ANNUAL REPORT 2015/16 - AAMEG€¦ · AAMEG 2015/16 ANNUAL REPORT | 6 AA’ LETTER Dear Members, The 2016 financial year has been one of significant challenge for your organisation,

The Australia-Africa Minerals & Energy Group (AAMEG)

- the peak body representing Australian companies engaged in the development of Africa’s resources

industry.

ANNUAL REPORT 2015/16

AAMEG 2015/16 ANNUAL REPORT | 2

Source: S&P Global Market Intelligence


Index

1. Corporate directory Page 5 2. Chairman’s Letter Page 6 3. Chief Executive Officer’s Report Page 8 4. The Year in Review Page 10

a. Who We Are Page 10 b. AAMEG Principles of Conduct Page 11 c. AAMEG Objectives Page 12 d. Key Achievements for 2015/2016 Page 28 e. Objectives for 2016/2017 Page 28 f. Our People Page 29 g. Sponsorship and Support Page 30

5. Finances and Administration Page 31 a. Review of Operations (financial) Page 31 b. Board Meeting Attendance Page 32 c. Board of Directors Page 33 d. Changes in State of Affairs Page 37

6. Financial Report Page 38 a. Auditors Independence Declaration Page 39 b. Financial Statements Page 40 c. Statement of Comprehensive Income Page 40 d. Statement of Financial Position Page 41 e. Statement of Cash Flow Page 42 f. Notes to and Forming Part of the Financial Statements Page 43 g. Independent Auditors Report Page 49



Corporate Directory Australia-Africa Minerals & Energy Group Limited CAN 150 520 862 Chief Executive Officer Trish O’Reilly Directors Tim Carstens (Chairman) Ben Gargett (Vice-Chairman)

Andrew Dinning Andrew Patterson

Gillian Swaby Bill Turner

Adel van der Walt John Welborn

Company Secretary Giovanny Jefferson Registered Office Suite 9, 1297 Hay St WEST PERTH WA 6005 Postal: PO Box 1018 WEST PERTH WA 6872 Tel: (+61 8) 9226 0175 Fax: (+61 8) 9321 0426 Email: [email protected] Website: www.aameg.org Auditors Deloitte Touche Tohmatsu Tower 2, Brookfield Place, 123 St Georges Terrace PERTH WA 6000 Legal Advisors Clayton Utz QV1, 250 St George’s Terrace PERTH WA 6000 Bankers Commonwealth Bank of Australia 1254 Hay Street WEST PERTH WA 6005 Insurance Brokers Lockton Companies Australia Pty Ltd Level 1, 50 Subiaco Square Road SUBIACO WA 6008 Annual General Meeting The Annual General Meeting will be held on

Tuesday, 15 November 2016 at 4pm The venue for the meeting is: BDO Offices Ground floor conference room 38 Station Street Subiaco WA 6008

mailto:[email protected]

http://www.aameg.org/


CHAIRMAN’S LETTER Dear Members,

The 2016 financial year has been one of significant challenge for your organisation, as well as for a significant number of our members. Notwithstanding, it has also been a year of significant achievement. While the prevailing economic conditions for much of the resources sector has curtailed available funding and activity for many Australian companies, as well as brought new focus to the risk/return equation of investment in Africa, I am firmly of the view that AAMEG membership has never been more relevant. AAMEG exists to better enable its members to operate successfully in Africa. It does this by assisting them to better understand, and more effectively and efficiently manage, the non-technical risk issues, such as political and social risk, heath, security, bribery and corruption, through the sharing of knowledge and resources, the facilitation of collaborative solutions to collective problems and drawing on the experience of those members who are African “veterans”. It creates networks of stakeholders for members to access. It provides a focal point for engagement with governments and a voice to influence policy and narrative. It provides collective support and a larger voice for members confronted with challenges. The ability to efficiently and effectively access such capability has never been more important. Our objective is to provide demonstrable, concrete value to our members. In order to do this successfully, our members must also play their role. Firstly, our members ultimately only get out of AAMEG what they collectively put in. The greater their involvement and contribution, the greater the collective value. Secondly, members need to actively engage with AAMEG and explore with our team how their organisation can secure maximum value. I encourage all of you to do more to help us to do more. There is no question that the commodity and capital markets conditions over the past year have impacted on our membership base. The AAMEG board has been exploring ways to refine our model, leverage our capabilities and access a wider membership base from which to secure the organisation’s financial sustainability and drive enhanced member benefits longer term. This is the central challenge for the year ahead. As an organisation, we can count among our many strengths a committed and capable Board and CEO in Trish O’Reilly, as well as the unwavering support of a suite of sponsors and contributors, in particular Paydirt, PwC, Clayton Utz, Cannings Purple, Resolute Mining, Perseus Mining and Base Resources. Without their collective commitment, we would be unable to pursue the full potential that we see in AAMEG.


That AAMEG exists at all is due in no small measure to the vision, passion and hard-won experience of Bill Turner. As Chairman from inception until earlier this year, Bill created a momentum for AAMEG that I, with you, the members, our Board and the management team, hope to build on and realise that potential we see ahead of us.

Tim Carstens Chairman

24 October 2016


CHIEF EXECUTIVE OFFICER’S REPORT It is with great pleasure that I present to you the 2015/16 Annual Report of the Australia-Africa Minerals & Energy Group. AAMEG continues to be the leading member association for the Australian extractive industry operating in Africa. This financial year has seen significant pressure on the industry and this has had implications for AAMEG. Membership has decreased from 110 members at the beginning of the financial year to 85 as of 30 June 2016. This total includes 11 new members. Feedback from members is that membership is important and relevant; however, in the current economic climate, membership is not necessarily seen as a top priority. Staffing at AAMEG also reflects the economic circumstances. The two full time positions of Program Manager and Executive Assistant have been replaced by two part time positions, each being 2 days per week. Notwithstanding the above, we at AAMEG strive to provide a comprehensive service and value to members. We continually call on the pro bono support provided by member companies and could not operate without your support. Thank you. Membership of AAMEG is imperative for Australian companies working in Africa. Our key value lies in our ability to:

facilitate the sharing of knowledge;

support members during challenging times;

provide access to government policy makers, and;

our ability to influence relevant dialogue and strategic direction. Key highlights for this year included:

Changing our name to Australia-Africa Minerals & Energy Group to reflect the wider scope of the industry and to meet the needs of the Australian resources sector operating in Africa.

Continuing to build on our strong relationship with the Australian Federal Government.

Providing an industry response to the issue of security risk in West Africa.

AAMEG’s submission to the Senate Standing Committee on Economics concerning Foreign Bribery, dated 24 August 2015 and developing an Anti-Bribery & Corruption (“ABC”) Toolkit for use in AAMEG ABC Workshops.

Industry research undertaken by Deakin University exploring the use of facilitation payments and the risk for Australian mining companies operating in Africa.

Continuing involvement in the Emerging Infectious Diseases project (IDRAM & PODD) in DRC.

Developing two research projects that provide a current picture of the Australian resources sector in Africa.


I would also like to acknowledge the significant contribution made to the organisation by retiring chairman Bill Turner. Bill was recognised in the Queen’s Birthday Honours List for 2016 for his distinguished service to the mining sector and international relations through leadership in business and exploration collaboration between Australia and Africa. Next year a key focus will be on further engagement with the Australian Government to promote the importance of the Australia-Africa relationship. We will continue to be at the forefront of dialogue and influencing policy development. I would like to thank the AAMEG Executive and Board for the significant contribution made to the ongoing operation of the organisation. To our key sponsors, particularly Paydirt Media, Base Resources, Perseus Mining and Resolute Mining, and to all our members, thank you for your active involvement, participation and support – you are world leaders in your field and have much to contribute to the positive and sustainable development of the African continent. I look forward to working with you all and together continuing to have a strong impact in the Australia-Africa space.

Trish O’Reilly Chief Executive Officer 24 October 2016


WHO WE ARE Incorporated in 2011, the Australia-Africa Minerals & Energy Group (AAMEG) is the leading member association supporting the Australian extractive industry operating in Africa. AAMEG’s vision is to be the peak body representing Australian companies engaged in the development of Africa’s resource industry. AAMEG’s mission is to support members operating in Africa and to facilitate collaboration between industry, governments and other stakeholders to ensure that resource development produces sustainable outcomes in Africa. The three key areas of focus are:

Building Government relations, with a particular focus on Australian Federal Government, to promote the importance of Africa to Australia and Australia to Africa.

Responding to key industry issues and influencing relevant dialogue, and

Sharing of information and promoting the value of good corporate citizenship as a fundamental requirement for successful business.

AAMEG Members

AAMEG brings together over 80 member companies that are involved in the resources industry in Africa, as well as nine African governments who are Associate members. Our membership base includes:

Mineral exploration and mining companies.

Energy, oil and gas companies.

Service and supply companies.

Academia.

Non-governmental & civil society organisations, and

African Governments. Benefits of Membership

AAMEG is a national organisation based in Perth and works with our members to support their operations in Africa. Some of the benefits we deliver to members include:

Events: Presenting workshops, seminars and roundtables on relevant industry issues.

Partnerships: Working together with governments, academia and non-government organisations in Australia and Africa.

Sharing: Exchanging experiences and developing networks.

Collaboration: Engaging with experienced not-for-profit organisations.

Representation and Advocacy: Be a voice on industry-wide issues.

Knowledge Hub: Providing access to recognised guiding documentation and leading research. Sponsorship: Providing the opportunity for brand promotion.


AAMEG PRINCIPLES OF CONDUCT AAMEG encourages good citizenship that recognises positive social change in host communities as a successful business imperative. AAMEG members have an understanding of relevant international guiding documentation and support ethical behaviour and best practice as outlined in the following Principles of Conduct (based on the ICMM sustainable development principles). AAMEG members undertake to do the following:

1. GOVERNANCE

Implement and maintain ethical business practices and sound systems of corporate governance.

Integrate sustainable development considerations within the corporate decision-making process.

Implement risk management strategies based on valid data and sound science.

2. WORKPLACE

Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and local communities.

Provide opportunities for all employees to reach their full potential.

Seek continual improvement in health and safety performance.

3. COMMUNITY

Contribute to the social, economic and institutional development of the communities in which they operate.

Implement effective and transparent engagement, communication and independently verified reporting arrangements with stakeholders.

Seek continual improvement in environmental performance.


AAMEG OBJECTIVES

Be the voice of industry and preferred channel of contact for stakeholders engaged in the Australian resources sector in Africa.

Build Australian Government understanding of and support for

Australian resource investors, operators and service providers in Africa.

Build African Government understanding of the benefits derived

from Australian resource investment, operation and service providers.

Improve the performance of Australian resource companies

operating in Africa through facilitating the sharing of information, knowledge and learnings so that they will become partners of choice for African Governments.

AAMEG presenting Wheelchairs for Kids a donation at Africa Down Under 2015


Objective 1: Be the voice of industry and preferred channel of contact for

stakeholders engaged in the Australian resources sector in Africa. Aims:

Industry authority: Be valued as a consistent contributor of quality input to policies and programs relating to the resource industry in Africa.

Listener: Be valued by members for understanding, contextualising and articulating key industry issues in Africa.

Spokesperson: Be seen to speak knowledgeably and clearly to stakeholders on matters of importance to members; and

Communicator: Be a valued channel for communications and intermediation between industry, governments and stakeholders on the resource industry in Africa.

Action 1: Support and grow membership so that it is representative of the industry.

Build membership to a viable level

AAMEG continues to work towards building its membership base so that it is representative of the industry. This is achieved through:

o Identifying and approaching potential members, increasing collaboration with possible partners, and continuing to host networking functions. AAMEG continued to attract a small number of new members throughout the 2015/16 period.

o Broadening of focus to other sectors facing common challenges, with AAMEG now having opened up membership to the oil and gas industry. This sector represents untapped membership potential.

o The current economic climate has limited membership growth. AAMEG commenced the 2015/16 period with 110 members, and subsequently 36 members ceased membership. However, 11 new members have joined, and total membership stands at 85 members.

Support current membership

AAMEG continues to engage with members on a regular basis and continues to host relevant events. We do this by:

o Actively encouraging member involvement in events. o Ensuring members are informed of industry issues through a regular e-news and

website. o Providing relevant information, including key industry reports and news

updates, through the website.

Identify, develop and manage sponsorship opportunities

AAMEG continues to seek sponsorships to supplement annual subscriptions. We do this by:

o Seeking key sponsor support from current members. Three key member companies became Gold-tiered sponsors; these were Base Resources, Perseus Mining and Resolute Mining.


o Paydirt Media continues to be a key sponsor and supporter of AAMEG, providing accommodation, staffing support (including Company Secretary), and general office support.

o Member companies continue to support AAMEG by sponsoring workshops, training, and our regular Celtic Club networking seminars.

Action 2: Identify from members and stakeholders key issues affecting the industry. Through ongoing engagement with members and the broader industry, AAMEG stays up to date with key issues affecting the Australian resources sector operating in Africa. In the 2015/16 period, AAMEG identified the following key areas of focus: Security and Risk Mitigation, Community Engagement Management, Infectious Disease Risk Assessment Management (IDRAM), and Facilitation Payments Defence.

Security and Risk Mitigation

AAMEG was invited to attend an industry meeting during Indaba 2016 regarding security issues in West Africa. The identified need was to improve overall preparedness and collaboration in developing appropriate risk-mitigation strategies for Australian companies operating in Africa. AAMEG took a lead role in responding to this issue by:

o Holding a workshop for members to explore issues.

o Establishing a working party to identify and work on outcomes.

Community Engagement Management

AAMEG recognises the importance of guidance and best practice resources that are practical and can assist at the community level. AAMEG together with Robin Budden (AAMEG member) produced the Social Aspects Management Handbook; this included a foreword from Foreign Minister Hon. Julie Bishop. This handbook provides a clear guide on the process of assessing the risks and managing the social aspects of a project with the same discipline one would apply to technical and financial aspects.

Infectious Disease Risk Assessment Management

The IDRAM Initiative commenced in the Katanga Province of the Democratic Republic of Congo (DRC) in June 2014, with strong support of AAMEG and its membership. This is an emerging infectious diseases project focused on the resources industry, led by the Centre for Global Health Security at Chatham House in London, managed by International SOS and funded by USAID. AAMEG assists by:

o Facilitating engagement of key industry members.

o Providing member updates, including the recent preliminary assessment of the feasibility of establishing a Participatory One Health Disease Detection ("PODD") system in the Katanga Copperbelt of the DRC.

o Encouraging active engagement in the uptake of this project.

o AAMEG members continue to support disease prevention initiatives in remote areas.


Facilitation Payments Defence

AAMEG is committed to working with its members and policy makers in Australia on all aspects related to anti-bribery and corruption issues, including the facilitation payments reform process. AAMEG’s approach to the issue is consistent with that of the OECD and the Australian Government. AAMEG action includes:

o AAMEG Submission to the Senate Standing Committee on Economics concerning Foreign Bribery, dated 24 August 2015.

o A statement on facilitation payments defence.

o Promoting the recommendations of the OECD Phase 3 Report on Implementing the OECD Anti-bribery Convention in Australia (2012), also taking into consideration the principles contained in Australia’s Response in April 2015 to the OECD Phase 3 Report.

o Engaging with the Australian Government and DFAT to explore possible programs to support African governments on the issue of facilitation.

o Encouraging AAMEG members to become supporting companies of the Extractive Industries Transparency Initiative.

Promoting the Importance of the Australia-Africa Relationship

The Australian resources sector has a significant footprint across Africa. AAMEG: o Will promote the importance of the Australia-Africa relationship to the

Australian Government.

o Will demonstrate the importance of Africa to Australia by undertaking research outlining the impact of the Australian resources industry across Africa.

o Seeks to elevate the Australia-Africa relationship in Federal Government policy considerations.

Action 3: Develop working parties around identified issues and provide analysis, support and guidance regarding possible solutions to identified issues.

Industry Response Group to Security Issues in Africa

AAMEG: o Coordinated a workshop with key stakeholders (including representatives from

the Australian Government), to explore the issues and the steps required to minimise the security risks of working in Africa.

o Coordinated a working party to identify deliverable outcomes. These included:

1. Measures to improve the sharing of intelligence.

2. Risk based tools and framework to assist members in managing changes in their security environment, along with risk and crisis management workshops.

3. Increased collaboration among companies and the engagement of all stakeholders, including the Australian Government and its counterparts in Africa.

Recommendations to address these particular issues are ongoing into 2016/17.


Voluntary Principles on Security and Human Rights

AAMEG is a member of the United Nations Global Compact – Australia Network, and coordinates member interaction with this network, including feedback into:

o Workshop: ‘Voluntary Principles – Managing Security Risks with Respect for Human Rights’, ADU 2015.

o Business Roundtable Consultations: Towards an Australian National Action Plan on Business and Human Rights.

Infectious Disease Risk Assessment Management

AAMEG has coordinated:

o AAMEG Workshop “Health Incident Planning – Infectious Disease and the Workplace.” Sponsored by International SOS, July 2015.

o AAMEG Workshop “Malaria in 2015 – Myths and Realities.” Sponsored by International SOS, November 2015.

Facilitation Payments Defence

AAMEG recognises the importance of providing opportunities for members to discuss

this issue: o A number of roundtable sessions under The Chatham House Rule were held for

AAMEG members. The aim was to increase the awareness of the difference between facilitation payments and bribery as well as discussing and sharing mechanisms designed to avoid making facilitation payments. A toolkit of scenarios was developed for discussion at these sessions.

o Representatives from the Australian Federal Police and the Federal Attorney General’s Department together with Deloitte have presented to AAMEG members regarding Anti-bribery and Corruption issues.

o AAMEG joined with Deakin University to undertake a research project exploring the Facilitation Payments Defence. A significant number of AAMEG members were interviewed over a two-week period to provide input into the report. This report is currently being finalised.

Promoting the Importance of the Australia-Africa Relationship

AAMEG has a significant role in highlighting the importance of the Australia-Africa relationship and will do this through:

o Quarterly visits to politicians and policy makers in Canberra.

o Undertake research (with assistance from the University of Western Australia) which will aim to provide a current snapshot of activity. This will include:

Collating data surrounding levels of investment and social contributions.


Identify specific case studies of Australian businesses operating in Africa and their models of best practice, detailing the benefits that flow back to Australia.

Action 4: Respond publically and promptly as issues arise.

Aim to provide at least two position papers per year:

AAMEG provided a submission to the Senate Standing Committee on Economics’ Inquiry into Foreign Bribery, titled Public Consultation Paper: Foreign Bribery. This committee was due to report back in June 2016.

AAMEG provided a submission to the Senate Standing Committee on Tax and Revenue, titled The Case for Reviewing Australian Taxation of Expatriate Mining Industry Employees Deployed to Africa to Improve International Competitiveness, November 2015. This was undertaken with considerable assistance from member company PwC.

o The process included two visits to Canberra to meet with the Australian Government’s Department of Treasury.

o Formal feedback is pending.

Aim to provide one public statement to a relevant issue:

AAMEG developed a public statement on the issue of Facilitation Payments, titled The Australia-Africa Minerals & Energy Group’s (“AAMEG”) Statement on Facilitation Payments, November 2015.

Aim to respond to at least five media opportunities per year:

AAMEG provided the following relevant media statements.

o “AAMIG Welcomes the Turnbull Bishop Government”, September 2015.

o “Australian resource industry sits poised to support UN Sustainable Development Goals in Africa”, September 2015.

o “An increased government focus required on Africa highlighted at AAMEG’s AGM”, October 2015.

Aus-Africa Dialogue 2015, Zambia, September 2015


o “Tim Carstens appointed AAMEG Chairman”, February 2016.

o “AAMEG acknowledges the Hon. Gary Gray’s service to the resources industry”, February 2016.

o “Bill Turner recognised for his services to the Resources Industry”, June 2016.


Objective 2: Build Australian Government understanding of and support for

Australian resource investors, operators and service providers in Africa.

Aims:

Be valued by the Australian political leadership as a premier source of knowledge, experience and influence regarding Australian resource companies with interests in Africa;

Be valued by Australian Government departments as a source of knowledge and expertise on resource industry issues relating to Africa; and

Encourage increased levels of Federal Government spending and more effective use of Government funds in the areas of AID and trade which are relevant to the industry and better support the Government’s Economic Diplomacy platform across Africa.

Action 1: Undertake quarterly visits to Canberra accompanied by member companies to develop relationships, and update/exchange views with political leadership and senior government representatives.

AAMEG’s key focus throughout 2015/16 was to continue engaging with the Australian Government to further promote the importance of the Africa-Australia relationship. This was enhanced by the following regular visits to Canberra:

June 2015- Meetings were held with representatives from Offices of:

o Minister for Resources, Shadow Minister for Resources, Foreign Minister, Shadow Foreign Minister, Minister for Trade, the Department of Foreign Affairs and Trade and the Australian Security Intelligence Organisation.

November 2015- Meetings were held with representatives from Offices of:

o Attorney Generals Department, Minister for Foreign Affairs, Shadow Minister for Foreign Affairs, Minister for Resources, Shadow Minister for Resources, Minister for Trade, Shadow Minister for Immigration, Minister for Defence, Member of Parliament for Canberra, Department of Treasury and Finance, Department of Foreign Affairs and Trade (The Africa Desk, Australian Resources Development Hub, the African International Development Desk, and the Resources and Energy Task Force), the Australian Strategic Policy Institute, the Australian Security Intelligence Organisation, and the African Heads of Missions.

March 2016- Meetings were held with representatives from Offices of:

o Foreign Affairs, Resources and Energy, Trade and Investment, International Development, Department of Treasury and Finance, Australia/Africa Parliamentary Network, Shadow Minister for Immigration, Member of Parliament for Canberra, and ‘Publish What You Pay’ proponents.

May/ June 2016- Meetings were held with representatives from Offices of:

Ambassador for Ethiopia, Department of Foreign Affairs and Trade, Australian Strategic Policy Institute, AAMEG members and potential AAMEG members

Action 2: Collate and present industry information relevant to preserving and growing the Australian resources industry footprint across Africa.

AAMEG is in the process of updating and presenting relevant documentation through:


o Undertaking a research project with support from the University of Western Australia.

o The research project will collate current data and information with a focus on Australia’s footprint on the African continent, levels of investment and flow back to Australia and the extent of the Australian resources sector’s economic and social contributions.

Action 3: Provide regular awareness-raising sessions to politicians, policy makers and Australian Heads of Mission on relevant issues.

AAMEG undertakes:

o Quarterly visits to Canberra AAMEG staff met with staff from Department of Foreign Affairs and Trade.

o Ongoing dialogue with Australian Heads of Mission. This includes holding two regular meetings per year.

Action 4: Build working relationship with the Australia/Africa Parliamentary Network

AAMEG has met with the convenors of this group and will continue to build links with this network.

Action 5: Initiate regular visits of Australian politicians to Africa in conjunction with member companies

AAMEG meets on a regular basis with Australian Members of Parliament and actively encourages visits by Australian politicians to Africa. Annual conferences such as Indaba and ADU offer good opportunity to coordinate such visits. Recent politician visits include: Darren Chester MP, Federal Member for Gippsland – ASPI Dialogue 2015, Gai Brodtmann MP, Federal Member for Canberra – ASPI Dialogue 2015.

AAMEG meeting with the Hon. Julie Bishop


Objective 3: Build African Governments’ understanding of the benefits

derived from Australian resources investment, operation and service providers.

Aims:

To position the Australian resources sector as preferred development partners for African Governments;

Establish AAMEG as a source of considered and reliable knowledge of capabilities and contacts in regard to Australian resource investors, operators and services;

Ensuring African Governments’ are aware of issues experienced by the Australian industry as they operate across Africa; and

Develop close and strong relationships with African Heads of Mission located in Australia.

Action 1: Promote AAMEG Associate membership.

AAMEG established Associate membership in 2013. Associate memberships currently: Cote d’Ivoire, Egypt, Equatorial Guinea, Ethiopia, Malawi, Mali, Mauritius, Nigeria and Uganda.

AAMEG undertakes regular meetings with the African Heads of Mission (HOMS) in Australia.

AAMEG with Ugandan Ambassador signing an associate membership


Action 2: Meet with African country delegations when they are visiting Australia and also at Indaba.

AAMEG coordinates meetings between visiting African Government officials and AAMEG members as required.

Africa Down Under Conference, September 2015

AAMEG held an Associate member meeting; the focus of the meeting was to create positive relationships between Australian mining and African Governments. The meeting was attended by representatives from South Africa, Ethiopia, Guinea, Ghana and Nigeria.

African Heads of Mission Meeting

In November 2015, AAMEG hosted a meeting for the African Heads of Mission based in Canberra. The focus of the discussion was on non-technical risk, social licence to operate and investment climates.

Mining Indaba 2016

AAMEG attended meetings and workshops with:

o Australian Government representatives (Australian Heads of Mission based across Africa).

o Minister of Mines Republic of Mali.

o Minister of Mines for Ethiopia.

o Ghanaian Minister for Lands and Natural Resources.

AAMEG meeting with African Heads of Mission, November 2015


o Hosted a workshop with Sheila Khama, Chairperson of Africa Natural Resources Centre at the African Development Bank. The key focus of the meeting was integration and communication with civil society organisations.

Objective 4: Improve the performance of Australian resource companies

operating in Africa through the facilitating the sharing of information, knowledge and learnings so that they will become partners of choice for African Governments. Aim:

Add value to members by facilitating the creation of a platform for members to share/learn/develop industry best practice.

Action 1: Undertake at least 10 member events per year. AAMEG facilitated the following workshops in response to current member issues:

July 2015 – AAMEG Workshop “Intelligent Security: Managing Risk in Deployed Environments.” Sponsored by Claviger.

July 2015 – AAMEG Workshop “Health Incident Planning – Infectious Disease and the Workplace.” Sponsored by International SOS.

August 2015 – AAMEG Seminar “Strategic Engagement Strategies”; “Social Development Approaches in West Africa”; “Community Relations in Ghana.” Sponsored by Squire Patton Boggs.

October 2015 – PwC Report “Over Taxed? Does the tax regime encourage new mines?” Sponsored by PwC.

September 2015 – ADU Workshop “Voluntary Principles – Managing Security Risks with Respect for Human Rights.

November 2015 – AAMEG Workshop “Malaria in 2015 – Myths and Realities.” Sponsored by International SOS.

November 2015 – AAMEG Roundtable: African Risk Issues.

November 2015 – AAMEG Luncheon “Investment Treaties and the Commodity Price Cycle.” Sponsored by Clifford Chance.

March 2016 – AAMEG Seminar “Project Success – a Community Perspective;” “Working in Africa – a Current Perspective.” Sponsored by Lycopodium.

March 2016 – Visit to Perth by Professor Patrick Utomi – New Business Dynamics in Nigeria.

May 2016 – AAMEG Seminar “Creating Shared Value Through Effective Community Engagement.” Sponsored by Newmont Mining.

May 2016 – Capital Africa Risk Division. Sponsored by Lycopodium.

May 2016 – AAMEG Luncheon “Emerging Security Issues in Africa.” Sponsored by South African Airways.

June 2016 – AAMEG Seminar. Presentation on cotton growing trials in Kenya, panellists from Baser Resources, Business for Development and Cotton On. Sponsored by Base Resources.


Action 2: Attend key Africa-focused conferences. AAMEG participated in:

Africa Down Under Conference, September 2015

o AAMEG hosted or were actively engaged in the following events:

A roundtable discussion, “Making Growth Inclusive: The role of mining in the post-2015 development agenda for Africa". The focus was on the future of the Australian-African relationship over the next decade, and informing Australian policymakers.

Voluntary Principles Workshop: Managing Security Risks with Respect for Human Rights. AAMEG, the United Nations Global Compact, DFAT and Woodside convened a workshop to explore the challenges of managing security risks and the importance of guidance documentation.

Panel discussion: Evolving Health Risks for the Mining Sector, “Moving from the Ebola outbreak towards a collaborative approach to preparedness and response”, including experts from USAID, ISOS and Chatham House.

Regular meeting with Australian Department of Foreign Affairs and Trade.

Regular meeting with Associate members.

AAMEG Celtic Club Seminar 2016 member event


5th Annual Africa-Australia Research Forum, September 2015

o This event was hosted by AAMEG, together with Murdoch University and the University of Western Australia. The outcome was to develop a white paper to inform public policy debate.

Mining Indaba, February 2016

o AAMEG hosted or were actively engaged in the following events:

o Associate Member Meeting. The topic for discussion: "Making Growth Inclusive: The role of mining in the post-2015 development agenda for Africa", presenting on the outcomes of recent research at Murdoch University funded by the Australian Government.

o Launch of the AAMEG Fact Sheet: This presented comprehensive information compiled in collaboration with SNL Metals & Mining on the Australian resources industry’s footprint across Africa.

o Department of Foreign Affairs and Trade regular meeting.

o Provided a presentation to the African Emerging Leaders Program. An AAMEG Board member presented on his experience investing in Africa. The Emerging Leaders Program is a professional development program funded by the Australian Government.

o Participated in a panel discussion focused on sustainability. The session, “Managing Relations with Communities”, was chaired by the African Development Bank and was held in partnership with the World Economic Forum. AAMEG Chairman Tim Carstens contributed on the panel.

AAMEG booth at the 2015 Africa Down Under Conference


o Initiated discussions with West Australian State Government, Department for State Development regarding holding capacity building workshops, targeting mining regulation and management. This training was subsequently provided to government regulation staff in both Ethiopia and Kenya with funding provided through, Australian in-country embassies.

Action 3: Collaborate to the extent appropriate with major organisations and initiatives (Chatham House, USAID, Global Compact Network, EITI, VPSHR, ICMM, ASPI and other organisations with similar aims). Collaboration with relevant external organisations is particularly valuable for members and provides linkages into extensive international networks, ensuring up to date information and our ability to be part of the current dialogue. AAMEG collaborates with national and international organisations

AAMEG is an active member of:

o International Council on Mining & Metals.

o United Nations Global Compact – Australia Network.

AAMEG supports non-governmental organisations, including:

o Bicycles for Humanity.

o Save the Children.

o Wheelchairs for Kids.

o University of Sydney – Paediatric training for isolated providers.

AAMEG works collaboratively with academia including:

o University of Western Australia.

o Curtin University.

o Murdoch University.

o University of Queensland.

o Deakin University.

AAMEG attending a post Indaba discussion panel, 2016.


AAMEG continues to supports various multilateral initiatives, including:

o The Extractive Industries Transparency Initiative.

o Chatham House – US AID Emerging Pandemic Threats Program: Infectious Disease Risk Assessment and Management.

o The OECD Guidelines for Multinational Enterprises.

o The Voluntary Principles on Security and Human Rights.

o Africa Mining Vision.

Action 4: Disseminate relevant reports and guidance issued by related organisations such as ICMM, the Africa Progress Panel, Africa Mining Vision and Brenthurst Foundation.

Through numerous linkages with related organisations, NGOs and academia, AAMEG remains comprehensively informed of issues affecting the Australian resources industry active in Africa. Relevant guides and resources are made available to AAMEG members and distributed through newsletters, emails and the website. Recent important publications disseminated include:

Australian Strategic Policy Institute Special Report: Aus-Africa Dialogue 2015 (AAMEG presented at this dialogue).

Corruption Watch, May 2016: Firms Need to Fight Graft with Intent.

The Zambezi Protocol - Result of a Dialogue on Natural Resource Policy in Africa.

Publish What You Fund: Aid Transparency Index 2016.

The Initiative for Responsible Mining Assurance (IRMA) (2016) Standard for Responsible Mining.

The World Bank (2016) Africa Pulse.

Verizon (2016) Data breach digest.


KEY ACHIEVEMENTS FOR 2015/2016

Organisational name change to reflect the inclusion of the oil & gas sector.

Ongoing development of AAMEG as the leading member organisation supporting the

Australian mining and energy industry operating in Africa.

Positive relationships with the Australian Government and related departments.

Continuing to be recognised as a key partner in Australia-Africa dialogue and

relationships. This was demonstrated by AAMEG attendance at the second Australia-

Africa Dialogue held in Zambia September 2015, co-hosted by the Brenthurst

Foundation and Australian Strategic Policy Institute. The dialogue is a platform for

governments and the private sectors in Australia and Africa to inform policy

development.

Continuing to deliver to members a relevant and diverse calendar of events.

Growth of associate membership. This initiative continues to provide the opportunity

for positive dialogue and relationship building.

Publishing a toolkit which continues to address specific risk issues associated with

operating in Africa. This includes the Social Aspects Management Handbook written by

Robin Budden, which aims to enhance the ability of member companies in managing

social and environmental risks in a manner that aligns with international guidelines and

good practices and also brings lasting benefits for those affected by their projects.

OBJECTIVES FOR 2016/2017 The focus for the next financial year will be on:

Continuing to build membership and ensure that AAMEG is the leading member association supporting the Australian resources sector engaged in Africa.

Positive engagement with the Australian Government with the aim of influencing strategic Australian Africa policy development. AAMEG research will aim to update the current Australian footprint in Africa, and the importance of investment and trade between Australia and Africa.

Being the voice of industry on relevant issues and actively participating in dialogue, with a focus on security, bribery & corruption and health risk mitigation issues.

Continuing to provide information and workshop opportunities for members.

Building relationships with key stakeholders including Governments, industry, academia and civil society.


OUR PEOPLE

The Board was elected at the Annual General Meeting 22 October 2015. It is representative of the industry and has an appropriate blend of skills and experience. All Board members occupy honorary positions. The Board members are:

Tim Carstens (Chairman) Base Resources Limited

Ben Gargett (Vice-Chairman) PricewaterhouseCoopers

Andrew Dinning Sarama Resources Limited

Andrew Patterson MMG Limited

Gillian Swaby Strategic Consultants Pty Limited

Bill Turner Retired as Chairman (January 2016)

Adel Van Der Walt Clayton Utz

John Welborn Resolute Mining Limited

Retiring Board members: Bill Repard, Peter Sullivan, Rick Yeates.

The AAMEG Executive Team continues to strive for excellence in service delivery to members and is passionate about making a valid contribution to the industry. The AAMEG Executive Team includes:

Trish O’Reilly Chief Executive Officer (4 days per week)

Victoria Bayliss Administration and Member Support Assistant (2 days per week)

Berkay Erkan Project and Research Assistant (2 days per week)

Many thanks to Jim Nylander and Jeff Hart who continue to contribute on a part time basis and add value to AAMEG.

Staffing changes during this financial year included:

The full time Executive Assistant position ceased in May 2016. This role was replaced by a 2 day a week Administrative & Member Support position.

The full time Program Manager position ceased in December 2015. This role was replaced by a 2 day a week Project & Research Assistant position.

AAMEG strongly appreciates the ongoing support of Paydirt staff, particularly Bill Repard for his ongoing support and advice, Giovanny Jefferson (Company Secretary – AAMEG) and his staff for making a significant contribution to the financial management of AAMEG during the year.


SPONSORSHIP AND SUPPORT

Sponsorship and member support is vital in order for AAMEG to adequately fulfil its role.

AAMEG has established categories for direct financial/in-kind support and pro-bono support and would like to recognise those who have contributed:

Platinum: up to $50,000

Paydirt Media

Gold: up to $25,000

Base Resources

Perseus Mining

Resolute Mining

In-Kind Support

AMEC Foster Wheeler

BDO

Cannings Purple

Clayton Utz

Deloitte

Globe 24-7

KordaMentha

Herbert Smith Freehills

International SOS

Norton Rose Fulbright

Paladin Energy Ltd

Paydirt Media

PwC

Risk2Solution Group

Stellar Recruitment


FINANCES AND ADMINISTRATION

At 30 June 2016, AAMEG had 85 full members, and nine associate members.

The membership fee structure is based on market capitalisation for companies that are listed and the number of employees for those that are not listed.

Membership Fee Structure (GST Inclusive)

Less than $100 million market capitalisation $2,750

$100 million to $1 billion market capitalisation $5,500

Greater than $1 billion market capitalisation $8,250

Private Service and Supply companies (>25 employees) $3,300

Private Service and Supply companies (<25 employees) $1,500

Individuals $500

Associate Members Free of Charge

REVIEW OF OPERATIONS (FINANCIAL)

The 2015/16 financial year saw the Company’s operating income (i.e. income net of

contributions) decrease by approximately $50,000 or 18.6% from $270,000 in 2014/15 to

$220,000, with the total membership revenues received in the last financial year declining by

almost $30,000 to $209,000.

Expenses were up by around $41,000 or 12.8% compared to the previous financial year, with

staff costs again making up almost three-quarters of the total expenses paid for the financial

year of $362,000.

The 2015/16 financial year was concluded with a deficit of a little under $60,000, with cash

available at the end of the financial year dropping by a little over $51,000 since the start of the

financial year, in contrast to a cash decrease of almost $100,000 in the previous financial year.

Assets as at 30 June 2016 totalled approximately $90,000, approximately three and a half times

its liabilities to other parties of around $24,000; with net assets/ accumulated surplus to date

standing at $66,000.



Board Meeting Attendance

Board attendance (Pre- AGM 22/10/2015)

Meeting Date

Tim Carstens

Andrew Patterson

Gillian Swaby

Adel van der Walt

Bill Turner

Peter Sullivan

Bill Repard

Hayley Butcher

Rick Yeates

17/07/15 X

X X

06/10/15 X

X X

Board Attendance (Post- AGM 22/10/2015)

Meeting Date

Tim Carstens

Andrew Patterson

Gillian Swaby

Adel van der Walt

Bill Turner

Andrew Dinning

Ben Gargett

John Welborn

Hayley Butcher

08/12/15

X X

28/01/16 X

X X X X

23/02/16 X X X

X X Retired

22/03/16 X

27/04/16 X

X

24/05/16 X

X X

28/06/16 X X X


BOARD OF DIRECTORS

AAMEG has a total of nine Non-Executive Directors. Five directors (Tim Carstens, Ben Gargett,

Andrew Dinning, Bill Turner and Adel van der Walt) have authority to operate the Company’s

bank accounts, in addition to the CEO and Company Secretary. None of the Directors receive any

financial compensation for their role.

Tim Carstens

BCom, ACA

Chairman

Tim has been Managing Director of Base Resources Ltd since its

inception in 2008. During this time, it has acquired, designed,

funded, developed and successfully operationalized the $310

million Kwale Mineral Sands Project, Kenya’s first large scale mining

project.

In the process of advancing the Kwale Mineral Sands project from

concept to operation, Tim has gained valuable experience of the

challenges and opportunities in the African resources sector.

Tim has been instrumental in laying the foundations for the company’s progressive governance,

sustainability and social responsibility programs, which have secured broad local community

and Kenyan government support for the Kwale project and the company. A Chartered

Accountant by profession, Tim’s resources career spans more than 16 years, including senior

executive roles with Perilya Limited, North Limited, Robe River Iron Associates, Iron Ore

Company of Canada and St Barbara Mines Limited in operations, strategy, corporate

development and finance, both in Australia and overseas.

Ben Gargett

BCom

Vice-Chairman

Ben Gargett is a partner in PwC’s Assurance practice, based in Perth.

Ben specialises in the resources sector, primarily mining, but also oil &

gas. Through his role in driving PwC’s growth in the mid-tier and junior

mining sectors, he developed a passion for supporting dynamic and

growing organisations and helping companies to achieve and exceed

their potential. Ben’s focus on the mining sector led to the development

of PwC’s Australia-Africa Practice, which Ben leads nationally.

The Australia-Africa practice connects Australian companies with PwC’s leading African

network, supported by our Australian team which understand their business, culture and

objectives and connects our clients to partners on the ground where they need it. He has

extensive experience in providing audit and related services to the resources sector globally,

working with iconic Australia companies such as Fortescue Metals Group, Rio Tinto and BHP


Billiton, large multinationals such as Newmont, Shell and Exxon Mobil and a range of companies

across the junior and mid-tier mining sector.

Ben spent three years as PwC’s Global Mining Knowledge Manager, on the firm’s Global Mining

Leadership Team, which included responsibility for supporting and growing PwC’s major

mining account teams around the world. He is an Assurance partner specialising in the

resources sector and has extensive experience in providing audit related services, merger and

acquisition assistance and accounting advice to all sizes of mining, oil & gas producers and

related services companies and is a frequent key speaker at conventions and conferences in the

resources sector.

Andrew Dinning

MBA, BE

Non-Executive Director

Andrew Dinning is a founder and the President and CEO of Sarama

Resources Ltd. He has over 25 years’ experience in the international

mining arena having worked in the Democratic Republic of Congo,

West Africa, UK, Russia and Australia.

Andrew has extensive mine management, operations and capital

markets experience and has spent most of his career in the gold

sector. He was a Director, President and Chief Operating Officer of DRC based Moto Goldmines

Ltd from 2005 to 2009. Andrew oversaw the company's flagship Moto Gold Project (now Kibali

Gold) develop from 4 million ounces of gold to +22 million ounces of gold and took the project

from exploration to pre-development before Moto Goldmines was purchased by Randgold

Resources and AngloGold Ashanti in October 2009.

Andrew Patterson

BA, LLB, MBA


Andrew is Chief Consultant International Development at MMG

with accountability for strategic advice on management of country

relationships in the company’s growing international operational,

development and exploration portfolio. He was previously General

Manager Support for MMG’s Sepon copper and gold mine in Laos

with responsibility for country and stakeholder relationships,

community relations, supply chain, human resources and shared business services.

Andrew has held senior management positions in the agro-forestry and education sectors and

served for five years as a diplomatic officer with DFAT. Andrew has been actively involved in

supporting AAMEG’s activities in Melbourne.

Gillian Swaby

BBus, FCIS FAICD



Gillian has been involved in financial and corporate administration for listed companies, as both

Director and Company Secretary covering a broad range of industry sectors, for over 30 years.

Gillian has extensive experience in the area of corporate governance, mergers and acquisitions,

and corporate and financial management. Gillian is the principal of a corporate consulting

company and was a member of the Paladin Energy Ltd Board for a period of 10 years. Until

recently, she was Group Company Secretary & EGM Corporate Services at Paladin, having been

involved as a senior executive with that company since its formation over 20 years ago. She has

extensive experience of operating in Africa with the development of Paladin’s two uranium

mines in Malawi and Namibia. She is also the director of listed companies Deep Yellow Ltd and

Comet Ridge Ltd.

Bill Turner

AO BSc, MSc, MBA

Non- Executive Director

Bill is the former President and CEO of Anvil Mining Limited and

retired in mid-2011 after 16 years with the company. He took Anvil

into Africa in 1995 and since 2002, has been involved with the

building of two open pit copper mines and a copper tailings

retreatment project in the Democratic Republic of Congo. He also

oversaw the development of a culture with a strong focus on

corporate social responsibility (CSR) issues.

Bill has substantial experience in political and operational risk management and a good

appreciation for the connections between enlightened approaches to CSR, risk mitigation and

developing competitive advantage. He has worked for more than 30 years in developing and

emerging countries in South East Asia, the Middle East, the former Soviet Union and latterly

Africa.

John Welborn

BCom, CA, MAICD, SA Fin, JP, MAusIMM


John Welborn is an experienced senior executive in the resources industry. A former International Rugby Union player, Mr. Welborn was previously the Head of Specialised Lending in Western Australia for Investec Bank. As a Director and Chief Executive, he has been responsible for driving growth in resource companies including Prairie Mining Ltd, Papillion Resources Ltd, and Equatorial Resources Ltd. Joining Resolute in July 2015, Mr Welborn is a champion for responsible and sustainable mining development in West and Central Africa and was named by MiningMx as one of the 100 Most Influential People in Africa’s Mining Industry.


Adel van der Walt

LLM, LLB


Adel is an Energy and Resources Partner in the Perth office of

law firm Clayton Utz. Adel specialises in a wide range of

matters in connection with energy and resources, electricity,

corporate and broader commercial transactions, mergers and

acquisitions and distressed business transactions. Adel has

extensive experience in energy and resources and corporate

matters both in Australia and Africa and regularly advises

Australian companies with assets or interests in Africa. Before joining Clayton Utz in 2008, Adel

practised at one of the leading South African law firms, where she specialised in mining law, and

advised clients in connection with energy and resources transactions and legal compliance

issues, including social responsibility and community issues as well as the South African

Government’s broad based black economic empowerment requirements. Adel has assisted with

the review of the mining legislation / codes of a number of African countries. Adel is recognised

in the International Who’s Who Legal directory of leading Energy lawyers. Jointly with partner

Gary Berson, Adel heads up Clayton Utz’ Africa Practice Group.

Giovanny Jefferson

BCom, MCom, CPA CIA CTA CRMA ACIS ACMA

Company Secretary

As a qualified accountant and company secretary with more than 10-year audit, not-for-profit and commercial experience, Giovanny, who is also the Company Secretary of Paydirt Media Pty Ltd (a member company), oversees AAMEG’s administration, compliance, accounting and other financial affairs. He has been AAMEG’s Company Secretary since its incorporation in April 2011.


CHANGES IN STATE OF AFFAIRS The Board of Directors of the Australia-Africa Mining Industry Group passed a special resolution at the 2014/15 Annual General Meeting to change the name of the Company. The previous name suggested that the company focus was limited to the mining industry only. The name change reflects the Company’s current focus which includes the resources industry at large, including both the minerals and energy sectors.

FUTURE DEVELOPMENTS Disclosure of information regarding likely developments in the operations of the Company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Company. Accordingly, this information has not been disclosed in this report.

SUBSEQUENT EVENTS There has not been any matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the AAMEG, the results of its operations, or the state of affairs of the Company in future financial years that has not been reflected in the financial statements.

AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s Independence Declaration is included on page 39.

INSURANCE

AAMEG provides insurance covers for its staff and consultants while undertaking work on behalf of the Company. All directors and officers of the Company are also covered while carrying out their duties and responsibilities as directed by the Constitution and relevant regulations. Public liability insurance is in place which covers all attendees at any AAMEG-organised event. AAMEG insurance is managed by Lockton Companies Australia Pty Ltd, which is also a member company, and insurance cover includes: - Corporate Travel;

- Workers Compensation - WA and ACT;

- Public Liability; and

- Management Liability.

DIVIDEND POLICY No dividends are paid to members. Surpluses are reinvested to support the Company’s operations and further its objectives.


FINANCIAL REPORT

The Directors have determined that the Company is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies described in Note 1 to the financial statements. The Directors of the Company declare that: 1. The financial statements and notes are in accordance with the Corporations Act 2001;

and

(a) comply with Accounting Standards; and

(b) give a true and fair view of the Company’s financial position as at 30 June 2016 and of its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements.

2. In the Directors’ opinion there are reasonable grounds to believe that the Company will

be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors.

Tim Carstens Chairman Perth, Western Australia 24 October 2016


AUDITORS INDEPENDENCE DECLARATION


FINANCIAL STATEMENTS

STATEMENT OF COMPREHENSIVE INCOME for the Year Ended 30 June 2016

NOTE 2016 2015

$ $

INCOME

Revenue 2 218,991 252,296

Bank Interest & Other Income 663 17,629

Voluntary Contributions 3 75,000 1,098

TOTAL INCOME 294,654 271,023

EXPENSES

Administration Expenses 4 355,824 305,863

Finance Costs 5 686 1,031

Other Expenses 6 5,273 13,788

TOTAL EXPENSES 361,783 320,682

OPERATING LOSS (67,129) (49,659)

OTHER COMPREHENSIVE INCOME - -

INCOME TAX (BENEFIT)/EXPENSE (7,197) 4,060

NET LOSS (59,932) (53,719)


STATEMENT OF FINANCIAL POSITION as at 30 June 2016

NOTE 2016 2015

$ $

ASSETS

Cash Available 60,846 112,357

Trade & Other Receivables

GST Receivable

7 24,050

5,025

34,961

-

TOTAL ASSETS 89,921 147,318

LIABILITIES

Trade Creditors 13 6,953

Net GST Payable 4,547 (1,877)

Owed to Paydirt

Provision for Income Tax

125

-

8,895

2,012

Accrued Expenses

Unearned Income

17,997

1,500

5,664

-

TOTAL LIABILITIES 24,182 21,647

NET ASSETS 65,739 125,671

EQUITY

Surplus Brought Forward 125,671 179,390

Current Financial Year’s Deficit (59,932) (53,719)

TOTAL EQUITY 65,739 125,671


STATEMENT OF CASH FLOW for the Year Ended 30 June 2016

NOTE 2016 2015

$ $

RECEIPTS

Membership Fees & Other Income 271,297 270,267

Bank Interest & Credit Card Surcharge

Net GST Receipts from ATO

665

14,820

2,629

4,315

TOTAL RECEIPTS 286,782 277,211

PAYMENTS

Payments to Suppliers 343,778 369,749

Income Tax (Refund)/ Payment (5,485) 7,048

TOTAL PAYMENTS 338,293 376,797

NET CASH MOVEMENTS (51,511) (99,586)

OPENING CASH BALANCE 112,357 211,943

CASH AVAILABLE 60,846 112,357


NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the Year Ended 30 June 2016

1. ACCOUNTING POLICIES

This special purpose financial report has been prepared for distribution to the members to fulfil

the Directors’ financial reporting requirements. The accounting policies used in the preparation

of this report, as described below, are consistent with the financial reporting requirements of

the Company’s Constitution and are, in the opinion of the Directors, appropriate to meet the

needs of members:

The financial report has been prepared on an accrual basis of accounting, including the

historical cost convention and the going concern assumption.

The Company is not a reporting entity because in the opinion of the Directors, there are

unlikely to exist users of the financial report who are unable to command the

preparation of reports tailored so as to satisfy specifically all of their information needs.

Accordingly, these special purpose financial statements have been prepared to satisfy

the Directors’ reporting requirements under the Corporations Act 2001.

The financial statements have been prepared in accordance with the Corporations Act

2001, the recognition and measurement requirements specified by all Australian

Accounting Standards and Interpretations, and the disclosure requirements of

Accounting Standards AASB 101 ‘Presentation of Financial Statements’, AASB 107

‘Statement of Cash Flows’, AASB 108 ‘Accounting Policies, Changes in Accounting

Estimates and Errors’ and AASB 1054 ‘Australian Additional Disclosures’.

Cost is based on the fair values of the consideration given in exchange for assets. Unless

otherwise indicated, all amounts are presented in Australian dollars.

Accounting policies are selected and applied in a manner which ensures that the

resulting financial information satisfies the concepts of relevance and reliability, thereby

ensuring that the substance of the underlying transactions or other events is reported.

AAMEG operates on a not-for-profit basis and is run only for the benefit of its members.

The following significant accounting policies have been adopted in the preparation and

presentation of the financial report.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments in money

market instruments, net of outstanding bank overdrafts (if applicable).

Payables

Trade payables and other accounts payable are recognised when the entity becomes obliged to

make future payments resulting from the purchase of goods and services.

Receivables

Trade receivables and other receivables are recorded at amortised cost less impairment.

Comparative Information

Certain comparative information has been adjusted to be presented on a consistent basis with

current year’s presentation.


1. ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Revenue from the sale of goods and disposal of other assets is recognised when the entity has

passed risks and benefits of ownership of the goods or other assets to the buyer.

Going Concern

This financial report has been prepared on the going concern basis, which contemplates the

continuity of normal business activities and the realisation of assets and the settlement of

liabilities in the normal course of business.

The Entity has incurred a net loss before tax for the year ended 30 June 2016 of $67,129 (2015:

$49,659) and experienced net cash outflows of $51,511 (2015: $99,586) for the year ended 30

June 2016.

The directors have prepared a cash flow forecast for the period ending 31 October 2017, which

indicates that the entity will experience a cash flow deficit in the first quarter of the 2018

financial year, which has been based on maintaining the existing level of membership income

and operating expenditure.

The Entity has a history of successfully receiving additional support from its members to meet

the Entity’s funding requirements. The Directors believe that at the date of signing the financial

statements there are reasonable grounds to believe that they will be successful in receiving

further support and that the Entity will have sufficient funds to meet their obligations as and

when they fall due, and are of the opinion that the use of the going concern basis remains

appropriate.

Should the Entity be unable to receive additional membership support, a material uncertainty

would exist as to whether the Entity will be able to continue as a going concern and therefore

whether it will realise its assets and discharge its liabilities in the normal course of business.

The financial report does not include adjustments relating to the recoverability and

classification of recorded asset amounts, nor to the amounts and classification of liabilities that

might be necessary should the Entity not continue as a going concern.


NOTES TO AND FORMING PART OF THE REPORT For the Year Ended 30 June 2016


Tax Status

It is unlikely AAMEG will be eligible for an income tax exemption or deductible gift recipient

(DGR) status. The aims and objectives of AAMEG do not include providing any direct welfare or

development assistance in Africa; the chances of AAMEG qualifying for registration as an

approved organisation under the Overseas Aid Gift Deduction Scheme are limited. As there is

no other appropriate DGR categories under which AAMEG could apply for DGR status, it is

unlikely AAMEG could be endorsed as a DGR. In addition, given the objects of AAMEG are not

charitable, it is unlikely AAMEG would be able to be exempt from income tax. However, the

principles of mutuality are applied. This means that receipts derived from mutual dealings with

members are not assessable income and expenses incurred to obtain the mutual receipts are

not deductible. The principle of mutuality only applies where the receipts from the members

result from a mutual activity rather than a trading activity. This requires a consideration of the

nature of the transaction, rather than the identity of the entity providing the receipt. As such no

tax has been considered in this financial report.

Finally AAMEG is carried out on a not-for-profit basis or is run only for the benefit of its

members, then it is specifically excluded from the definition of ‘lobbyist’; for the purposes of the

Lobbying Code of Conduct, which is established in Australian Government in 2008. It is

therefore not required to register on the Register of Lobbyists.

Tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from

profit as reported in the statement of comprehensive income because of items of income or

expense that are taxable or deductible in other years and items that are never taxable or

deductible. The Company’s liability for current tax is calculated using tax rates that have been

enacted or substantively enacted by the end of the reporting period.

Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax

(GST), except:

I. where the amount of GST incurred is not recoverable from the taxation authority, it is

recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

II. for receivables and payables which are recognised inclusive of GST. The net amount of

GST recoverable from, or payable to, the taxation authority is included as part of receivables or

payables.

Cash flows are included in the statement of cash flows on a gross basis. The GST component of

cash flows arising from investing and financing activities which is recoverable from, or payable

to, the taxation authority is classified within operating cash flows.



Adoption of New and Revised Accounting Standards

There are no new Standards and Interpretations that have been adopted in the current period.

Other Standards and Interpretations that were adopted in these financial statements have had

no effect on the amounts reported.



2. REVENUE 2016

$

2015

$

Level 1 Memberships

Level 2 Memberships

Level 3 Memberships

Large Service Company Memberships

Small Service Company Memberships

Individual Membership

Function Revenue

35,250

36,818

15,000

86,300

30,954

4,546

10,123

50,000

36,818

15,000

90,600

38,273

7,955

13,650

218,991 252,296

3. VOLUNTARY CONTRIBUTIONS 2016

$

2015

$

Members’ Voluntary Contributions 75,000 1,098

75,000 1,098

4. ADMINISTRATION EXPENSES 2016

$

2015

$

Bad Debts 50,868 8,864

Consultants-Main 205,056 182,328

Consultants-Admin

Consultants-Other

Function Expenses

Indaba Expenses

Insurance

IT Expenses

Legal Fees

Postage Costs

Printing & Stationery

Promotion & Marketing

Travel-Local

Travel-Overseas

Telephone Expenses

55,913

-

5,293

5,109

4,027

948

1,635

178

4,079

13,575

6,642

701

1,800

58,914

579

10,289

12,626

4,417

1,421

1,146

181

1,856

12,556

8,435

751

1,500

355,824 305,863



5. FINANCE COSTS 2016

$

2015

$

Bank Fees & Credit Card Surcharge 686 1,031

686 1,031

6. OTHER EXPENSES 2016

$

2015

$

Miscellaneous Expenses 4,867 13,402

Petty Cash Expenses 406 386

5,273 13,788

7. TRADE & OTHER RECIEVEABLES 2016

$

2015

$

Trade Receivables 41,455 41,800

Less: Provision - Bad Debts (17,405) (9,750)

Other Receivables - 2,911

24,050 34,961

8. SUBSEQUENT EVENTS There has not been any matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the entity, the results of those operations, or the state of affairs of the entity in future financial years that has not been reflected in the financial statements.

9. CONTINGENT LIABILITIES & COMMITMENTS

There are no contingent liabilities or commitments (2015: nil).

10. AUDITORS’ REMUNERATION

Services provided in relation to the financial statements are on a pro-bono basis.


INDEPENDENT AUDITORS REPORT


INDEPENDENT AUDITORS REPORT (CONTINUED)

Documents

ANNUAL REPORT 2015/16 - AAMEG€¦ · AAMEG 2015/16 ANNUAL REPORT | 6 AA’ LETTER Dear Members, The 2016 financial year has been one of significant challenge for your organisation,