944,860) 8,287 - - 1,916,337
	(481,441) (1,167,790)
	- 3,032,162 (6,221) (76,465) 2,572,000 1,200,000 - (1,200,000)
	2,565,779 2,955,697
	(303,603) (640,067) (6,582) 57,368 586,883 1,169,582
	276,698 586,883

The accompanying notes form an integral part of this Consolidated Statement of Cash Flows.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2014

At 1 July 2012 Currency translation differences Loss for the year Total comprehensive income for the year Transactions with owners in their capacity as owners Issue of share capital Transaction costs Cost of share-based payments At 30 June 2013 Currency translation differences Loss for the year Total comprehensive income for the year Transactions with owners in their capacity as owners Issue of share capital Transaction costs Cost of share-based payments At 30 June 2014	Issued capital Accumulated losses Option reserve Foreign currency translation reserve Non- controlling interest Total equity $ $ $ $ $ $
	45,530,847 (30,145,673) 534,662 (1,651,423) (2,057,470) 12,210,943
	- - - (141,160) 71,744 (69,416) - (7,818,715) - - (180,902) (7,999,617)
	- (7,818,715) - (141,160) (109,158) (8,069,033)
	3,032,162 - - - - 3,032,162 (82,687) - - - - (82,687) 50,000 - - - - 50,000
	48,530,322 (37,964,388) 534,662 (1,792,583) (2,166,628) 7,141,385
	- - - (431,485) 213,496 (217,989) - (3,851,672) - - (1,997,386) (5,849,058)
	- (3,851,672) - (431,485) (1,783,890) (6,067,047)
	- - - - - - - - - - - - - - - - - -
	48,530,322 (41,816,060) 534,662 (2,224,068) (3,950,518) 1,074,338

The accompanying notes form an integral part of this Consolidated Statement of Changes in Equity.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

1 CORPORATE INFORMATION

The financial report of Gippsland Limited for the year ended 30 June 2014 was authorised for issue in accordance with a resolution of the directors on 30 September 2014.

Gippsland Limited which is the ultimate parent company, is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the Group is exploration and mine development.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and applicable Australian Accounting Standards.

The consolidated financial statements have been prepared on the basis of historical cost, except for certain properties and financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair values of the consideration given in exchange for goods and services. All amounts are presented in Australian dollars, unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2, leasing transactions that are within the scope of AASB 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.

For the purpose of preparing the financial statements, the consolidated entity is a for-profit entity.

(b) Going Concern

The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The consolidated entity has incurred a net loss after income tax of $5,849,058 (2013: loss of $7,999,617) and experienced net cash outflows from operations of $2,387,941 (2013: $2,427,974) and net cash outflows from investing activities of $481,441 (2013: $1,167,790) for the year ended 30 June 2014. As at 30 June 2014, the consolidated entity had a working capital deficiency of $3,798,750 and had cash and cash equivalents of $276,698.

The ability of the company and the consolidated entity to continue as going concerns is principally dependent upon raising additional capital to fund project development, the Abu Dabbab project, other commitments, other principal activities and provide additional working capital.

These conditions indicate a material uncertainty that may cast significant doubt about the company and the consolidated entity’s ability to continue as going concerns.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

Subsequent to year end, Gippsland entered into agreements with Gandel Metals Proprietary Limited (a director related entity of Ian Gandel) to provide $620,000 in short-term funding. Details of the terms of this loan have been disclosed in Note 24 to the financial report. To the date of this report, the Company has received $3,192,000 of loan funding. In addition to this loan, Gandel Metals Pty Ltd has provided a conditional letter of support for further loan funding to 30 November 2014 to an amount sufficient to enable Gippsland to meet its debts as and when they fall due for that period, being approximately $362,000.

The directors have prepared a cash flow forecast for the period ending 30 September 2015 which indicates that the current cash resources will not meet expected cash outgoings without additional capital and / or debt funding. The directors anticipate that these requirements will be met through the following:

i. Obtaining the further loan funding to 30 November 2014 based on the conditional letter of support noted above;
ii. The continual deferral of amounts currently due and payable to trade creditors and other payables, particularly in respect to the Egyptian operations;
iii. Strategic sale of an equity interest in the core project for a tranche 1 consideration of $16,950,000 by 1 December 2014;
iv. Sale of plant and equipment from the Alluvial Mining Project for at least $351,000 by 1 December 2014; and
v. Obtaining a licence renewal confirmation and deferral on exploration commitments on its Eritrean project from the Eritrean Ministry of Energy and Mines for a period of at least 12 months from the date of the signing of this financial report.

The Company intends to use part of the cash proceeds obtained from the completion of the sale of equity interest to repay the short-term funding provided to the Company by Gandel Metals Proprietary Limited.

Should the company be unable to achieve the initiatives above in the required timeframe, the company and the consolidated entity will need to seek an extension of existing funding arrangements or obtain alternative funding arrangements. The directors are satisfied that they will achieve the matters set out above and therefore the going concern basis of preparation is appropriate.

Should the company and the consolidated entity be unable to achieve the initiatives referred to above, there is a material uncertainty whether the company and the consolidated entity will be able to continue as going concerns and, therefore, whether they will realise their assets and discharge their liabilities in the normal course of business and at the amounts stated in the financial report.

The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the company and the consolidated entity not continue as going concerns.

(c) Statement of Compliance

Compliance with Australian Accounting Standards ensures the financial report, the financial statements and notes comply with International Financial Reporting Standards (“IFRS”).

(d) New Standards and Interpretations Adopted

The consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to their operations and are effective for the current financial reporting period beginning 1 July 2013.

The following new and revised Standards and Interpretations have been adopted in the current period and have affected the amounts reported in these financial statements:

		AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements	This standard removes the individual key management personnel disclosure requirements in AASB 124 ‘Related Party Disclosures’. As a result the Group only discloses the key management personnel compensation in total and for each of the categories required in AASB 124. In the current year the individual key management personnel disclosure previously required byAASB 124(note 26 and 27 in the 30 June 2013 financial statements)is

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

	now disclosed in the remuneration report due to an amendment to Corporations Regulations 2001 issued in June 2013.
AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities	The Group has applied the amendments to AASB 7 ‘Disclosures – Offsetting Financial Assets and Financial Liabilities’ for the first time in the current year. The amendments to AASB 7 require entities to disclose information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement. The amendments have been applied retrospectively. As the Group does not have any offsetting arrangements in place, the application of the amendments does not have any material impact on the consolidated financial statements.
AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle	The Annual Improvements to AASBs 2009 - 2011 have made a number of amendments to AASBs. The amendments that are relevant to the Group are the amendments to AASB 101 regarding when a statement of financial position as at the beginning of the preceding period (third statement of financial position) and the related notes are required to be presented. The amendments specify that a third statement of financial position is required when: a) an entity applies an accounting policy retrospectively, or makes a retrospective restatement or reclassification of items in its financial statements, and b) the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position. The amendments specify that related notes are not required to accompany the third statement of financialposition.
AASB CF 2013-1 ‘Amendments to the Australian Conceptual Framework’ and AASB 2013-9 ‘Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments’ (Part A Conceptual Framework)	This amendment has incorporated IASB’s Chapters 1 and 3 Conceptual Framework for Financial Reporting as an Appendix to the Australian Framework for the Preparation and Presentation of Financial Statements. The amendment also included not-for-profit specific paragraphs to help clarify the concepts from the perspective of not-for-profit entities in the private and public sectors. As a result the Australian Conceptual Framework now supersedes the objective and the qualitative characteristics of financial statements, as well as the guidance previously available in Statement of Accounting Concepts SAC 2 ‘Objective of General Purpose Financial Reporting’. The adoption of this amending standard does not have anymaterial impact on the consolidated financial statements.
AASB 10 Consolidated Financial Statements and AASB 2011-7 Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards	AASB 10 replaces the parts of AASB 127 ‘Consolidated and Separate Financial Statements’ that deal with consolidated financial statements and Interpretation 112 ‘Consolidation – Special Purpose Entities’. AASB 10 changes the definition of control such that an investor controls an investee when a) it has power over an investee, b) it is exposed, or has rights, to variable returns from its involvement with the investee, and c) has the ability to use its power to affect its returns. All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Additional guidance has been included in AASB 10 to explain when an investor has control over an investee. Some guidance included in AASB 10 that deals with whether or not an investor that owns less than 50 per cent of the voting rights in an investee has control over the investee is relevant to the Group. The adoption of this amending standard does not have any material impact on the consolidated financial statements.
AASB 11 Joint Arrangements and AASB 2011-7 Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards	AASB 11 replaces AASB 131 ‘Interests in Joint Ventures’, and the guidance contained in a related interpretation, Interpretation 113 ‘Jointly Controlled Entities – Non-Monetary Contributions by Venturers’, has been incorporated in AASB 128 (as revised in 2011). AASB 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for. Under AASB 11, there are only two types of joint arrangements – joint operations and joint ventures. The classification of joint arrangements under AASB 11 is determined based on the rights and obligations ofparties to thejoint

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

		arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights to the net assets of the arrangement. Previously, AASB 131 contemplated three types of joint arrangements – jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint arrangements under AASB 131 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement that was established through a separate entity was accounted for as a jointly controlled entity). The adoption of this amending standard does not have any material impact on the consolidated financial statements.
	AASB 12 Disclosure of Interests in Other Entities and AASB 2011- 7 Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards	AASB 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the application of AASB 12 has resulted in more extensive disclosures in the consolidated financial statements.
	AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13	The Group has applied AASB 13 for the first time in the current year. AASB 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The scope of AASB 13 is broad; the fair value measurement requirements of AASB 13 apply to both financial instrument items and non-financial instrument items for which other AASBs require or permit fair value measurements and disclosures about fair value measurements, except for share based payment transactions that are within the scope of AASB 2 ‘Share- based Payment’, leasing transactions that are within the scope of AASB 117 _‘_Leases’, and measurements that have some similarities to fair value but are not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes). AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under AASB 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, AASB 13 includes extensive disclosure requirements. AASB 13 requires prospective application from 1 July 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Group has not made any new disclosures required by AASB 13 for the 2013 comparative period. Other than the additional disclosures, the application of AASB 13 does not have any material impact on the amounts recognised in the consolidated financial statements.
	AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments	This standard amends AASB 10 and various Australian Accounting Standards to revise the transition guidance on the initial application of those Standards. This standard also clarifies the circumstances in which adjustments to an entity’s previous accounting for its involvement with other entities are required and the timing of such adjustments. The adoption of this amending standard does not have anymaterial impact on the consolidated financial statements.
	AASB 119 Employee Benefits (2011) and AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119(2011)	In the current year, the Group has applied AASB 119 (as revised in 2011) ‘Employee Benefits’ and the related consequential amendments for the first time. AASB 119 (as revised in 2011) changes the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations andplan assets. The amendments

GIPPSLAND LIMITED AND CONTROLLED ENTITIES 19 ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

	require the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of AASB 119 and accelerate the recognition of past service costs. All actuarial gains and losses are recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assets used in the previous version of AASB 119 are replaced with a ‘net interest’ amount under AASB 119 (as revised in 2011), which is calculated by applying the discount rate to the net defined benefit liability or asset. The adoption of this amending standard does not have any material impact on the consolidated financial statements.
AASB 127 Separate Financial Statements (2011) and AASB 2011-7 Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards	This standard requires that when an entity prepares separate financial statements, investments in subsidiaries, associates, and joint ventures are accounted for either at cost, or in accordance with AASB 9 ‘Financial Instruments’. This standard also deals with the recognition of dividends, certain group reorganisations and includes a number of disclosure requirements. The adoption of this amending standard does not have any material impact on the consolidated financial statements.
AASB 128 Investments in Associates and Joint Ventures (2011) and AASB 2011-7 Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards	This standard defines 'significant influence' and provides guidance on how the equity method of accounting is to be applied (including exemptions from applying the equity method in some cases). It also prescribes how investments in associates and joint ventures should be tested for impairment. The adoption of this amending standard does not have any material impact on the consolidated financial statements.
AASB 2012-6 Amendments to Australian Accounting Standards Mandatory Effective Date of AASB 9 and Transition Disclosures	This standard amends the mandatory effective date of AASB 9 ‘Financial Instruments’ so that AASB 9 is required to be applied for annual reporting periods beginning on or after 1 January 2015 instead of 1 January 2013. It also modifies the relief from restating prior periods by amending AASB 7 ‘Financial Instruments: Disclosures’ to require additional disclosures on transition from AASB 139 ‘Financial Instruments: Recognition and Measurement’ to AASB 9 in some circumstances. The adoption of this amending standard does not have any material impact on the consolidated financial statements.
Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine and AASB 2011-12 Amendments to Australian Accounting Standards arising from Interpretation 20	This interpretation clarifies the requirements for accounting for stripping costs associated with waste removal in surface mining, including when production stripping costs should be recognised as an asset, how the asset is initially recognised, and subsequent measurement. The adoption of this interpretation does not have any material impact on the consolidated financial statements.

Accounting Standards and Interpretations issued but not yet effective

The following Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by the consolidated entity for the year ended 30 June 2014.

Standard / Interpretation	Effective for annual reporting periods beginning/ending on or after	Expected to be applied be consolidated entity
AASB 9 Financial Instruments, and the relevant amendingstandards	1 January 2018	30 June 2019
AASB 1031 ‘Materiality’ (2013)	1 January 2014	30 June 2015
AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities	1 January 2014	30 June 2015

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

Standard / Interpretation	Effective for annual reporting periods beginning/ending on or after	Expected to be applied be consolidated entity
AASB 2013-3 ‘Amendments to AASB 135 – Recoverable Amount Disclosures for Non-Financial Assets’	1 January 2014	30 June 2015
AASB 2013-4 ‘Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting’	1 January 2014	30 June 2015
AASB 2013-5 Amendments to Australian AccountingStandards – Investment Entities	1 January 2014	30 June 2015
AASB 2013-9 ‘Amendments to Australian Accounting Standards – Conceptual Framework, Materialityand Financial Instruments’	1 January 2014	30 June 2015
INT 21 ‘Levies’	1 January 2014	30 June 2015
AASB 2014-1 ‘Amendments to Australian Accounting Standards’ - Part A: ‘Annual Improvements 2010–2012 and 2011–2013 Cycles’ - Part B: ‘Defined Benefit Plans: Employee Contributions (Amendments to AASB 119)’ - Part C: ‘Materiality’	1 January 2016	30 June 2017
AASB 2014-1 ‘Amendments to Australian Accounting Standards’ – Part D: ‘Consequential Amendments arisingfrom AASB 14’	1 January 2016	30 June 2017
AASB 2014-1 ‘Amendments to Australian Accounting Standards’ – Part E: ‘Financial Instruments’	1 January 2015	30 June 2016
AASB 2014-3 ‘Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations	1 January 2016	30 June 2017
AASB 2014-4 ‘Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation’	1 January 2016	30 June 2017

At the date of authorisation of the financial statements, the following IASB Standards and IFRIC Interpretations were also in issue but not yet effective, although Australian equivalent Standards and Interpretations have not yet been issued.

Standard / Interpretation	Effective for annual reporting periods beginning/ending on or after	Expected to be applied be consolidated entity
IFRS 15 ‘Revenue from Contracts with Customers’	1 January 2017	30 June 2018
IFRS 9 Financial Instruments	1 January 2018	30 June 2019
Equity Method in Separate Financial Statements (Amendments to IAS 27)	1 January 2016	30 June 2017

The impact of these recently issued or amended Standards and Interpretation are not expected to have a material impact on the consolidated entity.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(e) Basis of consolidation

The consolidated financial statements comprise the financial statements of Gippsland Limited and entities (including special purpose entities) controlled by Gippsland Limited (its subsidiaries).

Control is achieved when the Company:

has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from the date on which control is transferred out of the Group. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Gippsland Limited has control.

(f) Interests in joint operations

The Group's interest in its joint operations is accounted for by recognising the Group's assets and liabilities from the joint operation, as well as expenses incurred by the Group and the Group's share of income earned from the joint operation, in the consolidated financial statements.

(g) Foreign currency translation

Both the functional and presentation currency of Gippsland Limited and its Australian subsidiaries is Australian dollars ($AU).

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

All differences in the consolidated financial report are taken to the statement of profit or loss and other comprehensive income with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in the statement of profit or loss and other comprehensive income.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates 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.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

The functional currency of the overseas subsidiaries Tantalum Egypt JSC, Nubian Resources JSC and Nubian Resources PLC is Egyptian pounds (EGP).

As at the reporting date the assets and liabilities of these overseas subsidiaries are translated into the presentation currency of Gippsland Limited at the rate of exchange ruling at the statement of financial position date and the statements of profit or loss and other comprehensive income are translated at the weighted average exchange rates for the year.

The exchange differences arising on the retranslation are taken directly to a separate component of equity.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the statement of profit or loss and other comprehensive income.

(h) Cash and cash equivalents

Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(i) Trade and other receivables

Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount which represents fair value at that date less an allowance for any doubtful debts. An allowance of doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

(j) Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-infirst-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Categories of inventory include spare parts and stores.

(k) Other financial assets

Other financial assets in the parent company represent investments in subsidiaries held at cost less any impairment.

(l) Property, plant and equipment

Leasehold improvements, buildings and plant and equipment are stated at cost less accumulated depreciation and any impairment losses recognised.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Leasehold Improvements - over 2 to 5 years Buildings – over 20 years Plant and equipment - over 3 to 10 years

Impairment

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cashgenerating unit to which the asset belongs. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses are recognised in the statement of profit or loss and other comprehensive income.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued used of the asset.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statement of profit or loss and other comprehensive income in the period the item is derecognised.

(m) Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred is recognised as exploration and evaluation assets, measured on the cost basis. The 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 or loss in the year in which the decision to abandon the area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

The Group assesses the stage of each mine under construction to determine when a mine moves into the pre-production stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such as the complexity of a plant and its location. The Group considers various relevant criteria to assess when the mine and the processing plant is substantially complete and ready for its intended use. At this time, any costs capitalised to ‘exploration and evaluation’ are reclassified to ‘mine properties’. Some of the criteria will include, but are not limited, to the following:

Availability of the plant;
Completion of a reasonable period of testing of the mine plant and equipment;
Ability to produce metal in saleable form (within specifications); and
Ability to sustain ongoing production of metal at commercial rates of production.

(n) Mine properties

When a mine construction project moves into the pre-production stage, any costs capitalised to ‘exploration and evaluation’ are reclassified to ‘mine properties’. During this pre-production stage, certain mine construction and commissioning costs continue to be capitalised to mine properties and offset any incidental revenue earned until such time as the project is operating in line with management’s expectation.

When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for costs that qualify for capitalisation relating to mine asset additions or improvements, mine development or mineable reserve development. It is also at this point that depreciation / amortisation commences.

Mine properties are recorded at cost, less accumulated depreciation and amortisation and any impairment losses.

Amortisation is over the units of production of the economically recoverable reserves (that is, tonnes of ore).

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(o) Recoverable amount of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

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

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

(p) Trade and other payables

Trade and other payables are carried at amortised cost and due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

(q) Provisions

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

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

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

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

(r) Loans and borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.

(s) Contributed equity

Ordinary share capital is recognised at the fair value of the consideration received.

Any transaction costs arising on the issue of shares are recognised directly in equity as a reduction of the share proceeds received.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(t) Share-based payment transactions

The Group provides remuneration to employees (including directors) of the Group in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Gippsland Limited ('market conditions').

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

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects - (i) the extent to which the vesting period has expired, and

(ii) the number of awards that, in the opinion of the directors of the Group, will ultimately vest.

This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

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

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see note 5).

(u) Leases

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. All other leases are classified as finance leases. Operating lease payments are recognised as an expense in the statement of profit or loss and other comprehensive income on a straight-line basis over the lease term. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(v) Revenue

Revenue is measured at the fair value of the consideration received or receivable. Revenue from the sale of alluvial tin is recognised when the goods are delivered and title has passed, at which time the following conditions are satisfied:

the Group has received the provisional advance payment from the buyer for the goods; and
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

Interest revenue is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

(w) Income tax

In principle, deferred income tax is provided on all temporary differences at the statement of financial position date between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes.

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

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
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 credits and unused tax losses can be utilised:

except where the deferred income tax asset relating to the deductible temporary differences 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
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 statement of financial position 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 statement of financial position 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.

(x) Financial instruments

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

Financial assets

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.

A financial asset is classified as held for trading if:
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and AASB 139 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘other gains and losses’ line item in the consolidated statement of profit or loss and other comprehensive income. Fair value is determined in the manner described in note 29.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve.

(y) Other taxes

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

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

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

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

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

(z) Employee entitlements

Provision is made for the Company's liability for employee benefits arising from services rendered by employees at balance date. Employee benefits expected to be settled within one year, together with entitlements arising from wages and salaries, annual leave and sick leave, which will be settled within one year, have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Contributions are made by the entity to employee superannuation funds and are charged as expenses when incurred.

(aa) Derecognition of financial instruments

The derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(bb)Segment information

Operating segments have been identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance. The chief operating decision maker has been identified as the board of directors of the Company.

(cc) Critical accounting judgements and key sources of estimation uncertainty

In the application of Australian Accounting Standards management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Judgments made by management that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, these relate to impairment of inter-company loans and exploration and evaluation expenditure.

The criteria used by management in determining the impairment is as follows:

Inter-company loans are impaired by the lending company to the extent that there is uncertainty about the future recoverability of such loans from the borrowing company. Reversal of all or part of prior period impairment losses may be approved by management once a borrowing company has a capacity to repay all or part of such intercompany loans, and
The ultimate recoupment of exploration and evaluation expenditure is dependent upon successful development and commercial exploitation or alternatively the sale of the respective areas of interest at an amount at least equal to book value. Therefore exploration and evaluation expenditure is impaired until such time as the aforementioned can be determined, normally by way of a Feasibility Study or some other event. Reversal of prior period impairment losses may be approved by management once the capacity to exploit or sell has been positively determined.
The impairment of financial assets is accounted for by revaluing the financial asset to market value at the reporting date. The financial asset consists of shares in an ASX listed company and the market value is determined by using the closing price on the last business day of the reporting period. Any movement in the market value of the financial asset is brought to account in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
The Group assesses the stage of each mine under construction to determine when a mine moves into the preproduction stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such as the complexity of a plant and its location. The Group considers various relevant criteria to assess when the mine and the processing plant is substantially complete, ready for its intended use and operating in the manner intended by management. When a mine construction project moves into the preproduction stage, any costs capitalised to ‘exploration and evaluation’ are reclassified to ‘mine properties’.

Mine properties are amortised over the units of production of the economically recoverable reserves.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

(dd)Financial risk management policy

Details of the Group's financial risk management policy are set out in Note 29.

(ee) Compound financial instruments

The Group evaluates the terms of any financial instrument to determine whether it contains both a liability and an equity component. The separate components of a financial instrument that create a financial liability and grant an option to

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

the holder of the instrument to convert it into an equity instrument are recognised separately on the statement of financial position.

(ff) Comparative figures

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

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

3 REVENUES, OTHER INCOME AND EXPENSES

3 REVENUES, OTHER INCOME AND EXPENSES
	*2014* *2013* $ $
Revenue and expenses from continuing operations (a) Revenue Revenue from sale of alluvial tin Finance revenue (b) Other income Sundry income (c) Other gains and losses Loss on sale of financial assets (d) Administration expenses Included in administrative expenses: Minimum lease payments - operating lease Consultancy expenses (e) Employee benefits expenses Payroll cost Superannuation As per Statement of Profit or Loss and Other Comprehensive Income Share-based payments expense Total employee benefit expenses 4 INCOME TAX Statement of Profit or Loss and Other Comprehensive Income	2,146,298 - 1,001 8,228
	2,147,299 8,228
	33,773 -
	33,773 -
	- (1,348,318)
	- (1,348,318)
	169,769 198,901 70,663 198,505 1,154,993 1,021,544 20,838 20,229
	1,175,831 1,041,773
	- 50,000
	1,175,831 1,091,773
	*2014* *2013* $ $
(a) The components of income tax expense for the years ended 30 June 2014 and 2013 are: Statement of Profit or Loss and Other Comprehensive Income Current income tax Current income tax charge/(benefit) Deferred income tax Relating to origination and reversal of temporary differences Benefit from previously unrecognised tax loss used to reduce deferred tax expense Income tax expense/(benefit) reported in statement of profit or loss and other comprehensive income Statement of changes in equity Income tax liability reported in equity	- - - - - -
	- -

	- -

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

A reconciliation of income tax expense (benefit) applicable to accounting profit before income tax at the statutory income tax rate to income tax expense at the Group's effective income tax rate for the years ended 30 June 2014 and 2013 is as follows:

Statement of Profit or Loss and Other Comprehensive Income

Statement of Profit or Loss and Other Comprehensive Income
	*2014* *2013* $ $
Accounting profit (loss) before tax At the statutory income tax rate of 30% (2013: 30%) Non-deductible expenses Temporary differences and tax losses not recognised Income tax expense recognised on profit or loss Effective income tax rate Unrecognised deferred tax assets and liabilities Deferred tax assets and liabilities have not been recognised in respect of the following items:	(5,849,058) (7,999,617)
	(1,754,717) (2,399,885) 294,178 770,029 1,460,539 1,629,856
	- -
	- -
	0% 0%

	*2014* *2013* $ $
Deferred tax liabilities Other assets Deferred tax assets Business related costs Accrued audit fees Accrued expenses Employee entitlements Foreign exchange loss Tax losses (domestic) Unrecognised deferred tax assets Net deferred tax Tax losses and temporary differences not recognised	(119) (122)
	(119) (122)
	17,178 19,003 2,929 3,597 111,287 112,255 34,316 32,355 438 224,447 7,426,858 5,740,810
	7,593,006 6,132,467 (7,592,887) (6,132,345)
	119 122
	- -
	7,592,887 6,132,345

The deductible temporary differences and tax losses do not expire under current legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Company and Group can utilise benefits.

5 EARNINGS PER SHARE

5 EARNINGS PER SHARE
	*2014*	*2013*
	*cents*	*cents*
Basic earnings per share	(0.43)	(0.67)
Diluted earnings per share	(0.43)	(0.67)

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

The following reflects the income and share data used in the basic and diluted earnings per share computations:

(a) Reconciliation of earnings used in calculating earnings per share

	*2014*	*2013*
	$	$
(Loss)/profit attributable to ordinary equity holders of the
Company used in calculating basic and diluted earnings per	(5,849,058)	(7,999,617)
share

(b) Weighted average number of shares used in the denominator

Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share	*Shares* Shares 1,375,700,081 1,195,966,832
	1,375,700,081 1,195,966,832

There were no potential ordinary shares as at 30 June 2014 (600,000 for 30 June 2013).

The consolidated entity's options over ordinary shares could potentially dilute basic earnings per share in the future, however they have been excluded from the calculations of diluted earnings per share because they are anti-dilutive and out of the money for the years presented.

6 CASH AND CASH EQUIVALENTS

	*2014* *2013* $ $
Cash at bank and in hand Short term deposits	276,698 285,883 - 301,000
	276,698 586,883

Cash at bank and in hand earns interest at floating rates based on daily bank rates.

Short-term deposits are made for varying periods of between one day and one month depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

The fair value of cash and cash equivalents is $276,698 (2013: $586,883).

Reconciliation to statement of cash flows

For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents comprise the following at 30 June:

Cash at bank and in hand Short-term deposits	276,698 285,883 - 301,000
	276,698 586,883

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

	*2014*	*2013*
	$	$
Reconciliation from the net profit/(loss) after tax to the net cash flows used in
operations
Net (Loss)/Profit after income tax	(5,849,058)	(7,999,617)
Adjustments for:
Depreciation and amortisation	159,354	86,836
Depreciation allocated to cost of sales	168,474	-
Amortisation of mine properties to cost of sales	745,421	-
Impairment losses	2,089,265	3,645,635
Reversal of impairment of loans to other entities	(8,287)	-
Foreign exchange loss (gain)	(106,454)	(35,258)
Share based payment expense	-	50,000
Loss on disposal of financial asset	-	1,348,318
Loss on disposal of assets	-	1,119
Changes in assets and liabilities
(increase)/decrease in trade and other receivables	298,522	(43,502)
(increase)/decrease in other assets	(2,138)	144,813
(increase)/decrease in inventories	(26,008)	(41,125)
(decrease)/increase in provisions	6,539	34,110
(decrease)/increase in trade and other payables	136,429	380,697
Net cash used in operating activities	(2,387,941)	(2,427,974)

Non-cash transactions

During the 2014 financial year, the Group did not enter into any non-cash investing and financing activities which are not reflected in the statement of cash flows.

During the 2013 financial year, the Group entered into the following non-cash investing and financing activities which are not reflected in the statement of cash flows:

The issue of 5,000,000 ordinary shares on 18 June 2013 at 1 cent per share in relation to director fees payable.

7 TRADE AND OTHER RECEIVABLES (CURRENT)

	*2014* *2013* $ $
Trade receivables (i) Other receivables (ii) Loan receivable from Adobha Resources Ltd (iii) Allowance for impairment of receivables (iii)	- 241,450 26,683 71,974 - 239,885 - (239,885)
	26,683 313,424

(i) Trade receivables are non-interest bearing and are generally on 30-day terms.

(ii) Other receivables relate to GST receivable from the Australian Taxation Office and a refund due from a supplier.

(iii) Gippsland loaned funds to Adobha Resources Ltd in relation to the proposed Initial Public Offering (“IPO”) of Adobha Resources Ltd. The loan funds were used by Adobha Resources Ltd for establishment costs, IPO costs, working capital and on-loaning funds to Adobha Resources (Eritrea) Pty Ltd for exploration costs. The proposed IPO was terminated in June 2011. The loan has been fully impaired and written off.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

8 INVENTORIES

	*2014* *2013* $ $
Spare parts and stores – at cost Spare parts in transit – at cost Provision for impairment – spare parts	112,878 94,976 8,757 - (52,668) -
	68,967 94,976

The cost of inventories recognised as an expense during the year in respect of continuing operations was nil (2013: nil).

9 OTHER ASSETS

	*2014* *2013* $ $
Prepayments Rental deposits Accrued revenue	38,370 52,779 7,976 3,139 - 72
	46,346 55,990

10 PROPERTY, PLANT AND EQUIPMENT

	*Leasehold* *Improvements* *Buildings* *Plant and* *equipment* *Total* $ $ $
Year ended 30 June 2014 Balance at 30 June 2013 Additions Reclassification of exploration and evaluation Depreciation allocated to cost of sales Impairment losses recognised in profit or loss Foreign Exchange Adjustment Depreciation and amortisation for the year Balance at 30 June 2014 At 1 July 2013 Cost Accumulated depreciation and impairment Net carrying amount At 30 June 2014 Cost Accumulated depreciation and impairment Net carrying amount Year ended 30 June 2013 Balance at 30 June 2012 Additions Disposals Foreign Exchange Adjustment Depreciation charge for the year Balance at 30 June 2013	1,614 154,241 1,783,003 1,938,858 - 1,781 107,847 109,628 - 192,014 - 192,014 - - (168,474) (168,474) - - (850,071) (850,071) - (7,381) (25,166) (32,547) (1,614) (36,877) (120,864) (159,355)
	- 303,778 726,275 1,030,053
	20,175 170,049 2,245,672 2,435,896 (18,561) (15,808) (462,669) (497,038)
	1,614 154,241 1,783,003 1,938,858
	- 355,115 2,147,020 2,502,135 - (51,337) (1,420,745) (1,472,082)
	- 303,778 726,275 1,030,053
	1,806 155,359 1,034,946 1,192,111 - 8,637 923,984 932,621 - (1,520) (1,520) - (86) (97,432) (97,518) (192) (9,669) (76,975) (86,836)
	1,614 154,241 1,783,003 1,938,858

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

Due to the closure of the Alluvial Tin Project in September 2014, the Group carried out a review of the recoverable amount of the Alluvial Mining plant and equipment with a view to bring any impairment required to account during the year ended 30 June 2014. These assets are used in the Group’s Tantalum-Tin reportable segment. The review led to the recognition of an impairment loss of $850,071, which has been recognised in profit or loss. This impairment loss was based on the Group’s estimate of the recoverable amount of the Alluvial Mining plant and equipment being the fair value less costs to sell. As it is difficult to obtain market prices for similar plant and equipment due to the small second-hand market for such assets, the Group has used what it considers is a conservative estimate of fair value less costs to sell for the plant and equipment. No impairment assessment was performed in 2013 as there was no indication of impairment.

11 EXPLORATION AND EVALUATION EXPENDITURE

11 EXPLORATION AND EVALUATION EXPENDITURE
	*2014* *2013* $ $
Exploration & evaluation expenditure (at cost) Accumulated amortisation and impairment Movement: Exploration & evaluation expenditure Balance at beginning of year Current year expenditure Foreign exchange adjustment Reclassification of expenditure as Property, Plant and Equipment Impairment Balance at end of year	10,785,834 10,944,830 (6,952,799) (6,903,936)
	3,833,035 4,040,894
	4,040,894 6,458,211 405,509 1,360,342 (207,381) (132,024) (192,014) - (213,973) (3,645,635)
	3,833,035 4,040,894

The ultimate recoupment of exploration and evaluation expenditure is dependent upon successful development and commercial exploitation or alternatively the sale of the respective areas of interest at an amount at least equal to book value.

For the year ended 30 June 2014 and 30 June 2013, evaluation expenditure on the Abu Dabbab project was capitalised at cost, until such time production commences and costs are transferred to ‘mine properties’.

For the year ended 30 June 2014 and 30 June 2013, there was no exploration expenditure on the Wadi Allaqi project.

For the year ended 30 June 2014, exploration expenditure in Eritrea in relation to the Group’s current Exploration Licences (Adobha and Gerasi South) of $213,973 (2013: $3,645,635) was impaired. Due to the reduction of exploration activities in Eritrea, the Group assessed the carrying value of the capitialised exploration expenditure in relation to the Adobha Exploration Licence and Gerasi South Exploration Licence and decided to fully impair the asset. The assessment led to the recognition of an impairment loss of $213,973, which has been recognised in profit or loss. Capitalised expenditure of $3,645,635 was fully impaired in 2013.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

12 MINE PROPERTIES

12 MINE PROPERTIES
	*2014* *2013* $ $
Mine properties (at cost) Accumulated amortisation and impairment Movement: Mine properties Balance at beginning of year Transfer from exploration and evaluation expenditure Additions Net pre-production revenue Prior year pre-production revenue adjustment Foreign exchange adjustments Amortisation Impairment Balance at end of year	1,750,059 1,573,476 (1,750,059) -
	- 1,573,476
	1,573,476 910,257 - - 1,912,019 - (1,236,406) 111,260 - 30,396 (12,394) (745,421) - (969,711) -
	- 1,573,476

During the year, $745,421 of the net capitalised costs in relation to the Alluvial Tin Project were amortised based on production. This has been treated as a cost of sales.

The Group carried out a review of the recoverable amount of the Alluvial Tin Project and determined that based on the Group’s forecasts, the recoverable amount of the Alluvial Tin Project was significantly less than its carrying value. The Directors decided to fully impair the remaining balance of net capitalised costs of $969,711, which has been recognised as an impairment expense in profit or loss. No impairment assessment was performed in 2013 as there was no indication of impairment. Accordingly, the carrying value of Mine Properties in the financial statements at the end of the year is nil.

13 TRADE AND OTHER PAYABLES (CURRENT)

	*2014* *2013* $ $
Trade payables and accruals (i)	1,521,041 1,355,268
	1,521,041 1,355,268

(i) Trade payables and accruals are non-interest bearing and are normally settled on repayment terms between 7 and 30 days.

14 PROVISIONS (CURRENT)

	*2014* *2013* $ $
Provision for annual leave Provision for long service leave 15 LOANS AND BORROWINGS (CURRENT)	79,899 83,721 34,488 24,127
	114,387 107,848
	*2014* *2013* $ $
Loans – unsecured	2,572,016 -
	2,572,016 -

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

During the period, Gandel Metals Pty Ltd, a company related to the Company’s Chairman, Mr Ian Gandel, provided unsecured loans to the Company of totalling $2,572,016. The terms of the loan agreements are as follows:

(a) the interest rate for the loans is equal to the ANZ loan interest rate, as varied (currently 5.33%);
(b) the loans are unsecured; and
(c) the loans are repayable by 1 November 2014 or such earlier date that Gippsland completes a capital raising for an amount equal to or greater than $500,000 more than the overall level of indebtedness to Gandel Metals at the time each loan agreement was entered into (currently the overall level of indebtedness to Gandel Metals is $3,192,000) .

During the year, interest paid or payable on the loan was $50,341.

16 NON-CONTROLLING INTEREST

	*2014* *2013* $ $
Balance at beginning of year Share of profit/(loss) for the year Share of movement in foreign currency translation reserve Balance at end of year 17 CONTRIBUTED EQUITY	(2,166,628) (2,057,470) (1,997,386) (180,902) 213,496 71,744
	(3,950,518) (2,166,628)
	*2014* *2013* $ $
(a) Ordinary Shares Issued and fully paid	48,530,322 48,530,322

Fully paid ordinary shares carry one vote per share and carry the right to dividends. Issued capital has no par value.

(b) Movement in ordinary share capital At 30 June 2012 Share issue (i) Share issue (ii) Share issue (iii) Share issue costs Subtotal (shares issued during year) At 30 June 2013 Share issue Share issue costs Subtotal (shares issued during year) At 30 June 2014		*Number of* *shares* $
		975,210,157 45,530,847 230,684,158 1,384,105 164,805,766 1,648,057 5,000,000 50,000 (82,687)
		400,489,924 2,999,475
		1,375,700,081 48,530,322
		- - -
		- -
		1,375,700,081 48,530,322

(i) 230,684,158 shares issued on 10 September 2012 for cash at 0.6 cents each.

(ii) 164,805,766 shares issued on 15 April 2013 for cash at 1 cent each.

(iii) 5,000,000 shares issued on 18 June 2013 in relation to fees payable at 1 cent each.

There are no unissued ordinary shares of Gippsland Limited under option.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

18 RESERVES AND ACCUMULATED LOSSES

(a) Reserves Option issue reserve Foreign currency translation reserve	*2014* *2013* $ $ 534,662 534,662 (2,224,068) (1,792,583) (1,689,406) (1,257,921) *Option issue reserve* *Foreign currency* *translation* *reserve* *Total* $ $ $
Movements in reserves At 30 June 2012 Share based payment Currency translation differences As at 30 June 2013 Currency translation differences As at 30 June 2014 (b) Accumulated losses Movements in accumulated losses were as follows: Balance 1 July Net profit/(loss) for the year Balance 30 June	534,662 (1,651,423) (1,116,761) - - - - (141,160) (141,160)
	534,662 (1,792,583) (1,257,921) - (431,485) (431,485)
	534,662 (2,224,068) (1,689,406)
	*2014* *2013* $ $ (37,964,388) (30,145,673) (3,851,672) (7,818,715) (41,816,060) (37,964,388)

(c) Nature and purpose of reserves

Option issue reserve

The option issue reserve is used to record items recognised as expenses on grant of share options.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the net investment hedged in these subsidiaries.

19 INTERESTS IN CONTROLLED ENTITIES

The consolidated financial statements include the financial statements of Gippsland Limited and the controlled entities listed in the following table:

Country of incorporation Percentage of equity interest held by the Group	Investment
2014 2013 % % Tantalum International Pty Ltd Australia 100 100 Here2win.com Pty Ltd Australia - 100 Adobha Resources (Eritrea) Pty Ltd Australia 100 100 Oryx Resources Pty Ltd Australia - 100 Gippsland (Jordan) Pty Ltd Australia - 100 Nubian Resources PLC United Kingdom 100 100 Tantalum Egypt JSC Egypt 50 50 Nubian Resources JSC Egypt 100 100	2014 2013 $ $ 100 100 - 100 100 100 - 100 - 100 27,388 27,388 - - - -
	27,588 27,888

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

Gippsland Limited is the ultimate Australian parent entity and ultimate parent of the Group.

Tantalum Egypt JSC is included in the consolidated financial statements on the basis that Gippsland Limited controls the activities of Tantalum Egypt JSC by way of Gippsland’s casting vote on the Board of Directors.

Here2win.com Pty Ltd, Oryx Resources Pty Ltd and Gippsland (Jordan) Pty Ltd were dormant subsidiaries and were deregistered during the year.

20 INTERESTS IN JOINT OPERATIONS AND BUSINESS UNDERTAKINGS

At 30 June 2014, the Group was a participant in the following joint operations:

Name of joint operations Seiga – Wadi Allaqi, Egypt Um Shashoba – Wadi Allaqi, Egypt Haimur – Wadi Allaqi, Egypt Nile Valley Block E – Wadi Allaqi, Egypt Nile Valley Block A – Wadi Allaqi, Egypt Um Garayat – Wadi Allaqi, Egypt Koleit – Wadi Allaqi, Egypt Um Tiur – Wadi Allaqi, Egypt Abu Swayel – Wadi Allaqi, Egypt	*2014* 2013 % Interest % Interest
	50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

The joint operations are not separate legal entities. They are contractual arrangements between the participants and are of the type where initially one party contributes tenements with the other party earning a specified percentage by funding exploration activities. The joint operations do not hold any assets and accordingly the Company's share of exploration expenditure is accounted for in accordance with the policy set out in Note 2.

The tenements are granted subject to an agreement with the Egyptian Government (EMRA) dated 21 June 2004 however the status of these tenements is in dispute with EMRA which the Company hopes to resolve through the grant of a large Exploration Licence area that encompasses all of the nine disputed tenements. No expenditure has been incurred or undertaken on the disputed tenements.

21 EXPENDITURE COMMITMENTS

(a) Lease expenditure commitments

The Group has entered into commercial leases for office accommodation in Perth, Australia; Asmara, Eritrea; and Cairo, Egypt.

Perth Office Lease

The property lease is a non-cancellable lease with a rolling 3 month term, with rent payable monthly in advance.

Cairo Office Lease

The property lease is a non-cancellable lease with a five year term, with rent payable monthly in advance.

Asmara Office Lease

The property lease was cancelled during the year following the closure of the Eritrean office.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

Future minimum rentals payable as at 30 June are as follows:

Within one year After one year but not more than five years	*2014* *2013* $ $
	33,500 125,600 20,800 40,800
	54,300 166,400

(b) Exploration expenditure commitments

Under Eritrean mining law, expenditure commitments entered into by a tenement holder with respect to a tenement are mandatory. Failure to expend funds in accordance with a commitment may result in a liability to the Eritrean government to the extent of the unexpended portion of the expenditure commitment, or forfeiture of the tenement/s. The Group has received verbal advice from the Eritrean Ministry of Energy and Mines that the minimum expenditure commitments in relation to the exploration licences has been waived and there is no remaining liability in relation to the current or prior year’s expenditure commitments. The Group has received a letter from the Eritrean Ministry of Energy and Mines stating that the Adobha Exploration Licence and the Gerasi South Exploration Licence may be revoked if exploration activities are not recommenced. The Group is in the process of clarifying this matter with the Eritrean Ministry of Energy and Mines including the status of the tenement renewals for the Adobha and Gerasi South Exploration Licences which were due for renewal on 23 July 2014 and 25 August 2014 respectively. As referred to in the Going Concern note (Note 2(b)), the financial forecast of the Group is based on the deferral of exploration commitments on its Eritrean project from the Eritrean Ministry of Energy and Mines for a period of at least 12 months from the date of the signing of this financial report. As at 30 June 2014, the Eritrean exploration licences were fully impaired. The Group has pending applications regarding other exploration licence areas.

During 2011, the Group committed to spend US$300,000 on exploration at its Nuweibi Tantalum-Tin Project by 31 December 2011. Drilling at Nuweibi planned for the December 2011 quarter was deferred due to the lack of a suitable drilling rig. Approximately US$294,400 as at 30 June 2014 is required to be spent in relation to exploration once a suitable drilling rig becomes available in order to meet this expenditure commitment.

The Group has no other minimum exploration expenditure commitments in respect to any mining tenements or projects.

(c) Joint venture expenditure commitments

The Group has no minimum expenditure commitments in respect to any of its mining joint ventures.

(d) Bank guarantee

A subsidiary of the Group has been required to provide a bank guarantee of US$30,000 to the General Authority for Investment and Free Zone in Egypt. The letter of guarantee is valid until 10 August 2015.

(e) Capital Commitments

There are no capital commitments of the Group at 30 June 2014.

22 SHARE BASED PAYMENT PLANS

(a) Recognised share-based payment expenses

The expense recognised for share based payments during the year is shown in the table below:

Expense arising from equity-settled share-based payment transactions	*2014* *2013* $ $
	- 50,000
	- 50,000

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(b) Types of share-based payment plans

On 25 November 2011, 1,200,000 options were issued to employees of the Company for nil consideration. The expiry date, exercise price and fair value of the options are shown in the table below.

The following share-based payment arrangements were in existence during the current and prior reporting periods:

Options series	Number	Grant date	Expiry date	Exercise price	Fair value at
					grant date
				$	$
(1) Issued 25 November 2011 (*)	600,000	25/11/11	31/12/12	0.04	0.0032
(2) Issued 25 November 2011 (*)	600,000	25/11/11	31/12/13	0.06	0.0039
Shares	Number	Issue date	Fair value at
			issue date
			$
Ordinary fully paid	5,000,000	18/6/13	0.01

(*) In accordance with the terms of the share-based arrangement, options issued during the financial year ended 30 June 2012, vest at the date of their issue.

(c) Summary of options granted

The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options issued during the year.

	2014 2014 2013 2013 No WAEP No WAEP
Outstanding at the beginning of the year Granted during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year	600,000 0.06 1,200,000 0.05 - - - - - - - - (600,000) 0.06 (600,000) 0.04
	- - 600,000 0.06
	- - 600,000 0.06

(d) Weighted average of remaining contractual life

There are no options outstanding at the end of the year. The weighted average remaining contractual life for the share options outstanding as at 30 June 2013 was 0.50 years.

(e) Range of exercise price

There are no options outstanding at the end of the year. The exercise price for options outstanding at the end of the previous year was $0.06.

(f) Option pricing model

Equity-settled transactions

There were no equity-settled share options granted during the year.

23 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) Contingent Liabilities

The Group did not have any contingent liabilities as at Balance Date.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(b) Contingent Assets

During 2012, the Company executed a sale and purchase agreement with Stellar Resources Ltd whereby Stellar Resources Ltd acquired the Company’s 40% interest in the Heemskirk Tin Project for 43,528,743 shares in Stellar Resources Ltd and a royalty. The 43,528,743 shares in Stellar Resources Ltd were sold during 2013. Under the Minerals Royalty Deed dated 30 January 2012, the royalty receivable by the Company will be calculated as follows:

Net Realised Price (Tin Price) per tonne Royalty Percentage

Less than $25,000	Nil
$25,000 - $30,000	1% plus 0.0002% for every $1 the Net Realised Price is over $25,000
$30,000 or more	2%

The Group did not have any other contingent assets as at Balance Date.

24 SUBSEQUENT EVENTS

Gandel Metals Pty Ltd, a company associated with Mr Ian Gandel, has entered into agreements to provide loan funding to Gippsland for a total of $620,000 for working capital.

The terms of the agreements are as follows:

(a) the interest rate for the loans is equal to the ANZ facility interest rate, as varied (currently 5.33%);
(b) the loans are unsecured; and
(c) the loans are repayable the earlier of:
1 November 2014; and
5 business days after completion of a capital raising by Gippsland for an amount equal to or greater than $500,000 more than the overall level of indebtedness to Gandel Metals at the time each loan agreement was entered into (currently the overall level of indebtedness to Gandel Metals is $3,192,000).

In August 2014, the Board of Tantalum Egypt JSC approved and signed a non-binding agreement with a major smelting company for toll smelting the tantalum-tin concentrates planned to be produced from the Abu Dabbab Tantalum-TinFeldspar Project.

On 10 September 2014, the Company ceased operations at its Alluvial Tin Project joint venture in Egypt.

25 REMUNERATION OF AUDITORS

The auditor of Gippsland Limited is Deloitte Touche Tomatsu (“Deloitte”).

Amounts received or due and receivable by Deloitte for: •an audit or review of the financial report of the entity and any other entity in the Group Amounts received by auditors other than Deloitte for: •an audit or review of the financial report of the entity and any entity in the Group	*2014* *2013* $ $
	40,517 63,892 30,104 39,632
	70,621 103,524

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

26 RELATED PARTY DISCLOSURE

The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial year:

relevant financial year:
	*2014*	*2013*
	$	$
Gandel Metals Pty Ltd – a company controlled by Mr IJ Gandel
became entitled to director’s fees and these fees are payable at
the balance date.	80,000*	80,000*
Gandel Metals Pty Limited – a company associated with Mr IJ
Gandel provided loan funds to Gippsland. The interest rates for
the loans is 5.33%, the loans are unsecured and are outstanding at
the balance date (Refer to Note 15).	2,572,016	-
Gandel Metals Pty Limited – a company associated with Mr IJ
Gandel received interest on its loan funds to Gippsland. The
interest rate for the loan is 5.33%, the loans were unsecured and
are outstanding at the balance date.	50,341	-
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandel
provided loan funds to Gippsland. The interest rate for the loans
was 7.14% (2013), the loans were unsecured and both loans have
been repaid.	-	1,200,000
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandel
was repaid loan funds by Gippsland. The interest rate for the
loans was 7.14% (2013) and the loans were unsecured.	-	1,200,000
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandel
received interest on its loan funds to Gippsland up to the date of
repayment of the loan by Gippsland Ltd. The interest rate for the
loans was 7.14% (2013), the loans were unsecured and both loans
have been repaid.	-	9,215
Keystone Resource Development – a business controlled by Mr
MB Rosenstreich received managing director’s fees. This amount
includes consulting fees of $70,200 paid to Mr Rosenstreich
during the period prior to his appointment as a director of the
Company.	102,360*	-
Mandu Pty Ltd – a company controlled by Dr JM Chisholm
received geological consulting fees.	-	197,400*
Ventureworks JDK Pty Ltd – a company controlled by Mr JD Kenny
became entitled to director’s fees and these fees are payable at
the balance date.	40,000*	40,000*
Mr J Starink – received director fees and consulting fees.	150,000*	300,000*
John S Dunlop and Associates Pty Ltd – a company controlled by
Mr JSF Dunlop received directors and mining consulting fees.	-	50,000*

Note: These amounts are included within the Remuneration Report in the Directors’ Report.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

27 KEY MANAGEMENT PERSONNEL COMPENSATION

(a) Details of key management personnel

IJ Gandel - Chairman (Non-Executive) MB Rosenstreich - Managing Director J Starink - Executive Director J Kenny - Non-Executive Director A Ayyash - Regional Manager - Middle East and North Africa

(b) Compensation of key management personnel

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

Short-term employee benefits Post-employment benefits Share-based payment	*2014* *2013* $ $
	572,601 806,000 - - - 50,000
	572,601 856,000

(c) Other transactions with key management personnel

Please refer to Note 26 regarding loans from key management personnel to the Company.

28 SEGMENT INFORMATION

(a) Reportable segments

The Group operates predominantly in the mining and exploration industry.

Information reported to the Group’s chief operating decision maker for the purpose of resource allocation and assessment of segment performance is focussed on the type of resources being explored for and evaluated or developed. The Group’s reportable segments under AASB 8 are therefore as follows:

Tantalum
Gold
Copper
Corporate

The tantalum segment relates to the development of the Group’s Abu Dabbab tantalum-tin project in Egypt. The gold segment relates to the exploration activities at Wadi Allaqi in Egypt. The copper segment relates to the exploration activities at the Adobha project in Eritrea. The corporate segment relates to operations of the corporate head office in Perth, Western Australia.

The following tables present revenue and profit information and certain asset and liability information regarding reportable segments for the years ended 30 June 2014 and 2013.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

	*Continuing Operations*	*Total* *Operations*
	*Tin/Tantalum* *Gold* *Copper* *Corporate* $ $ $ $	$
Year ended 30 June 2014 Revenue Other revenues from external customers Inter-segment transactions Total segment revenue Inter-segment elimination Total consolidated revenue Result Segment net operating loss after tax Profit/(loss) before income tax and minority interest Income tax expense Net profit (loss) for the year Assets and liabilities Segment assets Total assets Segment liabilities Total liabilities Other segment information Capital expenditure Amortisation of mine properties Depreciation Depreciation allocated to cost of sales Impairment losses	2,146,298 - - 34,774 - - - -	2,181,072 -
	2,146,298 - - 34,774	2,181,072 -
	(4,229,413) (71,768) (330,408) (1,217,469)
		2,181,072
		(5,849,058)
	4,854,772 18,842 153,341 254,827	(5,849,058) -
		(5,849,058)
		5,281,782
	(660,385) (176,909) (61,424) (3,308,726)	5,281,782
		(4,207,444)
	(109,277) - - (351) (745,421) - - - (91,154) (11,216) (39,488) (17,496) (168,474) - - - (1,875,292) - (213,973) -	(4,207,444)
		(109,628) (745,421) (159,354) (168,474) (2,089,265)
Year ended 30 June 2013 Revenue Other revenues from external customers Inter-segment transactions Total segment revenue Inter-segment elimination Total consolidated revenue Result Segment net operating loss after tax Profit/(loss) before income tax and minority interest Income tax expense Net profit (loss) for the year Assets and liabilities Segment assets Total assets Segment liabilities Total liabilities Other segment information Capital expenditure Depreciation Impairment losses	- - - 8,228 - - - -	8,228 -
	- - - 8,228	8,228 -
	(1,264,792) (37,533) (3,791,089) (2,906,203)
		8,228
		(7,999,617)
	7,802,728 32,855 246,164 522,754	(7,999,617) -
		(7,999,617)
		8,604,501
	(752,326) (163,273) (40,836) (506,681)	8,604,501
		(1,463,116)
	(928,881) - (1,748) (1,992) (27,454) (8,344) (38,129) (12,909) - - (3,645,635) -	(1,463,116)
		(932,621) (86,836) (3,645,635)

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(b) Geographical information

The Group's geographical areas are determined based on the location of the Group's assets and operations.

The following tables present revenue, expenditure and certain asset information regarding geographical locations for the years ended 30 June 2014 and 2013:

	*Australia* *Egypt* *Eritrea* $ $ $	*Total* $
Year ended 30 June 2014 Revenue Other revenues from external customers Less revenue attributable to discontinued operation Revenue from continuing operations Inter-segment sales Segment revenue Other segment information Segment assets Total assets Capital expenditure	34,774 2,146,298 - - - -	2,181,072 -
	34,774 2,146,298 - - - -	2,181,072 -
	34,774 2,146,298 -	2,181,072
	254,827 4,873,614 153,341 (351) (109,277) -	5,281,782
		5,281,782
		(109,628)
Year ended 30 June 2013 Revenue Other revenues from external customers Less revenue attributable to discontinued operation Revenue from continuing operations Inter-segment sales Segment revenue Other segment information Segment assets Total assets Capital expenditure	8,228 - - - - -	8,228 -
	8,228 - - - - -	8,228 -
	8,228 - -	8,228
	522,754 7,835,583 246,164 (1,992) (928,881) (1,748)	8,604,501
		8,604,501
		(932,621)

29 FINANCIAL INSTRUMENTS

(a) Financial risk management policy

The Group's management of financial risk is aimed at ensuring net cash flows are sufficient to:

meet all financial commitments as and when they fall due, and
maintain the capacity to fund its forecast project development and exploration strategies.

The Group continually monitors and tests its forecast financial position against these criteria.

The Group's principal financial instruments comprise cash and short-term deposits. The main purpose of these financial instruments is to raise finance for the Group operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and has been throughout the period under review, the Group's policy that no trading in financial instruments shall be undertaken.

The Group currently has had minimal exposure to commodity price risk but it is expected that as the Group's core Abu Dabbab Tantalum-Tin Project moves into the construction and production phase, the exposure to these risks is expected

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

to increase significantly. The main risks arising from the Group's financial instruments presently are interest rate risk, foreign currency risk, credit risk, security risk and liquidity risk.

The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate, foreign exchange and commodity prices. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling cash flow forecasts.

(b) Interest rate risk

The following table sets out the carrying amount of the financial instruments exposed to interest rate risk:

FINANCIAL ASSETS Interest Bearing Cash at bank Weighted average interest rate Non-Interest Bearing Cash at bank Trade receivables FINANCIAL LIABILITIES Interest Bearing Unsecured loans Weighted average interest rate Non-Interest Bearing Trade and other payables	*2014* *2013* $ $ - 416,502
	0.00% 1.60% 276,698 170,381 26,683 313,424
	303,381 900,307
	2,572,016 -
	5.33% 0.00% 1,521,041 1,355,268
	4,093,057 1,355,268

The following table summarises the sensitivity of financial assets held at balance date to interest rate risk, following a movement of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below.

		*Post-tax gain/(loss)/equity*	*Post-tax gain/(loss)/equity*
		*increase/(decrease)*
		2014	2013
		$	$
+1% (100	basis points)	-	4,163
-1% (100	basis points)	-	(4,163)

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(c) Fair values

Set out below is a comparison by category of carrying amounts and fair values of all of the Group's financial instruments recognised in the financial statements.

	*Carrying Amount* *Fair Value* *2014* *2013* *2014* *2013* $ $ $ $
Financial Assets Cash Trade and other receivables - current Financial Liabilities Trade and other payables Unsecured loans	276,698 586,883 276,698 586,883 26,683 313,424 26,683 313,424
	1,521,041 1,355,268 1,521,041 1,355,268 2,572,016 - 2,572,016 -

Cash, cash equivalents and security deposits: The carrying amount approximates fair value because of their short term to maturity

Trade receivables and trade creditors: The carrying amount approximates fair value.

Fair value hierarchy as at 30 June 2014

Financial assets Cash Trade and other receivables - current Total Financial liabilities Trade and other payables Unsecured loans Total	Level 1 Level 2 Level 3 Total 276,698 - - 276,698 - 26,683 - 26,683
	276,698 26,683 - 303,381
	- 1,521,041 - 1,521,041 - 2,572,016 - 2,572,016
	- 4,093,057 - 4,093,057

(d) Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, and trade and other receivables. The Group's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.

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

In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant.

There are no significant concentrations of credit risk within the Group.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

(e) Liquidity risk

The Group's liquidity position is managed to ensure sufficient funds are available to meet our financial commitments in a timely and cost-effective manner.

As referred to in the Going Concern note (Note 2(b)), the Group’s liquidity position will depend on several factors, including, but not limited to the following:

i. Obtaining the further loan funding to 30 November 2014 based on the conditional letter of support noted in Going Concern note (Note 2(b));
ii. The continual deferral of amounts currently due and payable to trade creditors and other payables, particularly in respect to the Egyptian operations;
iii. Strategic sale of an equity interest in the core project for a tranche 1 consideration of $16,950,000 by 1 December 2014;
iv. Sale of plant and equipment from the Alluvial Mining Project for at least $351,000 by 1 December 2014; and
v. Obtaining a licence renewal confirmation and deferral on exploration commitments on its Eritrean project from the Eritrean Ministry of Energy and Mines for a period of at least 12 months from the date of the signing of this financial report.

The Company continually reviews its liquidity position including cash flow forecast to determine the forecast liquidity position and maintain appropriate liquidity levels.

In addition to commitment disclosure in Note 21(b), the table below reflects the contractual maturity of financial instruments as at 30 June. Cash flows for financial instruments are presented on an undiscounted basis.

		Aging	analysis between		Currency
2014	Total	<30 days	30-60 days	>60 days	AUD	Other
Cash and Cash
Equivalents	(276,698)	(276,698)	-	-	(208,131)	(68,567)
Trade Receivables	(26,683)	(26,683)	-	-	(20,472)	(6,211)
Trade Payables	1,071,110	369,920	94,093	607,097	644,202	426,908
Other Payables	449,932	-	-	449,932	-	449,932
Unsecured Loans	2,572,016	188,000	166,000	2,218,016	2,572,016	-
Total	3,789,677	254,539	260,093	3,275,045	2,987,615	802,062
		Aging	analysis between		Currency
2013	Total	<30 days	30-60 days	>60 days	AUD	Other
Cash and Cash
Equivalents	(586,883)	(586,883)	-	-	(418,134)	(168,749)
Trade Receivables	(313,424)	(313,424)	-	-	(54,455)	(258,969)
Trade Payables	880,990	520,302	48,200	312,488	434,542	446,448
Other Payables	474,278	-	-	474,278	-	474,278
Total	454,961	(380,005)	48,200	786,766	(38,047)	493,008

(f) Foreign Exchange Risk

As a result of operations in Egypt, the Group's statement of financial position can be affected significantly by movements in the EGP/AUD exchange rates. The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating entity in currencies other than the functional currency.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

At 30 June 2014, the Group had the following exposure to foreign currency:

Financial Assets *US$* Cash and cash equivalents *EGP* Cash and cash equivalents Trade Receivables *Nakfa* Cash and cash equivalents *Nakfa* Trade Receivables Financial Liabilities *US$* Trade and other payables *EGP* Trade and other payables *Nakfa* Trade and other payables *GBP* Trade and other payables Net exposure	*2014* *2013*
	60,666 99,443 7,611 19,517 3,858 258,969 290 49,789 2,353 49,789
	74,778 427,718
	151,899 237,932 709,347 651,160 5,832 19,644 9,762 11,990
	876,840 920,726
	(802,062) (493,008)

The following sensitivity is based on the most significant foreign currency risk exposures in existence at the statement of financial position date, which is the Australian Dollar moving against the Egyptian Pound (EGP).

At 30 June 2014, had the Australian Dollar moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:

Judgements of reasonably possible movements:

AUD/EGP +10% AUD/EGP -10% Foreign exchange rates used during the period Rate as at 30 June Average Rate for year ended 30 June	*Post Tax Loss (Higher)/Lower* *Equity Higher/(Lower)* *2014* *2013* *2014* *2013* $ $ $ $
	(403,111) (40,568) (1,479,190) (1,160,772) 492,691 49,583 1,807,899 1,418,721 were as follows: 2014 2013 AUD:EGP AUD:EGP 6.71700 6.37220 6.37300 6.57920

(g) Capital management policy

The Board's policy is to preserve its capital base as much as possible so as to maintain investor, creditor and market confidence and to sustain future development of the business. Short-term funding for the Group has been obtained via loan funding from Gandel Metals Proprietary Limited (a director related entity of Ian Gandel) to fund operations and commitments. As referred to in the Going Concern note (Note 2(b)), a further capital raising of at least $16,950,000 is estimated to be required by December 2014, however, the actual amount of any capital raising will be determined closer to the time and be subject to the operational requirements of the Group.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

There were no changes in the Group's approach to capital management during the year.

Neither the Company nor any of its controlled entities are subject to externally imposed capital requirements.

(h) Equity price risk

The Group is no longer exposed to equity price risks arising from equity.

30 PARENT ENTITY INFORMATION

The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements. Refer to Note 2 for a summary of the significant accounting policies relating to the Group.

	*2014* *2013* $ $
(a) Financial Position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Equity Contributed equity Accumulated losses Option issue reserve Total equity	248,195 498,977 34,220 51,665
	282,415 550,642
	3,308,726 506,681 - -
	3,308,726 506,681
	48,530,322 48,530,322 (52,091,295) (49,021,023) 534,662 534,662
	(3,026,311) 43,961
	*2014* *2013* $ $
(b) Financial Performance Profit/(loss) for the year Other comprehensive income Total comprehensive income	(3,070,272) (6,966,347) - -
	(3,070,272) (6,966,347)

(c) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

At the Balance Date there are no guarantees entered into by the Parent Entity in relation to the debts of its subsidiaries (2013: nil).

(d) Contingent liabilities of the parent entity

The Parent Entity did not have any contingent liabilities as at Balance Date.

(e) Commitments for capital expenditure entered into by the parent entity

The Parent Entity did not have any commitments for capital expenditure as at Balance Date.

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

DIRECTORS' DECLARATION

The directors of Gippsland Limited declare that:

(a) in the directors’ opinion, the financial statements and notes on pages 12 to 53, and the remuneration disclosures that are contained in the Directors' report, set out on pages 6 to 10, are in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2014 and of its performance, for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001.
(b) in the directors’ opinion, the financial report also complies with International Financial Reporting Standards issued by the International Accounting Standards Board as disclosed in Note 2(c) to the financial statements; and
(c) in the directors’ opinion, 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 the directors pursuant to Section 295(5) of the Corporations Act 2001 .

Dated 30[th] day of September 2014.

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MB Rosenstreich Managing Director

GIPPSLAND LIMITED AND CONTROLLED ENTITIES

ABN 31 004 766 376

Deloitte Touche Tohmatsu ABN 74 490 121 060

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Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Independent Auditor’s Report to the Members of Gippsland Limited

Tel: +61 8 9365 7000 Fax: +61 9365 7001 www.deloitte.com.au

Report on the Financial Report

We have audited the accompanying financial report of Gippsland Limited, which comprises the statement of financial position as at 30 June 2014, the statement of profit or loss and other comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 12 to 54.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable 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 Note 2(c), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the consolidated financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the entity’s preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Gippsland Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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Opinion

In our opinion:

(a) the financial report of Gippsland Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the consolidated financial statements also comply with International Financial Reporting Standards as disclosed in Note 2(c).

Material Uncertainty Regarding Continuation as a Going Concern

Without modifying our opinion, we draw attention to Note 2(b) in the financial report which indicates that the consolidated entity has incurred net losses of $5,849,058 (2013: $7,999,617) and experienced net cash outflows from operations of $2,387,941 (2013: $2,427,974) and net cash outflows from investing activities of $481,441 (2013: $1,167,790) for the year ended 30 June 2014. These conditions, along with other matters set out in Note 2(b), indicate the existence of a material uncertainty that may cast significant doubt about the company’s and the consolidated entity’s ability to continue as going concerns and therefore, whether they will realise their assets and extinguish their liabilities in the ordinary course of business.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 6 to 10 of the directors’ report for the year ended 30 June 2014. 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.

Opinion

In our opinion the Remuneration Report of Gippsland Limited for the year ended 30 June 2014, complies with section 300A of the Corporations Act 2001 .

DELOITTE TOUCHE TOHMATSU

Chris Nicoloff Partner Chartered Accountants Perth, 30 September 2014

AI assistant

STREAMPLAY STUDIO LIMITED — Annual Report 2014

65841_rns_2014-09-29_0a2e01ee-4300-4f5c-9db5-cb3e4fe347ed.pdf

Annual Financial Report

Contents

DIRECTORS’ REPORT

DIRECTORS

Names, qualifications, experience and special responsibilities

Ian Jeffrey Gandel - Chairman (Non-executive) LLB, BEc, FCPA, FAICD

Michael Benjamin Rosenstreich – Managing Director BSC (Hons), MEE, FAusIMM, MAICD

DIRECTORS’ REPORT

Jon Starink – Director (Executive)

BSC (Hons), BChemE(Hons), MApplSc, FAusIMM, FIEAust, FIChemE, MRACI, MTMS, CPEng, CChem, CSci

John Damian Kenny – Director (Non-executive)

B Com (Hons), LLB

Interest in Shares and Options of the Company and related bodies corporate

OPTIONS

DIRECTORS’ REPORT

COMPANY SECRETARY

Rowan St John Caren BCom, CA

MEETINGS OF DIRECTORS

PRINCIPAL ACTIVITIES

CONSOLIDATED RESULTS

Review of Operations

DIRECTORS’ REPORT

Financial Position

DIVIDENDS

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

DIRECTORS’ REPORT

FUTURE DEVELOPMENTS

ENVIRONMENTAL REGULATION AND PERFORMANCE

INDEMNITY AND INSURANCE OF OFFICERS

PROCEEDINGS ON BEHALF OF COMPANY

NON-AUDIT SERVICES

AUDITOR’S INDEPENDENCE DECLARATION

DIRECTORS’ REPORT

REMUNERATION REPORT (Audited)

Remuneration Policy

Details of key management personnel

(i) Directors

DIRECTORS’ REPORT

(ii) Executives

Non-Executive Director Remuneration

Employment Contracts

DIRECTORS’ REPORT

Remuneration of key management personnel

Table 1: Remuneration for the year ended 30 June 2014

Compensation Options: Granted and vested during the year (consolidated)

DIRECTORS’ REPORT

Table 3: Shares issued on exercise of compensation options (consolidated)

Share-based payment arrangements in existence

Option holdings of key management personnel (consolidated)

Table 4: Shareholdings of key management personnel (consolidated)

DIRECTORS’ REPORT

Related party transactions with key management personnel

[END OF REMUNERATION REPORT]

MB ROSENSTREICH Managing Director

Gippsland Limited

DELOITTE TOUCHE TOHMATSU

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2014

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2014

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2014

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

1 CORPORATE INFORMATION

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

(b) Going Concern

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

(c) Statement of Compliance

(d) New Standards and Interpretations Adopted

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

STREAMPLAY STUDIO LIMITED Annual Report 2014