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VOLT RESOURCES LIMITED Annual Report 2014

Nov 2, 2014

66019_rns_2014-11-02_20ce473a-d768-48e8-9b31-acda4f54be81.pdf

Annual Report

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Mozambi(Coal(Limited a n d c o n t r o l l e d e n t i t i e s ABN!28!106!353!253

Financial!Report!for!the!year!ended 30!June!2014!

Mozambi(Coal(Limited( ABN$28$106$353$253$

Financial$Report$for$the$Year$Ended$30$June$2014

Page
CorporateDirectory 3
Directors’Report 4
Auditor’sIndependenceDeclaration 16
IndependentAuditor’sReport 17
Directors’Declaration 19
ConsolidatedStatementofProfitorLoss 20
ConsolidatedStatementofOtherComprehensiveIncome 21
ConsolidatedStatementofFinancialPosition 22
ConsolidatedStatementofChangesinEquity 23
ConsolidatedStatementofCashFlows 24
NotestotheFinancialStatements 25
CorporateGovernanceStatement 52
AdditionalASXInformation 62

Page$|$2

Mozambi(Coal(Limited( ABN!28!106!353!253! Corporate!Directory

Directors!

Mr!Alex!Neuling!–!Executive!Director! Mr!Julian!Jarman!–!NonLexecutive!Director Mr!Robert!Hemphill!–!NonLexecutive!Director

Bankers!

National!Australia!Bank!Limited! Level!1,!1238!Hay!Street! WEST!PERTH!!WA!!6005!

Company!Secretaries!

Mr!Alex!Neuling!! Mrs!Natalie!Madden!

Registered!and!Principal!Administration!Office!

Level!1,!44!Ord!Street! WEST!PERTH!WA!6005! PO!Box!1571!! WEST!PERTH!WA!6872! Tel:!+(618)!9321!0774!

Securities!Exchange!Listing!

Australian!Securities!Exchange! Home!Exchange:!Perth,!Western!Australia! Code:!MOZ!

Solicitors!

Steinepreis!Paganin! Level!4,!The!Read!Buildings! 16!Milligan!Street! PERTH!WA!6000!

Auditors!

Website!and!Email!!

HLB!Mann!Judd! Level!4,!130!Stirling!Street! PERTH!WA!6000!

www.mozambicoal.com [email protected]

Share!Registry!

Advanced!Share!Registry!Services! 150!Stirling!Hwy! NEDLANDS!WA!6009!

Postal'Address'

PO!Box!1156! NEDLANDS!WA!6909!! Tel:!(+618)!9389!8033

Page!|!3

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

Your!Directors!present!their!report!on!the!consolidated!entity!consisting!of!Mozambi!Coal!Limited!(“the!Company”!or! “MOZ”)!and!the!entities!it!controlled!during!the!financial!year!ended!30!June!2014!(“Consolidated!Entity”!or!“Group”).!

Directors!!

The!names!of!the!Directors!of!Mozambi!Coal!Limited!in!office!during!the!financial!year!and!until!the!date!of!this!report! are:!

Mr!Alex!Neuling!–!Executive!director!

Mr!Robert!Hemphill!–!NonLexecutive!director!

Mr!Julian!Jarman!–!NonLexecutive!director!(appointed!12!August!2013)!

Mr!Shiv!Madan!–!Executive!director!(resigned!12!August!2013)!

Principal!activities!

The! principal! activity! of! the! Group! during! the! financial! year! was! coal! exploration! in! Queensland,! Australia! and! in! Mozambique.!

Review!of!operations!

In!November!2013!MOZ!announced!that!it!had!secured!rights!to!acquire!a!number!of!Queensland!based!exploration! tenements! and! applications.! ! The! acquisition! of! these! rights! was! staged! and! the! final! part! of! the! transaction! was! formally!completed!on!31!March!2014!following!shareholder!approval.!!!

Initial!evaluation!of!the!tenements!identified!the!Bowen!River!project!(EPC!1768)!as!a!lead!candidate!for!nearLterm! exploration!activities.!!During!the!year,!preLdrill!activities!including!technical!evaluation!of!historical!drilling!results!in! the!region!and!finalisation!of!access!arrangements,!including!landholder!compensation,!environmental!clearances!and! cultural!heritage!were!progressed.!!!

As!at!the!date!of!this!report!MOZ!has!finalised!landholder!compensation!arrangements!with!one!of!the!two!relevant! holders!of!pastoral!leases!covering!EPC!1768!and!hopes!to!reach!a!mutually!acceptable!negotiated!arrangement!with! the!remaining!leaseholder!Imminently.!!In!the!event!that!this!negotiated!process!is!not!satisfactorily!concluded!in!an! acceptable!timeframe,!MOZ!notes!that!an!efficient!and!equitable!statutory!arbitration!process!exists!in!Queensland!to! protect!our!rights!of!access!to!conduct!exploration!activities!without!further!unreasonable!delays.!!MOZ!has!complied! with!all!relevant!statutory!provisions!and!timeframes!for!this!alternative!process!to!now!be!implemented!should!that! prove!necessary!to!ensure!unhindered!access!for!exploration.!!!

MOZ!also!continues!to!evaluate!other!potential!new!resource!project!investment!opportunities!worldwide.!

CORPORATE!&!FINANCE!

Placement!!

In!March!and!April!2014!the!Company!announced!a!share!placement!to!sophisticated!investors!in!two!tranches!plus!a! further!placement!as!part!of!a!strategic!alliance!with!the!Moultrie!Group.!!In!total!60,000,000!ordinary!shares!and!30! million!attaching!options!(exercisable!at!2c!on!or!before!31!December!2017)!were!issued!to!raise!a!total!of!$600,000! before!costs.!!The!second!tranche!of!the!placement!was!completed!in!early!June!2014!and!funds!are!being!applied! towards!priority!exploration!activities!and!general!working!capital.!

Page!|!4!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

Financial!results!

For!the!year!ended!30!June!2014!the!Company!recorded!a!net!loss!after!tax!of!$960,308!(2013:!$9,771,722).!!The!loss! for!the!year!included!nonLcash!shareLbased!payment!expenses!of!$93,200!(2013:!$38,690).!

Board!changes!

On!12!August!2013,!Mr.!Shiv!Madan!resigned!from!the!Board!and!was!replaced!by!Mr.!Julian!Jarman.!

Significant!changes!in!state!of!affairs!

There!were!no!significant!changes!in!the!state!of!affairs!of!the!Group!during!the!year!other!than!as!noted!above!or! elsewhere!in!this!report.!

Information!on!Directors!!

Current(Directors(

Mr!Alex!Neuling!–!Executive!Director!&!Joint!Company!Secretary!

Qualifications'–' FCA,!ACIS,!BSc

Special'responsibilities'6' Member!of!audit!and!nomination!committees

Other'current'directorship'of'Listed'Public'Companies'–' Ikwezi!Mining!Limited!–!from!June!2014.!

Former'directorships'(of'Listed'Public'Companies)'in'last'three'years !L!Eureka!Energy!Limited.!

Interests'in'Shares'and'Options'over'Shares'in'Group'Companies'

  • 682,000!fully!paid!ordinary!shares!

  • 3,350,000!unlisted!options!

Alex!is!a!Chartered!Accountant!and!Chartered!Secretary!with!over!14!years!corporate!and!financial!experience.!This! experience!includes!10!years!as!director,!chief!financial!officer!&!or!secretary!of!various!ASX!listed!companies!in!the! energy,!mineral!exploration,!biotechnology!and!mining!services!sectors.!!Prior!to!those!roles,!Alex!worked!at!Deloitte!in! London!and!Perth.!!Alex!also!holds!an!Honours!degree!in!Chemistry!from!the!University!of!Leeds!in!the!United!Kingdom! and! is! principal! of! Erasmus! Consulting! Pty! Ltd,! which! provides! company! secretarial! and! financial! management! consultancy!services!to!a!variety!of!ASXLlisted!companies.!!

Robert!Hemphill!–!NonRexecutive!Chairman!

Qualifications' –!B.!Bus,!CA

Special'responsibilities:' Chair!of!audit,!remuneration!and!nomination!committees,!lead!independent!director!!

Other'current'directorship'of'Listed'Public'Companies'6' None.!

Former'directorships'(of'Listed'Public'Companies)'in'last'three'years'6' None.!

Interests'in'Shares'and'Options'over'Shares'in'Group'Companies'

  • 174,250!fully!paid!ordinary!shares!

  • 3,350,000!unlisted!options!

Robert! has! more! than! 16! year’s! experience! in! financial! accounting,! taxation! and! business! advisory! services! both! domestically!and!internationally.!!Robert!completed!a!Bachelor!of!Business!at!Charles!Sturt!University,!is!a!member!of! the!Institute!of!Chartered!Accountants!in!Australia!and!a!registered!tax!agent.!!Robert!is!a!director!/!company!secretary! of!a!number!of!public!and!private!companies,!although!he!holds!no!other!directorships!of!Australian!listed!companies.!

Page!|!5!

Mozambi(Coal(Limited( ABN!28!106!353!253!

Directors’!Report!

Mr!Julian!Jarman!–!NonRexecutive!director!(appointed!12!August!2013)!

Qualifications' –!B.!Bus,!CA

Other'current'directorship'of'Listed'Public'Companies'6' None.!

Former'directorships'(of'Listed'Public'Companies)'in'last'three'years'6' None.!

Interests'in'Shares'and'Options'over'Shares'in'Group'Companies''

  • 3,250,001!fully!paid!ordinary!shares!

  • 3,000,000!unlisted!options!

Mr!Jarman!is!a!Director!with!Alignment!Capital!a!small!boutique!financial!services!firm.!!With!approximately!18! years!in!the!finance!sector,!he!commenced!his!career!at!Deloitte.!!!Mr.!Jarman!is!a!qualified!Chartered!Accountant! and!has!spent!time!working!at!Goldman!Sachs!JBWere!in!Melbourne!before!spending!several!years!working!in! London,!where!he!gained!experience!with!numerous!investment!banks!including!Dresdner!Kleinwort!Wasserstein! and!Credit!Suisse!First!Boston!

Former(Directors(

Mr!Shiv!Madan!–!Managing!Director!–!resigned!12!August!2013!

Qualifications'– !Bcom,!MBA

Special'responsibilities'–' none

Other'current'directorship'of'Listed'Public'Companies'– !none!

Former'directorships'(of'Listed'Public'Companies)'in'last'three'years'– !none!

  • Interests'in'Shares'and'Options'over'Shares'in'Group'Companies'(as'at'the'date'of'resignation):' 10,750,000!fully!paid!ordinary!shares!

  • 11,070,000!unlisted!options!

Company(Secretaries(

Mr!Alex!Neuling!–!refer!to!Director!details!above!

Mrs!Natalie!Madden!–!Joint!Company!Secretary!(appointed!13!August!2013)!

Qualificatiions !–!BSc,!FCA!

Natalie!has!over!10!years!experience!as!an!auditor!and!accountant!and!is!employed!by!Erasmus!Consulting!Pty!Ltd! as!a!Client!Manager!for!the!Company!and!explorer!Apollo!Consolidated!Limited!(AOP)!and!Ikwezi!Mining!Limited! (IKW).!!Prior!to!this,!Natalie!has!held!finance!roles!with!Deloitte!and!Curtin!University.!!Natalie!holds!a!Bachelor!of! Science! (Mathematics)! from! the! University! of! Warwick! (UK)! and! is! a! member! of! the! Institute! of! Chartered! Accountants!in!England!and!Wales!(ICAEW).!

Meetings!of!Directors!

The!following!table!sets!out!the!number!of!meeting!of!the!Company’s!directors!held!during!the!year!ended!30!June! 2014,!and!the!number!of!meetings!attended!by!each!director.!!

Directors’Meetings Directors’Meetings CommitteeMeetings CommitteeMeetings
Eligibletoattend Attended Audit Remuneration
MrRobertHemphill
7
7
2		 1L
MrAlexNeuling 7 7 2 L
MrJulianJarman 6 6 L L
MrShivMadan 1 L L L
*Notamemberoftherelevantcommittee.

Page!|!6!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

Share!options!

At!the!date!of!this!report!the!following!unlisted!options!have!been!granted!over!unissued!capital.!!

Series
6
7
8
9
TOTAL		 Number
ExercisePrice
ExpiryDate
475,000
25c
02/08/2016
2,200,000
25c
30/11/2016
50,000,000
2c
31/12/2017
9,000,000
2c
31/12/2017
61,675,000

No!ordinary!shares!have!been!issued!by!the!Company!during!or!since!the!end!of!the!financial!year!as!a!result!of!the! exercise!of!share!options.!

Performance!rights!

At!the!date!of!this!report!all!performance!rights!have!expired.

Subsequent!events!

There!have!been!no!matters!or!circumstances!since!the!end!of!the!financial!year!which!significantly!affected!or!may! significantly!affect!the!operations!of!the!Consolidated!Entity,!the!results!of!those!operations!or!the!state!of!affairs!of!the! Company!or!Consolidated!Entity!in!future!financial!years.!

Likely!Developments!

The! Group! intends! to! continue! its! exploration! activities! on! its! existing! tenements! and! to! acquire! further! suitable! tenements!for!exploration!and/or!development!as!opportunities!arise.!

Environmental!regulation!

The!Group!has!a!policy!of!exceeding!or!at!least!complying!with!its!environmental!performance!obligations.!!

During! the! financial! year,! the! Group! did! not! materially! breach! any! particular! or! significant! Commonwealth,! State,! Territory!or!other!regulation!in!respect!to!environmental!management.!!

Dividends!

No!dividends!have!been!declared,!provided!for!or!paid!in!respect!of!the!financial!year!ended!30!June!2014!(2013:!None).!

Indemnification!and!insurance!of!Officers!and!Auditors!

Since!the!end!of!the!year,!the!Group!has!paid!a!premium!in!respect!of!a!contract!insuring!the!directors!and!secretaries! of!the!Group!(as!named!above),!against!liabilities!incurred!as!such!a!director,!secretary!or!executive!officer!to!the!extent! permitted!by!the! Corporation'Act'2001 .!The!contract!of!insurance!prohibits!disclosure!of!the!nature!of!the!liability!and! the!amount!of!the!premium.!The!Group!has!not!otherwise,!during!or!since!the!financial!year,!indemnified!or!agreed!to! indemnify!an!officer!or!auditor!of!the!Group!or!of!any!related!body!corporate!against!a!liability!incurred!as!such!an! officer!or!auditor.!!

Proceedings!on!behalf!of!company

No!person!has!applied!for!leave!of!court!to!bring!proceedings!on!behalf!of!the!Group!or!intervene!in!any!proceeding!to! which!the!Group!is!a!party!for!the!purpose!of!taking!responsibility!on!behalf!of!the!Company!for!all!or!any!part!of!those! proceedings.!!

The!Group!was!not!a!party!to!any!such!proceedings!during!the!year.!!

Page!|!7!

Mozambi(Coal(Limited( ABN!28!106!353!253!

Directors’!Report!

NonRaudit!services!!!

The!Board!of!Directors!is!satisfied!that!the!provision!of!nonLaudit!services!performed!during!the!year!by!the!entity’s! auditors!is!compatible!with!the!general!standard!of!independence!for!auditors!imposed!by!the! Corporation'Act'2001 .! The! directors! are! satisfied! that! the! services! disclosed! (refer! Note! 19)! did! not! compromise! the! external! auditor’s! independence!for!the!following!reasons:!

• The! nature! of! the! services! provided! do! not! compromise! the! general! principles! relating! to! auditors! independence! as! set! out! in! Code' of' Conduct' APES' 110' Code' of' Ethics' for' Professional' Accountants ! issued! by! the! Accounting!Professional!&!Ethical!Standards!Board.!

• The!Directors!are!satisfied!that!the!provision!of!non!audit!services,!specifically!taxation!compliance!services,!is! compatible!with!the!general!standard!of!independence!for!auditors!imposed!by!the! Corporations'Act'2001 .!!

Auditor’s!Independence!Declaration!

The!Auditor’s!independence!declaration!is!included!on!page!16!of!the!financial!report!and!forms!part!of!this!directors’! report.!!!

Page!|!8!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

Remuneration!Report!–!Audited!!

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

For! the! purposes! of! this! report,! the! term! 'executive'! encompasses! the! chief! executive,! senior! executives,! asset! managers!and!secretaries!of!the!Parent!and!the!Group.!!

Details!of!key!management!personnel!!

(i) Directors!

(i)
Directors		 (i)
Directors
Current:
AlexNeuling
ExecutiveDirector&JointCompanySecretary
RobertHemphill NonLExecutiveDirector
JulianJarman NonLExecutiveDirector
Former:
MichaelGriffiths
NonLExecutiveChairman
ShivMadan ManagingDirector

(ii) Executives!

Current:
NatalieMadden
JointCompanySecretary		 Current:
NatalieMadden
JointCompanySecretary
Former:
ChalamaiahKondragunta
GeneralManagerLExploration
RyanBroom ChiefFinancialOfficer&CompanySecretary

Remuneration!committee

The!remuneration!committee!of!the!board!of!directors!of!the!Company!is!responsible!for!determining!and!reviewing! remuneration! arrangements! for! the! directors! and! executives.! The! remuneration! committee! assesses! the! appropriateness!of!the!nature!and!amount!of!remuneration!of!executives!on!a!periodic!basis!by!reference!to!relevant! employment!market!conditions!with!the!overall!objective!of!ensuring!maximum!stakeholder!benefit!from!the!retention! of!a!high!quality,!high!performing!director!and!executive!team.!!

Remuneration!philosophy!

The!performance!of!the!Company!depends!upon!the!quality!of!its!directors!and!executives.!To!prosper,!the!Company! must! attract,! motivate! and! retain! highly! skilled! directors! and! executives.! To! this! end,! the! charter! adopted! by! the! remuneration!committee!aims!to!align!rewards!with!achievement!of!strategic!objectives.!!The!remuneration!framework! applied!provides!for!a!mixture!of!fixed!and!variable!pay!and!a!blend!of!short!and!long!term!incentives!as!appropriate.!

Remuneration!structure!!

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

Page!|!9!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

NonPexecutive(directors(

The! maximum! aggregate! amount! of! fees! that! can! be! paid! to! nonLexecutive! directors! is! subject! to! approval! by! shareholders!at!General!Meeting.!!The!Company’s!policy!is!to!remunerate!nonLexecutive!directors!at!market!rates!(for! comparable!companies)!for!time,!commitment!and!responsibilities.!!Fees!for!nonLexecutive!directors!are!not!linked!to! the! performance! of! the! Company,! however! to! align! directors’! interests! with! shareholders’! interests,! directors! are! encouraged!to!hold!shares!in!the!Company,!and!subject!to!approval!by!shareholders,!are!permitted!to!participate!in!the! Employee!Share!Option!Plan.!

Retirement'benefits'and'allowances'

No! retirement! benefits! or! allowances! are! paid! or! payable! to! directors! of! the! Company! (other! than! statutory! or! mandatory!superannuation!contributions,!where!applicable).!

Executives(

Base'pay'

Executives!are!offered!a!competitive!level!of!base!pay!which!comprises!the!fixed!(unrisked)!component!of!their!pay!and! rewards.! ! Base! pay! for! senior! executives! is! reviewed! annually! to! ensure! market! competitiveness.! ! There! are! no! guaranteed!base!pay!increases!included!in!any!senior!executives’!contracts.!

Short'term'incentives'

Payment!of!short!term!incentives!is!dependent!on!the!achievement!of!key!performance!milestones!as!determined!by! the!remuneration!committee.!!For!the!periods!ended!30!June!2013!and!2014,!these!milestones!required!performance!in! relation!to!key!strategic,!nonLfinancial!measures!linked!to!drivers!of!performance!in!future!reporting!periods.!!!

No!bonuses!have!been!paid!or!are!payable!in!respect!of!the!year!to!30!June!2014.!There!have!been!no!forfeitures!of! bonuses!by!key!management!personnel!during!the!current!or!prior!periods!and!no!cash!bonuses!remained!unvested!at! yearLend.!!

Long'Term'Incentives'6'Share6based'compensation'

Both!performance!rights!and!share!options!have!been!issued!to!Directors!and!executives!as!part!of!their!remuneration.! ShareLbased!compensation!instruments!are!not!issued!based!on!performance!criteria,!however,!they!are!issued!with! vesting!conditions!and!exercise!prices!set!specifically!to!increase!goal!congruence!between!Directors,!executives!and! shareholders.!!!

Performance!rights!and!options!granted!under!the!Plan!carry!no!dividend!or!voting!rights.!

The!company!currently!has!no!policy!in!place!to!limit!an!individual’s!risk!exposure!in!relation!to!the!issue!of!company! securities!as!remuneration!

Link!to!Group!Performance!

There!was!no!performanceLbased!remuneration!paid!to!Directors!in!the!financial!year.!

Page!|!10!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

Service!agreements

The!Company’s!consulting!agreement!with!Shiv!Madan!was!terminated!at!the!end!of!July!2013.!

The!Company!has!entered!into!a!consultancy!agreement!with!Alex!Neuling,!in!his!capacities!as!Director!and!Company! Secretary.!The!agreement!is!between!Mozambi!Coal!Limited!and!Erasmus!Consulting!Pty!Ltd!(“Erasmus”),!an!associated! company!of!Mr!Alex!Neuling.!

Material!terms!of!the!contract!with!Erasmus!are!as!follows:!

  • Role!–!to!provide!Company!Secretarial!and/or!financial!management!consultancy!advice!

  • Term!of!agreement!–!indefinite!

  • Consultancy!fee!varying,!depending!on!work!performed,!subject!to!a!minimum!of!$2,700!plus!GST!per! month!(excluding!Director!Fees)!

  • Director!fees!–!payable!where!an!Erasmus!staff!member!is!appointed!as!a!director!of!the!Company!for!an! amount!equal!to!the!amount!paid!to!any!nonLexecutive!director!

  • Subject!to!a!three!month!termination!period!

NonLexecutive!Directors!are!currently!entitled!to!a!monthly!fee!of!$3,067.!

Remuneration!of!key!management!personnel!

2014
NonRexecutiveDirectors
RobertHemphill
JulianJarman
SubRtotalnonRexecutive
directors
ExecutiveDirectors
AlexNeuling
ShivMadan
SubRtotalexecutive
directors
Otherexecutives
NatalieMadden
SubRtotalother
executives
TotalKeyManagement
Personnel		 Shorttermbenefits PostRemployment
benefits		 Sharebased
payments
Performance
rights/
options
Total
Performance
related
$
$
%
Cash
salary
andfees
Cash
bonus
NonR
monetary
benefits
$
$
$		 SuperR
annuation
Retirement
Benefits
$
$
36,800
L
L
L
L
14,400
51,200
L
32,557
L
L
3,012
L
14,400
49,969
L
69,357
R
R
3,012
R
28,800
101,169
R
87,214
L
L
L
L
14,400
101,614
L
7,940
L
L
L
L
L
7,940
L
95,154
R
R
R
R
14,400
109,554
R
L
L
L
L
L
L
L
L
R
R
R
R
R
R
R
R
164,511
R
R
3,012
R
43,200
210,723
R

*!Amounts!shown!as!remuneration!for!Mr!Neuling!are!fees!paid!to!Erasmus!Consulting!Pty!Ltd!(“Erasmus”),!a!Company!controlled!by!Mr! Neuling!which!provides!Company!Secretarial,!Accounting,!Financial!and!general!management!services!as!well!as!administrative!support!to! the!Company.!!The!amounts!include!payments!for!services!provided!by!Mr!Neuling,!Mrs!Natalie!Madden!and!by!other!members!of!staff! employed!or!retained!by!Erasmus.!

Page!|!11!

Mozambi(Coal(Limited( ABN!28!106!353!253!

Directors’!Report!

2013
NonRexecutiveDirectors
MichaelGriffiths
RobertHemphill
SubRtotalnonRexecutive
directors
ExecutiveDirectors
ShivMadan
AlexNeuling
SubRtotalexecutive
directors
Otherexecutives
ChalamaiahKondragunta
RyanBroom
SubRtotalother
executives
TotalKeyManagement
Personnel*		 Shorttermbenefits PostRemployment
benefits		 Sharebased
payments
Performance
rights/
options
Total
Performance
related
$
$
%
Cash
salary
andfees
Cash
bonus
NonR
monetary
benefits
$
$
$		 SuperR
annuation
Retirement
Benefits
$
$
175,367
L
L
3,633
L
8,880
187,880
L
39,867
L
L
L
L
2,100
41,967
L
215,234
R
R
3,633
R
10,980
229,847
R
239,000
L
L
L
L
13,260
252,260
L
39,867
L
L
L
L
2,100
41,967
L
278,867
R
R
R
R
15,360
294,227
R
116,836
L
L
L
L
4,550
121,386
L
137,145
L
L
11,880
L
4,550
153,575
L
253,981
R
R
11,880
R
9,100
274,961
R
748,082
R
R
15,513
R
35,440
799,035
R

*Amounts!shown!as!remuneration!for!Mr!Neuling!are!fees!paid!to!Erasmus!Consulting!Pty!Ltd!(“Erasmus”),!a!Company!controlled!by!Mr! Neuling!which!provides,!Company!Secretarial,!Accounting,!Financial!and!general!management!services!as!well!as!administrative!support!to! the!Company.!!The!amounts!include!payments!for!services!provided!by!Mr!Neuling!and!by!other!members!of!staff!employed!or!retained!by! Erasmus.!

Share!Based!Compensation!!

Options'

Details!of!options!over!ordinary!shares!provided!as!remuneration!to!each!Director!of!Mozambi!Coal!Limited!and!each!of! the!key!management!personnel!of!the!parent!entity!and!Group!are!set!out!below.!When!exercisable,!each!option!is! convertible!into!one!ordinary!share!of!Mozambi!Coal!Limited.!

Terms!and!conditions!of!shareLbased!payment!arrangements!affecting!remuneration!of!key!management!personnel!in! the!current!financial!year!or!future!financial!years:!

%
OptionSeries Grantdate Number Vestingdate Expirydate Exerciseprice Grantdatefairvalue vested
6 02/08/2012 475,000 02/08/2012 02/08/2016 $0.25 $0.026 100
7 26/11/2012 2,200,000 26/11/2012 30/11/2016 $0.25 $0.006 100
9 27/05/2014 9,000,000 27/05/2014 31/12/2017 $0.02 $0.0048 100

Details!of!shareLbased!payments!granted!as!compensation!to!key!management!personnel!during!the!current!financial! year:!

Name
OptionSeries		 Duringthefinancialyear
%of
compensation
fortheyear
consistingof
options
No.granted
No.vested
%ofgrant
vested
%ofgrant
forfeited
AlexNeuling
Series9
RobertHemphill
Series9
JulianJarman
Series9		 3,000,000
3,000,000
100%
n/a
14%
3,000,000
3,000,000
100%
n/a
29%
3,000,000
3,000,000
100%
n/a
28%

Page!|!12!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

During!the!year,!there!were!no!options!exercised!that!were!granted!to!key!management!personnel!as!part!of!their! compensation.!

The!following!table!summarises!the!value!of!options!granted,!exercised!or!lapsed!during!the!financial!year,!in!relation!to! options!granted!to!key!management!personnel!as!part!of!their!remuneration:!

Valueofoptionsgrantedat Valueofoptionsgrantedat Valueofoptionsexercised Valueofoptionslapsedat
thegrantdate(i) attheexercisedate thedateoflapse
$ $ $
AlexNeuling 14,400 L L
RobertHemphill 14,400 L L
JulianJarman 14,400 L L
  • (i) The!value!of!options!granted!during!the!financial!year!is!calculated!as!at!the!grant!date!using!a!binomial!pricing! model.!!The!grant!date!value!is!allocated!to!remuneration!of!key!management!personnel!on!a!straightLline!basis! over!the!period!from!grant!date!to!vesting!date.!

Performance'Rights'

The!terms!and!conditions!of!each!grant!of!performance!rights!affecting!remuneration!in!the!current!period!is!as!follows:!

Tranche Vesting
Hurdle		 Fairvalueperright
Grantdate Number price Expirydate atgrantdate %vested
3B(i) 21/02/2011 204,000 $0.42 21/02/2014 $0.117 0%
3C(i) 21/02/2011 198,000 $0.50 21/02/2014 $0.072 0%

(i) Performance'Rights'expired,'unexercised'during'the'current'financial'year.'

No!performance!rights!were!granted!or!vested!during!the!years!ended!30!June!2014!and!30!June!2013.!

Key!management!personnel!equity!holdings!

Fully!paid!ordinary!shares!of!Mozambi!Coal!Limited!

Balanceat Balanceat
beginningof Issuedas OnExerciseof Balanceatendof
period* remuneration Options/PerfRights NetOtherChange period*
30June2014 Ord Ord Ord Ord Ord
Directors
AlexNeuling 682,000 L L L 682,000
RobertHemphill 174,250 L L L 174,250
JulianJarman 3,250,001 3,250,001
ShivMadan 10,750,000 L L L 10,750,000
OtherExecutives
NatalieMadden L L L L L
14,856,251 L L L 14,856,251

*!or!when!appointed/resigned!

Page!|!13!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

Balanceat Balanceat
beginningof Issuedas OnExerciseof Balanceatendof
period* remuneration Options NetChangeOther period*
30June2013 Ord Ord Ord Ord Ord
Directors
MichaelGriffiths 198,000 L L L 198,000
ShivMadan 10,750,000 L L L 10,750,000
AlexNeuling 682,000 L L L 682,000
RobertHemphill
174,250		 L L L 174,250
11,804,250 L L L 11,804,250

*!or!when!appointed/resigned!

Share!options!of!Mozambi!Coal!Limited!

30June2014
Directors
AlexNeuling
RobertHemphill
JulianJarman
ShivMadan
OtherExecutives
NatalieMadden
Total		 Balanceat
beginningof
period
Grantedas
remuneL
ration
Exercised
Netchange
Other
Balanceat
endof
period		 Vestedasatendofperiod
Exercisable
Not
Exercisable
Options
vested
duringthe
year
350,000
3,000,000
L
L
3,350,000
350,000
3,000,000
L
L
3,350,000
3,200,000
3,000,000
L
(3,200,000)
3,000,000
11,070,000
L
L
L
11,070,000
L
L
L
L
L		 3,350,000
L
3,000,000
3,350,000
L
3,000,000
3,000,000
L
3,000,000
11,070,000
L
L
L
L
L
14,970,000
9,000,000
L
(3,200,000)
20,770,000		 20,770,000
L
9,000,000
30June2013
Directors
MichaelGriffiths
ShivMadan
AlexNeuling
RobertHemphill
OtherExecutives
Chalamaiah
Kondragunta
RyanBroom
Total		 Balanceat
beginningof
period
Grantedas
remuneL
ration
Options
exercised
Netchange
Other
Balanceat
endof
period*		 Vestedasatendofperiod
Total
Exercisable
Not
Exercisable
L
750,000
L
L
750,000
10,320,000
750,000
L
L
11,070,000
L
350,000
L
L
350,000
L
350,000
L
L
350,000
500,000
175,000
L
L
675,000
250,000
175,000
L
L
425,000		 750,000
750,000
L
11,070,000 11,070,000
L
350,000
350,000
L
350,000
350,000
L
675,000
675,000
L
425,000
425,000
L
11,070,000
2,550,000
L
L
13,620,000		 13,620,000 13,620,000
L

*!or!when!appointed/resigned!

Page!|!14!

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Report!

All!share!options!issued!to!key!management!personnel!were!made!in!accordance!with!the!provisions!of!the!employee! share!option!plan.!

During!the!financial!year,!no!options!were!exercised!by!key!management!personnel!(2013:!nil).!No!amounts!remain! unpaid!on!the!options!at!yearLend.!

For!details!of!the!employee!share!option!plan!and!of!share!options!granted!during!the!2014!and!2013!financial!years,! please!refer!to!Note!13.!

Performance!Rights!of!Mozambi!Coal!Limited!

Mr!Michael!Griffiths!and!Mr!Shiv!Madan!respectively!held!268,000!and!536,000!performance!rights!as!at!1!July!2012;!all! performance!rights!lapsed!unexercised!during!the!year!ended!30!June!2013.!

Other!transactions!with!key!management!personnel!of!the!Group!

During!the!financial!year,!the!Group!paid!$36,000!as!a!placement!fee,!on!normal!commercial!terms!to!Alignment!Capital! Pty!Ltd,!a!company!related!to!Mr!Julian!Jarman.!!In!addition,!from!April!2014!Alignment!Capital!Pty!Ltd!has!been!paid! $5,000!per!month!as!an!ongoing!retainer!for!corporate!advisory!services!on!normal!commercial!terms.!

End!of!Remuneration!Report!

Signed!in!accordance!with!a!resolution!of!the!Directors!made!pursuant!to!s.298!(2)!of!the! Corporations'Act'2001 .!

On!behalf!of!the!Directors!

==> picture [112 x 36] intentionally omitted <==

Alex!Neuling!

Director!

Perth,!Western!Australia! 30!September!2014!

Page!|!15!

==> picture [162 x 68] intentionally omitted <==

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of Mozambi Coal Limited for the year ended 30 June 2014, I declare that to the best of my knowledge and belief, there have been no contraventions of:

  • a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

  • b) any applicable code of professional conduct in relation to the audit.

==> picture [162 x 54] intentionally omitted <==

Perth, Western Australia L Di Giallonardo 30 September 2014 Partner

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers.

Page | 16

==> picture [167 x 71] intentionally omitted <==

INDEPENDENT AUDITOR’S REPORT

To the members of Mozambi Coal Limited

Report on the Financial Report

We have audited the accompanying financial report of Mozambi Coal Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2014, the consolidated statement of profit or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

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

In Note 1 (c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements , that the financial report complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. 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 company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of 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.

Our audit did not involve an analysis of the prudence of business decisions made by directors or

management.

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

HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers.

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

Page | 17

==> picture [167 x 71] intentionally omitted <==

Independence

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

Auditor’s opinion

In our opinion:

  • (a) the financial report of Mozambi Coal 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 financial report also complies with International Financial Reporting Standards as disclosed in Note 1 (c).

Emphasis of matter

Without qualifying our conclusion, we draw attention to Note 1 to the financial report which indicates that the in order to continue as a going concern, the Group is dependent on maintaining the current low fixed cost base of the Group’s operations, and will be required to raise further funds when required. If the Group is unable to maintain the current low fixed cost base of the Group’s operations, or, if necessary, raise further funds when required, there exists a material uncertainty that may cast significant doubt over whether the Group will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business.

Report on the Remuneration Report

We have audited the remuneration report included in 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.

Auditor’s opinion

In our opinion the remuneration report of Mozambi Coal Limited for the year ended 30 June 2014 complies with section 300A of the Corporations Act 2001 .

==> picture [168 x 35] intentionally omitted <==

HLB Mann Judd Chartered Accountants

==> picture [162 x 48] intentionally omitted <==

L Di Giallonardo Partner

Perth, Western Australia 30 September 2014

Page | 18

Mozambi(Coal(Limited( ABN!28!106!353!253! Directors’!Declaration!

  • 1.! In!the!opinion!of!the!directors!of!Mozambi!Coal!Limited!(the!‘Company’):!

  • a.! the! accompanying! financial! statements! and! notes! and! the! additional! disclosures! 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!then!ended;!!and!

    • ii.! complying!with!Australian!Accounting!Standards!(including!the!Australian!Accounting! Interpretations)!and!the!Corporations!regulations!2001;!and!!

  • b.! there!are!reasonable!grounds!to!believe!that!the!Company!will!be!able!to!pay!its!debts!as! and!when!they!become!due!and!payable.!

  • 2.! The! financial! statements! and! notes! thereto! are! in! accordance! with! International! Financial! Reporting!Standards!issued!by!the!International!Accounting!Standards!Board.!

  • 3.! This! declaration! has! been! made! after! receiving! the! declarations! required! to! be! made! to! the! directors! in! accordance! with! Section! 295A! of! the! Corporations! Act! 2001! for! the! financial! year! ended!30!June!2014.!

This!declaration!is!signed!in!accordance!with!a!resolution!of!the!Board!of!Directors.!

==> picture [112 x 36] intentionally omitted <==

Alex!Neuling!

Director! Perth,!Western!Australia! 30!September!2014!

Page!|!19!

Mozambi(Coal(Limited(

Consolidated!statement!of!profit!or!loss!for!the!year!ended!30!June!2014!

Consolidated Consolidated Consolidated Consolidated
Note 2014
$		 2013
$
Revenue
2
11,677
55,451
Officecosts (43,231) (91,962)
Corporatemanagementcosts (206,709) (513,365)
Corporatecompliancecosts (75,212) (221,127)
Evaluationexpenses (65,022) (282,662)
Impairmentofexplorationexpenditure 2 R (8,155,408)
Sharebasedpayments 2 (93,200) (38,690)
Impairmentofotherassets R (51,017)
Blackallexplorationacquisitioncosts 2 (396,000) L
Othergainsandlosses 2 (6,161) L
Foreignexchangeloss (20,173) (3,927)
Otherexpensesfromordinaryactivities (66,277) (469,015)
Lossbeforeincometax
3
(960,308)
(9,771,722)
Incometaxexpense 3 R L
Lossaftertaxfromcontinuingoperations
(960,308)
(9,771,722)
Netlossfortheyear
(960,308)
(9,771,722)
Lossattributableto:
Ownersoftheparent
(955,402)
(9,677,399)
NonLcontrollinginterests (4,906) (94,323)
(960,308) (9,771,722)
Losspershare(centspershare)
Basic/dilutedlosspershare
4
(0.71)
(8.26)
Basic/dilutedlosspersharefromcontinuing 4
operations (0.71) (8.26)

The!accompanying!notes!form!part!of!these!financial!statements!

Page!|!20!

Mozambi(Coal(Limited

Consolidated!statement!of!other!comprehensive!income! !for!the!year!ended!30!June!2014!

fortheyearended30June2014 fortheyearended30June2014 fortheyearended30June2014
Consolidated
Note 2014
$		 2013
$
Lossfortheyear
(960,308)
(9,771,722)
Othercomprehensiveincome
Itemsthatmaybereclassifiedtoprofitorloss:
Exchangedifferencesontranslatingforeign
operations 17,682 (85,428)
17,682 (85,428)
Othercomprehensivelossfortheyearnetof
incometax
17,682
(85,428)
Totalcomprehensivelossfortheyear
(942,626)
(9,857,150)
Totalcomprehensivelossattributableto:
Ownersoftheparent
(937,720)
(9,762,827)
NonLcontrollinginterests (4,906) (94,323)
(942,626) (9,857,150)

The!accompanying!notes!form!part!of!these!financial!statements!

Page!|!21

Mozambi(Coal(Limited(

Consolidated!statement!of!financial!position!as!at!30!June!2014!

Consolidated Consolidated Consolidated Consolidated
Note 2014
$		 2013
$
CurrentAssets
Cashandcashequivalents 5 515,075 870,301
Tradeandotherreceivables 6 40,118 22,407
TotalCurrentAssets 555,193 892,708
NonRCurrentAssets
Property,plantandequipment 7 2,548 14,404
Deferredexplorationexpenditure 8 455,015 L
TotalNonRCurrentAssets 457,563 14,404
TotalAssets 1,012,756 907,112
CurrentLiabilities
Tradeandotherpayables 9 89,363 87,703
TotalCurrentLiabilities 89,363 87,703
NonRCurrentLiabilities
Amountsdueundercontract 10 L L
TotalNonRCurrentLiabilities R L
TotalLiabilities 89,363 87,703
NetAssets 923,393 819,409
Equity
Issuedcapital 11 31,758,385 30,874,975
Reserves 12(a) 2,758,783 2,577,901
Accumulatedlosses 12(b) (33,375,776) (32,420,374)
Parententityinterest 1,141,392 1,032,502
NonLcontrollinginterests (217,999) (213,093)
TotalEquity 923,393 819,409

The!accompanying!notes!form!part!of!these!financial!statements!

Page!|!22

Mozambi(Coal(Limited(

Consolidated+statement+of+changes+in+equity+for+the+year+ended+30+June+2014+

Consolidated+

NonF
Issued Accumulated controlling
Capital Losses Reserves Total interests Total
$ $ $ $ $ $
Balanceasat1July2012 30,482,928 (22,742,975) 2,624,639 10,364,592 (118,770) 10,245,822
Lossfortheyear
F
(9,677,399)
F
(9,677,399)
(94,323)
(9,771,722)
Exchangedifferencesarisingontranslationofforeignoperations F F (85,428) (85,428) F (85,428)
Totalcomprehensivelossfortheyear F (9,677,399) (85,428) (9,763,872) (94,323) (9,857,150)
Sharesissuedduringtheyear 400,000 F F 400,000 F 400,000
Lesstransactioncosts (7,953) F F (7,953) F (7,953)
RecognitionofshareFbasedpayments F F 38,690 38,690 F 38,690
Balanceat30June2013 30,874,975 (32,420,374) 2,577,901 1,032,502 (213,093) 819,409
Balanceasat1July2013 30,874,975 (32,420,374) 2,577,901 1,032,502 (213,093) 819,409
Lossfortheyear
F
(955,402)
F
(955,402)
(4,906)
(960,308)
Exchangedifferencesarisingontranslationofforeignoperations F F 17,682 17,682 F 17,682
TotalcomprehensiveLossfortheyear F (955,402) 17,682 (937,720) (4,906) (942,626)
Sharesissuedduringtheyear 926,000 F F 926,000 F 926,000
Lesstransactioncosts (42,590) F F (42,590) F (42,590)
RecognitionofshareFbasedpayments F F 163,200 163,200 F 163,200
Balanceat30June2014 31,758,385 (33,375,776) 2,758,783 1,141,392 (217,999) 923,393

The+accompanying+notes+form+part+of+these+financial+statements

Page+|+23

Mozambi(Coal(Limited(

Consolidated+statement+of+cash+flows+for+the+year+ended+30+June+2014+

MozambiCoalLimited
Consolidatedstatementofcashflowsfortheyearended30June2014		 MozambiCoalLimited
Consolidatedstatementofcashflowsfortheyearended30June2014		 MozambiCoalLimited
Consolidatedstatementofcashflowsfortheyearended30June2014		 MozambiCoalLimited
Consolidatedstatementofcashflowsfortheyearended30June2014
Consolidated
Note 2014
$		 2013
$
Inflows/(Outflows)
Cashflowsfromoperatingactivities
Paymentstosuppliersandemployees (451,090) (1,403,720)
Netcashappliedtooperatingactivities 5 (451,090) (1,403,720)
Cashflowsfrominvestingactivities
Paymentsforproperty,plant&equipment 7 K (3,334)
Proceedsfromdisposalofproperty,plant&equipment 1,396 K
Paymentsforexplorationexpenditure (472,127) (322,497)
Interestreceived 11,677 55,451
Netcashappliedtoinvestingactivities (459,054) (270,380)
Cashflowsfromfinancingactivities
Proceedsfromshareissues 600,000 400,000
Shareissuecosts (42,590) (7,953)
Netcashprovidedbyfinancingactivities 557,410 392,047
Netdecreaseincashandcashequivalents
(352,734)
Cashandcashequivalentsatthebeginningoftheyear
870,301		 (1,282,053)
2,144,477
Effectsofexchangeratechangesonthebalanceofcashheldin
foreigncurrencies (2,492) 7,877
Cashandcashequivalentsattheendoftheyear 5 515,075 870,301

The+accompanying+notes+form+part+of+these+financial+statements

Page+|+24

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

1. (Statement(of(significant(accounting(policies(

(a) Basis!of!Preparation!

These+financial+statements+are+general+purpose+financial+statements,+which+have+been+prepared+in+accordance+ with+the+requirements+of+the+Corporations+Act+2001,+Accounting+Standards+and+Interpretations+and+comply+ with+other+requirements+of+the+law.++

The+ accounting+ policies+ detailed+ below+ have+ been+ consistently+ applied+ to+ all+ of+ the+ years+ presented+ unless+ otherwise+ stated.+ + The+ financial+ statements+ are+ for+ the+ Group+ consisting+ of+ Mozambi+ Coal+ Limited+ and+ its+ subsidiaries.+

The+financial+statements+have+also+been+prepared+on+a+historical+cost+basis.++Cost+is+based+on+the+fair+values+of+ the+consideration+given+in+exchange+for+assets.+

The+Company+is+a+listed+public+company,+incorporated+in+Australia.+The+entity’s+principal+activities+are+mineral+ exploration+in+Australia+and+Mozambique+(as+more+fully+described+in+the+Directors’+Report+&+Note+16).++

Going&Concern&

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

The+Group+incurred+a+net+loss+of+$960,308+for+the+year+ended+30+June+2014+(2013:+$9,771,722)+and+had+a+net+ cash+outflow+from+operations+of+$451,090+for+the+year+(2013:+$1,403,720).++Notwithstanding+this,+the+financial+ report+has+been+prepared+on+a+going+concern+basis+which+the+Directors+consider+to+be+appropriate+based+upon+ periodKend+consolidated+cash+assets+of+$515,075+as+at+30+June+2014,+the+current+low+fixed+cost+base+of+the+ Group’s+operations+and+an+expectation+that+the+Group+will+be+able+to+raise+further+funds+when+required.+

Should+ the+ Group+ be+ unable+ to+ maintain+ the+ current+ low+ fixed+ cost+ base+ of+ the+ Group’s+ operations+ or,+ if+ necessary,+ raise+ further+ funds+ when+ required,+ there+ exists+ a+ material+ uncertainty+ that+ may+ cast+ significant+ doubt+over+whether+the+Group+will+be+able+to+continue+as+a+going+concern+and+therefore+whether+it+will+realise+ its+assets+and+extinguish+its+liabilities+in+the+normal+course+of+business.+

(b) Adoption!of!new!and!revised!standards!

Standards&and&Interpretations&applicable&to&30&June&2014&

In+ the+ year+ ended+ 30+ June+ 2014,+ the+ Directors+ have+ reviewed+ all+ of+ the+ new+ and+ revised+ Standards+ and+ Interpretations+ issued+ by+ the+ AASB+ that+ are+ relevant+ to+ the+ Group+ and+ effective+ for+ the+ current+ annual+ reporting+period.+++

As+a+result+of+this+review,+the+Directors+have+determined+that+there+is+no+impact,+material+or+otherwise,+of+the+ new+and+revised+Standards+and+Interpretations+on+the+Group’s+business+and,+therefore,+no+change+is+necessary+ to+Group+accounting+policies.+

The+Directors+have+also+reviewed+all+new+Standards+and+Interpretations+that+have+been+issued+but+are+not+yet+ effective+for+the+year+ended+30+June+2014.+As+a+result+of+this+review+the+Directors+have+determined+that+there+ is+ no+ impact,+ material+ or+ otherwise,+ of+ the+ new+ and+ revised+ Standards+ and+ Interpretations+ on+ the+ Group’s+ business+and,+therefore,+no+change+necessary+to+Group+accounting+policies.+

(c) Statement!of!Compliance!!

The+financial+report+was+authorised+for+issue+on+30+September+2014.+

The+financial+report+complies+with+Australian+Accounting+Standards,+which+include+Australian+equivalents+to+ International+Financial+Reporting+Standards+(AIFRS).+Compliance+with+AIFRS+ensures+that+the+financial+report,+ comprising+ the+ financial+ statements+ and+ notes+ thereto,+ complies+ with+ International+ Financial+ Reporting+ Standards+(IFRS).+

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Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

(d) Basis!of!Consolidation!

The+ consolidated+ financial+ statements+ incorporate+ the+ financial+ statements+ of+ the+ Company+ and+ entities+ controlled+by+the+Company+and+its+subsidiaries.+Control+is+achieved+when+the+Company:+

  • has+power+over+the+investee;+

  • is+exposed,+or+has+rights,+to+variable+returns+from+its+involvement+in+with+the+investee;+and++

  • has+the+ability+to+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+listed+above.+

Consolidation+of+a+subsidiary+begins+when+the+Company+obtains+control+over+the+subsidiary+and+ceases+when+ the+ Company+ loses+ control+ of+ the+ subsidiary.+ Specifically+ income+ and+ expenses+ of+ a+ subsidiary+ acquired+ or+ disposed+of+during+the+year+are+included+in+the+consolidated+statement+of+profit+or+loss+from+the+date+the+ Company+gains+control+until+the+date+when+the+Company+ceases+to+control+the+subsidiary.+

Profit+ or+ loss+ and+ each+ component+ of+ other+ comprehensive+ income+ are+ attributed+ to+ the+ owners+ of+ the+ Company+and+to+the+nonKcontrolling+interests.+Total+comprehensive+income+of+subsidiaries+is+attributed+to+the+ owners+ of+ the+ Company+ and+ to+ the+ nonKcontrolling+ interests+ even+ if+ this+ results+ in+ the+ controlling+ interest+ having+a+deficit+balance.+

When+necessary,+adjustments+are+made+to+the+financial+statements+of+subsidiaries+to+bring+their+accounting+ policies+in+line+with+the+Group’s+accounting+policies.+

All+intragroup+assets+and+liabilities,+equity,+income,+expenses+and+cash+flows+relating+to+transactions+between+ members+are+eliminated+in+full+on+consolidation.+

(e) Critical!accounting!judgements!and!key!sources!of!estimation!uncertainty!

The+ application+ of+ accounting+ policies+ requires+ the+ use+ of+ judgements,+ 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+ other+ factors+ that+ are+ considered+ to+ be+ relevant.+Actual+results+may+differ+from+these+estimates.+++

The+estimates+and+underlying+assumptions+are+reviewed+on+an+ongoing+basis.+Revisions+are+recognised+in+the+ period+in+which+the+estimate+is+revised+if+it+affects+only+that+period,+or+in+the+period+of+the+revision+and+future+ periods+if+the+revision+affects+both+current+and+future+periods.+

Share<based&payment&transactions:&

The+ Group+ measures+ the+ cost+ of+ equityKsettled+ transactions+ by+ reference+ to+ the+ fair+ value+ of+ the+ equity+ instruments+at+the+date+at+which+they+are+granted.+The+fair+value+is+determined+using+the+Black+and+Scholes+ formula+taking+into+account+the+terms+and+conditions+upon+which+the+instruments+were+granted.+

(f) Revenue!Recognition!

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

(i)&Interest&income&

Interest+revenue+is+recognised+on+a+time+proportionate+basis+that+takes+into+account+the+effective+yield+on+the+ financial+asset.+

(g) Borrowing!Costs!

Borrowing+ costs+ are+ recognised+ as+ an+ expense+ when+ incurred+ except+ those+ that+ relate+ to+ the+ acquisition,+ construction+or+production+of+qualifying+assets+where+the+borrowing+cost+is+added+to+the+cost+of+those+assets+ until+such+time+as+the+assets+are+substantially+ready+for+their+intended+use+or+sale.+

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Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

(h) Leases!

Leases+are+classified+as+finance+leases+whenever+the+terms+of+the+lease+transfer+substantially+all+the+risks+and+ rewards+of+ownership+to+the+lessee.+All+other+leases+are+classified+as+operating+leases.+

Operating+lease+payments+are+recognised+as+an+expense+on+a+straightKline+basis+over+the+lease+term,+except+ where+another+systematic+basis+is+more+representative+of+the+time+pattern+in+which+economic+benefits+from+ the+leased+asset+are+consumed.+

(i) Cash!and!cash!equivalents!

Cash+comprises+cash+at+bank+and+in+hand.+Cash+equivalents+are+short+term,+highly+liquid+investments+that+are+ readily+convertible+to+known+amounts+of+cash+and+which+are+subject+to+an+insignificant+risk+of+changes+in+value.+

(j) Trade!and!other!receivables!

Trade+ receivables+ are+ measured+ on+ initial+ recognition+ at+ fair+ value+ and+ are+ subsequently+ measured+ at+ amortised+cost+using+the+effective+interest+rate+method,+less+provision+for+impairment.++Trade+receivables+are+ generally+due+for+settlement+within+periods+ranging+from+15+days+to+30+days.++

Impairment+of+trade+receivables+is+continually+reviewed+and+those+that+are+considered+to+be+uncollectible+are+ written+off+by+reducing+the+carrying+amount+directly.++An+allowance+account+is+used+when+there+is+objective+ evidence+ that+ the+ Group+ may+ not+ be+ able+ to+ collect+ all+ amounts+ due+ according+ to+ the+ original+ contractual+ terms.+ Factors+ considered+ by+ the+ Group+ in+ making+ this+ determination+ include+ known+ significant+ financial+ difficulties+ of+ the+ debtor,+ review+ of+ financial+ information+ and+ significant+ delinquency+ in+ making+ contractual+ payments+to+the+Group.+The+impairment+allowance+is+set+equal+to+the+difference+between+the+carrying+amount+ of+the+receivable+and+the+present+value+of+estimated+future+cash+flows,+discounted+at+the+original+effective+ interest+rate.+Where+receivables+are+shortKterm+discounting+is+not+applied+in+determining+the+allowance.++

The+ amount+ of+ the+ impairment+ loss+ is+ recognised+ in+ the+ statement+of+ profit+ or+ loss+ within+ other+ expenses.+ When+a+trade+receivable+for+which+an+impairment+allowance+had+been+recognised+becomes+uncollectible+in+a+ subsequent+ period,+ it+ is+ written+ off+ against+ the+ allowance+ account.+ Subsequent+ recoveries+ of+ amounts+ previously+written+off+are+credited+against+other+expenses+in+the+statement+of+profit+or+loss.+

(k) Derecognition!of!financial!assets!and!financial!liabilities!

(i)&Financial&assets

A+financial+asset+(or,+where+applicable,+a+part+of+a+financial+asset+or+part+of+a+group+of+similar+financial+assets)+is+ derecognised+when:+

  • the+rights+to+receive+cash+flows+from+the+asset+have+expired;+

  • the+Group+retains+the+right+to+receive+cash+flows+from+the+asset,+but+has+assumed+an+obligation+to+pay+ them+in+full+without+material+delay+to+a+third+party+under+a+‘passKthrough’+arrangement;+or+

  • the+Group+has+transferred+its+rights+to+receive+cash+flows+from+the+asset+and+either:+

  • (a)+ +has+transferred+substantially+all+the+risks+and+rewards+of+the+asset,+or++

  • (b)++ has+ neither+ transferred+ nor+ retained+ substantially+ all+ the+ risks+ and+ rewards+ of+ the+ asset,+but+has+transferred+control+of+the+asset.+

When+the+Group+has+transferred+its+rights+to+receive+cash+flows+from+an+asset+and+has+neither+transferred+nor+ retained+substantially+all+the+risks+and+rewards+of+the+asset+nor+transferred+control+of+the+asset,+the+asset+is+ recognised+ to+ the+ extent+ of+ the+ Group’s+ continuing+ involvement+ in+ the+ asset.+ Continuing+ involvement+ that+ takes+ the+ form+ of+ a+ guarantee+ over+ the+ transferred+ asset+ is+ measured+ at+ the+ lower+ of+ the+ original+ carrying+ amount+of+the+asset+and+the+maximum+amount+of+consideration+received+that+the+Group+could+be+required+to+ repay.+

When+continuing+involvement+takes+the+form+of+a+written+and/or+purchased+option+(including+a+cashKsettled+ option+or+similar+provision)+on+the+transferred+asset,+the+extent+of+the+Group’s+continuing+involvement+is+the+ amount+of+the+transferred+asset+that+the+Group+may+repurchase,+except+that+in+the+case+of+a+written+put+option+ (including+ a+ cashKsettled+ option+ or+ similar+ provision)+ on+ an+ asset+ measured+ at+ fair+ value,+ the+ extent+ of+ the+ Group’s+continuing+involvement+is+limited+to+the+lower+of+the+fair+value+of+the+transferred+asset+and+the+option+ exercise+price.+

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Mozambi(Coal(Limited(

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

&(ii)&Financial&liabilities&

A+financial+liability+is+derecognised+when+the+obligation+under+the+liability+is+discharged+or+cancelled+or+expires.+ When+ an+ existing+ financial+ liability+ is+ replaced+ by+ another+ from+ the+ same+ lender+ on+ substantially+ different+ terms,+ or+ the+ terms+ of+ an+ existing+ liability+ are+ substantially+ modified,+ such+ an+ exchange+ or+ modification+ is+ treated+as+a+derecognition+of+the+original+liability+and+the+recognition+of+a+new+liability,+and+the+difference+in+ the+respective+carrying+amounts+is+recognised+in+profit+or+loss.

(l) Impairment!of!financial!assets!!

The+Group+assesses+at+each+reporting+date+whether+a+financial+asset+or+group+of+financial+assets+is+impaired.+

(i) Financial&assets&carried&at&amortised&cost

If+there+is+objective+evidence+that+an+impairment+loss+on+loans+and+receivables+carried+at+amortised+cost+has+ been+incurred,+the+amount+of+the+loss+is+measured+as+the+difference+between+the+asset’s+carrying+amount+and+ the+present+value+of+estimated+future+cash+flows+(excluding+future+credit+losses+that+have+not+been+incurred)+ discounted+at+the+financial+asset’s+original+effective+interest+rate+(i.e.+the+effective+interest+rate+computed+at+ initial+recognition).+The+carrying+amount+of+the+asset+is+reduced+either+directly+or+through+use+of+an+allowance+ account.++

The+amount+of+the+loss+is+recognised+in+profit+or+loss.+

The+Group+first+assesses+whether+objective+evidence+of+impairment+exists+individually+for+financial+assets+that+ are+ individually+ significant,+ and+ individually+ or+ collectively+ for+ financial+ assets+ that+ are+ not+ individually+ significant.+ If+ it+ is+ determined+ that+ no+ objective+ evidence+ of+ impairment+ exists+ for+ an+ individually+ assessed+ financial+asset,+whether+significant+or+not,+the+asset+is+included+in+a+group+of+financial+assets+with+similar+credit+ risk+characteristics+and+that+group+of+financial+assets+is+collectively+assessed+for+impairment.+Assets+that+are+ individually+assessed+for+impairment+and+for+which+an+impairment+loss+is+or+continues+to+be+recognised+are+not+ included+in+a+collective+assessment+of+impairment.+

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.+Any+subsequent+reversal+of+an+impairment+loss+is+recognised+in+profit+or+loss,+to+the+extent+that+ the+carrying+value+of+the+asset+does+not+exceed+its+amortised+cost+at+the+reversal+date.+

(ii)&Financial&assets&carried&at&cost&

If+there+is+objective+evidence+that+an+impairment+loss+has+been+incurred+on+an+unquoted+equity+instrument+ that+is+not+carried+at+fair+value+(because+its+fair+value+cannot+be+reliably+measured),+or+on+a+derivative+asset+that+ is+linked+to+and+must+be+settled+by+delivery+of+such+an+unquoted+equity+instrument,+the+amount+of+the+loss+is+ measured+as+the+difference+between+the+asset’s+carrying+amount+and+the+present+value+of+estimated+future+ cash+flows,+discounted+at+the+current+market+rate+of+return+for+a+similar+financial+asset.+

(iii)&Available<for<sale&investments&

If+ there+ is+ objective+ evidence+ that+ an+ availableKforKsale+ investment+ is+ impaired,+ an+ amount+ comprising+ the+ difference+between+its+cost+(net+of+any+principal+repayment+and+amortisation)+and+its+current+fair+value,+less+ any+impairment+loss+previously+recognised+in+profit+or+loss,+is+transferred+from+equity+to+profit+or+loss+for+the+ period.+Reversals+of+impairment+losses+for+equity+instruments+classified+as+availableKforKsale+are+not+recognised+ in+profit.+Reversals+of+impairment+losses+for+debt+instruments+are+reversed+through+profit+or+loss+if+the+increase+ in+an+instrument's+fair+value+can+be+objectively+related+to+an+event+occurring+after+the+impairment+loss+was+ recognised+in+profit+or+loss.+

(m) Foreign!currency!translation!

Both+ the+ functional+ and+ presentation+ currency+ of+ Mozambi+ Coal+ Limited+ and+ its+ Australian+ subsidiaries+ is+ Australian+dollars.+Each+entity+in+the+Group+determines+its+own+functional+currency+and+items+included+in+the+ financial+statements+of+each+entity+are+measured+using+that+functional+currency.+

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

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Mozambi(Coal(Limited(

All+exchange+differences+in+the+consolidated+financial+report+are+taken+to+profit+or+loss.+

NonKmonetary+items+that+are+measured+in+terms+of+historical+cost+in+a+foreign+currency+are+translated+using+the+ exchange+rate+as+at+the+date+of+the+initial+transaction.+

NonKmonetary+items+measured+at+fair+value+in+a+foreign+currency+are+translated+using+the+exchange+rates+at+the+ date+when+the+fair+value+was+determined.+Translation+differences+on+assets+and+liabilities+carried+at+fair+value+ are+reported+as+part+of+the+fair+value+gain+or+loss.+

The+ functional+ currency+ of+ foreign+ operations+ through+ Dugal+ Resources+ Lda+ and+ Xiluva+ Mozambi+ Lda,+ is+ Mozambique+New+Metical+(MZN).+

As+ at+ the+ balance+ date+ the+ assets+ and+ liabilities+ of+ these+ subsidiaries+ are+ translated+ into+ the+ presentation+ currency+of+Mozambi+Coal+Limited+at+the+rate+of+exchange+ruling+at+the+reporting+date+and+their+statements+of+ comprehensive+income+are+translated+at+the+weighted+average+exchange+rate+for+the+year.+

The+exchange+differences+arising+on+the+translation+are+taken+directly+to+a+separate+component+of+equity,+being+ recognised+in+the+foreign+currency+translation+reserve.+

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

(n) Income!tax!!

Current+tax+assets+and+liabilities+for+the+current+and+prior+periods+are+measured+at+the+amount+expected+to+be+ recovered+from+or+paid+to+the+taxation+authorities.+The+tax+rates+and+tax+laws+used+to+compute+the+amount+are+ those+that+are+enacted+or+substantively+enacted+by+the+reporting+date.+

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

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

  • when+the+deferred+income+tax+liability+arises+from+the+initial+recognition+of+goodwill+or+of+an+asset+or+ liability+in+a+transaction+that+is+not+a+business+combination+and+that,+at+the+time+of+the+transaction,+ affects+neither+the+accounting+profit+nor+taxable+profit+or+loss;+or+

  • when+the+taxable+temporary+difference+is+associated+with+investments+in+subsidiaries,+associates+or+ interests+in+joint+ventures,+and+the+timing+of+the+reversal+of+the+temporary+difference+can+be+controlled+ and+it+is+probable+that+the+temporary+difference+will+not+reverse+in+the+foreseeable+future.+

Deferred+income+tax+assets+are+recognised+for+all+deductible+temporary+differences,+carryKforward+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+carryKforward+of+unused+tax+credits+and+unused+tax+losses+ can+be+utilised,+except:+

  • when+the+deferred+income+tax+asset+relating+to+the+deductible+temporary+difference+arises+from+the+ initial+recognition+of+an+asset+or+liability+in+a+transaction+that+is+not+a+business+combination+and,+at+the+ time+of+the+transaction,+affects+neither+the+accounting+profit+nor+taxable+profit+or+loss;+or+

  • when+the+deductible+temporary+difference+is+associated+with+investments+in+subsidiaries,+associates+or+ interests+in+joint+ventures,+in+which+case+a+deferred+tax+asset+is+only+recognised+to+the+extent+that+it+is+ probable+that+the+temporary+difference+will+reverse+in+the+foreseeable+future+and+taxable+profit+will+be+ available+against+which+the+temporary+difference+can+be+utilised.

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

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

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

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Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

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

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

Tax&consolidation&legislation&

Mozambi+ Coal+ Limited+ and+ its+ 100%+ owned+ Australian+ resident+ subsidiary+ have+ implemented+ the+ tax+ consolidation+legislation.+Current+and+deferred+tax+amounts+are+accounted+for+in+each+individual+entity+as+if+ each+entity+continued+to+act+as+a+taxpayer+on+its+own.+

Mozambi+ Coal+ Limited+ recognises+ both+ its+ own+ current+ and+ deferred+ tax+ amounts+ and+ those+ current+ tax+ liabilities,+ current+ tax+ assets+ and+ deferred+ tax+ assets+ arising+ from+ unused+ tax+ credits+ and+ unused+ tax+ losses+ which+it+has+assumed+from+its+controlled+entities+within+the+tax+consolidated+group.+

Assets+or+liabilities+arising+under+tax+funding+agreements+with+the+tax+consolidated+entities+are+recognised+as+ amounts+payable+or+receivable+from+or+payable+to+other+entities+in+the+Group.+Any+difference+between+the+ amounts+ receivable+ or+ payable+ under+ the+ tax+ funding+ agreement+ are+ recognised+ as+ a+ contribution+ to+ (or+ distribution+from)+controlled+entities+in+the+tax+consolidated+group.+

(o) Other!taxes!

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

  • when+ 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,+which+are+stated+with+the+amount+of+GST+included.+

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

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

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

(p) Property,!plant!and!equipment!

Plant+and+equipment+is+stated+at+cost+less+accumulated+depreciation+and+any+accumulated+impairment+losses.+ Depreciation+is+calculated+on+a+straightKline+basis+over+the+estimated+useful+life+of+the+assets+as+follows:+

  • Plant+and+equipment+–+over+3+years+

The+assets'+residual+values,+useful+lives+and+amortisation+methods+are+reviewed,+and+adjusted+if+appropriate,+at+ each+financial+year+end.+

(i)&Impairment&

The+ carrying+ values+ of+ plant+ and+ equipment+ are+ reviewed+ for+ impairment+ at+ each+ reporting+ date,+ with+ recoverable+amount+being+estimated+when+events+or+changes+in+circumstances+indicate+that+the+carrying+value+ may+be+impaired.+

The+recoverable+amount+of+plant+and+equipment+is+the+higher+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+preKtax+ discount+rate+that+reflects+current+market+assessments+of+the+time+value+of+money+and+the+risks+specific+to+the+ asset.+

For+an+asset+that+does+not+generate+largely+independent+cash+inflows,+recoverable+amount+is+determined+for+ the+cashKgenerating+unit+to+which+the+asset+belongs,+unless+the+asset's+value+in+use+can+be+estimated+to+be+ close+to+its+fair+value.+

Page+|+30+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

An+ impairment+ exists+ when+ the+ carrying+ value+ of+ an+ asset+ or+ cashKgenerating+ units+ exceeds+ its+ estimated+ recoverable+amount.+The+asset+or+cashKgenerating+unit+is+then+written+down+to+its+recoverable+amount.+

For+plant+and+equipment,+impairment+losses+are+recognised+in+profit+or+loss+for+the+year+as+a+separate+line+item.++

(ii)&Derecognition&and&disposal&

An+item+of+property,+plant+and+equipment+is+derecognised+upon+disposal+or+when+no+further+future+economic+ benefits+are+expected+from+its+use+or+disposal.+

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+ asset)+ is+ included+ in+ profit+ or+ loss+ in+ the+ year+ the+ asset+ is+ derecognised.+

(q) Financial!assets!

Financial+assets+in+the+scope+of+AASB+139+ Financial&Instruments:&Recognition&and&Measurement& are+classified+as+ either+financial+assets+at+fair+value+through+profit+or+loss,+loans+and receivables,+heldKtoKmaturity+investments,+ or+ availableKforKsale+ investments,+ as+ appropriate.+ When financial+ assets+ are+ recognised+ initially,+ they+ are+ measured+ at+ fair+ value,+ plus,+ in+ the+ case+ of investments+ not+ at+ fair+ value+ through+ profit+ or+ loss,+ directly+ attributable+ transactions+ costs.+ The Group+ determines+ the+ classification+ of+ its+ financial+ assets+ after+ initial+ recognition+and,+when allowed+and+appropriate,+reKevaluates+this+designation+at+each+financial+yearKend.+

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

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

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

(ii)&Held<to<maturity&investments&

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

&(iii)&Loans&and&receivables&

Loans+and+receivables+are+nonKderivative+financial+assets+with+fixed+or+determinable+payments+that+are+not+ quoted+ in+ an+ active+ market.+ Such+ assets+ are+ carried+ at+ amortised+ cost+ using+ the+ effective+ interest+ method.+ Gains+and+losses+are+recognised+in+profit+or+loss+when+the+loans+and+receivables+are+derecognised+or+impaired,+ as+well+as+through+the+amortisation+process.+

(iv)&Available<for<sale&investments&

AvailableKforKsale+investments+are+those+nonKderivative+financial+assets+that+are+designated+as+availableKforK sale+or+are+not+classified+as+any+of+the+three+preceding+categories.+After+initial+recognition+availableKfor+sale+ investments+ are+ measured+ at+ fair+ value+ with+ gains+ or+ losses+ being+ recognised+ as+ a+ separate+ component+ of+ equity+until+the+investment+is+derecognised+or+until+the+investment+is+determined+to+be+impaired,+at+which+time+ the+cumulative+gain+or+loss+previously+reported+in+equity+is+recognised+in+profit+or+loss.+

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Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

The+fair+value+of+investments+that+are+actively+traded+in+organised+financial+markets+is+determined+by+reference+ to+quoted+market+bid+prices+at+the+close+of+business+on+the+reporting+date.+For+investments+with+no+active+ market,+fair+value+is+determined+using+valuation+techniques.+Such+techniques+include+using+recent+arm’s+length+ market+ transactions;+ reference+ to+ the+ current+ market+ value+ of+ another+ instrument+ that+ is+ substantially+ the+ same;+discounted+cash+flow+analysis+and+option+pricing+models.+

(r) Intangible!assets!

Intangible&assets&acquired&separately&

Intangible+ assets+ acquired+ separately+ are+ recorded+ at+ cost+ less+ accumulated+ amortisation+ and+ impairment.+ Amortisation+is+charged+on+a+straightKline+basis+over+their+estimated+useful+lives.+The+estimated+useful+life+and+ amortisation+ method+ is+ reviewed+ at+ the+ end+ of+ each+ annual+ reporting+ period,+ with+ any+ changes+ in+ these+ accounting+estimates+being+accounted+for+on+a+prospective+basis.+

Subsequent+to+initial+recognition,+intangible+assets+acquired+in+a+business+combination+are+reported+at+cost+less+ accumulated+amortisation+and+accumulated+impairment+losses,+on+the+same+basis+as+intangible+assets+acquired+ separately.+

(s) Impairment!of!assets!

The+Group+assesses+at+each+reporting+date+whether+there+is+an+indication+that+an+asset+may+be+impaired.+If+any+ such+ indication+ exists,+ or+ when+ annual+ impairment+ testing+ for+ an+ asset+ is+ required,+ the+ Group+ makes+ an+ estimate+of+the+asset’s+recoverable+amount.+An+asset’s+recoverable+amount+is+the+higher+of+its+fair+value+less+ costs+to+sell+and+its+value+in+use+and+is+determined+for+an+individual+asset,+unless+the+asset+does+not+generate+ cash+inflows+that+are+largely+independent+of+those+from+other+assets+or+groups+of+assets+and+the+asset's+value+ in+use+cannot+be+estimated+to+be+close+to+its+fair+value.+In+such+cases+the+asset+is+tested+for+impairment+as+part+ of+the+cashKgenerating+unit+to+which+it+belongs.+When+the+carrying+amount+of+an+asset+or+cashKgenerating+unit+ exceeds+its+recoverable+amount,+the+asset+or+cashKgenerating+unit+is+considered+impaired+and+is+written+down+ to+its+recoverable+amount.+

In+assessing+value+in+use,+the+estimated+future+cash+flows+are+discounted+to+their+present+value+using+a+preKtax+ discount+rate+that+reflects+current+market+assessments+of+the+time+value+of+money+and+the+risks+specific+to+the+ asset.+ Impairment+ losses+ relating+ to+ continuing+ operations+ are+ recognised+ in+ those+ expense+ categories+ consistent+with+the+function+of+the+impaired+asset+unless+the+asset+is+carried+at+revalued+amount+(in+which+case+ the+impairment+loss+is+treated+as+a+revaluation+decrease).+

An+ assessment+ is+ also+ made+ at+ each+ reporting+ date+ as+ to+ whether+ there+ is+ any+ indication+ that+ previously+ recognised+ impairment+ losses+ may+ no+ longer+ exist+ or+ may+ have+ decreased.+ If+ such+ indication+ exists,+ the+ recoverable+amount+is+estimated.+A+previously+recognised+impairment+loss+is+reversed+only+if+there+has+been+a+ change+in+the+estimates+used+to+determine+the+asset’s+recoverable+amount+since+the+last+impairment+loss+was+ recognised.+If+that+is+the+case+the+carrying+amount+of+the+asset+is+increased+to+its+recoverable+amount.+That+ increased+amount+cannot+exceed+the+carrying+amount+that+would+have+been+determined,+net+of+depreciation,+ had+no+impairment+loss+been+recognised+for+the+asset+in+prior+years.+Such+reversal+is+recognised+in+profit+or+loss+ unless+the+asset+is+carried+at+revalued+amount,+in+which+case+the+reversal+is+treated+as+a+revaluation+increase.++

After+ such+ a+ reversal+ the+ depreciation+ charge+ is+ adjusted+ in+ future+ periods+ to+ allocate+ the+ asset’s+ revised+ carrying+amount,+less+any+residual+value,+on+a+systematic+basis+over+its+remaining+useful+life.+

(t) Trade!and!other!payables!!

Trade+payables+and+other+payables+are+carried+at+amortised+cost+and+represent+liabilities+for+goods+and+services+ provided+to+the+Group+prior+to+the+end+of+the+financial+year+that+are+unpaid+and+arise+when+the+Group+becomes+ obliged+to+make+future+payments+in+respect+of+the+purchase+of+these+goods+and+services.+Trade+and+other+ payables+are+presented+as+current+liabilities+unless+payment+is+not+due+within+12+months.+

(u) Borrowings!

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

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Mozambi(Coal(Limited(

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

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

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

(v) 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.+

When+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+assets+but+only+when+the+reimbursement+is+virtually+certain.+ The+ expense+ relating+ to+ any+ provision+ is+ presented+ in+ the+ statement+ of+ comprehensive+ income+ net+ of+ any+ reimbursement.+

Provisions+are+measured+at+the+present+value+or+management’s+best+estimate+of+the+expenditure+required+to+ settle+the+present+obligation+at+the+end+of+the+reporting+period.+

If+the+effect+of+the+time+value+of+money+is+material,+provisions+are+discounted+using+a+current+preKtax+rate+that+ reflects+the+risks+specific+to+the+liability.+

When+discounting+is+used,+the+increase+in+the+provision+due+to+the+passage+of+time+is+recognised+as+an+interest+ expense.+

(w) Issued!capital!

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

(x) Earnings!per!share!

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

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

  • costs+of+servicing+equity+(other+than+dividends)+and+preference+share+dividends;+

  • the+after+tax+effect+of+dividends+and+interest+associated+with+dilutive+potential+ordinary+shares+that+ have+been+recognised+as+expenses;+and+

  • other+nonKdiscretionary+changes+in+revenues+or+expenses+during+the+period+that+would+result+from+the+ dilution+of+potential+ordinary+shares;+divided+by+the+weighted+average+number+of+ordinary+shares+and+ dilutive+potential+ordinary+shares,+adjusted+for+any+bonus+element.+

(y) Segment!reporting!

Operating+ segments+ are+ reported+ in+ a+ manner+ consistent+ with+ the+ internal+ reporting+ provided+ to+ the+ chief+ operating+decision+maker.++The+chief+operating+decision+maker,+who+is+responsible+for+allocating+resources+and+ assessing+performance+of+the+operating+segments,+has+been+identified+as+the+Board+of+Directors+of+Mozambi+ Coal+Limited.+

(z) NonScurrent!assets!(or!disposal!groups)!held!for!sale!and!discontinued!operations!

NonKcurrent+assets+(or+disposal+groups)+are+classified+as+held+for+sale+if+their+carrying+amount+will+be+recovered+ principally+ through+ a+ sale+ transaction+ rather+ than+ through+ continuing+ use+ and+ a+ sale+ is+ considered+ highly+ probable.++They+are+measured+at+the+lower+of+their+carrying+amount+and+fair+value+less+costs+to+sell,+except+for+ assets+ such+ as+ deferred+ tax+ assets,+ assets+ arising+ from+ employee+ benefits,+ financial+ assets+ and+ investment+ property+that+are+carried+at+fair+value+and+contractual+rights+under+insurance+contracts,+which+are+specifically+ exempt+from+this+requirement.+

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Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

An+impairment+loss+is+recognised+for+any+initial+or+subsequent+writeKdown+of+the+asset+(or+disposal+group)+to+ fair+value+less+costs+to+sell.++A+gain+is+recognised+for+any+subsequent+increases+in+fair+value+less+costs+to+sell+of+an+ asset+(or+disposal+group),+but+not+in+excess+of+any+cumulative+impairment+loss+previously+recognised.++A+gain+or+ loss+not+previously+recognised+by+the+date+of+the+sale+of+the+nonKcurrent+asset+(or+disposal+group)+is+recognised+ at+the+date+of+derecognition.+

NonKcurrent+assets+(including+those+that+are+part+of+a+disposal+group)+are+not+depreciated+or+amortised+while+ they+are+classified+as+held+for+sale.++Interest+and+other+expenses+attributable+to+the+liabilities+of+a+disposal+group+ classified+as+held+for+sale+continue+to+be+recognised.+

NonKcurrent+assets+classified+as+held+for+sale+and+the+assets+of+the+disposal+group+classified+as+held+for+sale+are+ presented+separately+from+the+other+assets+in+the+statement+of+financial+position.++The+liabilities+of+a+disposal+ group+classified+as+held+for+sale+are+presented+separately+from+other+liabilities+in+the+statement+of+financial+ position.+

A+discontinued+operation+is+a+component+of+the+entity+that+has+been+disposed+of+or+is+classified+as+held+for+sale+ and+that+represents+a+separate+major+line+of+business+or+geographical+area+of+operations,+is+part+of+a+single+coK ordinated+plan+to+dispose+of+such+a+line+of+business+or+area+of+operations,+or+is+a+subsidiary+acquired+exclusively+ with+a+view+to+resale.++The+results+of+discontinued+operations+are+presented+separately+in+the+statement+of+ profit+or+loss.+

(aa) Business!combinations!

The+ acquisition+ method+ of+ accounting+ is+ used+ to+ account+ for+ all+ business+ combinations,+ including+ business+ combinations+involving+entities+or+business+under+common+control,+regardless+of+whether+equity+instruments+ or+other+assets+are+acquired.++The+consideration+transferred+for+the+acquisition+of+a+subsidiary+comprises+the+ fair+value+of+the+assets+transferred,+the+liabilities+incurred+and+the+equity+interests+issued+by+the+group.++The+ consideration+transferred+also+includes+the+fair+value+of+any+contingent+consideration+arrangement+and+the+fair+ value+of+any+preKexisting+equity+interest+in+the+subsidiary.++AcquisitionKrelated+costs+are+expensed+as+incurred.+++ Identifiable+ assets+ acquired+ and+ liabilities+ and+ contingent+ liabilities+ assumed+ in+ a+ business+ combination+ are,+ with+limited+exceptions,+measured+initially+at+their+fair+values+at+the+acquisition+date.++On+an+acquisitionKbyK acquisition+basis,+the+group+recognises+any+nonKcontrolling+interest+in+the+acquiree+either+at+fair+value+or+at+the+ nonKcontrolling+interest’s+proportionate+share+of+the+acquiree’s+net+identifiable+assets.+

The+excess+of+the+consideration+transferred,+the+amount+of+any+nonKcontrolling+interest+in+the+acquiree+and+the+ acquisitionKdate+fair+value+of+any+previous+equity+interest+in+the+acquiree+over+the+fair+value+of+the+group’s+ share+of+the+net+identifiable+assets+acquired+is+recorded+as+goodwill.++If+those+amounts+are+less+than+the+fair+ value+of+the+net+identifiable+assets+of+the+subsidiary+acquired+and+the+measurement+of+all+amounts+has+been+ reviewed,+the+difference+is+recognised+directly+in+profit+or+loss+as+a+bargain+purchase.+

Where+ settlement+ of+ any+ part+ of+ cash+ consideration+ is+ deferred,+ the+ amounts+ payable+ in+ the+ future+ are+ discounted+to+their+present+value+as+at+the+date+of+exchange.++The+discount+rate+used+is+the+entity’s+incremental+ borrowing+rate,+being+the+rate+at+which+a+similar+borrowing+could+be+obtained+from+an+independent+financier+ under+comparable+terms+and+conditions.+

Contingent+consideration+is+classified+as+either+equity+or+a+financial+liability.++Amounts+classified+as+a+financial+ liability+are+subsequently+remeasured+to+fair+value+with+changes+in+fair+value+recognised+in+profit+or+loss.+

(bb) ShareSbased!payment!transactions!

(i)&Equity&settled&transactions:&

The+Group+provides+benefits+to+employees+(including+senior+executives)+of+the+Group+in+the+form+of+shareK based+ payments,+ whereby+ employees+ render+ services+ in+ exchange+ for+ shares+ or+ rights+ over+ shares+ (equityK settled+transactions).+

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

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Mozambi(Coal(Limited( Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

In+ valuing+ equityKsettled+ transactions,+ no+ account+ is+ taken+ of+ any+ performance+ conditions,+ other+ than+ conditions+linked+to+the+price+of+the+shares+of+Mozambi+Coal+Limited+(market+conditions)+if+applicable.+

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

The+cumulative+expense+recognised+for+equityKsettled+transactions+at+each+reporting+date+until+vesting+date+ reflects+(i)+the+extent+to+which+the+vesting+period+has+expired+and+(ii)+the+Group’s+best+estimate+of+the+number+ of+ equity+ instruments+ that+ will+ ultimately+ vest.+ 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.+ The+ statement+ of+ comprehensive+ income+ charge+ or+ credit+ for+ a+ period+ represents+ the+ movement+in+cumulative+expense+recognised+as+at+the+beginning+and+end+of+that+period.+

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

If+the+terms+of+an+equityKsettled+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+modification+that+increases+the+total+fair+ value+of+the+shareKbased+payment+arrangement,+or+is+otherwise+beneficial+to+the+employee,+as+measured+at+ the+date+of+modification.+

If+an+equityKsettled+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+4).+

(cc) Exploration!and!evaluation!

Exploration+ and+ evaluation+ expenditures+ in+ relation+ to+ each+ separate+ area+ of+ interest+ are+ recognised+ as+ an+ exploration+and+evaluation+asset+in+the+year+in+which+they+are+incurred+where+the+following+conditions+are+ satisfied:+

  • (i) the+rights+to+tenure+of+the+area+of+interest+are+current;+and+

  • (ii)+++at+least+one+of+the+following+conditions+is+also+met:+

  • (a) the+ exploration+ and+ evaluation+ expenditures+ are+ expected+ to+ be+ recouped+ through+ successful+ development+and+exploration+of+the+area+of+interest,+or+alternatively,+by+its+sale;+or+

  • (b)++exploration+and+evaluation+activities+in+the+area+of+interest+have+not+at+the+reporting+date+reached+a+ stage+ which+ permits+ a+ reasonable+ assessment+ of+ the+ existence+ or+ otherwise+ of+ economically+ recoverable+reserves,+and+active+and+significant+operations+in,+or+in+relation+to,+the+area+of+interest+are+ continuing.

Exploration+and+evaluation+assets+are+initially+measured+at+cost+and+include+acquisition+of+rights+to+explore,+ studies,+exploratory+drilling,+trenching+and+sampling+and+associated+activities+and+an+allocation+of+depreciation+ and+amortised+of+assets+used+in+exploration+and+evaluation+activities.+General+and+administrative+costs+are+only+ included+ in+ the+ measurement+ of+ exploration+ and+ evaluation+ costs+ where+ they+ are+ related+ directly+ to+ operational+activities+in+a+particular+area+of+interest.+

Exploration+and+evaluation+assets+are+assessed+for+impairment+when+facts+and+circumstances+suggest+that+the+ carrying+amount+of+an+exploration+and+evaluation+asset+may+exceed+its+recoverable+amount.+The+recoverable+ amount+of+the+exploration+and+evaluation+asset+(for+the+cash+generating+unit(s)+to+which+it+has+been+allocated+ being+no+larger+than+the+relevant+area+of+interest)+is+estimated+to+determine+the+extent+of+the+impairment+loss+ (if+any).+Where+an+impairment+loss+subsequently+reverses,+the+carrying+amount+of+the+asset+is+increased+to+the+ revised+estimate+of+its+recoverable+amount,+but+only+to+the+extent+that+the+increased+carrying+amount+does+not+

Page+|+35+

Mozambi(Coal(Limited( Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

exceed+the+carrying+amount+that+would+have+been+determined+had+no+impairment+loss+been+recognised+for+the+ asset+in+previous+years.+

Where+a+decision+has+been+made+to+proceed+with+development+in+respect+of+a+particular+area+of+interest,+the+ relevant+ exploration+ and+ evaluation+ asset+ is+ tested+ for+ impairment+ and+ the+ balance+ is+ then+ reclassified+ to+ development.+

(dd) !Parent!entity!financial!information!

The+financial+information+for+the+parent+entity,+Mozambi+Coal+Limited,+disclosed+in+Note+21+has+been+prepared+ on+the+same+basis+as+the+consolidated+financial+statements,+except+as+set+out+below.+

(i)&Investments&in&subsidiaries,&associates&and&joint&venture&entities&

Investments+ in+ subsidiaries,+ associates+ and+ joint+ venture+ entities+ are+ accounted+ for+ at+ cost+ in+ the+ financial+ statements+of+Mozambi+Coal+Limited.++Dividends+received+from+associates+are+recognised+in+the+parent+entity’s+ profit+or+loss,+rather+than+being+deducted+from+the+carrying+amount+of+these+investments.+

(ii)&Share<based&payments&

The+Group+measures+the+cost+of+equityKsettled+transactions+with+employees+by+reference+to+the+fair+value+of+ the+ equity+ instruments+ at+ the+ date+ at+ which+ they+ are+ granted.+ + The+ fair+ value+ is+ determined+ using+ a+ BlackK Scholes+model.+

2. Revenue(and(Expenses(

Consolidated Consolidated
2014 2013
$ $
(a)Revenue
ContinuingOperations
InterestIncome
11,677
55,451
(b)Expenses
•
•
Lossbeforeincometaxhasbeendeterminedaftercharging:
ContinuingOperations
Depreciation
(3,074)
(5,604)
Impairmentofexplorationexpenditure S (8,155,408)
Impairmentlossrecognisedontradereceivables S (37,278)
Impairmentlossrecognisedonproperty,plantandequipment S (13,739)
Lossondisposalofproperty,plantandequipment (6,161) K
ShareKbasedpayments
Ordinaryshares
(26,000)
K
Options (67,200) (25,550)
Performancerights S (13,140)
(93,200) (38,690)
Blackallexploration–acquisitioncosts(Note17(b))
K
Ordinaryshares (300,000) K
Options (96,000) K
(396,000)
K
TotalshareKbasedpayments
(489,200)
(38,690)
FurtherdetailsofshareKbasedpaymentscanbefoundinNote13.

Page+|+36+

Mozambi(Coal(Limited(

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

3. Income(Tax(

3.
IncomeTax		 3.
IncomeTax		 3.
IncomeTax
Consolidated
2014 2013
$ $
TheprimafacieincometaxbenefitonpreKtaxaccountinglossreconcilesto
theincometaxexpenseinthefinancialstatementsasfollows:
Accountinglossbeforeincometax (960,308) (9,771,722)
Incometaxbenefitcalculatedat30% 288,093 2,931,517
Sharebasedpayments (146,760) (11,607)
NonKdeductibleexpenses (6,837) (2,471,356)
Capitalraisingcostsdeductible 25,642 23,451
Incometaxlossesnotbroughttoaccount 160,138 472,005
Incometaxbenefitfromcontinuingoperationsreportedintheconsolidated
statementofprofitorloss		 S K
Incometaxbenefitattributabletodiscontinuedoperations S K

The+tax+rate+used+in+the+above+reconciliation+is+the+corporate+tax+rate+of+30%+payable+by+Australian+corporate+ entities+on+taxable+profits+under+Australian+tax+law.+There+has+been+no+change+in+this+tax+rate+since+the+previous+ reporting+period.+

The+Group+has+tax+losses+arising+in+Australia+of+$15,256,301+(2013:+$14,697,796)+that+are+available+indefinitely+ for+offset+against+future+taxable+profits+of+the+companies+in+which+the+losses+arose.++The+availability+of+these+ losses+is+subject+to+the+satisfaction+of+either+the+same+business+or+continuity+of+ownership+tests.

Deferred+tax+assets+have+not+been+recognised+in+respect+of+these+items+because+it+is+not+sufficiently+probable+ that+future+taxable+profit+will+be+available+against+which+the+Group+can+utilise+the+benefits+thereof.+

4. Loss(per(share(

4.
Losspershare		 4.
Losspershare		 4.
Losspershare		 4.
Losspershare
Consolidated
2014 2013
Centspershare Centspershare
Basic/dilutedlosspershare:
Continuingoperations
(0.71)		 (8.26)
Discontinuedoperations
K		 K
Totalbasiclosspershare
(0.71)		 (8.26)
Lossaftertax(usedincalculationofbasic/dilutedlosspershare)
(960,308)		 (9,771,722)
Adjustmentfordiscontinuedoperations
K		 K
Lossfromcontinuingoperationsaftertax(usedincalculationofbasic/
dilutedlosspersharefromcontinuingoperations
(960,308)		 (9,771,722)
Consolidated
2014 2013
No. No.
Weightedaveragenumberofordinarysharesusedasthedenominator
incalculatingbasic/dilutedlosspershare
135,574,185		 117,188,557

As+the+entity+is+lossKmaking+in+both+the+current+and+prior+year,+no+potential+ordinary+shares+are+considered+to+be+ dilutive+as+they+would+act+to+decrease+the+loss+per+share+(&+loss+per+share+from+continuing+activities).++++

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Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

The+options+on+issue+(Note+13)+represent+potential+ordinary+shares+but+are+not+dilutive+and+accordingly+have+ been+excluded+from+the+weighted+average+number+of+ordinary+shares+and+potential+ordinary+shares+used+in+the+ calculation+of+diluted+earnings+per+share.+

5. Cash(and(Cash(Equivalents

5.
CashandCashEquivalents		 5.
CashandCashEquivalents		 5.
CashandCashEquivalents		 5.
CashandCashEquivalents
Consolidated
2014 2013
$ $
Cashatbankandonhand 515,075 870,301
Cashatbankearnsinterestatfloatingratesbasedondailybankdepositrates
(i)ReconciliationtoStatementofCashFlows:
Cashandcashequivalents 515,075 870,301
515,075 870,301
(ii)Reconciliationoflossfortheyeartonetcashoutflowsfromoperating
activities
Lossfortheyear (960,308) (9,771,722)
Depreciation 3,074 5,604
Interestreceived (11,677) (55,451)
NonKcapitalisedexplorationexpenditure 396,000 160,457
Impairmentofassets K 8,206,425
Lossonsaleofproperty,plantandequipment 7,386 K
ForeignExchange(gain)/loss 20,173 3,927
Sharebasedpayments 93,200 38,690
(Increase)/decreaseindebtors (598) (1,504)
Increase/(decrease)increditorsandaccruals 1,660 9,854
Netcashusedinoperatingactivities (451,090) (1,403,720)

6. Current(Trade(and(Other(Receivables(

6.
CurrentTradeandOtherReceivables		 6.
CurrentTradeandOtherReceivables		 6.
CurrentTradeandOtherReceivables
Consolidated
2014 2013
$ $
Tradeandotherreceivables
80,421		 63,487
Allowanceforimpairment (40,303) (41,080)
40,118 22,407
Ageingofpastduebutnotimpaired
90K120days K -
Morethan120days 17,823 5,036
Total 17,823 5,036
Ageingofimpairedreceivables
Morethan120days 40,303 41,080
Total 40,303 41,080

Page+|+38+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

7. Property,(Plant(and(Equipment(

7.
Property,PlantandEquipment		 7.
Property,PlantandEquipment		 7.
Property,PlantandEquipment
Consolidated
2014 2013
$ $
Cost
8,156		 24,237
Accumulateddepreciation (5,608) (9,833)
Netcarryingamount 2,548 14,404
Areconciliationofmovementsinplant&equipmentduringthecurrent&priorfinancialyearisasfollows:
Openingbalance 14,404 30,564
Depreciation (3,074) (5,604)
Additions K 3,334
Disposals (8,782) K
Netimpairment K (13,890)
Closingbalance 2,548 14,404

Impairment!of!property,!plant!and!equipment:!

During+the+previous+financial+year,+recoverable+amount+was+estimated+for+certain+items+of+property,+plant+and+ equipment.++An+impairment+loss+of+$13,890+in+total+was+recognised+to+reduce+the+carrying+amount+of+certain+of+ those+assets+to+recoverable+amount.+

8. Deferred(Exploration(Expenditure(

8.
DeferredExplorationExpenditure		 8.
DeferredExplorationExpenditure		 8.
DeferredExplorationExpenditure
Consolidated
2014 2013
$ $
Openingbalance K 9,951,803
AcquisitionofBowenRiver&Carmilla 426,000 K
Expenditureduringtheyear 29,015 162,041
Contingentconsiderationreversed K (1,958,436)
Impairment K (8,155,408)
Closingbalance 455,015 K

Capitalised+ exploration+ and+ evaluation+ expenditure+ represents+ the+ accumulated+ cost+ of+ acquisition+ and+ subsequent+cost+of+exploration+and+evaluation+of+the+properties.+

Ultimate+recoupment+of+these+costs+is+dependent+on+the+successful+development+and+commercial+exploitation,+ or+alternatively+sale,+of+the+respective+areas+of+interest.+

Acquisition!of!Bowen!River!and!Carmilla!coal!tenements!

On+19+November+2013,+the+Group+acquired+EPC+1768+(“Bowen+River”)+and+EPC+2098+(“Carmilla”)+from+Rio+Tinto+ Exploration.++The+acquisition+was+pursuant+to+a+sale+and+purchase+agreement+with+an+initial+cash+consideration+ paid+of+$375,000.++Additional+costs+of+$51,000+were+incurred+in+relation+to+the+transaction.+

Page+|+39+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

Deferred!Exploration!Expenditure!(continued)

Contingent!consideration!derecognised!–!prior!year!

On+acquisition+of+the+exploration+licences+3245L+and+3246L,+the+Group+entered+into+a+contract+where+the+Group+ will+ be+ required+ to+ pay+ US$500,000+ for+ every+ 50,000,000+ tonnes+ of+ commercially+ exploitable+ coal+ resources+ identified+on+the+areas+covered+by+the+exploration+licences+up+to+a+cap+of+US$3,000,000+(the+cap+included+the+ US$1,000,000+ already+ paid+ for+ acquisition+ of+ the+ license+ areas)+ upon+ satisfaction+ of+ the+ conditions+ of+ the+ contract.+

On+ acquisition,+ the+ Group+ recognised+ the+ liability+ (see+ note+ 10)+ and+ a+ corresponding+ increase+ in+ deferred+ exploration+expenditure.+

At+the+prior+year’s+balance+date,+Management’s+expectation,+based+on+information+available+at+that+time+and+the+ uncertainties+regarding+the+forward+exploration+program+for+the+assets,+was+that+the+likelihood+of+discovering+a+ commercially+exploitable+coal+resource+of+a+size+to+trigger+payment+of+contingent+consideration+was+remote+and+ therefore+the+most+likely+value+of+the+contingent+consideration+was+nil.

Impairment!–!prior!year!

License!2738L!

On+ 14+ July+ 2011,+ Mozambi+ entered+ into+ a+ Memorandum+ of+ Understanding+ (“MOU”)+ with+ Xiluva+ Mineral+ Resources+Limitada+for+the+purchase+of+exploration+license+2738L.++Under+the+terms+of+the+MOU,+Mozambi+had+ the+right+to+complete+a+legal+and+technical+due+diligence+on+2738L.++On+13+December+2012,+Mozambi+announced+ it+ had+ completed+ its+ due+ diligence+ and+ on+ 17+ December+ 2012+ announced+ that+ it+ had+ exercised+ its+ right+ to+ withdraw+ from+ its+ agreement+ to+ acquire+ the+ license.+ + As+ a+ result,+ Mozambi+ no+ longer+ retained+ the+ right+ to+ explore+2738L+and+recognised+an+impairment+loss+of+$1,053,864+of+all+expenditure+incurred+on+the+license+in+the+ prior+year.+

Licenses!3245L!and!3246L!

As+ noted+ in+ the+ 2013+ Directors’+ Report,+ Mozambi’s+ board+ implemented+ a+ number+ of+ measures+ to+ reduce+ administrative+expenditure+during+the+2013+financial+year,+including+salary+and+fee+reductions+as+well+as+staff+ retrenchments+and+a+reduction+in+the+size+of+the+Company’s+board.++These+measures+would+allow+the+Company+ to+preserve+its+working+capital+while+the+Board+investigated+alternatives+for+both+new+investment+opportunities+ and+development+/+exploitation+of+its+existing+assets.++Accordingly+there+was+significant+resultant+uncertainty+ regarding+ the+ timing+ and+ extent+ of+ further+ exploration+ activity+ on+ the+ Company’s+ Mozambican+ assets.+ + In+ accordance+with+accounting+standards,+as+substantive+expenditure+on+further+exploration+for+and+evaluation+of+ mineral+ resources+ in+ the+ specific+ area+ was+ neither+ budgeted+ nor+ planned,+ the+ Company+ recognised+ an+ accounting+impairment+in+the+value+of+those+assets+in+the+prior+year.++Based+on+information+available+at+that+time+ and+in+the+absence+of+reliably+estimable+measures+of+the+future+value+in+use+or+potential+recoverable+amount+ through+sale+of+the+assets,+management+had+assigned+a+recoverable+amount+of+zero+to+the+assets+and+recognised+ a+full+impairment+accordingly+in+the+prior+year.+

Page+|+40+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

9. Trade(&(Other(Payables(

9.
Trade&OtherPayables		 9.
Trade&OtherPayables		 9.
Trade&OtherPayables
Consolidated
2014 2013
$ $
TradeCreditors&Accruals 46,650 70,172
Relatedpartypayables 42,713 17,531
TotalTrade&OtherPayables 89,363 87,703

Trade+payables+are+nonKinterest+bearing+and+are+normally+settled+on+30Kday+terms.

Related+party+payables+as+at+reporting+date+relate+to+Company+Secretarial+and+consulting+fees+owed+to+Erasmus+ Consulting+ Pty+ Ltd+ (an+ entity+ associated+ with+ Mr+ Alex+ Neuling,+ a+ Director,+ which+ is+ owed+ $31,715+ (2013:+ $17,531))+and+Alignment+Capital+Pty+Ltd+(an+entity+associated+with+Mr+Julian+Jarman,+a+Director,+which+is+owed+ $11,000+(2013:+nil)).++No+interest+is+currently+being+levied+on+these+payables.+

10. Amounts(due(under(contract(

10.
Amountsdueundercontract		 10.
Amountsdueundercontract		 10.
Amountsdueundercontract
Consolidated
2014
$		 2013
$
NonKCurrent
Openingbalance
S		 1,861,353
Revaluationofamountsdueundercontract
duetocurrencyfluctuations
S		 294,981
ReclassifiedasnonKcurrent
S		 K
Reversalofamountsdueundercontract
S		 (2,156,334)
S K

Amounts+ due+ under+ contract+ represented+ amounts+ payable+ under+ contract+ to+ the+ vendors+ of+ exploration+ licences+3245L+and+3246L+upon+satisfaction+of+the+conditions+of+the+contract.+Under+the+agreement,+the+Group+ was+ required+ to+ pay+ US$500,000+ for+ every+ 50,000,000+ tonnes+ of+ commercially+ exploitable+ coal+ resource+ identified+on+the+areas+covered+by+the+exploration+licences+up+to+a+cap+of+US$3,000,000+(the+cap+includes+the+ US$1,000,000+already+paid+for+acquisition+of+the+license+areas).+

Management’s+ expectation+ in+ the+ prior+ year,+ based+ on+ information+ available+ at+ that+ time,+ including+ an+ independent+geologist’s+report,+was+that+a+commercially+exploitable+coal+resource+would+not+be+identified+and+ the+ liability+ would+ not+ eventuate.+ + Consequently,+ the+ liability+ was+ derecognised+ and+ the+ amount+ previously+ recognised+as+deferred+exploration+expenditure+was+reversed+in+the+prior+year+(see+note+8).+

Page+|+41+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

11. Contributed(Equity( Share(Capital(

11.
ContributedEquity
ShareCapital		 11.
ContributedEquity
ShareCapital		 11.
ContributedEquity
ShareCapital
Consolidated Consolidated
2014 2013 2014 2013
Shares Shares $ $
Ordinarysharesissuedandfullypaid 212,541,987 119,941,987 31,758,386 30,874,975
TotalContributedEquity 31,758,386 30,874,975

Movements+in+Share+Capital+during+the+current+and+prior+financial+years+are+as+follows:+

Ordinary&Shares&

OrdinaryShares OrdinaryShares
Date No. IssuePrice $
Balanceasat1July
2012 114,941,987 30,482,928
Sharesissued
17/01/13
5,000,000
$0.08
400,000
Lesscostsofissue
K
(7,953)
Balanceasat30June
2013 119,941,987 30,874,975
Blackallacquisition
31/03/14
30,000,000
$0.01
300,000
Tranche1placement 31/03/14 19,990,331 $0.01 199,903
Placementcosts 31/03/14 2,000,000 $0.01 20,000
Tranche2placement 06/06/14 30,009,669 $0.01 300,097
Moultrieplacement 06/06/14 10,000,000 $0.01 100,000
Placementcosts 06/06/14 600,000 $0.01 6,000
Lesscostsofissue K (42,589)
Balanceasat30June
2014 212,541,987 31,758,386

  • On+17+March+2014+the+Company+announced+a+share+placement+of+50,000,000+ordinary+shares+plus+ 25,000,000+attaching+options+exercisable+at+2c+on+or+before+31+December+2017.++The+placement+was+ conducted+in+two+tranches+to+raise+$500,000+before+costs;+Tranche+1+was+issued+on+31+March+2014+ and+Tranche+2+on+6+June+2014;

  • Concurrently+with+Tranche+1+of+the+share+placement,+the+Company+issued+30,000,000+ordinary+shares+ plus+15,000,000+options+exercisable+at+2c+on+or+before+31+December+2017+to+acquire+Blackall+Capital+ Pty+Ltd.++Further+details+of+the+acquisition+are+at+note+17.

  • A+total+of+2,600,000+shares+were+issued+in+lieu+of+cash+for+costs+associated+with+the+placement+and+ acquisition+of+Blackall+Capital.

Page+|+42+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

Options

The+following+options+were+in+existence+during+the+current+and+prior+reporting+periods:+

Fairvalueat Vesting
grantdate Exerciseprice date
Series Number Grantdate $ $ Expirydate
1 20,000,000 21/02/2011 $0.1002 $0.25 21/02/2014 21/02/2011
2 250,000 6/07/2011 $0.1280 $0.35 30/06/2014 6/07/2011
3 250,000 6/07/2011 $0.1140 $0.45 30/06/2014 6/07/2011
4 250,000 6/07/2011 $0.1030 $0.55 30/06/2014 6/07/2011
5 2,500,000 22/07/2011 n/a $0.30 22/07/2013 n/a
6 475,000 2/08/2012 $0.0260 $0.25 2/08/2016 2/08/2012
7 2,200,000 26/11/2012 $0.0060 $0.25 30/11/2016 26/11/2012
8 50,000,000 27/05/2014 $0.0048 $0.02 31/12/2017 27/05/2014
9 9,000,000 27/05/2014 $0.0048 $0.02 31/12/2017 27/05/2014

The+options+are+not+listed+and+carry+no+dividend+or+voting+rights.++Upon+exercise,+each+option+is+convertible+into+ one+ordinary+share+to+rank+pari+passu+in+all+respects+with+the+Company’s+existing+fully+paid+ordinary+shares.++All+ options+on+issue+vested+at+the+grant+date.+

The+following+table+illustrates+the+number+and+weighted+average+exercise+prices+of+and+movements+in+share+ options+during+the+year:+

optionsduringtheyear: optionsduringtheyear:
2014
2013
Number
Weighted
average
exerciseprice
Number
Weighted
average
exerciseprice
Number
Weighted
average
exerciseprice
Number
Weighted
average
exerciseprice
Outstandingatthebeginningoftheyear
Grantedduringtheyear
Forfeitedduringtheyear
Exercisedduringtheyear
Expiredduringtheyear
Outstandingattheendoftheyear
Exercisableattheendoftheyear		 25,925,000
$0.26
23,250,000
$0.26
59,000,000
$0.02
2,675,000
$0.25
K
K
K
K
K
K
K
K
(23,250,000)
$0.26
K
K
61,675,000
$0.03
25,925,000
$0.26
61,675,000
25,925,000

Share!options!exercised!during!the!year!

No+shares+were+issued+during+the+year+to+30+June+2014+as+a+result+of+the+exercise+of+options+(2013:+nil).+

Share!options!outstanding!at!the!end!of!the!year!

The+share+options+outstanding+at+the+end+of+the+year+had+an+exercise+price+of+$0.03+(2013:+$0.26)+and+a+ weighted+average+remaining+contractual+life+of+1,262+days+(2013:+321+days).+

Page+|+43+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

12. Reserves(and(accumulated(losses(

(a) Reserves!

12.
Reservesandaccumulatedlosses
(a) Reserves		 12.
Reservesandaccumulatedlosses
(a) Reserves		 12.
Reservesandaccumulatedlosses
(a) Reserves
Consolidated
2014 2013
$ $
OptionReserve
Balanceatbeginningofyear
2,672,000
2,633,310
Sharebasedpayments 163,200 38,690
Balanceatendofyear 2,835,200 2,672,000

The+option+reserve+has+historically+been+used+to+record+the+fair+value+of+shareKbased+payments+made+by+the+ Company+to+employees+and+directors+as+part+of+their+remuneration.+

Companytoemployeesanddirectorsaspartoftheirremuneration. Companytoemployeesanddirectorsaspartoftheirremuneration. Companytoemployeesanddirectorsaspartoftheirremuneration.
Foreigncurrencytranslationreserve
Balanceatbeginningofyear
(94,099)
(8,671)
Currencytranslationdifferences 17,682 (85,428)
Balanceatendofyear (76,417) (94,099)

The+foreign+currency+translation+reserve+is+used+to+record+exchange+differences+arising+from+the+translation+of+ the+financial+statements+of+foreign+subsidiaries.+

2014 2014 2013
$ $
TotalReserves 2,758,783 2,577,901

(b) Accumulated!Losses!

Atthebeginningofthefinancialyear
Lossfortheyear
Balanceatendoffinancialyear		 (32,420,374)
(22,742,975)
(955,402)
(9,677,399)
(33,375,776)
(32,420,374)

13. Share(Based(Payments(

The+following+shareKbased+payments+were+made+during+the+current+year:+

ThefollowingshareKbasedpaymentsweremadeduringthecurrentyear:
Description
Securitytype
Numberissued		 Fairvalue
$
Issueofrelatedpartyoptions(i)
Options
9,000,000
43,200
Issueofoptionstoconsultants(ii)
Options
5,000,000
24,000
Sharesissuedaspaymentforservices(ii)
Ordinaryshares
2,600,000
26,000
93,200
Blackallassetacquisition(iii)
Ordinaryshares
30,000,000
300,000
Options
15,000,000
96,000
396,000		 43,200
24,000
26,000

(i) 9,000,000+related+party+options+were+issued+to+the+directors+of+the+Company+as+a+performance+incentive+ on+6+June+2014.+

Page+|+44+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

  • (ii) A+total+of+5,000,000+options+and+2,600,000+ordinary+shares+were+issued+to+consultants+of+the+Company+for+ services+provided+in+relation+to+the+Blackall+acquisition+and+capital+raising.+

  • (iii) Blackall+asset+acquisition+

100%+of+the+issued+capital+of+Blackall+Capital+Pty+Ltd+was+acquired+for+a+consideration+of+30,000,000+ ordinary+shares+issued+at+$0.01+per+share+plus+15,000,000+options+with+an+expiry+date+of+31+December+ 2017+and+exercise+price+of+$0.02.++See+Note+17+for+further+details.+

Fair!value!of!share!options!granted!during!the!year!

The+fair+value+of+the+equityKsettled+share+options+granted+during+the+year+is+estimated+as+at+the+date+of+grant+ using+the+Black+and+Scholes+model+taking+into+account+the+terms+and+conditions+upon+which+the+options+were+ granted.+++

granted. granted.
Series8 Series9
Dividendyield 0% 0%
Expectedvolatility 100% 100%
RiskKfreeinterestrate 2.86% 2.86%
Expectedlifeofoption 3.6years 3.6years
Exerciseprice $0.02 $0.02
Grantdateshareprice $0.009 $0.009

14. Financial(Instruments(

(a) Capital!risk!management!

The+Group+manages+its+capital+to+ensure+that+entities+in+the+Group+will+be+able+to+continue+as+a+going+concern+ while+maximising+the+return+to+stakeholders+through+the+optimisation+of+the+debt+and+equity+balance.+

The+Group’s+overall+strategy+remains+unchanged+from+2013.+

The+capital+structure+of+the+Group+consists+of+debt,+cash+and+cash+equivalents+and+equity+attributable+to+equity+ holders+of+the+parent,+comprising+issued+capital,+reserves+and+retained+earnings.+

None+of+the+Group’s+entities+are+subject+to+externally+imposed+capital+requirements.+

Operating+cash+flows+are+used+to+maintain+and+expand+operations,+as+well+as+to+make+routine+expenditures+such+ as+tax,+and+general+administrative+outgoings.+

Gearing+levels+are+reviewed+by+the+Board+on+a+regular+basis+in+line+with+its+target+gearing+ratio,+the+cost+of+capital+ and+the+risks+associated+with+each+class+of+capital.+

ndtherisksassociatedwitheachclassofcapital. ndtherisksassociatedwitheachclassofcapital. ndtherisksassociatedwitheachclassofcapital.
Consolidated
2014 2013
$ $
(b) Categoriesoffinancialinstruments
Financialassets
Loansandreceivables 40,118 22,407
Cashandcashequivalents 515,075 870,301
Financialliabilities
Trade&otherpayables 89,363 87,705

Page+|+45+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

(c) Financial!risk!management!objectives!

The+Group+is+exposed+to+market+risk+(including+currency+risk,+fair+value+interest+rate+risk+and+price+risk),+credit+ risk,+liquidity+risk+and+cash+flow+interest+rate+risk.+

The+Group+seeks+to+minimise+the+effect+of+these+risks,+by+using+derivative+financial+instruments+to+hedge+these+ risk+exposures+where+appropriate.++The+use+of+financial+derivatives+is+governed+by+the+Group’s+policies+approved+ by+the+board+of+directors,+which+provide+written+principles+on+foreign+exchange+risk,+interest+rate+risk,+credit+risk,+ the+use+of+financial+derivatives+and+nonKderivative+financial+instruments,+and+the+investment+of+excess+liquidity.+ Compliance+ with+ policies+ and+ exposure+ limits+ is+ reviewed+ by+ management+ on+ a+ continuous+ basis.+ The+ Group+ does+ not+ enter+ into+ or+ trade+ financial+ instruments,+ including+ derivative+ financial+ instruments,+ for+ speculative+ purposes.+

(d) Market!risk!!

The+Group’s+activities+expose+it+primarily+to+the+financial+risks+of+changes+in+foreign+currency+exchange+rates,+ commodity+prices+and+exchange+rates.++There+has+been+no+change+to+the+Group’s+exposure+to+market+risks+or+the+ manner+in+which+it+manages+and+measures+the+risk+from+the+previous+period.+

(e) Foreign!currency!risk!management!!

The+ Group+ undertakes+ certain+ transactions+ denominated+ in+ foreign+ currencies,+ hence+ exposures+ to+ exchange+ rate+fluctuations+arise.+Exchange+rate+exposures+are+managed+within+approved+policy+parameters.++No+forward+ contracts+or+other+hedging+instruments+have+been+used+during+the+current+or+prior+year+as+the+Group’s+foreign+ exchange+exposure+is+not+considered+to+be+sufficiently+material+to+justify+such+activities.++

The+carrying+amounts+of+the+Group’s+foreign+currency+denominated+monetary+assets+and+monetary+liabilities+at+ the+balance+date+expressed+in+Australian+dollars+are+as+follows:+

Liabilities Liabilities Liabilities Assets Assets
2014 2013 2014 2013
USdollars
(25,241)
(15,794)
160,413
179,352

Foreign!currency!sensitivity!analysis!

The+Group+is+exposed+to+US+Dollar+(USD)+currency+fluctuations.+

The+following+table+details+the+Group’s+sensitivity+to+a+10%+increase+and+decrease+in+the+Australian+dollar+against+ the+relevant+foreign+currencies.+10%+is+the+sensitivity+rate+used+when+reporting+foreign+currency+risk+internally+to+ key+ management+ personnel+ and+ represents+ management’s+ assessment+ of+ the+ possible+ change+ in+ foreign+ exchange+rates.+The+sensitivity+analysis+includes+only+outstanding+foreign+currency+denominated+monetary+items+ and+adjusts+their+translation+at+the+period+end+for+a+10%+change+in+foreign+currency+rates.+A+positive+number+ indicates+ an+ increase+ in+ profit+ or+ loss+ and+ other+ equity+ where+ the+ Australian+ Dollar+ strengthens+ against+ the+ respective+currency.+For+a+weakening+of+the+Australian+Dollar+against+the+respective+currency+there+would+be+an+ equal+and+opposite+impact+on+the+profit+and+other+equity+and+the+balances+below+would+be+negative.+

USDImpact USDImpact
2014 2013
$ $
Resultfortheyear* 10,779
4,947
Otherequity S
K
  • This+is+mainly+attributable+to+the+exposure+outstanding+on+USD+receivables+and+payables+at+year+end+in+the+ Group.+

Page+|+46+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

(f)!Interest!rate!risk

As+ at+ and+ during+ the+ year+ ended+ on+ reporting+ date+ the+ Group+ had+ no+ significant+ interestKbearing+ assets+ or+ liabilities+other+than+liquid+funds+on+deposit.++As+such,+the+Group’s+income+and+operating+cash+flows+(other+than+ interest+income+from+funds+on+deposit)+are+substantially+independent+of+changes+in+market+interest+rates.++The+ Group’s+exposure+to+interest+rate+risk+and+the+effective+weighted+average+interest+rate+for+each+class+of+financial+ assets+and+liabilities+is+set+out+below.+

Consolidated
2014
2013
$
$
FinancialAssets
Cashassets
Floatinginterest
515,075
870,301

Weighted+average+effective+interest+rate+3.33%+(2013:+4.85%).

Group&and&Parent&Company&sensitivity&

The+sensitivity+analyses+below+have+been+determined+based+on+the+exposure+to+interest+rates+at+the+balance+ date+and+the+stipulated+change+taking+place+at+the+beginning+of+the+financial+year+and+held+constant+through+the+ reporting+period.+

At+balance+date,+if+interest+rates+had+been+80+basis+points+higher+or+lower+and+all+other+variables+were+held+ constant,+ the+ Group’s+ net+ result+ would+ increase+ or+ decrease+ by+ $5,542+ (2013:+ $12,059).+ + This+ is+ mainly+ attributable+to+the+Group’s+exposure+to+interest+rates+on+its+variable+rate+cash+holdings.+

(g) Credit!risk!

The+Group+seeks+to+trade+only+with+recognised,+trustworthy+third+parties+and+it+is+the+Group’s+policy+to+perform+ credit+verification+procedures+in+relation+to+any+customers+wishing+to+trade+on+credit+terms+with+the+Group.++The+ Group+has+no+significant+concentrations+of+credit+risk.+

(h) Liquidity!risk!

Prudent+liquidity+management+involves+the+maintenance+of+sufficient+cash,+marketable+securities,+committed+ credit+facilities+and+access+to+capital+markets.++It+is+the+policy+of+the+board+to+ensure+that+the+Group+is+able+to+ meet+its+financial+obligations+and+maintain+the+flexibility+to+pursue+attractive+investment+opportunities+through+ keeping+committed+credit+lines+available+where+possible,+ensuring+the+Group+has+sufficient+working+capital+and+ preserving+the+15%+share+issue+limit+available+to+the+Company+under+the+ASX+Listing+Rules.+

Maturities&of&financial&liabilities&

Group+K+As+at+reporting+date+the+Group+had+total+financial+liabilities+of+$89,363+(2012:+$87,705),+comprised+of+ non+ interestKbearing+ payables+ to+ related+ parties,+ trade+ creditors+ and+ accruals+ with+ a+ maturity+ of+ less+ than+ 6+ months.++

(i) Net!fair!value!

The+carrying+amount+of+financial+assets+and+liabilities+recorded+in+the+financial+statements+approximate+their+fair+ value+as+at+30+June+2014.++

Page+|+47+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

15. Commitments(and(Contingencies(

In+order+to+maintain+and+preserve+rights+of+tenure+to+granted+coal+exploration+tenements,+the+Group+is+ required+to+meet+certain+minimum+levels+of+exploration+expenditure+specified+by+the+State+Government+of+ Queensland.+

As+at+reporting+date+these+future+minimum+exploration+expenditure+commitments+are+as+follows:+

30/06/14 30/06/13
$ $
Notlongerthan1year 420,000 K
Longerthan1yearandnotlongerthan5years 1,828,453 K
Longerthan5years K K
Total 2,248,453 S

16. Segment(Reporting(

a) Description!

AASB+8+requires+operating+segments+to+be+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+ segment+and+to+assess+its+performance.+

The+function+of+the+chief+operating+decision+maker+is+performed+by+the+Board+collectively.++Information+reported+ to+the+Board+for+the+purposes+of+resource+allocation+and+assessment+of+performance+is+focused+broadly+on+the+ Group’s+diversified+activities+across+different+sectors.+

The+Group’s+reportable+segments+under+AASB+8+are+therefore+as+follows:+

  • Mineral+Exploration+–+Mozambique+

  • Mineral+Exploration+–+Australia+

Information+regarding+the+activities+of+these+segments+during+the+current+and+prior+financial+period+is+set+out+in+ the+following+tables.+

b) Segment!revenues!and!results!

Segmentrevenue Segmentrevenue Segmentrevenue Segmentprofit/(loss) Segmentprofit/(loss)
Yearended Yearended Yearended Yearended
30/06/14 30/06/13 30/06/14 30/06/13
$ $ $ $
MineralExploration–Mozambique K K (19,347) (8,588,389)
MineralExploration–Australia K K (462,358) K
Totalforcontinuingoperations K K (481,705) (8,588,389)
Investmentincome 11,677 55,451
Sharebasedpayments (93,200) (38,689)
Centraladministrationcostsanddirectors’salaries (397,080) (1,200,095)
Lossbeforetax(continuingoperations) (960,308) (9,771,722)

Page+|+48+

Mozambi(Coal(Limited(

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

c) Segment!assets!and!liabilities!

c) Segmentassetsandliabilities c) Segmentassetsandliabilities
30/06/14 30/06/13
Segmentassets $ $
MineralExploration–Mozambique 23,973 25,685
MineralExploration–Australia 455,015 K
Totalsegmentassets 478,988 25,685
Unallocated 533,768 881,427
Consolidatedtotalassets 1,012,756 907,112
30/06/14 30/06/13
Segmentliabilities $ $
MineralExploration–Mozambique 5,283 5,385
MineralExploration–Australia K K
Totalsegmentliabilities 5,283 5,385
Unallocated 84,080 82,318
Consolidatedtotalliabilities 89,363 87,703

d) Other!segment!information!

AdditionstononScurrent AdditionstononScurrent
Impairment assets
Yearended Yearended Yearended Yearended
30/06/14 30/06/13 30/06/14 30/06/13
$ $ $ $
MineralExploration–Mozambique K 8,155,408 K 162,041
MineralExploration–Australia K K 455,015 K
S 8,155,408 455,015 162,041

17. Subsidiaries(

The+consolidated+financial+statements+include+the+financial+statements+of+Mozambi+Coal+Limited+and+the+ subsidiaries+listed+in+the+following+table.+

subsidiarieslistedinthefollowingtable. subsidiarieslistedinthefollowingtable. subsidiarieslistedinthefollowingtable.
Countryof %EquityInterest
Name Principalactivity Incorporation 2014 2013
MineMixersPtyLtd Dormant Australia 100 100
DugalPtyLtd Holdingcompany Australia 100 100
DugalResourcesLda Coalexploration Mozambique 70 70
XiluvaMozambiLda Coalexploration Mozambique 80 80
MozambiResourcesPtyLtd Dormant Australia 100 100
MozambiVenturesLda Coalexploration Mozambique 80 80
MNBBPtyLtd(a) Coalexploration Australia 100 K
BlackallCapitalPtyLtd(b) Coalexploration Australia 100 K

Mozambi+Coal+Limited+is+the+ultimate+Australian+parent+entity+and+ultimate+parent+of+the+Group.++

Page+|+49+

Mozambi(Coal(Limited( Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

None+of+the+nonKwholly+owned+subsidiaries+are+considered+to+have+material+nonKcontrolling+interests+to+the+ Group.+

(a) MNBB+Pty+Ltd+

MNBB+Pty+Ltd+was+established+during+the+year+ended+30+June+2014+for+the+acquisition+of+the+Bowen+River+and+ Carmilla+tenements+in+Queensland.+

(b) Acquisition+of+Blackall+Capital+Pty+Ltd+

On+31+March+2014,+Mozambi+Coal+Limited+acquired+100%+of+the+share+capital+of+Blackall+Capital+Pty+Ltd.++Blackall+ was+not+actively+operating+as+a+business+and+therefore+the+acquisition+has+been+treated+as+an+asset+purchase+as+ opposed+to+a+business+combination.+

Blackall+ was+ acquired+ for+ a+ consideration+ of+ 30,000,000+ ordinary+ shares+ issued+ at+ $0.01+ per+ share+ plus+ 15,000,000+options+with+an+expiry+date+of+31+December+2017+and+exercise+price+of+$0.02.+

At+acquisition,+Blackall+held+options+to+acquire+a+beneficial+interest+of+95%+in+two+exploration+licences+and+a+ further+application+for+coal+tenements+in+Queensland.++Net+assets+at+acquisition+were+$1,475.++As+no+tenure+is+ held+by+Blackall,+the+acquisition+cost,+which+on+consolidation+would+be+represented+by+exploration+and+ evaluation+expenditure,+does+not+meet+the+conditions+for+being+able+to+be+capitalised+as+exploration+and+ evaluation+expenditure+in+accordance+with+the+Company’s+accounting+policy,+and+as+a+result,+has+been+ expensed+in+the+current+year.+

18. Events(After(the(Balance(Date(

There+have+been+no+matters+or+circumstances+since+the+end+of+the+financial+year+which+significantly+affected+or+ may+significantly+affect+the+operations+of+the+Consolidated+Entity,+the+results+of+those+operations+or+the+state+of+ affairs+of+the+Company+or+Consolidated+Entity+in+future+financial+years.+

19. Auditor’s(Remuneration(

The+auditor+of+Mozambi+Coal+Limited+is+HLB+Mann+Judd.

TheauditorofMozambiCoalLimitedisHLBMannJudd.
AmountsreceivedordueandreceivablebyHLBMannJuddfor:
Anauditorreviewofthefinancialreportoftheentityandanyotherentityinthe
Group		 Consolidated
2014
$
2013
$
28,050
34,000
28,050
34,000

20. Key(Management(Personnel(Remuneration(

Total+remuneration+paid+to+key+management+personnel+during+the+year:+

Totalremunerationpaidtokeymanagementpersonnelduringtheyear: Totalremunerationpaidtokeymanagementpersonnelduringtheyear: Totalremunerationpaidtokeymanagementpersonnelduringtheyear:
Consolidated
2014 2013
ShortKtermbenefits 164,511 748,082
PostKemploymentbenefits 3,012 15,513
Sharebasedpayments 43,200 35,440
210,723 799,035

Page+|+50+

Notes+to+the+Financial+Statements+for+the+Year+ended+30+June+2014+

Mozambi(Coal(Limited(

21. Parent(Entity(Information(

The+ following+ details+ information+ related+ to+ the+ parent+ entity,+ Mozambi+ Coal+ Limited,+ at+ 30+ June+ 2014.+ The information+presented+here+has+been+prepared+using+consistent+accounting+policies+as+presented+in+Note+1.+

Financialposition Parent
Assets 2014 2013
CurrentAssets 986,921 853,326
NonKCurrentAssets 2,548 14,404
TotalAssets 989,469 867,730
Liabilities
CurrentLiabilities (68,082) (48,321)
TotalLiabilities (68,082) (48,321)
Equity
Issuedcapital 31,758,386 30,874,975
Reserves 2,835,200 2,672,000
Accumulatedlosses (33,672,199) (32,727,566)
TotalEquity 921,387 819,409
Financialperformance
Lossfortheyear (944,633) (9,857,150)
Totalcomprehensivelossfortheyear (944,633) (9,857,150)

The+ Company+ has+ a+ receivable+ owing+ to+ it+ by+ its+ wholly+ owned+ subsidiary+ Dugal+ Pty+ Ltd+ of+ $1,026,170+ (2013:$1,026,170).+ The+ amount+ has+ been+ advanced+ interest+ free,+ unsecured+ and+ with+ no+ fixed+ terms+ for+ repayment.++An+allowance+for+impairment+for+the+full+amount+outstanding+has+been+recognised+at+30+June+2014.+

The+ Company+ has+ a+ receivable+ owing+ to+ it+ by+ its+ 70%+ owned+ subsidiary+ Dugal+ Resources+ Lda+ of+ $538,885+ (2013:$538,885).+ The+ amount+ has+ been+ advanced+ interest+ free,+ unsecured+ and+ with+ no+ fixed+ terms+ for+ repayment.++An+allowance+for+impairment+for+the+full+amount+outstanding+has+been+recognised+at+30+June+2014.+

The+ Company+ has+ a+ receivable+ owing+ to+ it+ by+ its+ 80%+ owned+ subsidiary+ Xiluva+ Mozambi+ Lda+ of+ $388,820+ (2013:$388,820).+ The+ amount+ has+ been+ advanced+ interest+ free,+ unsecured+ and+ with+ no+ fixed+ terms+ for+ repayment.++An+allowance+for+impairment+for+the+full+amount+outstanding+has+been+recognised+at+30+June+2014.+

The+Company+has+a+receivable+owing+to+it+by+its+100%+owned+subsidiary+Mine+Mixers+Pty+Ltd+ of+ $1,271,070+ (2013:$1,270,305).+ The+ amount+ has+ been+ advanced+ interest+ free,+ unsecured+ and+ with+ no+ fixed+ terms+ for+ repayment.++An+allowance+for+impairment+for+the+full+amount+outstanding+has+been+recognised+at+30+June+2014.+

The+ Company+ has+ a+ receivable+ owing+ to+ it+ by+ its+ 80%+ owned+ subsidiary+ Mozambi+ Ventures+ Lda+ of+ $19,399+ (2013:$19,399).+ The+ amount+ has+ been+ advanced+ interest+ free,+ unsecured+ and+ with+ no+ fixed+ terms+ for+ repayment.++An+allowance+for+impairment+for+the+full+amount+outstanding+has+been+recognised+at+30+June+2014.+

The+Company+has+a+receivable+owing+to+it+by+its+100%+owned+subsidiary+MNBB+Pty+Ltd+of+$455,015+(2013:+Nil).+ The+amount+has+been+advanced+interest+free,+unsecured+and+with+no+fixed+terms+for+repayment.+

For+details+of+commitments,+see+Note+15.

Page+|+51+

Corporate(Governance(Statement(

Mozambi(Coal(Limited(

Mozambi( Coal( is( committed( to( good( corporate( governance( practices.( The( Listing( Rules( of( the( Australian(Securities(Exchange((“ASX”)(require(AustralianKlisted(companies(to(report(on(the(extent(to( which(they(meet(the(Principles(and(Recommendations(published(by(the(ASX(Corporate(Governance( Council(as(part(of(its(Principles(of(Good(Corporate(Governance.(Mozambi(Coal(seeks(to(adopt(these( Principles( in( full( wherever( practicable,( having( regard( to( the( size( and( scale( of( the( Company’s( operations(and(board(composition(at(any(point(in(time.((

COMPLIANCE(WITH(ASX(CORPORATE(GOVERNANCE(RECOMMENDATIONS(

During( the( 2013K2014( financial( year,( the( Company( complied( with( each( of( the( ASX( Principles( and( Recommendations(other(than(in(relation(to(the(matters(below:(

Recommendation
Reference		 NotificationofDeparture ExplanationforDeparture
2.1 K A majority of the
board
are
independent
directors		 ThecurrentBoardcomposition
complies
with
the
recommendation,
however
from1July2013to12August
2014,themajorityofDirectors
did not satisfy the Company’s
criteriaforindependence.		 TheCompanyhaselectedtoemploy
its Directors from a mixture of
backgrounds
with
skills
and
experience that will complement
each other and are relevant to the
industry in which Mozambi Coal
operates. In addition the Board
seeks to ensure that its size and
composition are appropriate to the
Company’s circumstances as these
evolveovertime.
2.4
K
The
Board
has
established a nomination
committee		 A
separate
Nomination
Committee
has
not
been
formed.		 The
Board
considers
that
the
Companyisnotcurrentlyofasizeto
justify the formation of Nomination
Committee.The Board as a whole
undertakestheprocessofreviewing
the skill base and experience of
existing
Directors
to
enable
identification of attributes required
or desirable in new Directors.
Where considered appropriate by
the Board, independent consultants
maybeengagedtoidentifypossible
newcandidates.

Page(|(52(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

Recommendation
Reference		 NotificationofDeparture ExplanationforDeparture
3.3
–
The
entity
has
disclosed
in
its
annual
report
the
measurable
objectives
for
achieving
genderdiversitysetbythe
Board in accordance with
the diversity policy and
progresstowardsachieving
them.		 Theentityhasnotyetadopted
measurable
objectives
for
achievinggenderdiversity.		 Mozambi Coal is committed to
workplace
diversity
and
has
developed a diversity policy which
can be found in the Company’s
Corporate Governance Plan on the
Companywebsite.
Rather than developing measurable
objectives with regard to diversity,
the Company is committed to the
employment of the highest quality
staff regardless of gender, age,
ethnicityorculturalbackground.
4.2 K The audit committee
hasbeenstructuredsothat
it:
•
consists only of nonK
executivedirectors
•
consists of a majority
of
independent
directors
•
is
chaired
by
an
independent
chair,
whoisnotchairofthe
Board
•
has
at
least
three
members		 During the year the Audit
Committee
has
comprised
fewerthanthreemembersand
hasincludedamemberwhois
anexecutiveDirector.		 During the financial year, the Audit
Committeestructuredidnotcomply
with
the
ASX
Principles
and
Recommendations
due
to
the
limitedsizeofthecurrentBoardand
management
changes
which
occurredduringtheyear.
Since the end of the financial year,
the Audit Committee has been
restructured so that Mr Julian
Jarman
is
now
Chair
of
the
committeeandMrAlexNeulingisno
longeramember.
The size of the current Board does
not enable the composition of an
auditcommitteetobestructuredin
accordance with all aspects of this
recommendation. The composition
of the Audit Committee has been
determined
by
the
Board
to
comprisethoseDirectorsconsidered
best
able
to
discharge
the
responsibilities
of
the
Audit
Committee in accordance with its
charterandobjectives.

Page(|(53(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

Recommendation
Reference		 NotificationofDeparture ExplanationforDeparture
8.2 – The remuneration
committeeisstructuredso
thatit:
•
consists of a majority
of
independent
directors
•
is
chaired
by
an
independentchair
•
has
at
least
three
members		 During
the
year
the
Remuneration Committee has
comprised only two members
and also been chaired by a
Director who has not at all
times satisfied the Company’s
criteriaforindependence.The
current composition of the
Committee complies with this
recommendation.		 ThecompositionoftheBoardduring
the year has not enabled the
composition of the remuneration
committee to be structured in
accordance with all aspects of this
recommendation. The composition
of the Remuneration Committee is
determined
by
the
Board
to
comprisethoseDirectorsconsidered
best
able
to
discharge
the
responsibilities of the Committee in
accordance with its charter and
objectives.

PRINCIPLE(1:(LAY(SOLID(FOUNDATIONS(FOR(MANAGEMENT(AND(OVERSIGHT(

Role+of+the+Board+and+Management

The+Board+of+Directors

The(Board(operates(within(the(broad(principles(set(out(in(its(Charter.((A(copy(of(the(Board(Charter( can(be(found(in(the(Company’s(Corporate(Governance(Plan(which(is(available(from(the(Corporate( Governance(section(of(the(Company(website(at(www.mozambicoal.com.au.(

Board+Responsibilities+

The( role( of( the( Board( is( to( increase( shareholder( value( within( an( appropriate( framework( while( protecting( the( rights( and( interests( of( the( Company’s( shareholders( and( to( ensure( the( Company’s( affairs(are(properly(managed.(

The(Board(Charter(outlines(the(responsibilities(of(the(Board(as(follows:(

  • appointment(of(the(Chief(Executive(Officer(and(other(senior(executives(and(the(determination( of(their(terms(and(conditions(including(remuneration(and(termination;((

  • driving(the(strategic(direction(of(the(Company,(ensuring(appropriate(resources(are(available(to( meet(objectives(and(monitoring(management’s(performance;((

  • reviewing( and( ratifying( systems( of( risk( management( and( internal( compliance( and( control,( codes(of(conduct(and(legal(compliance((

  • approving(and(monitoring(the(progress(of(major(capital(expenditure,(capital(management(and( significant(acquisitions(and(divestitures;((

  • approving(and(monitoring(the(budget(and(the(adequacy(and(integrity(of(financial(and(other( reporting;((

  • approving(the(annual,(half(yearly(and(quarterly(accounts;((

Page(|(54(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

  • approving(significant(changes(to(the(organisational(structure;((

  • approving( the( issue( of( any( shares,( options,( equity( instruments( or( other( securities( in( the( Company;((

  • ensuring( a( high( standard( of( corporate( governance( practice( and( regulatory( compliance( and( promoting(ethical(and(responsible(decision(making;((

  • recommending(to(shareholders(the(appointment(of(the(external(auditor(as(and(when(their( appointment(or(reKappointment(is(required(to(be(approved(by(them;(and((

  • meeting(with(the(external(auditor,(at(their(request,(without(management(being(present.(

The(key(terms(of(service(agreements(with(Directors(and(senior(executives(can(be(found(on(page(11( of(the(Annual(Report.((

All(Directors(and(senior(executives(are(subject(to(annual(performance(reviews(based(on(performance( and(responsibilities.((

Process+for+evaluating+the+performance+of+key+executives+++

In( addition( to( ongoing( feedback( about( performance,( the( Company( also( performs( regular( performance(appraisals(of(key(executives(to(ensure(defined(objectives(are(being(met.((During(each( review(objectives(for(the(coming(review(period(are(set(and(agreed(upon.(((No(formal(performance( review(has(been(conducted(during(the(current(financial(year(for(the(Board.((

PRINCIPLE(2:(STRUCTURE(THE(BOARD(TO(ADD(VALUE(

A+majority+of+the+Board+should+be+independent

The( Company( has( elected( to( employ( its( Directors( from( a( mixture( of( backgrounds( with( skills( and( experience(that(will(complement(each(other(and(are(relevant(to(the(industry(in(which(Mozambi(Coal( operates.((The(details(of(the(skills(and(experience(of(each(Director(are(set(out(on(pages(5K6(of(the( annual(report.((

The(Board(has(adopted(specific(principles(in(relation(to(Directors’(independence.((These(state(that(an( independent(Director(must(be(a(nonKexecutive(and:(

  • holds(less(than(5%(of(the(voting(shares(of(the(Company(and(is(not(an(officer(of,(or(otherwise( associated(directly(or(indirectly(with,(a(shareholder(of(more(than(5%(of(the(voting(shares(of( the(Company;((

  • within(the(last(three(years(has(not(been(employed(in(an(executive(capacity(by(the(Company(or( another(group(member,(or(been(a(Director(after(ceasing(to(hold(any(such(employment;((

  • within( the( last( three( years( has( not( been( a( principal( of( a( material( professional( adviser( or( a( material( consultant( to( the( Company( or( another( group( member,( or( an( employee( materially( associated(with(the(service(provided;((

  • is(not(a(material(supplier(or(customer(of(the(Company(or(other(group(member,(or(an(officer(of( or(otherwise(associated(directly(or(indirectly(with(a(material(supplier(or(customer;((

  • has(no(material(contractual(relationship(with(the(Company(or(another(group(member(other( than(as(a(Director(of(the(Company;((

Page(|(55(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

  • has(not(served(on(the(board(for(a(period(which(could,(or(could(reasonably(be(perceived(to,( materially(interfere(with(the(Director’s(ability(to(act(in(the(best(interests(of(the(Company;(and((

  • is( free( from( any( interest( and( any( business( or( other( relationship( which( could,( or( could( reasonably(be(perceived(to,(materially(interfere(with(the(Director’s(ability(to(act(in(the(best( interests(of(the(Company.(((

The( materiality( thresholds( are( assessed( on( a( caseKbyKcase( basis,( taking( into( account( the( relevant( Director’s(specific(circumstances,(rather(than(referring(to(a(general(materiality(threshold.((

The( Board( regularly( reviews( the( independence( of( each( nonKexecutive( Director.( Independent( Directors(are(required(to(provide(the(Board(with(all(information(required(to(make(a(judgement(on( independence(and(any(change(to(this(status(will(be(reported(to(the(market(on(a(timely(basis(

Between(1(July(2013(and(12(August(2013,(the(Board(had(three(Directors,(only(one(of(whom((Mr.( Hemphill)(was(an(independent(nonKexecutive,((

On( 12( August( 2013,( Mr.( Shiv( Madan( resigned( as( managing( director( and( Mr.( Julian( Jarman( was( appointed( as( a( nonKexecutive( director.( Mr.( Hemphill( and( Mr.( Jarman( are( considered( to( be( independent(under(the(principles(outlined(above.(((

Board+Composition+++

The(Board(is(currently(comprised(of(one(executive(and(two(nonKexecutive(Directors.((The(Directors( believe(that(the(current(Board(composition(is(appropriate(for(the(Board(to(properly(discharge(its( duties.((Directors(are(required(to(use(independent(judgment(for(all(Board(decision(making(and(the( presence(of(two(independent(nonKexecutive(Directors(means(that(the(views(of(management(can(be( challenged(to(ensure(a(balanced(perspective(is(maintained.(((

The+Chairman+

The(Chairman(of(the(Board,(Mr.(Hemphill,(is(an(independent,(nonKexecutive(Director(who(is(required( to(be(elected(by(the(full(Board.((The(role(of(Chief(Executive(Officer(was(held(by(Mr.(Shiv(Madan(as( Managing(Director(until(12(August(2013.(((

Nomination+ Committee+ (The( Company( does( not( currently( have( a( formal( Nomination( Committee.( Given( the( Company’s( size,( the( Board( does( not( believe( that( it( would( be( efficient( to( establish( a( separate( Nomination( Committee( and( the( Board( as( a( whole( undertakes( this( role.( (( A( copy( of( the( Nomination(Committee(Charter(can(be(found(in(the(Company’s(Corporate(Governance(Plan(which(is( available(from(the(Corporate(Governance(section(of(the(Company(website.((

The( Chairman( has( initiated( a( process( for( assessing( Board( performance( both( as( a( Board( and( each( Director( individually.( ( This( involves( completion( of( a( selfKassessment( questionnaire( and( individual( discussions(with(the(Chairman(regarding(the(overall(performance(of(the(Board(versus(key(criteria.( The(Board(is(committed(to(maintaining(transparency(in(the(review(process(with(full(results(being( presented(to(the(Board.(

Independent+Advice

If(a(Director(considers(it(necessary(to(obtain(independent(professional(advice(to(properly(discharge( the(responsibility(of(his/her(office(as(a(Director(then,(provided(the(Director(first(obtains(approval(for( incurring( such( expense( from( the( chairperson,( the( Company( will( pay( the( reasonable( expenses( associated(with(obtaining(such(advice.(

Page(|(56(

Corporate(Governance(Statement(

Mozambi(Coal(Limited(

PRINCIPLE(3:(PROMOTE(ETHICAL(AND(RESPONSIBLE(DECISION(MAKING(

Code+of+Conduct

The(Company(has(developed(a(Code(of(Conduct(which(has(been(fully(endorsed(by(the(Board(and( applies(to(all(Directors(and(employees.((The(Code(is(regularly(reviewed(and(updated(as(necessary(to( ensure(it(reflects(the(highest(standards(of(behaviour(and(professionalism(and(the(practices(necessary( to(maintain(confidence(in(the(Company’s(integrity.(

A(copy(of(the(Code(of(Conduct(can(be(found(in(the(Company’s(Corporate(Governance(Plan(which(is( available( from( the( Corporate( Governance( section( of( the( Company( website( at( www.mozambicoal.com.au.(

Diversity

Mozambi(Coal(is(committed(to(workplace(diversity(and(has(developed(a(diversity(policy(which(can(be( found(in(the(Company’s(Corporate(Governance(Plan(on(the(Company(website.(

Rather(than(developing(measurable(objectives(with(regard(to(diversity,(the(Company(is(committed(to( the( employment( of( the( highest( quality( staff( regardless( of( gender,( age,( ethnicity( or( cultural( background.(

During(the(year,(the(Company’s(workforce(comprised(the(Board(and(Joint(Company(Secretary.((Mrs.( Natalie(Madden(was(appointed(Joint(Company(Secretary(as(of(12(August(2013;(there(are(currently( no(other(women(occupying(senior(executive(or(board(positions.(

Trading+Policy

The(Company(has(developed(a(policy(for(the(trading(Company(securities(by(Relevant(Persons(being( the( Directors( and( employees( of( the( Company( as( well( as( their( Associates( as( defined( under( the( Corporations(Act.(

The(Policy(states(that(securities(can(only(be(traded(by(Relevant(Persons(where:(

  • a(trading(window(has(been(determined(and(all(Relevant(Persons(have(been(notified(by(the( Company(Secretary,(or;((

  • where(the(Company(has(a(current(prospectus(or(other(form(of(disclosure(document(on(issue( under(which(persons(may(subscribe(for(securities.(((

Trading(is(prohibited(under(the(above(circumstances,(where:((

  • the(Company(has(released(an(ASX(announcement,(until(the(third(day(after(the(release(of(the( announcement((

  • a( Relevant( Person( is( in( possession( of( price( sensitive( or( ‘inside’( information( or( where( the( Company(is(in(possession(of(price(sensitive(or(‘inside’(information(and((

  • the(Company(has,(during(the(‘window(period’,(notified(Relevant(Persons(that(they(may(not( buy(or(sell(securities(during(all(or(part(of(that(period.(((

All(Relevant(Persons(are(made(aware(of(their(obligations(under(the(Trading(Policy(on(an(annual(basis( and(the(Directors(are(satisfied(that(the(Company(has(complied(with(its(Trading(policy.((

A(summary(of(the(Trading(Policy(can(be(found(in(the(Company’s(Corporate(Governance(Plan(which(is( available(from(the(Corporate(Governance(section(of(the(Company(website.((

Page(|(57(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

PRINCIPLE(4:(SAFEGUARD(INTEGRITY(IN(FINANCIAL(REPORTING(

Audit+Committee

The(Audit(Committee(has(had(the(following(structure:(

Mr.(Robert(Hemphill((Chairman)(from(1(July(2013(

Mr.(Alex(Neuling(from(1(July(2013(to(30(September(2014(

Mr.(Julian(Jarman(from(30(September(2014(

Details(of(these(Directors’(qualifications(and(attendance(at(Audit(Committee(meetings(are(set(out(in( the(Directors’(Report(on(pages(5K6.(

Whilst( it( is( acknowledged( that( the( Audit( Committee( should( consist( entirely( of( independent,( nonK( executive( Directors,( due( to( management( changes( during( the( financial( year( the( Audit( Committee( consisted( of( two( members,( one( of( whom( was( also( an( executive( Director.( ( Since( the( end( of( the( financial( year,( the( Audit( Committee( has( been( restructures( so( that( whilst( there( are( only( two( members,(both(are(independent(nonKexecutives.((The(Board(size(and(composition(does(not(currently( allow( for( the( minimum( committee( size( of( no( less( than( three( Directors( to( be( maintained( unless( executive(Directors(are(also(permitted(to(serve(on(the(Audit(Committee.(

Audit( Committee( members( are( required( to( be( financially( literate( and( have( an( appropriate( understanding( of( the( industry( in( which( the( Company( operates.( ( One( member( of( the( Committee( (currently(Mr.(Jarman)(is(designated(as(the(financial(expert.(

The(Audit(Committee(operates(in(accordance(with(the(Audit(Committee(Charter(which(is(available(on( the(Company(website.((The(primary(purpose(of(the(Committee(is(to(assist(the(Board(in(fulfilling(its( statutory(and(fiduciary(responsibilities(relating(to:(

  • the( quality( and( integrity( of( the( Company’s( financial( statements,( accounting( policies( and( financial(reporting(and(disclosure(practices;((

  • compliance(with(all(applicable(laws,(regulations(and(company(policy;((

  • the(effectiveness(and(adequacy(of(internal(control(processes;((

  • the(performance(of(the(Company’s(external(auditors(and(their(appointment(and(removal;((

  • the(independence(of(the(external(auditor(and(the(rotation(of(the(lead(engagement(partner;( and((

  • the(identification(and(management(of(business(risks.(((

A(secondary(function(of(the(Committee(is(to(perform(such(special(reviews(or(investigations(as(the( Board(may(consider(necessary.((

PRINCIPLE(5:(MAKE(TIMELY(AND(BALANCED(DISCLOSURE(

Continuous+Disclosure++

The(Company(has(adopted(a(Continuous(Disclosure(Policy(that(requires(all(Directors,(officers(and( executives( to( inform( the( Managing( Director,( or( in( his( absence( the( Company( Secretary,( of( any( potential(material(information(as(soon(as(practicable(after(they(become(aware(of(the(information.(

Page(|(58(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

Information(is(material(if(it(is(likely(that(the(information(would(influence(investors(who(commonly( acquire(securities(on(the(ASX(in(deciding(whether(to(buy,(sell(or(hold(the(Company’s(securities.((

During(the(financial(year,(the(Managing(Director(was(responsible(for(interpreting(and(monitoring(the( Company’s(Disclosure(Policy(and(where(necessary(informing(the(Board.((Following(his(resignation,( this(responsibility(has(passed(to(the(Joint(Company(Secretaries.(

A(summary(of(this(Policy(found(in(the(Company’s(Corporate(Governance(Plan(which(is(available(from( the(Corporate(Governance(section(of(the(Company(website(at(www.mozambicoal.com.au.((

PRINCIPLE(6:(RESPECT(THE(RIGHTS(OF(SHAREHOLDERS(

Shareholder+Communication+

The( Executive( Director( and( the( Joint( Company( Secretaries( have( been( nominated( as( the( persons( responsible( for( communications( with( the( ASX.( This( role( includes( responsibility( for( ensuring( compliance( with( continuous( disclosure( requirements( in( the( ASX( Listing( Rules( and( overseeing( and( coordinating(information(disclosure(to(the(ASX,(analysts,(brokers,(shareholders,(the(media(and(the( public.(

The(Company(utilises(its(website(as(an(important(tool(for(efficient(and(effective(communication(and( all(information(disclosed(to(the(ASX(is(disclosed(on(the(Company(website(as(soon(as(practicable(after( disclosure.(

The(Board(encourages(full(participation(of(shareholders(at(Annual(General(and(general(meetings(and( uses(these(meetings(to(assist(shareholders(in(understanding(the(Company’s(objectives(and(strategies( in(relation(to(its(business(activities.(

The(Board(encourages(shareholders(to(discuss(Company(issues(with(Directors(and(to(facilitate(this( contact,(provides(details(of(authorised(Company(contacts(on(all(disseminated(information.(

The(Company’s(Communication(Strategy(can(be(found(in(the(Corporate(Governance(Plan(which(is( available(in(the(Corporate(Governance(section(of(the(Company(website.(

PRINCIPLE(7:(RECOGNISE(AND(MANAGE(RISK(

Risk+Assessment+and+Management

The( Company( believes( that( the( identification( and( management( of( risk( is( central( to( achieving( its( corporate(objectives.(The(Board(is(responsible(for(risk(management(and(control(and(they(examine( and(consider(areas(of(significant(business(risk(on(an(ongoing(basis(and(implement(policy(to(minimise( exposure(to(these(risks.(

Risk(is(monitored(by(the(Company(through(frequent(communication(between(Board(members(and( management.(((

Management(is(also(required(to(develop(and(implement(internal(control(procedures(which(enable( the(company(to(monitor(and(mitigate(any(material(business(risks(on(a(day(to(day(basis.(( (In( order( to( ensure( that( the( Company’s( internal( control( and( risk( management( policies( are( being( implemented(and(monitored(correctly,(the(Board(requires(that(the(Managing(Director(and(Company( Secretary(report(in(writing(on(the(following(matters:(

Page(|(59(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

  • The(financial(statements(for(the(Company(for(each(half(and(full(year(present(a(true(and(fair( view,(in(all(material(aspects,(of(the(Company’s(financial(condition(and(operational(results(and( are(in(accordance(with(accounting(standards;(((

  • The( above( statement( is( founded( on( a( sound( system( of( risk( management( and( internal( compliance(and(control(which(implements(the(policies(implemented(by(the(Board;(and(

  • The(Company’s(risk(management(and(internal(compliance(and(control(framework(is(operating( efficiently(and(effectively(in(all(material(aspects.((((

A(summary(of(the(Company’s(Risk(Management(Policy(can(be(found(in(the(Corporate(Governance( section(of(the(Company(website.((

PRINCIPLE(8:(REMUNERATE(FAIRLY(AND(RESPONSIBLY((

Remuneration+Committee

The(Remuneration(Committee(consists(of(the(following(Directors(and(Consultants:(

Mr.(Robert(Hemphill((Chairman)(

Mr.(Alex(Neuling(((

Details( of( these( Directors’( attendance( at( Remuneration( Committee( meetings( are( set( out( in( the( Directors(Report(on(page(6.(

Whilst(it(is(acknowledged(that(the(Remuneration(Committee(should(consist(entirely(of(independent,( nonK(executive(Directors,(the(Board(size(and(composition(does(not(currently(allow(this(to(occur(if(the( minimum(committee(size(of(no(less(than(three(Directors(is(to(be(maintained.((The(Remuneration( Committee( is( currently( comprised( of( one( independent( nonKexecutive( Director( and( one( executive( Director.((The(Chair(is(independent(and(is(also(the(Chairman(of(the(Board(of(Directors.(

The( Remuneration( Committee( operates( in( accordance( with( its( Charter( which( is( available( in( the( Corporate( Governance( Plan( available( from( the( Corporate( Governance( section( of( the( Company( website.(

The( role( of( the( Remuneration( Committee( is( to( review( and( make( recommendations( to( the( Board( about:(

  • reviewing(and(approving(the(executive(remuneration(policy(to(enable(the(Company(to(attract( and(retain(executives(and(Directors(who(will(create(value(for(shareholders;((

  • ensuring(that(the(executive(remuneration(policy(demonstrates(a(clear(relationship(between( key(executive(performance(and(remuneration;((

  • recommending(to(the(Board(the(remuneration(of(executive(Directors;((

  • fairly(and(responsibly(rewarding(executives(having(regard(to(the(performance(of(the(Group,( the(performance(of(the(executive(and(the(prevailing(remuneration(expectations(in(the(market;((

  • reviewing(the(Company’s(recruitment,(retention(and(termination(policies(and(procedures(for( senior(management;((

  • reviewing( and( approving( the( remuneration( and( direct( reports( to( the( Board,( and( as( appropriate(other(senior(executives;(and((

  • reviewing(and(approving(any(equity(based(plans(and(other(incentive(schemes.((

Page(|(60(

Mozambi(Coal(Limited(

Corporate(Governance(Statement(

(In(order(to(fulfill(its(objectives,(the(Remuneration(Committee(may(seek(independent(professional( advice(as(it(sees(necessary.((

The(Company(currently(has(no(policy(in(place(to(limit(an(individual’s(risk(exposure(in(relation(to(the( issue(of(company(securities(as(remuneration.(((

There(are(currently(no(terms(or(schemes(in(place(relating(to(retirement(benefits(for(nonKexecutive( Directors.((

Further( information( on( Directors’( and( executives’( remuneration,( including( principles( used( to( determine( remuneration( is( set( out( in( the( Directors( Report( under( the( heading( “Remuneration( Report”.((

Page(|(61(

Additional(ASX(Information(

Mozambi(Coal(Limited(

The(shareholder(information(set(out(below(was(applicable(as(at(16(October(2014.(

1. Twenty+largest+holders+of+quoted+equity+securities+

1.
Twentylargestholdersofquotedequitysecurities
Rank
Name		 Numberof
units
%ofunits
1.
BBDCustodiansPtyLtd
2.
RedMarlinPtyLtd
3.
MoultrieSuperFundPtyLtd
4.
FloydBarryAquino
5.
KhalidSalehAlRashid
6.
DabvalePtyLtd
7.
SinoPortfolioInternationalLtd
8.
SyracuseCapitalPtyLtd
9.
MrIanHunter
10.
Mr.AnthonyMichaelMalyniak
11.
HSBCCustodyNominees(Australia)Limited
12.
EZRSystemsPtyLtd
13.
D.A.RHoldingsPtyLtd
14.
Mrs.RenuKumar&Dr.AsokKumar
15.
VectorNomineesPtyLtd
16.
Mr.IanHunter
17.
Mr.JohnWardman
18.
ChataHoldingsPtyLtd
19.
Lonhro(WA)PtyLtd
20.
S3ConsortiumPtyLtd
TotalTop20
Other
TotalOrdinarySharesOnIssue		 14,000,000
6.587
14,000,000
6.587
10,000,000
4.705
5,705,340
2.684
5,000,000
2.352
4,500,000
2.117
3,850,000
1.811
3,750,000
1.764
3,500,000
1.647
3,480,000
1.637
3,265,001
1.536
3,200,001
1.506
3,200,001
1.506
3,000,000
1.411
3,000,000
1.411
2,514,746
1.183
2,500,000
1.176
2,100,000
0.988
2,000,000
0.941
2,000,000
0.941
94,565,089
44.492
117,976,898
55.508
212,541,987
100%

2. Substantial+shareholders+

The(Company(has(not(been(notified(of(any(substantial(shareholders(as(at(16(October(2014.(

3. Distribution+of+holders+of+equity+securities+

Ordinaryshares Ordinaryshares UnlistedOptions
1K1,000
245
1,001–5,000
221
5,001–10,000
88
10,001–100,000
398
>100,001
232
12
Total 1,184 12

864( shareholders( held( fewer( than( a( marketable( parcel( of( shares( based( on( the( share( price( at( 16( October(2014.(

Page(|(62(

Additional(ASX(Information(

Mozambi(Coal(Limited(

4. Voting+rights+

Subject(to(any(rights(or(restrictions(for(the(time(being(attached(to(any(class(or(classes(of(shares,(at( meetings(of(shareholders(or(classes(of(shareholders:(

  • each(shareholder(entitled(to(vote(may(vote(in(person(or(by(proxy,(attorney(or(representative;((

  • on(a(show(of(hands,(every(person(present(who(is(a(shareholder(or(a(proxy,(attorney(or( representative(of(a(shareholder(has(one(vote;(and((

  • on(a(poll,(every(person(present(who(is(a(shareholder(or(a(proxy,(attorney(or(representative(of( a(shareholder(shall,(in(respect(of(each(fully(paid(share(held(by(him,(or(in(respect(of(which(he(is( appointed(a(proxy,(attorney(or(representative,(have(one(vote(for(the(share,(but(in(respect(of( partly(paid(shares,(shall(have(such(number(of(votes(being(equivalent(to(the(proportion(which( the(amount(paid((not(credited)(is(of(the(total(amounts(paid(and(payable(in(respect(of(those( shares((excluding(amounts(credited).((

5. Unquoted+equity+security+holdings+greater+than+20%+

The(Company(has(61,675,000(unlisted(options(on(issue(as(of(16(October(2014.((The(options(do(not( carry(a(right(to(vote(at(a(general(meeting(of(shareholders.(

Expirydate
Exerciseprice		 No.ofoptions
No.ofholders
02/08/2016
$0.25
475,000
3
30/11/2016
$0.25
2,200,000
4
31/12/2017
$0.02
50,000,000
30
31/12/2017
$0.02
9,000,000
3
61,675,000

There(are(no(holders(holding(greater(than(20%(of(unlisted(options:(

6. Securities+subject+to+voluntary+escrow+

The(following(securities(are(subject(to(voluntary(escrow:(

Securitytype Numberof Voluntaryescrow
securities periodenddate
Ordinaryshares 10,000,000 6December2014
Optionsexercisableat$0.02on 5,000,000 6December2014
orbefore31December2017

7. OnWmarket+buy+back+

There(is(currently(no(onKmarket(buyKback(program(for(any(of(the(Company’s(listed(securities.(

8. Company+secretary,+registered+and+principal+administrative+office+and+share+registry+

The(Company(Secretaries(are(Mr.(Alex(Neuling(and(Mrs.(Natalie(Madden.(

The(Company’s(registered(and(principal(administration(office(is(Level(1,(44(Ord(Street,(West(Perth,( WA(6005.(

The(Company’s(Share(Registry(is(maintained(by(Advanced(Share(Registry(Services(Pty(Ltd,(150(Stirling( Hwy(Nedlands(WA(6009.(

Page(|(63(

Mozambi(Coal(Limited(

Additional(ASX(Information(

9. Tenement+listing+

Number Name Location Status Beneficial
Interest
EPC1768 BowenRiver Queensland Explorationlicence 100%
EPC2098 Carmilla Queensland Explorationlicence 100%
EPC2702 GreatWhite1 Queensland Explorationlicence 95%1
EPC2861 EPC2861 Queensland Explorationlicence 95%1
3245L TeteWest Mozambique Explorationlicence 70%2
3246L Muturara Mozambique Explorationlicence 70%2

  1. Blackall(Capital(Pty(Ltd(holds(options(to(acquire(these(tenements(

  2. Mozambi(Coal(Limited(owns(70%(of(Dugal(Resources(Lda(which(holds(a(contractual(interest( in(these(licences.((

Page(|(64(

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