VOLT RESOURCES LIMITED - Annual Report 2013

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 2013

Mozambi(Coal(Limited( ABN!28!106!353!253! Financial!Report!for!the!Year!Ended!30!June!2013

Page	Page
*CorporateDirectory*	3
*Directors’Report*	4
*AuditorsIndependenceDeclaration*	17
*IndependentAuditorsReport*	18
*Directors’Declaration*	20
*ConsolidatedStatementofProfitorLoss*	21
*ConsolidatedStatementofProfitorLossandOtherComprehensiveIncome*	22
*ConsolidatedStatementofFinancialPosition*	23
*ConsolidatedStatementofChangesinEquity*	24
*ConsolidatedStatementofCashFlows*	25
*NotestotheFinancialStatements*	26
*CorporateGovernanceStatement*	55
*AdditionalASXInformation*	64

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Mozambi Coal Limited ABN 28 106 353 253 Corporate Directory

Directors

Mr Alex Neuling – Executive Director

Mr Julian Jarman – Non � executive Director

Mr Robert Hemphill – Non � executive 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

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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 2013 (“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 – Non � executive director

Mr Julian Jarman – Non � executive director (appointed 12 August 2013)

Mr Michael Griffiths (resigned 30 April 2013)

Mr Shiv Madan (resigned 12 August 2013)

Principal activities

The principal activity of the Company during the financial year was coal exploration in Mozambique.

Review of operations

Results

For the financial year ended 30 June 2013 the Group recorded a net loss of $9,771,722 (2012: $1,801,399) split between continuing and discontinuing operations as follows:

Lossaftertax Fromcontinuingoperations Fromdiscontinuedoperations Total	2013 $ (9,771,722) � (9,771,722)	2012 $
		(1,800,088) (1,311)
		(1,801,399)

The loss includes a non � cash impairment charge of $8,155,408 in relation to the writedown of capitalized exploration and evaluation expenditure.

Exploration and Projects

3246L “Muturara” Project, Zambeze Coal Basin

During the year the Company carried out interpretation of the airborne geophysical survey and a geochemical sampling program on the northern part of the license. Options for the 2013/2014 forward program are undergoing Board review.

2738L “Songo” Project, Zambeze Coal Basin

Reinterpretation of the Company’s airborne magnetic and radiometric data acquired over the License in conjunction with interpreted satellite imagery was carried out during the year, followed by a series of ground based geophysical surveys in the northeast corner of the License, including gravity, electromagnetic and magnetics. Results indicated that any potential coal is likely to be covered by very deep thicknesses of overburden whilst the gravity survey, which seeks to identify the depth to basement rocks, indicates a deepening of the basement in a westerly and southerly direction. Based on the cumulative exploration results achieved on the license, the Company considered it unlikely that its objective of discovering near surface coal (<500m) would be met and in December 2012 the Company exercised its right to withdraw from its agreement to acquire the license.

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

New Opportunities

The Company evaluated a large number of potential resource project acquisitions both in Africa and elsewhere during the year and is continuing to do so.

Corporate & Finance

In September 2012, the Company signed a share subscription agreement with Khalid Saleh Al Rashid Co (KAR) to raise additional working capital. The original subscription agreement was subsequently varied and a $400,000 placement at $0.08 per share was subsequently concluded in January 2013.

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 will allow the Company to preserve its working capital while the Board investigates alternatives for both new investment opportunities and development / exploitation of its existing assets. Given the resultant uncertainty regarding the timing and extent of further exploration activity on the Company’s Mozambican assets, the Company has recognised an accounting impairment in the value of those assets.

On 30 April 2013, Mr. Robert Hemphill was appointed Non � Executive Chairman after Mr. Michael Griffiths stepped down from his role as Chairman and Director. Mr. Shiv Madan stepped down as Managing Director at that time and subsequent to year � end 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.

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Information on Directors

Current Directors

Mr Alex Neuling – Executive Director & Joint Company Secretary

Qualifications – FCA, ACIS, BSc

Special responsibilities �� Member of audit and nomination committees

Other current directorship of Listed Public Companies – None.

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

Interests in Shares and Options over Shares in Group Companies

682,000 fully paid ordinary shares

350,000 unlisted options

Alex is a Chartered Accountant and Chartered Secretary with over 14 years corporate and financial experience. This experience includes 9 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 ASX � listed companies.

Robert Hemphill – Non � executive Chairman

Qualifications – B. Bus, CA

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

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

174,250 fully paid ordinary shares

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.

Mr Julian Jarman – Non � executive director (appointed 12 August 2013)

Qualifications – B. Bus, CA

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

3,250,001 fully paid ordinary shares

3,200,000 unlisted options

Mr Jarman is a share broker with Cygnet Capital. Before joining Cygnet 18 months ago he spent 6 years as a broker with Paterson’s Securities in Melbourne. With approximately 17 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.

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Former Directors

Mr Michael Griffiths– Non executive Chairman – resigned 30 April 2013

Qualifications – B.Sc , Dip Ed, FAusIMM, GAICD.

Special responsibilities �� Member of audit, remuneration and nomination committees

Other current directorships of Listed Public Companies (as at date of resignation)

Currie Rose Resources Inc (a TSX � V listed company)

Tiger Resources Limited

Chrysalis Resources Limited (alternate director)

Former directorships (of Listed Public Companies) in last three years –

Chalice Gold Mines Limited

Sub � Sahara Resources NL

Interests in Shares and Options over Shares in Group Companies (as at the date of resignation):

198,000 fully paid ordinary shares

750,000 unlisted options

Mr Shiv Madan – Managing Director – resigned 12 August 2013

Qualifications – Bcom, MBA

Special responsibilities – none

Other current directorship of Listed Public Companies (as at date of resignation)

Currie Rose Resources Inc (a TSX � V listed company)

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, ACA

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).

Mr Ryan Broom – Former Company Secretary (resigned 30 April 2013)

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Meetings of Directors

The following table sets out the number of meeting of the Company’s directors held during the year ended 30 June 2013, and the number of meetings attended by each director.

	Directors’	Meetings	CommitteeMeetings	CommitteeMeetings
	Eligibletoattend	Attended	Audit	Remuneration
MrMichaelGriffiths	5	5	2		1
MrShivMadan	7	7	*		*
MrRobertHemphill	7	7	2		1
MrAlexNeuling	7	7	*		1
MrJulianJarman	�	�	�		�

Not a member of the relevant committee.

Share options

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

Type 1 2 3 4 5 6 7 TOTAL	Number ExercisePrice ExpiryDate 20,000,000 25c 21/02/2014 250,000 35c 30/06/2014 250,000 45c 30/06/2014 250,000 55c 30/06/2014 2,500,000 30c 22/06/2013 475,000 25c 02/08/2016 2,200,000 25c 30/11/2016 25,925,000

Performance rights

At the date of this report the following performance rights have been granted.

Type 3B 3C	Number HurdlePrice ExpiryDate 204,000 $0.42 21/02/2014 198,000 $0.50 21/02/2014 402,000

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

– Remuneration Report Audited

This remuneration report outlines the director and executive 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

Current : Alex Neuling Executive Director & Joint Company Secretary Robert Hemphill Non � Executive Director Julian Jarman * Non � Executive Director Former : Michael Griffiths Non � Executive Chairman Shiv Madan Managing Director

(ii) Executives

Current : Natalie Madden * Joint Company Secretary Former : Chalamaiah Kondragunta General Manager �� Exploration Ryan Broom Chief Financial Officer & Company Secretary

Mr Julian Jarman and Mrs Natalie Madden were appointed after the end of the financial period and received no remuneration prior to their appointment.

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 non � executive director and executive remuneration is separate and distinct.

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Non � executive directors

The maximum aggregate amount of fees that can be paid to non � executive directors is subject to approval by shareholders at General Meeting. The Company’s policy is to remunerate non � executive directors at market rates (for comparable companies) for time, commitment and responsibilities. Fees for non � executive 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 2012 and 2013, these milestones required performance in relation to key strategic, non � financial 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 2013. There have been no forfeitures of bonuses by key management personnel during the current or prior periods and no cash bonuses remained unvested at year � end.

Long Term Incentives �� Share � based compensation

Both performance rights and share options have been issued to Directors and executives as part of their remuneration. Share � based 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 performance � based remuneration paid to Directors in the financial year.

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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 Directors 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 non � executive director
Subject to a three month termination period

Non � executive Directors are currently entitled to a monthly fee of $3,067.

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Remuneration of key management personnel

2013 Shorttermbenefits Post�employmentbenefits Sharebased payments Cashsalary andfees Cashbonus Non� monetary benefits Superannuation Retirement Benefits Performance rights/options Total Performance related $ $ $ $ $ $ $ % Non�executiveDirectors RobertHemphill 39,867 � � � � 2,100 41,967 � MichaelGriffiths 175,367 � � 3,633 � 8,880 187,880 � Sub�totalnon�executivedirectors 215,234 � � 3,633 � 10,980 229,847 � ExecutiveDirectors AlexNeuling 39,867 � � � � 2,100 41,967 � ShivMadan 239,000 � � � � 13,260 252,260 � Sub�totalexecutivedirectors 278,867 � � � � 15,360 294,227 � Otherexecutives ChalamaiahKondragunta 116,836 � � � � 4,550 121,386 � RyanBroom 137,145 � � 11,880 � 4,550 153,575 � Sub�totalotherexecutives 253,981 � � 11,880 � 9,100 274,961 � TotalKeyManagementPersonnel 748,082 � � 15,513 � 35,440 799,035 �*	Shorttermbenefits	Post�employmentbenefits	Sharebased payments Performance rights/options Total Performance related $ $ %
		Superannuation Retirement Benefits $ $
	39,867 � � � � 2,100 41,967 � 175,367 � � 3,633 � 8,880 187,880 �
	215,234 � � 3,633 � 10,980 229,847 �
	39,867 � � � � 2,100 41,967 � 239,000 � � � � 13,260 252,260 �
	278,867 � � � � 15,360 294,227 �
	116,836 � � � � 4,550 121,386 � 137,145 � � 11,880 � 4,550 153,575 �
	253,981 � � 11,880 � 9,100 274,961 �
	748,082 � � 15,513 � 35,440 799,035 �

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.

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Remuneration of key management personnel (continued)

2012 Shorttermbenefits Post�employmentbenefits Sharebased payments Cashsalary andfees Cashbonus Non� monetary benefits Superannuation Retirement Benefits Performance rights/options Total Performance related $ $ $ $ $ $ $ % Non�executiveDirectors MichaelGriffiths 170,924 � � 4,376 � 16,265 191,565 � RobertHemphill 40,167 � � � � � 40,167 � Sub�totalnon�executivedirectors 211,091 � � 4,376 � 16,265 231,732 � ExecutiveDirectors ShivMadan 279,904 � � � � 32,529 312,433 � AlexNeuling 77,141 � � � � � 77,141 � Sub�totalexecutivedirectors 357,045 � � � � 32,529 389,574 � Otherexecutives ChalamaiahKondragunta 146,543 � � � � � 146,543 � RyanBroom 174,167 � � 15,675 � � 189,842 � Sub�totalotherexecutives 320,710 � � 15,675 � � 336,385 � TotalKeyManagementPersonnel 888,846 � � 20,051 � 48,794 957,691 �*	Shorttermbenefits	Post�employmentbenefits	Sharebased payments Performance rights/options Total Performance related $ $ %
		Superannuation Retirement Benefits $ $
	170,924 � � 4,376 � 16,265 191,565 � 40,167 � � � � � 40,167 �
	211,091 � � 4,376 � 16,265 231,732 �
	279,904 � � � � 32,529 312,433 � 77,141 � � � � � 77,141 �
	357,045 � � � � 32,529 389,574 �
	146,543 � � � � � 146,543 � 174,167 � � 15,675 � � 189,842 �
	320,710 � � 15,675 � � 336,385 �
	888,846 � � 20,051 � 48,794 957,691 �

*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.

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Mozambi Coal Limited ABN 28 106 353 253 Directors’ Report

Share Based Compensation

Performance Rights

No performance rights were granted or vested during the years ended 30 June 2013 and 30 June 2012.

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.

	Numberofoptions	Numberofoptions		Numberofoptionsvested	Numberofoptionsvested
	grantedduringtheyear			duringtheyear
	30June13	30June12		30June13	30June12
*Directors*:
AlexNeuling	350,000		�	350,000		�
ShivMadan	750,000		�	750,000		�
RobertHemphill	350,000		�	350,000		�
MichaelGriffiths	750,000		�	750,000		�
*Otherkeymanagementpersonnel:*
ChalamaiahKondragunta	175,000		�	175,000		�
RyanBroom	175,000		�	175,000		�
	2,550,000		�	2,550,000		�

Vesting Conditions of Performance Rights

The terms and conditions of each grant of performance rights affecting remuneration in the current and future reporting periods is as follows:

			Vesting
Tranche			Hurdle		Fairvalueperright
	Grantdate	Number	price	Expirydate	atgrantdate	%vested
2A(i)	21/02/2011	198,000	$0.31	21/02/2013	$0.09	100%
2B(ii)	21/02/2011	204,000	$0.42	21/02/2013	$0.072	0%
2C(ii)	21/02/2011	198,000	$0.50	21/02/2013	$0.045	0%
3A(i)	21/02/2011	198,000	$0.31	21/02/2014	$0.126	100%
3B	21/02/2011	204,000	$0.42	21/02/2014	$0.117	0%
3C	21/02/2011	198,000	$0.50	21/02/2014	$0.072	0%

(i) Each Performance Right was converted into one ordinary share on 21 February 2012;

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

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Vesting Conditions of Options

The terms and conditions of each grant of options affecting remuneration in the current and future reporting periods is as follows:

Fair value per option % Grant date Number Vesting date Expiry date Exercise price at grant date vested 02/08/2012 475,000 02/08/2012 2 August 2016 $0.25 $0.026 100 26/11/2012 2,200,000 26/11/2012 30 November 2016 $0.25 $0.006 100

Share � based compensation exercised or lapsed during the year to directors and executives

Performance Rights

Performance Rights Value of performance rights Value of performance rights Value of performance rights lapsed at the date of granted at the grant date exercised at the exercise date lapse Name $ $ $ Michael Griffiths �� 9,250 Robert Hemphill �� Shiv Madan �� 18,500 Alex Neuling ��

Shares issued on exercise of compensation options

None (2012: None).

Shares issued on exercise of performance rights

None (2012: 734,250).

Dividends

No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2013 (2012: None).

End of Remuneration Report

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Subsequent events

Since the end of the reporting period, the following events have occurred:

Changes to the Board of Directors:

Mr. Shiv Madan resigned as a director on 12 August; Mr Julian Jarman was appointed as a non � executive director on the same date.

Lapse of options:

2,500,000 options lapsed on 22 July 2013. The options were issued on 22 July 2011 and had an exercise price of $0.30.

There have been no other 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.

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.

Non � audit services

The Board of Directors is satisfied that the provision of non � audit 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 20) 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 18 of the financial report and forms part of this directors report.

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Mozambi Coal Limited ABN 28 106 353 253 Directors’ 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

Alex Neuling Director Perth, Western Australia

27 September 2013

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Mozambi Coal Limited for the year ended 30 June 2013, 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.

This declaration is in respect to Mozambi Coal Limited and the entities it controlled throughout the year.

Perth, Western Australia 27 September 2013

N G Neill Partner

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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.

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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 2013, the consolidated statement of profit or loss, the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration 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.

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HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

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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 2013 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).

Report on the Remuneration Report

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

Auditor’s opinion

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

HLB Mann Judd Chartered Accountants

N G Neill Partner

Perth, Western Australia 27 September 2013

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Mozambi Coal Limited ABN 28 106 353 253

Directors’ Declaration

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 2013 and of it’s 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.
The financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.
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 2013.

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

Alex Neuling

Director Perth, Western Australia

27 September 2013

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Mozambi Coal Limited

Consolidated statement of profit or loss for the year ended 30 June 2013

		Consolidated	Consolidated
		2013	2012
	Note	$	$
Revenue	2	55,451	144,096
OfficeCosts		(91,962)	(137,074)
CorporateManagementCosts		(136,036)	(462,846)
CorporateComplianceCosts		(221,127)	(215,784)
EvaluationExpenses		(282,662)	(489,079)
ImpairmentofExplorationExpenditure	2	(8,155,408)	(7,164)
ShareBasedPayments	2	(38,690)	(48,794)
Impairmentofotherassets		(51,017)	�
ForeignExchangeGain/(Loss)		(3,927)	167,665
OtherExpensesfromOrdinaryActivities		(846,344)	(751,108)
LossbeforeIncomeTax	2	(9,771,722)	(1,800,088)
IncomeTaxExpense	3	�	�
LossafterTaxfromContinuingOperations		(9,771,722)	(1,800,088)
LossafterTaxfromDiscontinuedOperations	4	�	(1,311)
NetLossfortheyear		(9,771,722)	(1,801,399)
Lossattributableto:
Ownersoftheparent		(9,677,399)	(1,779,540)
Non�controllinginterests		(94,323)	(21,859)
		(9,771,722)	(1,801,399)
Losspershare(centspershare)
Basic/dilutedlosspershare	5	(8.26)	(1.58)
Basic/dilutedlosspersharefromcontinuingoperations	5	(8.26)	(1.58)

The accompanying notes form part of these financial statements

Page | 22

Mozambi Coal Limited

Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2013

		Consolidated	Consolidated
		2013	2012
	Note	$	$
Lossfortheyear		(9,771,722)	(1,801,399)
Othercomprehensiveincome
Itemsthatwillnotbereclassifiedsubsequentlytoprofit
orloss		�	�
Itemsthatmaybereclassifiedsubsequentlytoprofitor
loss:
Exchangedifferencesontranslatingforeignoperations		(85,428)	(14,804)
		(85,428)	(14,804)
Othercomprehensivelossfortheyearnetofincometax		(85,428)	(14,804)
Totalcomprehensivelossfortheyear		(9,857,150)	(1,816,203)
Totalcomprehensivelossattributableto:
Ownersoftheparent		(9,762,827)	(1,789,962)
Non�controllinginterests		(94,323)	(26,241)
		(9,857,150)	(1,816,203)

The accompanying notes form part of these financial statements

Page | 23

Mozambi Coal Limited

Consolidated statement of financial position as at 30 June 2013

		Consolidated	Consolidated
		2013	2012
	Note	$	$
CurrentAssets
Cashandcashequivalents	6	870,301	2,144,477
Tradeandotherreceivables	7	22,407	58,182
TotalCurrentAssets		892,708	2,202,659
Non�CurrentAssets
Property,plantandequipment	8	14,404	30,564
Deferredexplorationexpenditure	9	�	9,951,803
TotalNon�CurrentAssets		14,404	9,982,367
TotalAssets		907,112	12,185,026
CurrentLiabilities
Tradeandotherpayables	10	(87,703)	(77,851)
TotalCurrentLiabilities		(87,703)	(77,851)
Non�CurrentLiabilities
Amountsdueundercontract	11	�	(1,861,353)
TotalNon�CurrentLiabilities		�	(1,861,353)
TotalLiabilities		(87,703)	(1,939,204)
NetAssets		819,409	10,245,822
Equity
IssuedCapital	12	30,874,975	30,482,928
Reserves	13	2,577,901	2,624,639
Accumulatedlosses	13	(32,420,374)	(22,742,975)
Parententityinterest		1,032,502	10,364,592
Non�controllinginterest		(213,093)	(118,770)
TotalEquity		819,409	10,245,822

The accompanying notes form part of these financial statements

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Mozambi Coal Limited

Consolidated statement of changes in equity for the year ended 30 June 2013

Consolidated

Consolidated
					Non�
	Issued	Accumulated			controlling
	Capital	Losses	Reserves	Total	interests	Total
	$	$	$	$	$	$
Balanceasat1July2011	28,607,928	(20,963,435)	2,586,267	10,230,760	(92,711)	10,138,049
Lossfortheyear	�	(1,779,540)	�	(1,779,540)	(21,859)	(1,801,399)
Exchangedifferencesarisingontranslationofforeignoperations	�	�	(10,422)	(10,422)	(4,382)	(14,804)
Totalcomprehensiveloss fortheyear	�	(1,779,540)	(10,422)	(1,789,962)	(26,241)	(1,816,203)
Sharesissuedduringtheyear	1,875,000	�	�	1,875,000	�	1,875,000
Sharesissuedtonon�controllinginterests	�	�	�	�	182	182
Recognitionofshare�basedpayments	�	�	48,794	48,794	�	48,794
Balanceat30June2012	30,482,928	(22,742,975)	2,624,639	10,364,592	(118,770)	10,245,822
Balanceasat1July2012	30,482,928	(22,742,975)	2,624,639	10,364,592	(118,770)	10,245,822
Lossfortheyear	�	(9,677,399)	�	(9,677,399)	(94,323)	(9,771,722)
Exchangedifferencesarisingontranslationofforeignoperations	�	�	(85,428)	(85,428)	�	(85,428)
TotalcomprehensiveLoss fortheyear	�	(9,677,399)	(85,428)	(9,672,827)	(94,323)	(9,857,150)
Sharesissuedduringtheyear	400,000	�	�	400,000	�	400,000
Lesstransactioncosts	(7,953)	�	�	(7,953)	�	(7,953)
Recognitionofshare�basedpayments	�	�	38,690	38,690	�	38,690
Balanceat30June2013	30,874,975	(32,420,374)	2,577,901	1,032,502	(213,093)	819,409

The accompanying notes form part of these financial statements

Page | 25

Mozambi Coal Limited

Consolidated statement of cash flows for the year ended 30 June 2013

		Consolidated	Consolidated
		2013	2012
	Note	$	$
		Inflows/(Outflows)
Cashflowsfromoperatingactivities
Paymentstosuppliersandemployees		(1,403,720)	(2,231,004)
Netcashappliedtooperatingactivities	6	(1,403,720)	(2,231,004)
Cashflowsfrominvestingactivities
Paymentsforproperty,plant&equipment	8	(3,334)	(30,782)
Proceedsfromdisposaloffixedassetsclassifiedasheldforsale		�	125,000
Paymentsforexplorationexpenditure		(322,497)	(973,721)
Interestreceived		55,451	144,096
Netcashappliedtoinvestingactivities		(270,380)	(735,407)
Cashflowsfromfinancingactivities
Proceedsfromshareissues		400,000	1,875,000
Shareissuecosts		(7,953)	�
Netcashprovidedbyfinancingactivities		392,047	1,875,000
Net(decrease)/increaseincashandcashequivalents		(1,282,053)	(1,091,411)
Cashandcashequivalentsatthebeginningoftheyear		2,144,477	3,235,888
Effectsofexchangeratechangesonthebalanceofcashheldin		7,877	�
foreigncurrencies
Cashandcashequivalentsattheendoftheyear	6	870,301	2,144,477

The accompanying notes form part of these financial statements

Page | 26

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

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 and operating in Australia. The entity’s principal activity is mineral exploration in Mozambique (as more fully described in the Directors’ Report & Note 17).

(b) Adoption of new and revised standards

Standards and Interpretations applicable to 30 June 2013

In the year ended 30 June 2013, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company 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 2013. 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 27 September 2013.

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).

(d) Basis of Consolidation

The consolidated financial statements comprise the separate financial statements of Mozambi Coal Limited and its subsidiaries as at 30 June each year (the Group or Consolidated Entity). Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

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

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra � group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of the assets

Page | 27

Mozambi Coal Limited Notes to the Financial Statements for the Year ended 30 June 2013

acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial statements include the results of subsidiaries for the period from their acquisition.

Non � controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in the statement of comprehensive income and within equity in the consolidated statement of financial position. Losses are attributed to the non � controlling interest even if that results in a deficit balance.

The Group treats transactions with non � controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non � controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non � controlling interests and any consideration paid or received is recognised within equity attributable to owners of Mozambi Coal Limited.

When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(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 equity � settled 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.

(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 straight line 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.

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Mozambi Coal Limited Notes to the Financial Statements for the Year ended 30 June 2013

(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 short � term discounting is not applied in determining the allowance.

The amount of the impairment loss is recognised in the statement of comprehensive income 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 comprehensive income.

(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 ‘pass � through’ 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 cash � settled 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 cash � settled 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.

(ii) Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

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Mozambi Coal Limited Notes to the Financial Statements for the Year ended 30 June 2013

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 available � for � sale 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 available � for � sale are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument's fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

(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.

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

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

Page | 30

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

Non � monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. 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, carry � forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry � forward of unused tax credits and unused tax losses can be utilised, except:

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.

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.

Page | 31

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

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 straight � line 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 pre � tax 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 cash � generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.

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

For plant and equipment, impairment losses are recognised in profit or loss for the year in the cost of sales 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.

Page | 32

Mozambi Coal Limited Notes to the Financial Statements for the Year ended 30 June 2013

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, held � to � maturity investments, or available � for � sale 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, re � evaluates this designation at each financial year � end.

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

Non � derivative financial assets with fixed or determinable payments and fixed maturity are classified as held � to � maturity 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 held � to � maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

(iii) Loans and receivables

Loans and receivables are non � derivative financial assets with fixed or determinable payments that are not quoted in an active market. 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

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

The fair 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.

Page | 33

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

(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 straight � line 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 cash � generating unit to which it belongs. When the carrying amount of an asset or cash � generating unit exceeds its recoverable amount, the asset or cash � generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre � tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. 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 costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. 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.

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

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

(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.

Page | 34

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

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 pre � tax 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 non � discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(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) Non � current assets (or disposal groups) held for sale and discontinued operations

Non � current 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.

An impairment loss is recognised for any initial or subsequent write � down 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 non � current asset (or disposal group) is recognised at the date of derecognition.

Non � current 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.

Non � current 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

Page | 35

Mozambi Coal Limited Notes to the Financial Statements for the Year ended 30 June 2013

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 co � 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 comprehensive income.

(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 pre � existing equity interest in the subsidiary. Acquisition � related 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 acquisition � by � acquisition basis, the group recognises any non � controlling interest in the acquiree either at fair value or at the non � controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non � controlling interest in the acquiree and the acquisition � date 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) Share � based payment transactions

(i) Equity settled transactions:

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

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

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

The cost of equity � settled 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 equity � settled 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.

Page | 36

Mozambi Coal Limited Notes to the Financial Statements for the Year ended 30 June 2013

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 equity � settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share � based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

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

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

(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 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

Page | 37

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

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 grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

Page | 38

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

2. Revenue and Expenses

2. *RevenueandExpenses*
	Consolidated
	2013	2012
	$	$
*(a)Revenue*
ContinuingOperations
InterestIncome	55,451	144,096
(b)Expenses
Lossbeforeincometaxhasbeendeterminedaftercharging:
ContinuingOperations
Depreciation	(5,604)	(5,188)
Impairmentofexplorationexpenditure	(8,155,408)	(7,164)
Impairmentlossrecognisedontradereceivables	(37,278)	�
Impairmentlossrecognisedonproperty,plantandequipment	(13,739)	�
Share�basedpayments
Performancerights	(13,140)	(48,794)
Options	(25,550)	�
	(38,690)	(48,794)
3. *IncomeTax*
	Consolidated
	2013	2012
	$	$
Theprimafacieincometaxbenefitonpre�taxaccountingloss from
operationsreconcilestotheincometaxexpenseinthefinancialstatements
asfollows:
Accountinglossbeforetaxfromcontinuingoperations	(9,771,722)	(1,800,088)
Lossbeforetaxfromdiscontinuedoperations	�	(1,311)
Accountinglossbeforeincometax	(9,771,722)	(1,801,399)
Incometaxbenefitcalculatedat30%	2,931,517	540,420
Sharebasedpayments	(11,607)	(14,638)
Non�deductibleexpenses	(2,471,356)	(251,581)
Non�assessableincome	�	52,670
Capitalraisingcostsdeductible	23,451	31,472
Incometaxlossesnotbroughttoaccount	472,005	358,343
Incometaxbenefitfromcontinuingoperationsreportedintheconsolidated
incomestatement	�	�
Incometaxbenefitattributabletodiscontinuedoperations	�	�

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 $14,697,796 (2012: $13,170,353) 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.

Page | 39

Notes to the Financial Statements for the Year ended 30 June 2013

Mozambi Coal Limited

4. Discontinued Operations

Discontinued operations relates to the 2009 shareholder approved disposal of the rights to the Mine Mixers Intellectual Property.

Disclosures in relation to the discontinued businesses are as follows:

Disclosuresinrelationtothediscontinuedbusinessesareasfollows:
		Consolidated
	2013		2012
		$		$
Revenue		�		�
Depreciation		�		�
Compliancecosts		�		(1,018)
Otherexpenses/income		�		(293)
Profit/(Loss)beforetaxfromdiscontinuedoperations		�		(1,311)
Incometaxbenefit		�		�
Profit/(Loss)fortheyearfromdiscontinuedoperations		�		(1,311)
Cashflowsfromdiscontinuedoperations:
Netcashflowsfrom/(appliedto)operatingactivities		�		(1,311)
Netcashflowsfrom/(appliedto)investingactivities		�		�
Netcashflowsfrom/(appliedto)financingactivities		�		�
Netcashflows		�		(1,311)
5. *Losspershare*
		Consolidated
	2013			2012
	Centsper	share	Centspershare
Basic/dilutedlosspershare:
Continuingoperations		(8.26)		(1.58)
Discontinuedoperations		�		�
Totalbasiclosspershare		(8.26)		(1.58)
Lossaftertax(usedincalculationofbasic/dilutedlosspershare)	(9,771,722)			(1,801,399)
Adjustmentfordiscontinuedoperations		�		1,311
Lossfromcontinuingoperationsaftertax(usedincalculationofbasic/
dilutedlosspersharefromcontinuingoperations	(9,771,722)			(1,800,088)
		Consolidated
	2013			2012
	No.			No.
Weightedaveragenumberofordinarysharesusedasthedenominator
incalculatingbasic/dilutedlosspershare	117,188,557		113,776,225

As the entity is loss � making 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).

The options on issue (Note 14) 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.

Page | 40

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

6. Cash and Cash Equivalents

	Consolidated	Consolidated
	2013	2012
	$	$
Cashatbankandonhand	870,301	2,144,477
Cashatbankearnsinterestatfloatingratesbasedondailybankdepositrates
(i)ReconciliationtoStatementofCashFlows:
Cashandcashequivalents	870,301	2,144,477
	870,301	2,144,477
(ii)Reconciliationoflossfortheyeartonetcashoutflowsfromoperating
activities
Lossfortheyear	(9,771,722)	(1,801,399)
Depreciation	5,604	5,188
Interestreceived	(55,451)	(144,096)
Non�capitalisedexplorationexpenditure	160,457	�
Impairmentofassets	8,206,425	7,164
ForeignExchange(gain)/loss	3,927	(111,838)
Sharebasedpayments	38,690	48,793
(Increase)/decreaseindebtors	(1,504)	(43,117)
Increase/(decrease)increditorsandaccruals	9,854	(191,699)
Netcashusedinoperatingactivities	(1,403,720)	(2,231,004)
7. *CurrentTrade&OtherReceivables*
	Consolidated
	2013	2012
	$	$
Tradeandotherreceivables	63,487	58,182
Allowanceforimpairment	(41,080)	�
	22,407	58,182
*Ageingofpastduebutnotimpaired*
90�120days	�	1,659
Morethan120days	5,036	38,123
Total	5,036	39,782
*Ageingofimpairedreceivables*
Morethan120days	41,080	�
Total	41,080	�

Page | 41

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

8. Plant & Equipment

8. *Plant&Equipment*
	Consolidated
	2013	2012
	$	$
Cost	24,237	35,876
Accumulateddepreciation	(9,833)	(5,312)
Netcarryingamount	14,404	30,564
Areconciliationofmovementsinplant&equipmentduringthe	current&priorfinancialyearisasfollows:
Openingbalance	30,564	5,055
Depreciation	(5,604)	(5,188)
Additions	3,334	30,782
Foreigncurrencytranslationdifferences	�	(85)
Netimpairment	(13,890)	�
Closingbalance	14,404	30,564

Impairment of property, plant and equipment:

During the 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.

9. Deferred Exploration Expenditure

9. *DeferredExplorationExpenditure*
	Consolidated
	2013	2012
	$	$
Openingbalance	9,951,803	8,985,246
Additionsasaresultofacquisitionof2738L	�	143,489
Expenditureduringtheyear	162,041	830,376
Contingentconsiderationreversed	(1,958,436)	�
Impairment	(8,155,408)	(7,308)
Closingbalance	�	9,951,803

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.

Contingent consideration derecognised

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 includes 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 11) and a corresponding increase in deferred exploration expenditure.

Page | 42

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

9. Deferred Exploration Expenditure (cont’d)

At the date of this report, Management’s expectation, based on information currently available and the uncertainties regarding the forward exploration program for the assets is that the likelihood of discovering a commercially exploitable coal resource of a size to trigger payment of contingent consideration is remote and therefore the most likely value of the contingent consideration is nil.

Impairment

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 retains the right to explore 2738L and has recognised an impairment loss of $1,053,864 of all expenditure incurred on the license.

Licenses 3245L and 3246L

As noted in the 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 will allow the Company to preserve its working capital while the Board investigates alternatives for both new investment opportunities and development / exploitation of its existing assets. Accordingly there is 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 is neither budgeted nor planned, the Company has recognised an accounting impairment in the value of those assets. Based on information currently available and in the absence of reliably estimable measures of the future value in use or potential recoverable amount through sale of the assets management have assigned a recoverable amount of zero to the assets and have recognised a full impairment accordingly.

10. Trade & Other Payables

*10.* *Trade&OtherPayables*
	Consolidated
	2013	2012
	$	$
TradeCreditors&Accruals	(70,172)	(51,857)
Relatedpartypayables	(17,531)	(25,994)
TotalTrade&OtherPayables	(87,703)	(77,851)

Trade payables are non � interest bearing and are normally settled on 30 � day 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 $17,531 (2012: $11,403)) and Black Barrel Exploration Pty Ltd (an entity associated with Mr Michael Griffiths, a Director, which is owed nil (2012: $14,591)). No interest is currently being levied on these payables.

Page | 43

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

11. Amounts due under contract

*11.* *Amountsdueundercontract*
	Consolidated
	2013	2012
	$	$
Non�Current
Openingbalance	(1,861,353)	(1,115,123)
Revaluationofamountsdueundercontract duetocurrencyfluctuations	(294,981)	97,082
Reclassifiedasnon�current	�	(843,312)
Reversalofamountsdueundercontract	2,156,334	�
	�	(1,861,353)

Amounts due under contract represents 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 will be 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, based on information currently available, including an independent geologist’s report is that a commercially exploitable coal resource will not be identified and the liability will not eventuate. Consequently, the liability has been derecognised with and the amount previously recognised as deferred exploration expenditure has also been reversed (see note 9).

12. Contributed Equity

Share Capital

*ShareCapital*
	Consolidated		Consolidated
	2013	2012	2013	2012
	Shares	Shares	$	$
Ordinarysharesissuedandfullypaid	119,941,987	114,941,982	30,874,975	30,482,928
TotalContributedEquity			30,874,975	30,482,928

Page | 44

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

12. Contributed Equity (Cont’d)

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

Ordinary Shares

	Date	No.	IssuePrice	$
Balanceasat1July
2011		106,707,732		28,607,928
Privateplacement		7,500,000	$0.25	$1,875,000
Exerciseof
performancerights		734,250	�	�
Balanceasat30June
2012		114,941,982		30,482,928
Sharesissued	17/01/13	5,000,000	$0.08	400,000
Lesscostsofissue		�		(7,953)
Balanceasat30June
2013		119,941,982		30,874,975

13. Reserves and accumulated losses

(a) Reserves

	Consolidated	Consolidated
	2013	2012
	$	$
OptionReserve
Balanceatbeginningofyear	2,633,310	2,584,516
Sharebasedpayments	38,690	48,794
Balanceatendofyear	2,672,000	2,633,310

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

Foreigncurrencytranslationreserve
Balanceatbeginningofyear	(8,671)	1,751
Currencytranslationdifferences	(85,428)	(14,804)
Noncontrollinginterest	�	4,382
Balanceatendofyear	(94,099)	(8,671)

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

TotalReserves (b) AccumulatedLosses Atthebeginningofthefinancialyear Lossfortheyear Balanceatendoffinancialyear	2,577,901 2,624,639
	(22,742,975) (20,963,435) (9,677,399) (1,779,540) (32,420,374) (22,742,975)

Page | 45

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

14. Share Based Payments

The following share � based payments were in place during the current and prior periods:

Options

The Company has the following classes of options on issue as at reporting date:

Type	Number Grantdate Expirydate Exerciseprice $ Fairvalueat grantdate $
1 20,000,000 21/02/2011 21/02/2014 $0.25 $0.1002 2 250,000 6/07/2011 30/06/2014 $0.35 $0.1280 3 250,000 6/07/2011 30/06/2014 $0.45 $0.1140 4 250,000 6/07/2011 30/06/2014 $0.55 $0.1030 5 2,500,000 22/07/2011 22/07/2013 $0.30 � 6 475,000 2/08/2012 2/08/2016 $0.25 $0.0260 7 2,200,000 26/11/2012 30/11/2016 $0.25 $0.0060 25,925,000

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.

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

2013 2012 Number Weighted average exerciseprice Number Weighted average exerciseprice	2013 2012 Number Weighted average exerciseprice Number Weighted average exerciseprice
	Number Weighted average exerciseprice Number Weighted average exerciseprice
Outstandingatthebeginningoftheyear Grantedduringtheyear Forfeitedduringtheyear Exercisedduringtheyear Expiredduringtheyear Outstandingattheendoftheyear Exercisableattheendoftheyear	23,250,000 $0.26 20,750,000 $0.26 2,675,000 $0.25 2,500,000 $0.30 � � � � � � � � � � � �
	25,925,000 $0.26 23,250,000 $0.26
	25,925,000 12,930,000

No shares were issued during the year to 30 June 2013 as a result of the exercise of options (2012: nil).

The fair value of the equity � settled 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.
	Type6	Type7
Dividendyield	0%	0%
Expectedvolatility	90%	90%
Risk�freeinterestrate	5.46%	5.46%
Expectedlifeofoption	4years	4years
Exerciseprice	$0.25	$0.25
Grantdateshareprice	$0.064	$0.025

Page | 46

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

15. 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 2012.

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.

	Consolidated	Consolidated
	2013	2012
	$	$
(b) Categoriesoffinancialinstruments
Financialassets
Loansandreceivables	22,407	58,182
Cashandcashequivalents	870,301	2,144,477
Financialliabilities
Trade&otherpayables	(87,705)	(77,851)

(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 non � derivative 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.

Page | 47

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

15. Financial Instruments (Cont’d)

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		Assets	Assets
	2013	2012	2013	2012
USdollars	(15,794)	(26,892)	179,352	152,286

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
	2013	2012
	$	$
Resultfortheyear*	4,947	11,426
Otherequity	�	�

This is mainly attributable to the exposure outstanding on USD receivables and payables at year end in the Group.

(f) Interest rate risk

As at and during the year ended on reporting date the Group had no significant interest � bearing 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	Consolidated
		2013	2012
		$	$
FinancialAssets
Cashassets	Floatinginterest	870,301	2,144,477

Weighted average effective interest rate 4.85% (2012: 4.35%).

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 profit would increase or decrease by $12,059 (2012: $17,156). This is mainly attributable to the Group’s exposure to interest rates on its variable rate cash holdings.

Page | 48

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

15. Financial Instruments (Cont’d)

(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 �� As at reporting date the Group had total financial liabilities of $87,705 (2012: $77,851), comprised of non interest � bearing 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 2013.

16. Commitments and Contingencies

The Company has no material commitments at reporting date.

At 30 June 2012, the Company had disclosed a commitment of US$1,350,000 for contingent consideration payable to the vendors of exploration license 2738L. On 17 December 2012 Mozambi announced that it had exercised its right to withdraw from its agreement to acquire the license and as a result, Mozambi no longer recognises the commitment.

17. Segment Reporting

The company only operates in one segment, being exploration for mineral assets in Mozambique.

18. Related Party Disclosure

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

	Countryof	%EquityInterest
Name	Incorporation	2013	2012
MineMixersPtyLtd	Australia	100	100
DugalPtyLtd	Australia	100	100
DugalResourcesLda	Mozambique	70	70
XiluvaMozambiLda	Mozambique	80	80
MozambiResourcesPtyLtd	Australia	100	100
MozambiVenturesLda	Mozambique	80	80

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 2013

19. Events After the Balance Sheet Date

Since the end of the reporting period, the following events have occurred:

Changes to the Board of Directors:

Mr Shiv Madan resigned as a director on 12 August 2013; Mr Julian Jarman was appointed as a non � executive director on the same date.

Lapse of options:

2,500,000 options lapsed on 22 July 2013. The options were issued on 22 July 2011 and had an exercise price of $0.30.

20. Auditors’ Remuneration

The auditor of Mozambi Coal Limited is HLB Mann Judd.

TheauditorofMozambiCoalLimitedisHLBMannJudd.
AmountsreceivedordueandreceivablebyHLBMannJuddfor: Anauditorreviewofthefinancialreportoftheentityandanyotherentityinthe Group OtherservicesinrelationtotheentityandanyotherentityintheGroup �taxcompliance	Consolidated 2013 $ 2012 $
	34,000 33,900 � 600
	34,000 34,500

21. Parent Entity Information

The following details information related to the parent entity, MOZ, at 30 June 2013. The information presented here has been prepared using consistent accounting policies as presented in Note 1.

Financialposition	Parent	Parent
Assets	2013	2012
CurrentAssets	853,326	2,116,253
Non�CurrentAssets	14,404	8,203,980
TotalAssets	867,730	10,320,233
Liabilities
CurrentLiabilities	(48,321)	(74,411)
TotalLiabilities	(48,321)	(74,411)
Equity
Issuedcapital	30,874,975	30,482,928
Reserves	2,672,000	2,633,310
Accumulatedlosses	(32,727,566)	(22,870,416)
TotalEquity	819,409	10,245,822
Financialperformance
Profitand(Loss)fortheyear	(9,857,150)	(1,816,021)
Totalcomprehensiveincome/(loss)fortheyear	(9,857,150)	(2,193,754)

Page | 50

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

21. Parent Entity Information (Cont’d)

The Company has a receivable owing to it by its wholly owned subsidiary Dugal Pty Ltd of $1,026,170 (2012:$984,139). 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 2013.

The Company has a receivable owing to it by its 70% owned subsidiary Dugal Resources Lda of $538,885 (2012:$286,399). 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 2013.

The Company has a receivable owing to it by its 80% owned subsidiary Xiluva Mozambi Lda of $388,820 (2012:$369,110). 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 2013.

22. Directors and Executives Disclosures

(a) Details of Key Management Personnel

(i) Directors

Michael Griffiths Chairman (non � executive) – resigned 30 April 2013 Shiv Madan Managing Director – resigned 15 August 2013 Alex Neuling Executive Director / Company Secretary Robert Hemphill Director (non � executive)

(ii) Other executives Chalamaiah Kondragunta Exploration Manager – resigned 30 April 2013 Ryan Broom CFO / Company Secretary – resigned 30 April 2013

Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report.

(b) Option holdings of Key Management Personnel (Consolidated)

30June2013 Directors MichaelGriffiths ShivMadan AlexNeuling RobertHemphill OtherExecutives Chalamaiah Kondragunta RyanBroom Total	Balanceat beginningof period Grantedas remune� ration Options exercised Netchange Other Balanceat endof period* Vestedasatendofperiod Total Exercisable Not Exercisable
	� 750,000 � � 750,000 750,000 750,000 � 10,320,000 750,000 � � 11,070,000 11,070,00011,070,000 � � 350,000 � � 350,000 350,000 350,000 � � 350,000 � � 350,000 350,000 350,000 � 500,000 175,000 � � 675,000 675,000 675,000 � 250,000 175,000 � � 425,000 425,000 425,000 �
	11,070,000 2,550,000 � � 13,620,000 13,620,00013,620,000 �

or when ceased to be a director/executive.

Page | 51

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

22. Directors and Executives Disclosures (Cont’d)

30June2012 Directors MichaelGriffiths ShivMadan AlexNeuling RobertHemphill OtherExecutives Chalamaiah Kondragunta RyanBroom Total	Balanceat beginningof period Grantedas remune� ration Options exercised Netchange Other Balanceat endof period* Vestedasatendofperiod Total Exercisable Not Exercisable
	� � � � � � � � 10,320,000 � � � 10,320,000 10,320,000 � 10,320,000 � � � � � � � � � � � � � � � � 500,000 � � � 500,000 500,000 500,000 � 250,000 � � � 250,000 250,000 250,000 �
	11,070,000 � � � 11,070,000 11,070,000 750,000 10,320,000

or when ceased to be a director/executive.

(c) Shareholdings of Key Management Personnel (Consolidated)

Shares held in Mozambi Coal Limited

	Balanceat
	beginningof
	period
	(orwhen		Issuedas		OnExerciseof	NetChangeOther	Balanceatendof
	appointed)		remuneration		Options/PerfRights	(disposal)	period*
30June2013	Ord		Ord		Ord	Ord	Ord
Directors
MichaelGriffiths	198,000			�	�	�	198,000
ShivMadan	10,750,000			�	�	�	10,750,000
AlexNeuling	682,000			�	�	�	682,000
RobertHemphill	174,250			�	�	�	174,250
OtherExecutives
Chalamaiah
Kondragunta		�		�	�	�	�
RyanBroom		�		�	�	�	�
	11,804,250			�	�	�	11,804,250

or when ceased to be a director/executive

Page | 52

Mozambi Coal Limited

Notes to the Financial Statements for the Year ended 30 June 2013

22. Directors and Executives Disclosures (Cont’d)

Balanceat beginningof period (orwhen appointed) Issuedas remuneration OnExerciseof Options NetChangeOther (disposal) Balanceatendof period 30June2012 Ord Ord Ord Ord Ord Directors MichaelGriffiths � � 198,000 � 198,000 ShivMadan 10,320,000 � 330,000 100,000 10,750,000 AlexNeuling 550,000 � 132,000 � 682,000 RobertHemphill 100,000 � 74,250 � 174,250 OtherExecutives* Chalamaiah Kondragunta � � � � � RyanBroom � � � � � 10,970,000 � 734,250 100,000 11,804,250	Balanceat beginningof period (orwhen appointed) Issuedas remuneration OnExerciseof Options NetChangeOther (disposal) Balanceatendof period 30June2012 Ord Ord Ord Ord Ord Directors MichaelGriffiths � � 198,000 � 198,000 ShivMadan 10,320,000 � 330,000 100,000 10,750,000 AlexNeuling 550,000 � 132,000 � 682,000 RobertHemphill 100,000 � 74,250 � 174,250 OtherExecutives* Chalamaiah Kondragunta � � � � � RyanBroom � � � � � 10,970,000 � 734,250 100,000 11,804,250	Balanceat beginningof period (orwhen appointed) Issuedas remuneration OnExerciseof Options NetChangeOther (disposal) Balanceatendof period 30June2012 Ord Ord Ord Ord Ord Directors MichaelGriffiths � � 198,000 � 198,000 ShivMadan 10,320,000 � 330,000 100,000 10,750,000 AlexNeuling 550,000 � 132,000 � 682,000 RobertHemphill 100,000 � 74,250 � 174,250 OtherExecutives* Chalamaiah Kondragunta � � � � � RyanBroom � � � � � 10,970,000 � 734,250 100,000 11,804,250
	� � 10,320,000 � 550,000 � 100,000 � � � � �	198,000 � 198,000 330,000 100,000 10,750,000 132,000 � 682,000 74,250 � 174,250 � � � � � �
		734,250 100,000 11,804,250

or when ceased to be a director/executive

All equity transactions with key management personnel have been entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at arm's length.

(d) Performance Right holdings of Key Management Personnel (Consolidated)

30June2013 Directors MichaelGriffiths ShivMadan AlexNeuling RobertHemphill OtherExecutives Chalamaiah Kondragunta RyanBroom Total	Balanceat beginningof period Grantedas remune� ration Exercised Netchange Other Balanceat endofperiod Vestedasatendofperiod Total Exercisable Not Exercisable
	268,000 � � (268,000) � � � � 536,000 � � (536,000) � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �
	804,000 � � (804,000) � � � �

Page | 53

Notes to the Financial Statements for the Year ended 30 June 2013

Mozambi Coal Limited

22. Directors and Executives Disclosures (Cont’d)

30June2012 Directors MichaelGriffiths ShivMadan AlexNeuling RobertHemphill OtherExecutives Chalamaiah Kondragunta RyanBroom Total	Balanceat beginningof period Grantedas remune� ration Exercised Netchange Other Balanceat endofperiod Vestedasatendofperiod Total Exercisable Not Exercisable
	600,000 � (198,000) (134,000) 268,000 � � � 1,000,000 � (330,000) (134,000) 536,000 � � � 400,000 � (132,000) (268,000) � � � � 225,000 � (74,250) (150,750) � � � � � � � � � � � � � � � � � � � �
	2,225,000 � (734,250) (686,750) 804,000 � � �

(e) Key Management Personnel Compensation

Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each member of the Group’s key management personnel (KMP) for the year ended 30 June 2013.

The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:

	2013	2012
	$	$
Shorttermemploymentbenefits	748,082	888,846
Postemploymentbenefits	15,513	20,051
Otherlong�termbenefits	�	�
Share�basedpayments	35,440	48,794
TotalKMPcompensation	799,035	957,691

Page | 54

Mozambi(Coal(Limited( Corporate+Governance+Statement

Mozambi+Coal+is+committed+to+good+corporate+governance+practices.+The+Listing+Rules+of+the+Australian+Securities+ Exchange+(“ASX”)+require+AustralianLlisted+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+2012+financial+year,+the+Company+complied+with+each+of+the+ASX+Principles+and+Recommendations+other+ than+in+relation+to+the+matters+below:+

RecommendationReference	NotificationofDeparture	ExplanationforDeparture
2.1 L A majority of the board areindependentdirectors	The current Board composition complieswiththerecommendation, however during the year the majorityofDirectorsdidnotsatisfy the Company’s criteria for independence.	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. In addition the Board seeks to ensure that its size and composition are appropriate to the Company’s circumstancesastheseevolveovertime.
2.2 – The Chair is an IndependentDirector	ThecurrentChairisanindependent director, however during the year the previous Chair did not at all timessatisfytheCompany’scriteria forindependence.	TheBoardseekstoensurethatitssizeand composition are appropriate to the Company’s circumstances as these evolve over time and that the role of Chair at a particular point in time is filled by the personconsideredbytheBoardtobemost suitableforthatrole,notwithstandingthat person not at all times satisfy the Company’scriteriaforindependence.
2.4LTheBoardhasestablished anominationcommittee	A separate Nomination Committee hasnotbeenformed.	The Board considers that the Company is not currently of a size to justify the formationofNominationCommittee.The Board as a whole undertakes the process ofreviewingtheskillbaseandexperience of existing Directors to enable identification of attributes required or desirable in new Directors. Where considered appropriate by the Board, independent consultants may be engaged toidentifypossiblenewcandidates.

Page+|+55+

Corporate+Governance+Statement

Mozambi(Coal(Limited(

RecommendationReference	NotificationofDeparture	ExplanationforDeparture
3.3 – The entity has disclosed in its annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them.	The entity has not yet adopted measurable objectives for achieving genderdiversity.	Mozambi Coal is committed to workplace diversity and has developed a diversity policy which can be found in the Company’sCorporateGovernancePlanon theCompanywebsite. Rather than developing measurable objectives with regard to diversity, the Companyiscommittedtotheemployment of the highest quality staff regardless of gender, age, ethnicity or cultural background.
4.2LTheauditcommitteehas beenstructuredsothatit: • consists only of nonL executivedirectors • consists of a majority of independentdirectors • is chaired by an independent chair, who is notchairoftheBoard • has at least three members	During the year the Audit Committee has at times comprised only two members. The current compositionoftheAuditCommittee includes a member who is an executiveDirector.	ThecurrentcompositionoftheBoarddoes not enable the composition of an audit committeetobestructuredinaccordance with all aspects of this recommendation. ThecompositionoftheAuditCommitteeis determined by the Board to comprise those Directors considered best able to discharge the responsibilities of the Audit Committee in accordance with its charter andobjectives.
8.2 – The remuneration committee is structured so thatit: • consists of a majority of independentdirectors • is chaired by an independentchair • has at least three members	During the year the Remuneration Committee has at times comprised only two members and also been chairedbyaDirectorwhohasnotat all times satisfied the Company’s criteria for independence. The current composition of the Committee complies with this recommendation.	The composition of the Board during the yearhasnotatallenabledthecomposition of the remuneration committee to be structured in accordance with all aspects ofthisrecommendation.Thecomposition of the Remuneration Committee is determined by the Board to comprise those Directors considered best able to discharge the responsibilities of the Committee in accordance with its charter andobjectives.

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.+

Page+|+56+

Mozambi(Coal(Limited( Corporate+Governance+Statement

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;++
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+ reLappointment+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+annual+performance+appraisals+of+ key+executives+(including+the+Managing+Director)+to+ensure+defined+objectives+are+being+met.++During+each+annual+ review+objectives+for+the+coming+year+are+set+and+agreed+upon.+++During+the+current+financial+year,+the+Board+and+all+ key+executives+were+subject+to+a+performance+review.++

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+6+–+7+of+the+annual+report.++

Page+|+57+

Mozambi(Coal(Limited( Corporate+Governance+Statement

The+Board+has+adopted+specific+principles+in+relation+to+Directors’+independence.++These+state+that+an+independent+ Director+must+be+a+nonLexecutive+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;++
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+caseLbyLcase+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+nonLexecutive+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+

From+1+July+2012+to+30+April+2013,+the+Company+had+four+Directors,+two+of+whom+were+nonLexecutive+(Mr.+Michael+ Griffiths+and+Mr.+Robert+Hemphill).++Mr.+Griffiths+did+not+satisfy+the+Company’s+criteria+for+Directors’+independence+ for+the+whole+of+that+period,+due+to+the+extent+of+geological+consulting+work+carried+out+for+the+Company+by+an+ entity+related+to+Mr.+Griffiths+having+reached+a+level+where+it+was+considered+likely+to+be+material.+

Following+the+resignation+of+Mr.+Griffiths+on+30+April+2013,+between+30+April+2013+and+12+August+2013,+the+Board+ had+three+Directors,+only+one+of+whom+(Mr.+Hemphill)+was+an+independent+nonLexecutive,++

On+12+August+2013,+Mr.+Shiv+Madan+resigned+as+managing+director+and+Mr.+Julian+Jarman+was+appointed+as+a+nonL executive+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+nonLexecutive+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+ judgement+ for+ all+ Board+ decision+ making+ and+ the+ presence+ of+ two+ independent+ nonLexecutive+ 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,+nonLexecutive+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.+++

Page+|+58+

Mozambi(Coal(Limited( Corporate+Governance+Statement

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+ selfLassessment+ 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.+

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+employed+1.2+full+time+equivalent+women+–+approximately+19%+of+total+staff+levels.++ Mrs.+Natalie+Madden+has+been+appointed+Joint+Company+Secretary+as+of+12+August+2103;+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.+++

Page+|+59+

Mozambi(Coal(Limited( Corporate+Governance+Statement

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.++

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

Audit!Committee

The+Audit+Committee+has+had+the+following+structures+since+1+July+2012:+

From(1(July(2012(to(30(April(2013:(

Mr.+Robert+Hemphill+(Chairman)++

Mr.+Michael+Griffiths++

From(1(May(2013(onwards(

Mr.+Robert+Hemphill+(Chairman)++

Mr.+Alex+Neuling+

Mr.+Julian+Jarman+(from+12+August+2013)+

Details+of+these+Directors’+qualifications+and+attendance+at+Audit+Committee+meetings+are+set+out+in+the+Directors’+ Report+on+pages+6+–+8.+

Whilst+ it+ is+ acknowledged+ that+ the+ Audit+ Committee+ should+ consist+ entirely+ of+ independent,+ nonL+ 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.++Up+to+30+April+2013,+the+Committee+was+chaired+by+an+independent+ Director,+distinct+from+the+Chairman+of+the+Board+and+was+solely+comprised+of+Independent+Directors.++From+1+May+ 2013,+ the+ size+ and+ composition+ of+ the+ Board+ was+ such+ that+ all+ Directors+ are+ currently+ serving+ 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.+Hemphill)+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;++

Page+|+60+

Mozambi(Coal(Limited( Corporate+Governance+Statement

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.+

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+ Managing+ Director+ and+ the+ Company+ Secretary+ 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.+

Page+|+61+

Mozambi(Coal(Limited( Corporate+Governance+Statement

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:+

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+from+1+May+2013)+

Mr.+Alex+Neuling+++

Mr.+Michael+Griffiths+(Chairman+and+member+to+30+April+2013)+

Details+of+these+Directors’+attendance+at+Remuneration+Committee+meetings+are+set+out+in+the+Directors+Report+on+ page+8.+

Whilst+it+is+acknowledged+that+the+Remuneration+Committee+should+consist+entirely+of+independent,+nonL+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+nonLexecutive+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.+

Page+|+62+

Mozambi(Coal(Limited( Corporate+Governance+Statement

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.++

+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+nonLexecutive+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+|+63+

Mozambi(Coal(Limited( Additional+ASX+Information

The+shareholder+information+set+out+below+was+applicable+as+at+15+October+2013.+

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

1. Twentylargestholdersofquotedequitysecurities
Rank Name	Numberof units %ofunits
1. JPMorganNomineesAustraliaLimited 2. Mr.MarkBuratovic 3. Motte&BaileyPtyLtd 4. KhalidSalehAlRashid 5. SinoPortfolioInternationalLimited 6. HSBCCustodyNominees(Australia)Limited 7. NinoConstructionsPtyLtd 8. EZRSystemsPtyLtd 9. D.A.RHoldingsPtyLtd 10. Mr.TroyRobertValentine 11. WesternstarLimited 12. Mrs.RenuKumar&DrAsokKumar 13. Mr.IanHunter 14. ChataHoldingsPtyLtd 15. VarunaPtyLtd 16. Mr.FranjoBoros 17. Mr.DannyMichaelRechichi&Mrs.ClaireLouise Rechichi 18. Motte&BaileyLtdLtd 19. FloydBarryAquino 20. HaweraPtyLtd TotalTop20 Other TotalOrdinarySharesOnIssue	6,179,666 5.152 5,979,723 4.986 5,581,000 4.653 5,000,000 4.169 3,850,000 3.210 3,546,001 2.956 3,400,000 2.835 3,200,001 2.668 3,200,001 2.668 3,200,001 2.668 3,102,647 2.587 3,000,000 2.501 2,200,000 1.834 2,100,000 1.751 1,600,000 1.334 1,577,581 1.315 1,483,000 1.236 1,457,487 1.215 1,453,332 1.212 1,334,009 1.112
	62,444,449 52.062% 57,497,538 47.938%
	119,941,987 100%

2. Substantial!shareholders!

The+Company+has+not+been+notified+of+any+substantial+shareholders+as+at+15+October+2013.+

3. Distribution!of!holders!of!equity!securities!

		Performance
	Ordinaryshares	Rights	UnlistedOptions
1L1,000 247 1,001–5,000 232 5,001–10,000 92 10,001–100,000 377 >100,001 145 2 12
Total	1,093	2	12

816+shareholders+held+fewer+than+a+marketable+parcel+of+shares+based+on+the+share+price+at+15+October+2013.+

Page+|+64+

Mozambi(Coal(Limited( Additional+ASX+Information

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+23,425,000+unlisted+options+on+issue+as+of+15+October+2013.++The+options+do+not+carry+a+right+to+ vote+at+a+general+meeting+of+shareholders.+

Expirydate Exerciseprice	No.ofoptions No.ofholders
21/02/2014 $0.25 20,000,000 5 30/06/2014 $0.35 250,000 2 30/06/2014 $0.45 250,000 2 30/06/2014 $0.55 250,000 2 02/08/2016 $0.25 475,000 3 30/11/2016 $0.25 2,200,000 4 23,425,000 Holdersofgreaterthan20%ofunlistedoptions: No.unlistedoptionsheld %Held VarunaPtyLtd 10,320,000 44.1%

The+Company+has+402,000+performance+rights+on+issue+as+of+7+October+2013.++The+performance+rights+do+not+carry+a+ right+to+vote+at+a+general+meeting+of+shareholders.+

Expirydate Hurdleprice	No.ofoptions No.ofholders
21/02/2014 $0.42 204,000 2 21/02/2014 $0.50 198,000 2 402,000

Holders+of+greater+than+20%+of+performance+rights:+

21/02/2014 $0.42 204,000 21/02/2014 $0.50 198,000 402,000 Holdersofgreaterthan20%ofperformancerights:	21/02/2014 $0.42 204,000 21/02/2014 $0.50 198,000 402,000 Holdersofgreaterthan20%ofperformancerights:	2 2
No.performancerights
	held	%Held
ShivMadan	268,000	66.7%
MichaelGriffiths	134,000	33.3%

6. OnRmarket!buy!back!

There+is+currently+no+onLmarket+buyLback+program+for+any+of+the+Company’s+listed+securities.+

Page+|+65+

Mozambi(Coal(Limited( Additional+ASX+Information

7. 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.+

8. Tenement!listing!

Number	Name	Country	Interest
3245L	TeteWest	Mozambique	70%
3246L	Muturara	Mozambique	70%

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AI assistant

VOLT RESOURCES LIMITED — Annual Report 2013

66019_rns_2013-10-22_0cfa5a86-1468-46ee-bb64-168d3502e269.pdf

Directors

Bankers

Company Secretaries

Registered and Principal Administration Office

Securities Exchange Listing

Solicitors

Website and Email

Share Registry

Postal Address

Directors

Principal activities

Review of operations

Results

Exploration and Projects

3246L “Muturara” Project, Zambeze Coal Basin

2738L “Songo” Project, Zambeze Coal Basin

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

New Opportunities

Corporate & Finance

Significant changes in state of affairs

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Information on Directors

Current Directors

Mr Alex Neuling – Executive Director & Joint Company Secretary

Qualifications – FCA, ACIS, BSc

Other current directorship of Listed Public Companies – None.

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

Interests in Shares and Options over Shares in Group Companies

Robert Hemphill – Non � executive Chairman

Qualifications – B. Bus, CA

Former directorships (of Listed Public Companies) in last three years ��� None.

Mr Julian Jarman – Non � executive director (appointed 12 August 2013)

Qualifications – B. Bus, CA

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

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Former Directors

Mr Michael Griffiths– Non executive Chairman – resigned 30 April 2013

Mr Shiv Madan – Managing Director – resigned 12 August 2013

Company Secretaries

Mr Alex Neuling – refer to Director details above

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

Qualificatiions – BSc, ACA

Mr Ryan Broom – Former Company Secretary (resigned 30 April 2013)

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Meetings of Directors

Share options

Performance rights

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

– Remuneration Report Audited

Details of key management personnel

(i) Directors

(ii) Executives

Remuneration committee

Remuneration philosophy

Remuneration structure

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Non � executive directors

Retirement benefits and allowances

Executives

Base pay

Short term incentives

Long Term Incentives ��� Share � based compensation

Link to Group Performance

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Service agreements

Mozambi Coal Limited ABN 28 106 353 253

Directors’ Report

Remuneration of key management personnel

VOLT RESOURCES LIMITED Annual Report 2013

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

Former directorships (of Listed Public Companies) in last three years �� None.

Other current directorship of Listed Public Companies �� None.

Former directorships (of Listed Public Companies) in last three years �� None.

Long Term Incentives �� Share � based compensation