building emerging miners for personal use only

building emerging minerspeople u projects u opportunities

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y

lionselectiongrouplimited 2013 annual report | 1

Contents02 chairman’slettertoshareholders

03 lionselectiongroupinvestmentsummary

04 lionmanager’sreport

06 lionperformance

08 oneAsiaresourceslimited

10 corporategovernancestatement

13 director’sreport

20 Auditor’sindependentdeclaration

21 lionselectiongrouplimiteddirector’sdeclaration

22 Financialstatements

22 statementofcomprehensiveincomefortheYearended31July2013

23 statementofFinancialpositionasat31July2013

24 statementofcashFlowsfortheYearended31July2013

25 statementofchangesinequityfortheYearended31July2013

26 notestotheFinancialstatementsfortheYearended31July2013

44 independentAuditor’sreport

46 shareholderinformation

48 lionselectiongrouplimitedregistry

48 corporatedirectory

lionselectiongrouplimitedABn26077729572level4,15QueenstreetmelbourneVic3000tel:+61396148008www.lionselection.com.au

Directors believe that Lion has a portfolio of emerging miners capable of strong growth and markets will recognise value in the fullness of time, but for now Lion will look for further opportunities where good people and projects go unrecognised.

For

per

sona

l use

onl

y

2 | lionselectiongrouplimited 2013 annual report

Chairman’s Letter to Shareholders

thefinancialyearsawacontinuedmalaiseoverthesmallresourcessectorwiththeAsXsmallresourcesindexoff33%duringtheperiod.manyoflion’sinvesteeswereimpactedbythisnegativesentiment,evenwherethecompanyspecificoutlookwasquitepositive.lion’sfinancialresultfortheyearincludedasmallmarktomarketlossoninvestmentsof$2.3million,withthegeneralfallincompaniesintheportfoliolargelyoffsetbyanincreaseinthevalueoflion’sdirectandindirectholdinginoneAsia,anunlistedgoldcompanyfocussedontwokeyprojectsinsulawesiindonesia.

theongoingmarketturbulencehasdamagedinvestorconfidencewithrespecttothejuniorsector,particularlyastheimpairmentofmanyboomtimeinvestmentsfiltersthroughthemarket.However,goodminingprojectscontinuetobefinanced,particularlyinAustraliawhereequitymarketsdespitebeingdownhaveactuallyoutperformedcanada’stsXanduK’sAimmarkets.itispossiblethatAustraliawillintimebecome‘the’investmentdestinationforthesmallresourcessectorgiventhediredownturnintheseotherjurisdictionscoupledwithmoreminingfriendlypoliciesinAustraliafollowingtherecentchangeofgovernment.

duringtheyearoneAsiawastheoutstandingperformerinthelionportfoliowithitspaniprojecthavingthehallmarksofbeingacompanymakerfollowingamaidenJorcresourceof1.88mozofgold,continuingexplorationsuccessandimprovedunderstandingofpani’sdevelopmentpotential.thelionboardandourpatron,ewentyler,weredelightedtoawardtheinauguralliontylerexplorationmedaltostephenWalters,managingdirectorofoneAsiainrecognitionofhisleadershipwithrespecttothisexceptionaldiscovery.oneAsiaisbyfarlion’slargestinvestment,andlioncontinuestoinvestinthecompanyasitlookstotransitionfromexplorertodeveloper.manyshareholdersmayrightlywonderwhethersuchaconcentratedinvestmentwithinlion’sportfolioiswarranted.Fromtimetotimeinthepastlionhassuccessfullyweightedits

portfoliotowardsspecificinvestmentswhereaninvestee’spotentialstoodouttakingintoaccounttherisks.thelionboardremainscognisantofportfolioconcentration,butisoftheviewthatthereispotentiallymanytimesupsideinitsoneAsiainvestmentifthechallengesandrisksofdevelopingamineinindonesiacanbeovercome.initialindicationsarethatoneAsia’spanideposithasthepotentialtobealowcostmineandprofitableinmostgoldpriceenvironments.robinWiddupfromthelionteamhasrecentlybecomeanon-executivedirectorofoneAsia.

thisyearhasbeentransformationalforlion,withthecompanysuccessfullyimplementingthelionplan.lionhassuccessfullyre-listedontheAsXandhasmorerecentlyraised$10millioninaverywellsupportedcapitalraisingcomprisingaplacementandfullyunderwrittenshareholderpurchaseplan.lionmaintainsitsdisciplinedinvestmentmodelfocussingondirectinvestmentsinearlystageminingandexplorationcompanieswhichhasbeendemonstratedtoworkoverlion’s16yearhistory.iampleasedtoreportthatlioniswellpositionedtotakeadvantageofqualityinvestmentsfromthemultitudeofopportunitiesthecompanycontinuestosee,andinparticularnotethatsuchchallengingtimeshavehistoricallyprovidedsomeofthebestopportunitiesforlion.

Althoughlionisnotcurrentlyinapositiontopayadividend,lionremainscommittedtopayingsustainabledividendsasreturnsarerealised,subjectalwaystotheinvestmentopportunitiesandcommitmentsofthecompany.

onbehalfofthedirectorsandmanagement,iwouldliketothankthelionteamfortheireffortsandlion’sshareholdersfortheirsupportduringlion’stransformationandcapitalraisingthisyear.

PeterMaloneychairman

Dear ShareholderYour directors are pleased to provide you with the annual report for the year ended 31 July 2013.

For

per

sona

l use

onl

y


Lion Selection Group Investment Summary

AsAt30sePteMber2013

CoMModity MArketVAlueA$M

Australia

dorayminerals gold 5.1

rumJungleresources phosphate 1.8

Auricupresources gold 1.3

Ytcresources gold/Basemetals 1.1

otherAustralia 0.3

Africa

roxgoldinc gold 4.2

Kasbahresources tin 2.3

torogold gold 1.8

otherAfrica 1.7

cashdedicatedtoAfrica1 3.1

Asia

oneAsiaresources2 gold 29.6

sihayogold gold 1.6

otherAsia 3.0

Americas ironore/coal 1.0

uncommittedNetCash 10.0

NettangibleAssets $67.9m

NtAPershare 63c

1includescommittedcashofus$2.8mtoAFl3.2oneAsiaatavalueofA$0.75/share.

note:theabovetableincludesinvestmentshelddirectlybylionandthevaluetolionofinvestmentswhichareheldbyAfricanandAsianlionFunds.

By Region Funds Invested

20% Australia

19% Africa

4% Americas

57% Asia

By Commodity Funds Invested

16% Other

4% Copper

13% Nickel

67% Gold

For

per

sona

l use

onl

y


sentimenttowardscommoditieshasbeenfocussedonthefuturesustainabilityofeconomicgrowthinchina,whichisdirectlyrelatedtomineralcommoditydemand.therearehighlydivergentviewsonfuturegrowththathavebeenarguedforthelasttwoyears,howeverwithnoclearsignthatgrowthwillmateriallydifferfromthecurrentrate,commoditypricesfinishedtheyearrelativelyflat.thesignificantexceptionwasgold,whichwasus$1599/ozatthestartofAugust2012,touchedalmostus$1800/ozbyoctoberbeforefallingtothepresentlevelwhereitistradingjustaboveus$1300/oz.themostdramaticfallswereinApril2013,whenthepricedroppedfromus$1600/oztobelowus$1350/ozinthespaceoftwoweeks–thiswasduetomassiveshortsalesofpapergoldinthefuturesmarket.thefallinthegoldpricerevealedastructuralshiftinappetiteforphysicalgoldfromwesttoeast.

Financialmarketshavebeencharacterisedbyalackofriskappetite,witheasymoneyresultingfromgovernmentstimuluschasingyield.Broadlyspeaking,thishasbenefitedlargecapitalisationstocksattheexpenseofjuniors.inmining,thejuniorresourcesstockshavebeenaggressivelysolddownaspartofamigrationoffundsoutofresourcesortowardslargercompanies,andthisbecamemostapparentbetweenAprilandJune2013,whichwasthesameperiodoftimethatthemostprecipitousfallsingoldalsooccurred.Fallswereamplifiedbyredemptionsellingasinvestorswithdrewtheirfundsfrommanagedfunds.inmanycases,theeffortrequiredtomanageredemptionshasforcedmanyfundmanagerstofocussolelyonsalesleavingnofundsortimeforinvesting.

themarketsmoveawayfromresourceshasresultedinafundingsqueeze,makingitdifficultforjuniorstoraisenewfunds.Valuationsinminersremaindepressed,juniorsmostofall.Basedonthenegativeperformancein

miningequitiessincemid2011,combinedwiththemarketliquidityandsentimentconditionsweobserve,wenowconcludethetimeonthelionclockis3o’clock.Weviewtheperiod2008-2013asafullcycle,althoughwithoutapronouncedboomphase.theslowdeclineoftheresourcemarketsince2011hasbeenmuchmoreprolongedthanmostcycleends,whicharenormallyashort,sharpcrash.

theimplicationforequityvaluationsisthatfurthermaterialdownsideforthesectorasawholeappearsunlikely.Wedonotruleoutfurtherunderperformanceofjuniors,primarilyforthefundingchallengestheyface.lion’sinvestmentcatchmenthasexpanded,ascompanymarketcapitalisationshaveshrunk.

Lion Manager’s Reportu

s$/o

z

us$

/lb

AuSpot Price

CuLME Cash Price

2000 4.00

1000 2.50Sep13 Sep13Aug12 Aug12

OutlookuOver the past year, many junior companies

have severely curtailed budgets and reduced staffing levels. We expect there will be company liquidations, and consolidation in the sector as companies pool resources to survive.

uBeing the bottom of the market, our main conclusion remains that investment opportunities are abundant and attractive.

uThe boom phase of mining cycles can be slow to take shape (months to years).

uMajor companies will be the first beneficiaries of a switch in sentiment, it may take longer for this to trickle down to more accommodative funding conditions for juniors.

For

per

sona

l use

onl

y


Basedonthenegativeperformanceinminingequitiessincemid2011,combinedwiththemarketliquidityandsentimentconditionsweobserve,wenowconcludethetimeonthelionclockis3o’clock.

us$

/T

Fe62% Fines

A$:us$180 1.1

80 0.8Sep13 Sep13Aug12 Aug12

12

9 3

6

1

2LOOK

SEL

L

11

10

8 4

7 5BUY

CRASH

BOOM

New floats (big companies)

People leave bigcompanies (top $ small

companies short careers)

Rising exploration Mergers

New floats(small companies) Cash takeovers AGGRESSIVE BUYER

CAUTIOUS SELLER

Declining exploration

Company liquidations

Paper takeovers

AGGRESSIVE SELLER

CAUTIOUS BUYER

For

per

sona

l use

onl

y


Lion Performance

Comparative performance from 1 August 2012 to 30 September 2013 (13 months) for Lion versus the ASX 100 Resources, ASX Small Resources and ASX 100 Industrials indices.

source:iress

140

120

100

80

60

40

%

Aug 12 Sep 13

asX100 industrials 128%

lion selection Group 114%

asX100 resources 109%

asX small resources 67%

For

per

sona

l use

onl

y


Lion Performance

Total shareholder return for Lion Selection Group versus ASX Small Resources and All Ordinaries Accumulation Indices to 30 September 2013 1-7

Main investment flows

notes1 investmentperformancefiguresreflectthehistoricperformanceoflionselectiongrouplimited(AsX:lsg,1997–2007),lionselectionlimited

(AsX:lst,2007-2009),lionselectiongrouplimited(nsX:lgp,2009-2013)andlionselectiongrouplimited(AsX:lsX,2013-present)2 smallresourcesandAllordinariesAccumulationindiceshavebeenusedforcomparison,whichassumereinvestmentofdividends.3 methodologyforcalculatingtotalreturnisbasedonmorningstar(2006),whichassumesreinvestmentofdistributions.4 distributionsmadeincludecashdividends,sharesdistributedinspecieasadividend,proceedsfromanoffmarketbuybackconductedindec2008,and

thedistributionofsharesincatalparesourcesviathedemergeroflionselectionlimitedindec2009.lionassumealldistributionsarereinvested,withallnon-cashdistributionsaresoldandtheproceedsreinvestedonthedistributionpaydate.

5 investmentperformanceispre-taxandignoresthepotentialvalueoffrankingcreditsondividendsthatwerepartiallyorfullyfranked.6 pastperformanceisnotaguidetofutureperformance.7 source:iress,lionmanager.

Acquisitions divestments

One Asia Resources (Gold / Indonesia) Copperbelt Minerals (Copper, DRC)

Roxgold Inc (Gold, Burkina Faso)

Doray Minerals (Gold, Western Australia)

Rum Jungle Resources (Phosphate, Northern Territory)

Note: the above table includes investments held directly by Lion and the value to Lion of investments which are held by African and Asian Lion Funds

40

20

0

-20

-40

-60

%

1 Year Return 3 Year Return 5 Year Return 10 Year Return 15 Year Return Return since inception

13.5

%

2.4%

27.5

%

13.4

%

17.3

%

14.0

%

Lion ASX Small Resources All Ordinaries

For

per

sona

l use

onl

y

8 | lionselectiongrouplimited 2013 annual report lionselectiongrouplimited 2012 annual report | 8

duringtheyear,oneAsiareleaseditsmaidenJorcresourceof1.88mozforitspaniproject(90%economicinterest)whichhasbeenindependentlyreviewedbysrKAustralasia,assetoutintheadjacenttable(seetheannouncementmadebylionon13June2013forfurtherinformation).oneAsia’sdrillinghasbeenextremelysuccessful,withthe1.88mozJorcresourcebasedonaround13,000mofdiamonddrillinginlessthan12monthssincedrillingcommencedinJune2012,equatingtoadiscoverycostoflessthan$3/oz.

oneAsiacontinuestoidentifyextensionstopanimineralisationinadditiontothemaidenJorcresource,withanadditional7,500mdrillingwhichisinprogressatpresent.Anextensiontothepanidepositisbeingdrilledouttotheimmediatewestofthepaniridge,withresultsforthenew‘goroba’areabelownotbeingincludedinthemaidenJorcresource:

pdH71 224mat0.9g/tAu([email protected]/tAu)

pdH75 290mat0.6g/tAu

pdH83 225mat1.10g/tAu([email protected]/tAu)

Aftertheendofthefinancialyear,lioninvested$7.5millionaspartofoneAsia’srightsissueraising$21millionat$0.65/share.

Forthepurposesoflion’snettangibleAsset(ntA)backingasat31July2013oneAsiawasvaluedat$0.75/share.lionbelievesthisvaluationcontinuestobe

appropriate,reflectingthattherightsissuepricingrepresentsasmalldiscounttothisvaluationaswouldnormallybethecaseforalistedcompany,andnotingthattherightsissueislargelyaninternalraisingfromexistingshareholders.inaddition,oneAsiaishavingoutstandingexplorationsuccessatthepaniprojectincludingthemaidenJorcresourcenotedabove.

FundsraisedbyoneAsiainitsrightsissuewillenablethecompletionofaresourceupdate,expectedtobecompletedbeforetheendof2013,andafeasibilitystudyatpani,expectedtobedeliveredinthefirstquarterof2014.theunderstandingofpaniwillunfoldastheprojectisputthroughtherigoursofvariousstudies,howeveratthisearlystagethreekeyfactorsareapparent:

uthickandcontinuousgoldmineralisation;

uminimaloverburden;uearlytestworkindicatingveryhigh

heapleachrecovery(>90%).

Aspreviouslyannounced,oneAsia’sotherproject,Awakmas(oneAsiaearning80%)hasJorcresourcesof2.142mozofgold.oneAsiahascompletedapre-feasibilitystudythatcontemplatesdevelopmentoftheAwakmasresourceandisexpectedtoundertakeaJorcresourceupdateinthefourthquarter2013fromrecentdrillingatitssaluBulotarget.

robinWiddupfromthelionteambecameanon-executivedirectorofoneAsiainAugust2013.

image: One Asia Site Visit, May 2013

One Asia Resources Limited

Lion Selection Group and Asian Lion own a combined equity interest of 36% of One Asia Resources, an Australian unlisted public company. One Asia is focused on the development of two gold mines in Sulawesi, Indonesia.

suMMAryoFresourCesPANiProjeCtAsoFjuNe2013(100%bAsis)

iNACCordANCewithjorCCode2012

CutoFFGrAde

resourCeClAss

toNNesMillioNs

GoldGrAdeG/tAu

MetAlsMillioNsozAu

0.2g/tAu indicated 42.2 1.01 1.37

inferred 15.3 1.03 0.51

total 57.5 1.02 1.88

0.5g/tAu indicated 28.2 1.34 1.21

inferred 10.5 1.35 0.45

total 38.7 1.34 1.67

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y


boardresponsibilitiestheBoard’sprimaryresponsibilityistosatisfytheexpectationsandbeacustodianfortheinterestsofitsshareholders.inaddition,theBoardseekstofulfillitsbroaderethicalandstatutoryobligations,andensurethatlionoperatesinaccordancewiththesestandards.theBoardisalsoresponsibleforidentifyingareasofriskandopportunity,andrespondingappropriately.

responsibilityfortheadministrationandfunctioningoflionisdelegatedbytheBoardtothechiefexecutiveofficer.throughmonitoringtheperformanceofthechiefexecutiveofficer,theBoardensuresthatlionisappropriatelyadministeredandmanaged.

theBoardguidesstrategicplanningandensuresitadherestotheinterestsandexpectationsoflion’sshareholders,managesrisksandopportunities,andmonitorscompanyprogress,expenditure,significantbusinessinvestmentsandtransactionsandkeyperformanceindicators.

CompositionoftheboarditisapolicyoflionthattheBoardcomprisesindividualswitharangeofknowledge,skillsandexperiencewhichareappropriatetoitsobjectives.

lion’sconstitutionprovidesthatthenumberofdirectorsistobedeterminedbytheBoardbutshallnotbelessthanthree.Atpresent,thecompanyhasfourdirectors–threenonexecutivedirectors(includingthechairman)andoneexecutivedirector.

independencetheindependentandobjectivejudgmentoflion’sdirectorsisofparamountimportancetotheeffectiveoperationoftheBoardandthecompany.

independenceisdefinedforthepurposesofthedirectorashe/shebeingindependentofanybusinessrelations,whethermanagerialorotherwise,withlionoritssubsidiariesoritsactualorpotentialinvestmentswhichmightinterferewiththeirabilitytomakesound,unfettered,objectivejudgments,andactinthebestinterestoflionanditsshareholders.

thedirectors’independenceisregularlyassessedbytheBoard.

relationshipwithAfricanlion2limited(AFl2),Africanlion3limited(AFl3)andAsianlionlimited(AlF)underthetermsoftheshareholderAgreementsforAFl2,AFl3andAlF,allshareholdersincertaincircumstances,willreferinvestmentscontemplatedundertheinvestmentpolicytothefund.shareholdershavetherighttoco-investwiththefundincertaincircumstances.

themanager(lionmanagerptyltd)hasbeenappointedbytheshareholdersofthesefundstoimplementitsinvestmentstrategyandmanagetheirinvestments.thisincludesallstepsoftheinvestmentselectionprocessandthemakingofrecommendationstotheinvestmentcommitteeofeachfund.

managementAgreementshavebeenestablishedtoformalisethe

relationshipbetweenthefundsandthemanager.

themanager,undertheseagreements,undertakestoactasinvestmentmanagerforthefunds.themanagerisatlibertytoengagespecialistsandconsultantsasappropriatetoassistintheassessmentprocessandprovidesaregularflowofinformationtolion’sdirectors.

However,theinvestmentcommitteeincludinglion’srepresentativeretainsthepowertomakethefinalinvestmentdecisiononthebasisofthisinformationandadvice.thisretentionoffinalinvestmentdecisionsallowstheinvestmentcommitteetoeffectivelyreviewthefunctionandproficiencyofthemanagerandoftheinvestmentselectionprocesses.

CorporateGovernancetheBoardwillatleastannuallyreviewlion’scorporategovernancepoliciesandpracticesandseekassurancethatthepoliciesandpracticesarebeingobserved,andthatsubjecttosizeconstraints,theyareconsistentwithcontentsandformatofthecorporategovernancestatementrequiredbytheAustralianstockexchange(AsX).

AuditCommitteetheBoardandtheexternalauditorsareaccountabletoshareholders.theAuditcommitteeisaccountabletotheBoard.

theprimaryfunctionoftheAuditcommitteeistoassisttheBoardofdirectorsinfulfillingitsresponsibilitiesbyreviewing:

Corporate Governance Statement

The Board of Directors of Lion is committed to high standards of corporate governance. This statement summarises the Company’s corporate governance framework. Full documentation may be viewed on Lion’s website, www.lionselection.com.au.

For

per

sona

l use

onl

y


• thefinancialinformationthatwillbeprovidedtoshareholdersandthepublic;

• thesystemsofinternalcontrolsthattheBoardandthemanagerhaveestablished;and

• lion’sauditing,accountingandfinancialreportingprocess.

theAuditcommitteeconsistsonlyofnon-executivedirectors,themajorityofwhomareindependent.AllmembersoftheAuditcommitteemusthaveaworkingknowledgeofbasicfinanceandaccountingpractices.

theexternalauditorandmembersofthemanagerandBoardofdirectorsmaybeinvitedtoattendthemeetingsandtoprovideinformationasnecessary.

membersoftheAuditcommitteeatthedateofthisreportareBarrysullivan(chairman),petermaloneyandchrismelloy.

NominationCommitteelionrecognisesthatrecommendation2.4ofthecorporategovernancecouncil’s‘principlesofgoodcorporategovernanceandBestpracticerecommendations’suggeststheestablishmentofanominationcommitteeandassociatedcharter.However,inviewofthesmallsizeoflion’sBoard,theBoardinitsentiretyacts,effectively,asanominationscommittee,andthereisnoneedtofurthersubdivideit.Assuch,anominationscommitteeisanunnecessarymeasureforlion.

Nomination,AppointmentandretirementofdirectorsifavacancyoccursorifitisconsideredthattheBoardwouldbenefitfromtheservicesandskillsofanadditionaldirector,theBoardselectsapanelofcandidateswithappropriateexpertiseandexperienceand,afterassessment,appointsthemostsuitablecandidate.

lion’sconstitutionrequiresthatdirectorsappointedbytheBoardsubmitthemselvesforre-electionatthefirstmeetingofshareholdersfollowingtheirappointment.Whilstdirectorsarenotappointedforafixedterm,undertheconstitution,one-thirdofthedirectors(excludingthemanagingdirector)mustretirebyrotationeachyearandsubmitthemselvesforre-electionbyshareholders.

directors’AccesstoProfessionalAdvicetheremunerationofthedirectorsofthecompanyisreviewedbythefullBoard.

lion’sconstitutionstipulatesthattheaggregateremunerationavailablefordivisionamongstthenonexecutivedirectorsisdeterminedbytheshareholdersingeneralmeeting(currently$200,000perannum).thisamount,orsomepartofit,isdividedamongthenonexecutivedirectorsasdeterminedbytheBoard.Atpresenttheaggregateannualremunerationpaidtononexecutivedirectorsis$132,000.

PerformanceevaluationthesmallscaleoftheBoardandtheexceptionalnatureofthecompany’sactivitiesmaketheformalestablish-mentofaperformanceevaluationstrategyunnecessary.performanceevaluationisadiscretionarymatterforconsiderationbytheentireBoard.theBoardwillannuallymeettoasessperformanceofmanagement,directorsandtheBoardasawhole.

businessriskstheBoardaimstoreduceinvestmentriskthroughapolicyofdiversificationofinvestmentsgeographicallyandavoidoverdependenceonasinglecommodity,investeecompanyorcountry.

risksassociatedwiththeexplorationandminingindustryinclude

geological,technical,political,titleandcommoditypricingrisks.

themainareasofbusinessrisktothecompanyarisefrom:

• failureofaninvesteecompanyduetooneoranumberoftheabovecauses;

• downturninthestockmarket;and• changestothelaw–corporations/

taxationlegislation.

individualinvestmentseachhavetheirownriskswhichrelatetotheminingindustrygenerally.theserisksareregularlyconsideredbythelionBoard.

thechiefexecutiveofficeralsoprovidesmonthlystatusreportstotheBoardwhichidentifiespotentialareasofbusinessriskarisingfromchangesinthetechnical,legal,financialoreconomiccircumstancesofanyinvesteecompanyoritsoperatingenvironment.

CodeofConducttheBoardacknowledgestheneedforthehigheststandardsofcorporategovernancepracticeandethicalconductbyalldirectorsandemployeesofboththecompanyandthemanager.

thedirectorsoflion,allcompanyemployees,directorsandemployeesofthemanager,undertaketopreservethehigheststandardsofintegrity,accountabilityandhonestyintheirdealings,operatinginstrictadherencetostatutoryandethicalobligations.theseindividualsaremindfulandrespectfulofrelevantpoliciesandresponsibilities.

companypracticesarestringentlymonitoredbytheBoard,whiletheBoarditselfissubjecttotheprinciplesofitscharter,whichrequiresahighstandardofindependence,objectivityandopennessinitsdealingsandrelationshipwithshareholdersandthemanagementteam.the

Corporate Governance StatementF

or p

erso

nal u

se o

nly


shareholdercommunicationsstrategy,thesecuritiestradingpolicy,andthecontinuousdisclosurepolicycollectivelyformasolidethicalfoundationforcompanypractices.

securitiestradingPolicylionhasanestablishedsecuritiestradingpolicy.thispolicyissummarisedbelow.

Asaresultofthenatureofthebusinessoflion(togetherwithanysubsidiaries,andthemanagerreferredtoastheliongroup),directors,officersandotheremployeesoftheliongroupwillbeinpossessionofinformationregardingawiderangeofsmallandmediumsizedexplorationandmineralproductioncompanies.Fromtimetotimesomeofthisinformationmaybeclassifiedas‘inside’information.theymayalsobeawareofpotentialtransactionsbetweensmallandmediumsizedexplorationcompaniesandothercompanies.

lionhasadoptedapolicyandproceduredesignedtopreventthepossibilityofanyactualorperceivedconflictofinterestbetweentheinterestsoftheliongroupanditsdirectors,officersandemployees.theyarealsodesignedtopreventanyinsidertradingbyanydirector,officeroremployeeoflioninthesecuritiesoflion,investeecompaniesandothercompanieswheretheymaybeinpossessionofinsiderinformation.

supervisoryandComplianceProcedureslionhasprocedurestoensurealldirectors,officersandemployeesoflionarefamiliarwiththesepolicies,thattheyarereviewedonaregularbasisandupdatedasnecessary.

thetradingactivityofeachdirector,officerandemployeeisreviewedfromtimetotime.

complianceproceduresareinplacewhichrestricttradingbydirectors,officersandemployeesinsecuritiesofsmallandmediumsized

explorationandminingcompanies,andcompanieswhereapotentialconflictofinterestmayoccur.

ContinuousdisclosurePolicylioniscommittedtocontinuousdisclosureofmaterialinformationasameansofpromotingtransparencyandinvestorconfidence.thepracticesoflionarefullycompliantwiththeAsXlistingrules,includinginparticularthoseregardingcontinuousdisclosure.

lionwillimmediatelynotifythemarketofanyinformationconcerningitselfwhichisnotsubjecttotheexceptionsintheAsXlistingrulesandwhichareasonablepersonwouldexpecttohaveamaterialeffectonthepriceorvalueoflion’ssecurities.

thechiefexecutiveofficerandthecompanysecretaryoflion(management)areresponsiblefortheregularreviewoflion’saffairstoensurethatanyrelevantinformationispromptlyannouncedtotheAsX.managementiswellawareofitslegalresponsibilitiesregardingcontinuousdisclosureundertheAsXlistingrules.managementensuresthattheprocessesgoverningthereviewandreleaseofmaterialinformationensurescompliancewiththeseobligations,andthatinformationisreleasedinanefficientandconsistentfashion.Wherethereisanydisagreementorambiguityastothereleaseofparticularinformation,membersofmanagementwillconsultthefullBoard.eventssuchastradinghalts,iftheyoccur,willbearrangedbymanagement.

releaseofmaterialinformationtotheAsXisconductedbylion’scompanysecretary.WheretheAsXcontactslion,forexampleintheeventofunusualsharepricefluctuations,communicationsaremanagedbythecompanysecretary.

thecompanyexpectsinvesteecompaniestoadoptandadheretothesamestandardsofcontinuousdisclosures.

Lion’s Other Corporate Governance PolicieslocalindigenousCommunitieslionhasapolicythatdevelopmentsofinvesteesarenotexploitativeoflocalandindigenouscommunitiesandtoassistsuchcommunitiesthroughsymbioticprojectdevelopment.thisassistanceislikelytofocusonhealth,educationandemploymentofindigenouspeopleneartoinvesteecompanies’developmentprojects.

environmentlionhasapolicythatenvironmentalimpactofdevelopmentsisinlinewithcountry/internationalstandardsanddoesnotadverselyimpactlocalcommunities.

Corporate Governance StatementF

or p

erso

nal u

se o

nly


thedirectorsoflionselectiongrouplimited(“lsg”or“thecompany”)submittheirreportontheoperationsofthecompanyforthefinancialyearended31July2013.

Atthedateofthisreport,lionhad95,420,281fullypaidordinarysharesonissue.

directorsthefollowingpersonsweredirectorsoflionduringthefinancialyearanduptothedateofthisreport:

• petermaloney(non-executivechairman)

• Barrysullivan(non-executivedirector)

• chrismelloy(non-executivedirector)appointed1november2012

• robinWiddup(director)

• craigsmyth(managingdirector)resigned31october2012(remainschiefexecutiveofficer)

PrincipalActivitiesduringthefinancialyeartheprincipalcontinuingactivitiesofthecompanywereinvestmentinminingandexplorationcompanies.

operatingandFinancialreviewthisfinancialreportispreparedinaccordancewithAustralianAccountingstandardsandthereforeincludestheresultofthe“mark-to-market”ofthecompany’sinvestmentportfolioinboththestatementofcomprehensiveincomeandthestatementofFinancialposition.

thecompany’slossbeforetaxfortheyearwas$2.0million(2012loss:$27.5million).thisincludesrealisedlossesfromthesaleofinvestmentsandunrealisedlossesfrommarktomarketmovementsinitsinvestmentportfoliorecognisedinthestatementofcomprehensiveincomeinthecurrentperiodassetoutinthetablebelow.

gross(loss)/profitoninvestmentsrealisedduringtheperiodincludesmarktomarketadjustmentsrealisedinthecurrentperiodaswellasmarktomarketadjustmentsrecognisedinthestatementofcomprehensiveincomeinpriorperiodsassetoutinthetablebelow.

theresultfortheyearreflectsamarktomarketlossof$2.3millionwithrespecttoinvestments

(7%reductioncomparedwithvalueofassetsheldat31July2012).thisincludesanunrealisedlossof$4.2million.thisreductioninvalueispartiallyduetogeneralmarketmovements,withnegativeinvestorsentimentevidentwiththeAsXsmallresourcesindexreducing33%duringtheyear.theunrealisedmarktomarketlossof$4.2millionat31July2013intheportfoliovalueincludes:

• Aincreaseinthevalueoflion’sdirectandindirectholdinginoneAsia(unlisted)of$8.4millionasaresultofoutstandingexplorationandmetallurgicalresultsfromoneAsia’spaniproject,includinganinitialJorcresourceof1.88mozgold;

• Areductioninthevalueoflion’sdirectandindirectholdingsinsihayogoldof$3.2millionasaresultofadelaystothecompany’sfeasibilitystudyandlowergoldprices;

• Asteepdecreaseinvalueacrosstheotherinvestmentsinlion’sportfoliobroadlyconsistentwithothersmallresourcecompaniesduringthefinancialyear;

Director’s Report

2013$’000

2012$’000

Gains/(loss)attributabletomovementinfairvalueofinvestments

marktomarketadjustmentforperiod–investmentsrealisedduringperiod 1,958 (188)

marktomarketadjustmentforperiod–investmentsheldatendofperiod (4,236) (28,802)

Gains/(loss)attributabletomovementinfairvalueofinvestments (2,278) (28,990)

resultsofinvestmentsrealisedduringPeriod

salesproceeds 2,781 150

Historicalcostofsales (2,876) (1,363)

Gross(loss)/profitmeasuredathistoricalcost (95) (1,213)

representedby:

marktomarketrecognisedinpriorperiods (2,053) (1,025)

marktomarketrecognisedincurrentperiod 1,958 (188)

(95) (1,213)

For

per

sona

l use

onl

y


lion’sdirectorsbelieveitisimportantforshareholdersthatitsfinancialstatementsandthisreportexplainboththeeffectofrealisationofitsinvestmentsandmarktomarketofitsinvestmentsonitsresultsforthefinancialyear.duringtheyearlionhadasmallrealisedlossof$0.1millionlargelywithrespecttothesaleofitssharesincopperbeltminerals.

lossaftertaxattributabletomemberswas$2.0millionandlosspersharewas2.3¢.

duringtheyearthecompanymadeneworfollowoninvestmentstotalling$17.3millionasfollows:

Purchases: million

AfricanandAsianlionfunds $2.6

Asianmineralresources $1.0

centaurusmetalsltd $1.3

doraymineralsltd $2.5

rumJungleresourcesltd $1.0

oneAsiaresources $8.0

otherinvestments $0.9

$17.3

sales:copperbeltminerals $2.6

otherinvestments $0.2

$2.8

At31July2013thecompanyheldinvestmentsvaluedat$45.8million(31July2012:$34.5million),andcashof$17.9million(31July2012:$24.0million).oneAsiarepresentslion’ssinglelargestinvestmentvaluedat$21.0million(includingdirectandindirectholdings).subsequenttotheendofthefinancialyearlionhascommittedtomakeafurtherinvestmentinoneAsiaasnotedbelow.

dividendsnodividendwasdeclaredorpaidduringtheyear(2012:nil).

Compliancewithenvironmentalregulationslionhasapolicythatenvironmentalimpactsofdevelopmentsofinvesteesareinlinewithcountry/internationalstandardsanddonotadverselyimpactlocalcommunities.

lionhasnotbeennotifiedbyanyinvesteeofanyenvironmentalbreachbyanygovernmentorotheragency,andisnotawareofanysuchbreach.

significantChangesinthestateofAffairstherewerenosignificantchangesinthestateofAffairsofthecompany.

significanteventsafterbalancedatesubsequenttotheendofthefinancialyearlioncompletedafinancialraisingthatspannedthefinancialyearend.Accordingly,lionreceivedanadditional$2.4millionwithrespecttothecompany’ssharepurchaseplan(“spp”),andissuedanadditional11.5millionshareswithrespecttotheplacementandspp.Followingthisissuelionhadissuedcapitalof106,911,413ordinaryFullypaidshares.

inaddition,subsequenttotheendofthefinancialyearoneoflion’sinvesteecompaniesoneAsiaresourceslimitedinitiatedarightsissue.lionhascommittedtopartlyunderwritetherightsissue,withacommitmentof$7.5million.inAugust2013lionprovidedshorttermfundingof$1millionaspartofa$5millionfacilitywhichwasrepaidpriortothedateofthisreport.

otherthantheitemsabove,therehasnotarisenintheintervalbetweentheendoftheyearandthedateofthisreport,anyitem,transactionoreventofamaterialorunusualnaturewhichhasormaysignificantlyaffecttheoperationsofthecompany,theresultsofthoseoperations,orthestateofaffairsofthecompanyinfutureperiods.

ProceedingsonbehalfoftheCompanynoproceedingshavebeenbroughtorintervenedinoronbehalfofthecompanywithleaveofthecourtundersection237ofthecorporationsAct2001.

likelydevelopmentsandFutureresultsthecompany’sfutureoperatingresultswilldependontheresultsofitsinvestments,andinparticularitslargestinvestment,oneAsia.thecompany’sabilitytosustainprofitsisdependentonfuturesalesofinvestmentswhichinturnaredependentonmarketopportunitiesandtheperformanceofthecompany’svariousinvestments,whicharedifficulttopredict.

thereareawidevarietyofrisksassociatedwiththeminingandexplorationindustryincludingmarketconditions,exploration,operationalandpoliticalrisk,tenureoftenements,liquidityandnativetitleissues.Becauseofthevagariesoftheminingandexplorationindustryandthelongtermnatureofmostoflion’sinvestments,thedirectorsareunabletopredictfutureresults.

CorporateGovernancestatement

inrecognisingtheneedforthehigheststandardsofcorporatebehaviourandaccountability,thedirectorsoflionsupporttheapplicableprinciplesofgoodcorporategovernance.thecompany’scorporategovernancestatementiscontainedintheannualreport.

employeesAt31July2013therewas1fulltimeequivalentemployeeofthecompany(2012:1Fte).

Director’s ReportF

or p

erso

nal u

se o

nly


remunerationreportAlldisclosuresinthisremunerationreporthavebeenaudited.thisremunerationreportoutlinesthedirectorandexecutiveremunerationarrangementsofthecompanyasrequiredbysection308(3c)ofthecorporationsAct2001.Forthepurposesofthisreport,keymanagementpersonnelofthecompanyaredefinedasthosepersonshavingauthorityandresponsibilityforplanning,directingandcontrollingthemajoractivitiesofthecompany,directlyorindirectly,includinganydirector,andincludestheexecutiveemployedbythecompanyconsideredtomeetthedefinitionofkeymanagementpersonnel.

keyManagementPersonnelremunerationFrameworkemolumentsofindividualBoardmembersandotherkeymanagementpersonnelaredeterminedonthebasisofmarketconditionsandthelevelofresponsibilityassociatedwiththeirposition.theemolumentsarenotspecificallyrelatedtocompanyperformanceandtherearenolong-termorshort-termperformance-relatedincentivesprovidedtokeymanagementpersonnel.

remunerationandothertermsofemploymentforkeymanagementpersonnelareformalisedineitherserviceagreementsoremploymentcontracts.

theremunerationpolicyinrelationtodirectorsisdeterminedbythefullBoard.remunerationofotherkeymanagementpersonnelisdeterminedbythedirectorsofthecompany.directors’feesaredeterminedwithinanaggregatedirectors’feepoollimit,whichisperiodicallyrecommendedforapprovalbyshareholders.AsapprovedbyshareholdersattheAnnualgeneralmeetingheldon1december2011,themaximumaggregateamount,includingsuperannuationcontribution,thatmaybepaidtodirectorsofthecompanyasremunerationfortheirservicesis$200,000foranyfinancialyear.

otherkeymanagementpersonnelreceiveabasesalaryandsuperannuationcontributionsinaccordancewithAustraliansuperannuationguaranteelegislation.

theremunerationpolicyofthecompanywithrespecttodirectorsandotherkeymanagementpersonnelprovidesfordirector’s&officer’s

(d&o)insurancecover,butdoesnotprovideoptions,shares,loansoranyothernon-monetarybenefits.

VotingandCommentsattheCompany’s2012AnnualGeneralMeetingthecompanyreceivedmorethan97%of“yes”votesonitsremunerationreportforthepreviousfinancialyear.thecompanydidnotreceiveanyspecificfeedbackatthecompany’s2012Annualgeneralmeetingonitsremunerationpractices.

detailsofremunerationdetailsofremunerationpaid/payabletodirectorsandtheotherkeymanagementpersonnelofthecompanyaredetailedinthetableopposite.thebenefitsprovidedtoKeymanagementpersonnelarefixedwithnoat-riskcomponentsofremuneration.

keyManagementPersonnelshareholdingsAtthedateofthisreportthedirectandindirectinterestsofthedirectorsandotherkeymanagementpersonnelintheordinarysharesandoptionsoflionaredetailedbelow.nosharesoroptionswereissuedasremuneration.

Director’s Report

shAreholdiNGsoFkeyMANAGeMeNtPersoNNeloFtheCoMPANy

NAMe bAlANCe1AuGust2012

shAresissuedAsreMuNerAtioN

NetChANGeother

ClosiNGbAlANCe31july2013

directors

pJmaloney 1,347,489 - - 1,347,489

cmelloy - 4,245,967 4,245,967

rAWiddup 18,256,223* - (8,646,833)* 9,609,390

BJsullivan 60,000 - 290,000 350,000

otherkeyManagementPersonnel

cKsmyth 271,316 - 84,905 356,221

Jmrose 58,000 - (58,000) -

total 19,993,028 - (4,083,961) 15,909,067

* mrWiddup’sshareholdingreflectshisrelevantinterestinthecompany.thisincludesanumberofshareholderswhoareassociatedwithmrWiddupduetoanoralunderstandingreachedon13may2010inrelationtotheirshares.thisassociationendedon31october2012.

For

per

sona

l use

onl

y


Director’s Report

(a) cmelloywasappointedon1november2012.(b) rAWiddupismanagingdirectoroflionmanagerptyltd,anddoesnotreceiveanydirectorsfeesfromthecompany.(c) cKsmythhasbeenemployedbylionmanagerptyltd,anddoesnotreceiveanydirectorsfeesfromthecompany.mrsmythresignedasadirectoron

31october2012,butremainsthechiefexecutiveofficerofthecompany.

2013shortterMbeNeFits

terMiNAtioNbeNeFits

AlloCAtioNoFd&oiNsurANCe

PreMiuM

Post-eMPloyMeNt

suPerANNuAtioNtotAlsAlAries/

FeesCAsh

boNus

NAMe Notes $ $ $ $ $ $

directors

pJmaloney 27,821 - - 8,516 24,180 60,517

cmelloy (a) 2,918 - - 6,083 27,083 36,084

BJKsullivan 35,139 - - 8,516 4,861 48,516

rAWiddup (b) - - - 8,516 - 8,516

cKsmyth (c) - - - 8,516 - 8,516


Jmrose 86,450 - - 8,409 7,781 102,640

total 152,312 - - 48,663 63,921 264,896

keyMANAGeMeNtPersoNNeloFtheCoMPANy–reMuNerAtioNForyeArto31july2013

2012shortterMbeNeFits

terMiNAtioNbeNeFits

AlloCAtioNoFd&oiNsurANCe

PreMiuM

Post-eMPloyMeNt

suPerANNuAtioNtotAlsAlAries/

FeesCAsh

boNus

NAMe $ $ $ $ $ $

directors

eWJtyler 16,667 - - 4,905 - 21,572

pJmaloney 28,135 - - 8,409 19,865 56,409

BJKsullivan 24,465 - - 3,504 2,202 30,171

rAWiddup - - - 8,409 - 8,409

cKsmyth - - - 8,409 - 8,409


Jmrose 86,450 - - 8,409 7,781 102,640

total 155,717 - - 42,045 30,124 227,610

oPtioNsoNissue

NAMe bAlANCe1AuGust2012

oPtioNsissuedAsreMuNerAtioN

NetChANGeother

ClosiNGbAlANCe31july2013

directors

pJmaloney - - 224,583 224,583

cmelloy - - 707,663 707,663

rAWiddup - - 1,544,899 1,544,899

BJsullivan - - 10,000 10,000


cKsmyth - - 45,221 45,221

Jmrose - - -

total - - 2,532,366 2,532,366

For

per

sona

l use

onl

y


Information on DirectorsPeterMaloneybComm,MbA(roch)(Chairman)petermaloneyhasbroadcommercial,financialandmanagementexpertiseandexperience.HewaspreviouslychiefFinancialofficerofliontodecember2009,andanexecutiveoflionmanagerptyltd.inalongcareerwithWmcresources,heheldthepositionsoftreasurer,executiveVicepresidentAmericas,andmanagercommercialandmarketing–WA.Hehasalsobeenexecutivegeneralmanager,FinanceatsantosandchiefFinancialofficeratFHFaulding.peterhasmanagedvarieddebtandequityfinancings,mergers,takeovers,acquisitions,divestments,jointventurenegotiations,commoditysaleagreements,commodityandcurrencyhedgingprograms,goldandnickelsales,andhasbeeninvolvedinanumberofipos.Asanexecutive,hehasledmajorcorporateandmanagementrestructures.

peterhasalsobeenadirectorofseveralcompaniesandorganisations,includingindophilresourcesandBarraresourcesandwaschairmanofsouthernHealth,thelargesthealthcareproviderinVictoria.Hewaschairmanofcatalparesourcesfromdecember2009toitsmergerwithconquestmininglimitedtoformevolutionmininglimitedinoctober2011.

peterholdsaBachelorofcommercefromtheuniversityofmelbourneandanmBAfromuniversityofrochester.HehasalsocompletedtheAdvancedmanagementprogramatHarvardBusinessschool.

peterbecameanon-executivedirectoroflionindecember2010,becomingchairmanfrom1January2012.

ChrisMelloybe(Mining)(hons),Mengsc,MAusiMM,FFin(Non-executivedirector)mrmelloycompletedanHonoursdegreeinminingengineeringattheuniversityofQueenslandin1976.Hejoinedmountisaminesin1977,workingundergroundandholdinganumberofengineeringappointmentsintheminingarea.duringthisperiod,chrisgainedhisprofessionalqualificationofregisteredminemanagerandamastersdegreeinengineeringscience.

mrmelloyheldanumberofmanagementpositionsintheplanningandoperatingareasofmim’sminingdivision,culminatingwithresponsibilityforthecoppermine.HejoinedJBWere&sonin1987toresearchthebasemetalssectorandcrAlimited.HegainedhisgraduatediplomaofAppliedFinanceandinvestmentin1990andfrom1992wasconsistentlyrankedasaleadingresourceanalystinindependentsurveys.

mrmelloywasanexecutivedirectoroflionmanagerfromitsinceptionin1997throughto2011,whenheretiredtonon-executivedirector.inseptember2012,mrmelloyresignedfromhisnon-executivedirectorrolewithlionmanager.mrmelloywasalsopreviouslyanon-executivedirectorofanumberoflion’sinvestees,includingcatalparesources.

chrisbecameanon-executivedirectoron1november2012.

barrysullivanbsc(Min),ArsM,FAusiMM,MAiCd(Non-executivedirector)Barrysullivanisanexperiencedandsuccessfulminingengineerwithacareerspanning40yearsintheminingindustry.HisinitialminingexperiencewasgainedinthesouthAfricangoldminingindustry,followedbymorethan20yearswithmountisamines.inthefinalfiveyearsofhistenurewithmim,Barrywas

executivegeneralmanagerresponsiblefortheextensivemountisaandHiltonoperations.

Barryiscurrentlyanon-executivedirectorofBassmetals,andwaspreviouslyanon-executivedirectorandchairmanofexcoresourcesandanon-executivedirectorofcatalparesources,sedimentaryHoldingsandAllegiancemining.Hewasalsoanon-executivedirectoroflion’spredecessorcompany,lionselectionlimited.

Barryjoinedlionindecember2011.

robinwiddupbsc(hons),MAusiMM(director)robinWiddupgraduatedfromtheuniversityofleeds(uK)withanHonoursdegreeingeologyin1975.HeworkedintheZambiancopperbeltgainingexperienceinminegeologyatmajorcopper-cobaltdeposits,returningtotheunitedKingdomin1978toworkforthenationalcoalBoardinopen-castcoalexplorationactivities.in1980,robinjoinedmountisamineslimitedinQueenslandandworkedinboththecopperandsilver-lead-zincmineareas.

robinmovedtostockbrokerJBWere&sonasbasemetalsanalystin1986,beforehissubsequentappointmentsasgoldanalystandmanagerofJBWere’sresourceresearchteam.duringhistimeatJBWere,robinestablishedhimselfasoneofAustralia’sleadingresourceanalysts,andtheresourceresearchteamunderhismanagementwasheldinthesameregard.

robinresignedfromJBWere&soninearly1997toestablishlionandlionmanager.robinismanagingdirectoroflionmanagerptyltd,andanon-executivedirectoroflioninvesteesoneAsiaresourceslimitedandAsianmineralresourceslimited.

Director’s ReportF

or p

erso

nal u

se o

nly


Other Key Management PersonnelCraigsmythbCA(Acctg),MAppFin,CA(Chiefexecutiveofficer)craigsmythgraduatedfromtheVictoriauniversityofWellingtonwithaBachelorofcommerceandAdministration,andhascompletedhismasterofAppliedFinanceattheuniversityofmelbourne.craig’sfinancialbackgroundincludescoopersandlybrand,creditsuisseFirstBoston(london)andAnZinvestmentBank.craigisamemberoftheinstituteofcharteredAccountantsofAustralia.

craigjoinedlionastheFinancialcontrollerinmarch2005andwasappointedcompanysecretaryinAugust2007.FromJuly2009tooctober2012craigwasmanagingdirectoroflion.on31october2012craigsteppeddownfromtheBoardoflionselectiongroupbutremainsaschiefexecutiveofficeroflion.craigisemployedbylionmanagerptylimited.

janerose(investorrelationsManager&Companysecretary)Janerosecommencedworkin1983asalegaladministrativeassistant.duringthefollowing12years,JaneheldsenioradministrativepositionswithphillipsFoxandcorrschambersWestgarthinmelbourneandnabarronathansoninlondon.

onreturningtoAustralia,JaneworkedasexecutiveAssistanttothemanagingdirectorofAcaciaresourceslimitedandAnglogoldAshantilimitedwhereshewasalsoresponsibleforthemanagementofvariouscorporateinitiatives,includingmarketingandco-ordinationofinvestorrelationsactivities.From2002to2006,Janeworkedforseverallioninvestees,includingmpiminesltd,leviathanresourcesandindophilresources.Janeworked

withlioninearly2007toassistwiththemerger,andshesubsequentlyjoinedthecompanyinJuly2007ascorporaterelationsmanager.

innovember2008Janewasappointedinvestorrelationsmanagerandcompanysecretary.

directors’Meetingsduringtheyearandupuntilthedateofthisreport,thecompanyheldfourteendirectors’meetings.thenamesofthedirectorsaresetoutabove.

thetablebelowreflectsattendancesofthedirectorsatmeetingsoflion’sBoard.

AuditCommitteeMeetingduringtheyearandupuntilthedateofthisreport,thecompanyheldoneauditcommitteemeeting.

thetablebelowreflectsattendancesoftheauditcommitteemeeting.

directors’benefitssincetheendoftheprecedingfinancialyear,nodirectorhasreceivedorbecomeentitledtoreceiveabenefit,otherthanbenefitsdisclosedinthisreportasemolumentsorthefixedsalaryofafulltimeemployeeofthecompanyorarelatedbodycorporate,byreasonofacontractmadebythecompanyorrelatedbodycorporatewiththedirectororwithafirmofwhichheisamember,orwithanentityinwhichhehasasubstantialfinancialinterest.

indemnificationofdirectors,officersandAuditorsAnindemnityagreementhasbeenenteredintobetweenlionandeachofthecompany’sdirectorsnamedearlierinthisreportandwiththecompanysecretary.undertheagreement,thecompanyhasagreedtoindemnifythoseofficersagainstanyclaimorforanyexpensesorcostswhichmayariseasaresultofworkperformedintheirrespectivecapacitiestotheextentpermittedbylaw.thereisnomonetarylimittotheextentofthisindemnity.

lionhaspaidaninsurancepremiumof$48,663inrespectofacontractinsuringeachofthedirectors,previousdirectorsofthecompany,andotherkeymanagementpersonnel,againstallliabilitiesandexpensesarisingasaresultofworkperformedintheirrespectivecapacities,totheextentpermittedbylaw.

AuditorindependenceWehaveobtainedanindependencedeclarationfromourauditors,pricewaterhousecoopers,asrequiredundersection307ofthecorporationsAct2001.Acopycanbefoundonpage22ofthisfinancialreport.

Director’s Report

boArdoFdireCtors

AtteNdedMAx.

PossibleAtteNded

pJmaloney 14 14

cKsmyth 4 5

rAWiddup 14 14

BJKsullivan 14 14

cpmelloy 11 11

AuditCoMMittee

AtteNdedMAx.

PossibleAtteNded

pJmaloney 1 1

BJKsullivan 1 1

cpmelloy 1 1For

per

sona

l use

onl

y


Director’s Report

Non-AuditservicesAfeeof$10,000waspaidtotheexternalauditorsduringtheyearended31July2013forspecificreviewproceduresoverinvestmentperformancecalculations.thedirectorsaresatisfiedthattheprovisionofnon-auditservicesiscompatiblewiththegeneralstandardofindependenceforauditorsimposedbythecorporationsAct.thenatureandscopeofeachtypeofnon-auditserviceprovidedmeansthatauditorindependencewasnotcompromised.

roundingofAmountsthecompanyisofakindspecifiedinAustraliansecuritiesandinvestmentscommissionclassorder98/100.inaccordancewiththatclassorder,amountsinthefinancialreportandthedirectors’reporthavebeenroundedtothenearestthousanddollarsunlessspecificallystatedtobeotherwise.

thisreporthasbeenmadeinaccordancewitharesolutionofthediretors.

PjMaloneychairman

rAwiddupdirector

melbourne

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y


Lion Selection Group LimitedDirector’s Declaration

inaccordancewitharesolutionofthedirectorsoflionselectiongrouplimited,wedeclarethat:

1. intheopinionofthedirectors:

(a) thefinancialstatements,notessetoutonpages23to42areinaccordancewiththecorporationsAct2001andothermandatoryreportingrequirements,including:

(i) complyingwiththeAccountingstandards,thecorporationsregulations2001andothermandatoryprofessionalreportingrequirements;and

(ii) givingatrueandfairviewofthefinancialpositionofthecompany’spositionasat31July2013anditsperformancefortheyearendedonthatdate;and

(b) therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.

2. note2(a)confirmsthatthefinancialstatementsalsocomplywithinternationalFinancialreportingstandardsasissuedbytheinternationalAccountingstandardsBoard.

3. thisdeclarationhasbeenmadeafterreceivingthedeclarationsrequiredtobemadetothedirectorsinaccordancewithsection295AofthecorporationsAct2001forthefinancialyearended31July2013.

4. thedirectorshavebeengiventhedeclarationbythechiefexecutiveofficerrequiredbysection295AofthecorporationsAct2001.

onbehalfoftheBoard

PjMaloney rAwiddup

chairman director

melbourne

date:3september2013

For

per

sona

l use

onl

y


Financial Statements

Statement of Comprehensive Income for the Year ended 31 July 2013

Notes 2013$’000

2012$’000

gain/(loss)attributabletomovementinfairvalue 4 (2,278) (28,990)

dividendincome 1,304 361

interestincome 547 1,490

Foreignexchangegain/(loss) (42) 541

managementfees (600) (357)

employeebenefits (217) (189)

otherexpenses 4 (741) (354)

(loss)/profitbeforeincometax (2,027) (27,498)

incometax(expense)/benefit 5 - -

Net(loss)/profitaftertax (2,027) (27,498)

othercomprehensiveincome - -

totalComprehensive(loss)/incomefortheyear (2,027) (27,498)

Attributableto:

non-controllinginterest - -

members (2,027) (27,498)

Centspershare Centspershare

Basic(loss)/earningspershare (2.3) (31.2)

diluted(loss)/earningspershare (2.3) (31.2)

theabovestatementofcomprehensiveincomeshouldbereadinconjunctionwiththeaccompanyingnotes.

For

per

sona

l use

onl

y



Statement of Financial Position as at 31 July 2013

Notes 2013$’000

2012$’000

CurrentAssets

cashandcashequivalents 11 17,938 23,981

tradeandotherreceivables 6 82 132

totalCurrentAssets 18,020 24,113

Non-CurrentAssets

FinancialAssets 7 45,813 34,474

totalnon-currentAssets 45,813 34,474

totalAssets 63,833 58,587

Currentliabilities

tradeandotherpayables 8 51 50

totalCurrentliabilities 51 50

Non-Currentliabilities

totalnon-currentliabilities - -

totalliabilities 51 50

NetAssets 63,782 58,537

equity

contributedequity 10 103,684 100,109

sharestobeissuedreserve 3,697 -

(Accumulatedlosses) 9 (43,599) (41,572)

totalequity 63,782 58,537

theabovestatementoffinancialpositionshouldbereadinconjunctionwiththeaccompanyingnotes.

For

per

sona

l use

onl

y



Statement of Cash Flows for the Year ended 31 July 2013

Notes 2013$’000

2012$’000

Cashflowsfromoperatingactivities

dividendsreceived 1,304 361

interestreceived 611 1,890

paymentstosuppliersandemployees(includinggst) (1,570) (900)

netoperatingcashflows 11(b) 345 1,351

Cashflowsfrominvestingactivities

paymentsforinvestments (17,283) (13,980)

capitalreturnsfrominvestments 884 -

proceedsfrominvestmentsales 2,781 150

netinvestingcashflows (13,618) (13,830)

Cashflowsfromfinancingactivities

proceedsfromtheissueofshares 3,575 -

proceedsfromsharestobeissued 3,697 -

netfinancingcashflows 7,272 -

exchangeratevariationsonforeigncashbalances (42) 541

Net(decrease/increase)incashandcashequivalentsheld (6,001) (11,938)

cashandcashequivalentsatbeginningoffinancialperiod 23,981 35,919

Cashandcashequivalentsatendoffinancialperiod 17,938 23,981

theabovestatementofcashflowsshouldbereadinconjunctionwiththeaccompanyingnotes

For

per

sona

l use

onl

y



theabovestatementofchangesinequityshouldbereadinconjunctionwiththeaccompanyingnotes

Statement of Changes in Equity for the Year ended 31 July 2013

issuedCAPitAl$’000

shArestobeissuedreserVe

$’000

ACCuMulAtedlosses

$’000

totAl$’000

balanceat1August2012 100,109 - (41,572) 58,537

totalcomprehensiveloss - - (2,027) (2,027)

transactionswithownersintheircapacityasowners

sharesissued 3,918 - - 3,918

shareissueexpenses (343) - - (343)

receiptoffunds–sharestobeissued - 3,697 - 3,697

balanceat31july2013 103,684 3,697 (43,599) 63,782

balanceat1August2011 100,109 (14,074) 86,035

totalcomprehensiveloss - (27,498) (27,498)

balanceat31july2012 100,109 (41,572) 58,537

For

per

sona

l use

onl

y



Notes to the Financial Statements for the Year ended 31 July 2013

Note1. CorPorAteiNForMAtioN

thefinancialreportoflionselectiongrouplimited(“lion”)fortheyearended31July2013wasauthorisedforissueinaccordancewitharesolutionofthedirectorson3september2013.thedirectorshavethepowertoamendandreissuethefinancialreport.

lionisacompanylimitedbysharesincorporatedinAustralia.thenatureoftheoperationsandprincipalactivitiesofthecompanyaredescribedinthedirectors’report.theregisteredaddressoflionislevel4,15Queenstreet,melbourne.

Note2. suMMAryoFsiGNiFiCANtACCouNtiNGPoliCies

theprincipalaccountingpoliciesadoptedinthepreparationofthefinancialreportaresetoutbelow.thesepolicieshavebeenconsistentlyappliedtoall theyearspresented,unlessotherwisestated.comparative information isreclassifiedwhereappropriatetoenhancecomparability.

(a) basisofPreparation

these general purpose financial statements have been prepared in accordance with Australian Accountingstandards and interpretations issued by the Australian Accounting standards Board and the corporations Act2001.lionisafor-profitentityforthepurposeofpreparingthefinancialstatements.

the financial report complies with Australian Accounting standards. the financial report also complies withinternationalFinancialreportingstandards(iFrs)asissuedbytheinternationalAccountingstandardsBoard(iAsB).

the financial report has been prepared on a historical cost basis, except for financial assets that have beenmeasuredatfairvalue.

thefinancialreportispresentedinAustraliandollarsandallvaluesareroundedtothenearestthousanddollars($’000)unlessotherwisestatedundertheoptionavailabletolionunderAsicclassorder98/100.lionisanentitytowhichtheclassorderapplies.

early adoption of standards.

lionhaselectednottoearlyadoptanystandards.

(b) Newaccountingstandardsandinterpretations

certainnewaccountingstandardsandinterpretationshavebeenpublishedthatarenotmandatoryfor31July2013reportingperiods.thecompany’sassessmentof the impactof thesenewstandardsand interpretations issetoutbelow.

aasB 9 Financial instruments, aasB 2009-11 amendments to australian accounting standards arising from aasB 9 and aasB 2010-7 amendments to australian accounting standards arising from aasB 9 (December 2010) (effective from 1 january 2015*)

AAsB9Financialinstrumentsaddressestheclassification,measurementandderecognitionoffinancialassetsandfinancialliabilities.thestandardisnotapplicableuntil1January2015butisavailableforearlyadoption.thecompanyisyettoassessitsfullimpact.However,initialindicationsarethatassetscurrentlyheldasfairvaluethroughprofitandlosswillcontinuetobecarriedatfairvaluewithallfairvaluegains/lossesbeingrecognisedinprofitandloss.thecompanyhasnotyetdecidedwhentoadoptAAsB9.

aasB 10 consolidated Financial statements, aasB 11 joint arrangements, aasB 12 Disclosure of interests in other entities, revised aasB 127 separate Financial statements and aasB 128 investments in associates and joint Ventures, aasB 2011-7 amendments to australian accounting standards arising from the consolidation and joint arrangements standards and aasB 2012-10 amendments to australian accounting standards - transition guidance and other amendments (effective 1 january 2013)

inAugust2011,theAAsBissuedasuiteoffivenewandamendedstandardswhichaddresstheaccountingforjointarrangements,consolidatedfinancialstatementsandassociateddisclosures.

AAsB 10 replaces all of the guidance on control and consolidation in AAsB 127 consolidated and separateFinancialstatements,and interpretation12consolidation–specialpurposeentities.thestandard introducesasingledefinitionofcontrol thatapplies toallentities focusingon theneed tohavebothpowerandrightsor

For

per

sona

l use

onl

y




exposure to variable returns before control is present. power is the current ability to direct the activities thatsignificantlyinfluencereturns.returnsmustvaryandcanbepositive,negativeorboth.thereisalsonewguidanceonparticipatingandprotectiverightsandonagent/principalrelationships.Whilethecompanydoesnotexpectthenewstandardtohaveasignificantimpactonitscomposition,ithasyettoperformadetailedanalysisofthenewguidanceinthecontextofitsvariousinvesteesthatmayormaynotbecontrolledunderthenewrules.

AAsB11introducesaprinciplesbasedapproachtoaccountingforjointarrangements.thefocusisnolongeronthelegalstructureofjointarrangements,butratheronhowrightsandobligationsaresharedbythepartiestothejointarrangement.Basedontheassessmentofrightsandobligations,ajointarrangementwillbeclassifiedaseithera jointoperationor joint venture.Joint venturesareaccounted forusing theequitymethod,and thechoicetoproportionatelyconsolidatewillnolongerbepermitted.partiestoajointoperationwillaccounttheirshareofrevenues,expenses,assetsandliabilitiesinmuchthesamewayasunderthepreviousstandard.AAsB11alsoprovidesguidanceforpartiesthatparticipateinjointarrangementsbutdonotsharejointcontrol.lionisaventurecapitalorganisation,anddesignates its investmentsasbeingfairvaluethroughprofitor loss.thescopeofAAsB128investmentsinAssociatesallowsthistreatmentforventurecapitalorganisationseventhoughthecompanymayhavesignificantinfluenceinaninvestee.thistreatmentisnotexpectedtochangeundertheamendedaccountingstandard.

aasB 13 Fair Value Measurement and aasB 2011-8 amendments to australian accounting standards arising from aasB 13 (effective 1 january 2013)

AAsB13wasreleasedinseptember2011.itexplainshowtomeasurefairvalueandaimstoenhancefairvaluedisclosures.thecompanyhasyettodeterminewhich,ifany,ofitscurrentmeasurementtechniqueswillhavetochangeasaresultofthenewguidance.itisthereforenotpossibletostatetheimpact,ifany,ofthenewrulesonanyoftheamountsrecognisedinthefinancialstatements.However,applicationofthenewstandardwillimpactthetypeofinformationdisclosedinthenotestothefinancialstatements.thecompanydoesnotintendtoadoptthenewstandardbefore itsoperativedate,whichmeans that itwouldbefirstapplied in theannual reportingperiodending31July2014.

(c) significantaccountingestimatesandassumptions

thecarryingamountsofcertainassetsandliabilitiesareoftendeterminedbasedonestimatesandassumptionsoffutureevents.thekeyestimatesandassumptionsthathaveanimpactonthecarryingamountsofcertainassetsandliabilitiesare:

(i) income taxes lion issubject to incometaxes inAustralia.significant judgment isrequired indeterminingtheprovision

forincometaxesanddeferredtaxes.therearemanytransactionsandcalculationsundertakenduringtheordinarycourseofbusinessforwhichtheultimatetaxdeterminationisuncertain.lionrecognisesliabilitiesforanticipatedtaxauditissuesbasedonestimatesofwhetheradditionaltaxeswillbedue.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswillimpactthecurrentanddeferredtaxprovisionsintheperiodinwhichsuchdeterminationismade.

deferred tax assets are recognised for deductible temporary differences and unused tax losses only if itis probable that sufficient future taxable amounts will be available to utilise those temporary differencesand losses.this involves judgmentregarding the futurefinancialperformanceand is therefore inherentlyuncertain. to the extent assumptions regarding future profitability change, there can be an increase ordecreaseinthelevelofdeferredtaxassetsrecognisedwhichcanresultinachargeorcreditintheperiodinwhichthechangeoccurs.

(ii) Fair value of investments and other financial assets the company carries its investments at fair value with changes in the fair values recognised in profit or

loss. the fair value of investments and other financial assets that are not traded in an active market isdetermined based on either the last sale price, or where not available, the market value of underlyinginvestments.determinationofmarketvalueinvolvesthecompany’sjudgmenttoselectavarietyofmethodsandinmakingassumptionsthataremainlybasedonmarketconditionsexistingateachbalancesheetdate.thekeyassumptionsusedinthisdeterminationaresetoutinnote2(k).

For

per

sona

l use

onl

y



(d) revenue

revenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtolionandtherevenuecanbereliablymeasured.thefollowingspecificrecognitioncriteriamustalsobemetbeforerevenueisrecognised:

(i) interest revenueisrecognisedasinterestaccruesusingtheeffectiveinterestmethod.thisisamethodofcalculating

theamortisedcostofafinancialassetandallocatingtheinterestincomeovertherelevantperiodusingtheeffective interestrate,which is therate thatexactlydiscountsestimated futurecashreceipts throughtheexpectedlifeofthefinancialassettothefairvalueofthefinancialasset.

(ii) Dividends revenueisrecognisedwhentheshareholders’righttoreceivethepaymentisestablished.

(e) Cashandcashequivalents

Forcashflowstatementpurposes,cashandcashequivalents includescashonhand,depositsheldatcallwithfinancialinstitutions,othershort-term,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessorthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue,andbankoverdrafts.Bankoverdraftsareshownwithinborrowingsincurrentliabilitiesonthebalancesheet.

(f) tradeandotherreceivables tradereceivables,whichgenerallyhave30dayterms,arerecognisedandcarriedatoriginalinvoiceamountless

anallowanceforanyuncollectibleamounts.

Anallowancefordoubtfuldebtsismadewhenthereisobjectiveevidencethatthecompanywillnotbeabletocollectthedebts.Baddebtsarewrittenoffwhenidentified.

(g) Foreigncurrencytranslation BoththefunctionalandpresentationcurrencyoflionisAustraliandollars(Aud).

transactions and Balances Foreigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthe

datesofthetransactions.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsand fromthe translationatyearendexchangeratesofmonetaryassetsand liabilitiesdenominated in foreigncurrenciesarerecognisedinprofitorloss,exceptwhentheyaredeferredinequityasqualifyingcashflowhedgesandqualifyingnetinvestmenthedgesorareattributabletopartofthenetinvestmentinaforeignoperation.

non-monetaryitemsthataremeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.translationdifferencesonassetsandliabilitiescarriedatfairvaluearereportedaspartofthefairvaluegainorloss.Forexample,translationdifferencesonnon-monetaryassetsandliabilitiessuchasequitiesheldatfairvaluethroughprofitorlossarerecognisedinprofitorlossaspartofthefairvaluegainorlossandtranslationdifferencesonnon-monetaryassetssuchasequitiesclassifiedasavailable-for-salefinancialassetsareincludedinthefairvaluereserveinequity.

(h) incometax currenttaxassetsandliabilitiesforthecurrentandpriorperiodsaremeasuredattheamountexpectedtobe

recoveredfromorpaidtothetaxationauthorities.thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantivelyenactedbythebalancesheetdate.

deferredincometaxisprovidedonalltemporarydifferencesatthebalancesheetdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexcept:

• whenthedeferredincometaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliabilityinatransactionthatisnotabusinesscombinationandthat,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or

• whenthetaxabletemporarydifferenceisassociatedwithinvestmentsinsubsidiaries,associatesorinterestsinjointventures,andthetimingofthereversalofthetemporarydifferencecanbecontrolledanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.


For

per

sona

l use

onl

y



deferredincometaxassetsarerecognisedforalldeductibletemporarydifferences,carry-forwardofunusedtaxassetsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencesandthecarry-forwardofunusedtaxcreditsandunusedtaxlossescanbeutilised,except:

• whenthedeferred incometaxassetrelatingtothedeductibletemporarydifferencearisesfromthe initialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or

• when the deductible temporary difference is associated with investments in subsidiaries, associates orinterestsinjointventures,inwhichcaseadeferredtaxassetisonlyrecognisedtotheextentthatitisprobablethatthetemporarydifferencewillreverseintheforeseeablefutureandtaxableprofitwillbeavailableagainstwhichthetemporarydifferencecanbeutilised.

thecarryingamountofdeferredincometaxassets isreviewedateachbalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredincometaxassettobeutilised.

unrecogniseddeferredincometaxassetsarereassessedateachbalancesheetdateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxableprofitwillallowthedeferredtaxassettoberecovered.

deferred incometaxassetsandliabilitiesaremeasuredat thetaxratesthatareexpectedtoapplytotheyearwhentheassetisrealisedortheliabilityissettled,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.

incometaxesrelatingtoitemsrecogniseddirectlyinequityarerecognisedinequityandnotinthestatementofcomprehensiveincome.

deferredtaxassetsanddeferredtaxliabilitiesareoffsetonlyifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxassetsandliabilitiesrelatetothesametaxableentityandthesametaxationauthority.

(j) othertaxes revenues,expensesandassetsarerecognisednetoftheamountofgstexcept:

• whenthegstincurredonapurchaseofgoodsandservicesisnotrecoverablefromthetaxationauthority,inwhichcasethegstisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpenseitemasapplicable;and

• receivablesandpayables,whicharestatedwiththeamountofgstincluded.

thenetamountofgstrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartofreceivablesorpayablesinthebalancesheet.

cash flows are included in the cash Flow statement on a gross basis and the gst component of cash flowsarisingfrominvestingandfinancingactivities,whichisrecoverablefrom,orpayableto,thetaxationauthority,areclassifiedasoperatingcashflows.

commitments and contingenciesaredisclosed net of the amount of gst recoverable from,or payable to, thetaxationauthority.

(k) investments,otherFinancialAssetsandinvestmentsinAssociates FinancialassetsinthescopeofAAsB139Financialinstruments:recognitionandmeasurementareclassifiedas

eitherfinancialassetsatfairvaluethroughprofitorloss,loansandreceivables,held-to-maturityinvestments,oravailable-for-saleinvestments,asappropriate.lionisaventurecapitalorganisation,anddesignatesitsinvestmentsasbeingfairvaluethroughprofitorloss.thescopeofAAsB128investmentsinAssociatesallowsthistreatmentfor venturecapitalorganisationseven though thecompanymayhavesignificant influence inan investee.Afterinitialrecognition,investmentsaremeasuredatfairvalue,withgainsorlossesonfairvalueofinvestmentsbeingrecognisedinthestatementofcomprehensiveincome.thefairvalueofassetsisre-measuredateachreportingdate.thisrecognitionismorerelevanttoshareholdersandconsistentwithinternalinvestmentevaluation.

Forlistedinvestments,fairvalueisdeterminedbasedontheclosingbidpriceatreportingdate.unlistedinvestmentsarevaluedbasedoneitherthemarketvalueofunderlyinginvestmentsorthelastsaleprice.Wherethereisnorecentsalesprice,marketvalueforunlistedinvestmentsisdeterminedusingadiscountedcashflowanalysis.


For

per

sona

l use

onl

y



(k) investments,otherFinancialAssetsandinvestmentsinAssociates(cont’d)

thepriceassumptionsanddiscount rate included in thisanalysisarebasedonmarketdataaswell asotherrelevantdata.Forunlistedoptionsoverlistedequities,thevaluationwillbecalculatedusingtheBlack-scholesmethod,havingregardtothevolatilityoftheunderlyingequitybasedonobservablemarketdataandthetimetoexpiryoftherelevantoptions.

Allregularpurchasesandsalesoffinancialassetsarerecognisedonthetradedatei.e.thedatethatthecompanycommits to purchase the asset. regular purchases or sales are purchases or sales of financial assets undercontractsthatrequiredeliveryoftheassetswithintheperiodestablishedgenerallybyregulationorconventioninthemarketplace.

(l) derecognitionoffinancialassetsandfinancialliabilities

(i) Financial assets

Afinancialasset(or,whereapplicable,apartofafinancialassetorpartofagroupofsimilarfinancialassets)isderecognisedwhen:

• therightstoreceivecashflowsfromtheassethaveexpired;

• thecompanyretainstherighttoreceivecashflowsfromtheasset,buthasassumedanobligationtopaytheminfullwithoutmaterialdelaytoathirdpartyundera‘pass-through’arrangement;orthecompanyhastransferreditsrightstoreceivecashflowsfromtheassetandeither(a)hastransferredsubstantiallyalltherisksandrewardsoftheasset,or(b)hasneithertransferrednorretainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontroloftheasset.

(ii) Financial liabilities

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled orexpires.

Whenanexistingfinancial liability is replacedbyanother fromthesame lenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodification istreatedasade-recognitionoftheoriginalliabilityandtherecognitionofanewliability,andthedifferenceintherespectivecarryingamountsisrecognisedinprofitorloss.

(m) impairmentofassets

Assetsthathaveanindefiniteusefullifearenotsubjecttoamortisationandaretestedannuallyforimpairment.Assetsthataresubjecttoamortisationarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognisedfortheamountbywhich the asset’s carrying value exceeds its recoverable amount. the recoverable amount is the higher of anasset’sfairvaluelesscoststosellandvalueinuse.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cashgeneratingunits).

(n) borrowings

Borrowingsareinitiallyrecognisedatfairvalue,netoftransactioncostsincurred.Borrowingsaresubsequentlymeasuredatamortisedcost.Anydifferencebetweentheproceeds(netoftransactioncosts)andtheredemptionamount is recognised in thestatementofcomprehensive incomeover theperiodof theborrowingsusing theeffectiveinterestmethod.Borrowingsareclassifiedascurrentliabilitiesunlesslionhasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthebalancesheetdate.

(o) Payables

payablesarecarriedatamortisedcostandrepresentliabilitiesforgoodsandservicesprovidedtothecompanypriortotheendofthefinancialyearthatareunpaidandarisewhenthecompanybecomesobligedtomakefuturepaymentsinrespectofthepurchaseofthesegoodsandservices.theamountsareunsecuredandareusuallypaidwithin30daysofrecognition.


For

per

sona

l use

onl

y



(p) Provisions provisionsarerecognisedwhenlionhasapresentobligation(legalorconstructive)asaresultofapastevent,it

isprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation.

Whenlionexpectssomeorallofaprovision tobereimbursed, forexampleunderan insurancecontract, thereimbursementisrecognisedasaseparateassetbutonlywhenthereimbursementisvirtuallycertain.theexpenserelatingtoanyprovisionispresentedinthestatementofcomprehensiveincomenetofanyreimbursement.

if theeffectof the timevalueofmoney ismaterial,provisionsarediscountedusingacurrentpretaxrate thatreflectstherisksspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasaborrowingcost.

(q) employeeleavebenefits-wages,salaries,annualleaveandlongserviceleave liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave that

areexpectedtobesettledwithin12monthsofthereportingdatearerecognisedinotherpayablesinrespectofemployees’servicesuptothereportingdate.theyaremeasuredattheamountsexpectedtobepaidwhentheliabilitiesaresettled.liabilitiesfornon-accumulatingsickleavearerecognisedwhentheleaveistakenandaremeasuredattheratespaidorpayable.

the liability for longservice leave forwhichlionhasanunconditionalright todefersettlement forat least12monthsafterthebalancesheetdateisrecognisedintheprovisionforemployeebenefitsandmeasuredasthepresentvalueofexpected futurepayments tobemade inrespectofservicesprovidedbyemployeesup to thereportingdateusingtheprojectedunitcreditmethod.considerationisgiventoexpectedfuturewageandsalarylevels,experienceofemployeedeparturesandperiodsofservice.expectedfuturepaymentsarediscountedusingmarketyieldsatthereportingdateonnationalgovernmentbondswithtermstomaturityandcurrencythatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.

(r) Contributedequity ordinary shares are classified as equity. incremental costs directly attributable to the issue of new shares or

optionsareshowninequityasadeduction,netoftax,fromtheproceeds.

iftheentityreacquiresitsownequityinstruments,forexample,asaresultofasharebuy-back,thoseinstrumentsaredeductedfromequityandtheassociatedsharesarecancelled.nogainorlossisrecognisedintheprofitorlossandtheconsiderationpaidincludinganydirectlyattributableincrementalcosts(netofincometaxes)isrecogniseddirectlyinequity.

(s) earningspershare Basicearningspershareiscalculatedasnetprofit,adjustedtoexcludeanycostsofservicingequity(otherthan

dividends)andpreferencesharedividends,dividedbytheweightedaveragenumberofordinaryshares.

dilutedearningspershareiscalculatedasnetprofit,adjustedfor:

• costsofservicingequity(otherthandividends)andpreferencesharedividends;

• theaftertaxeffectofdividendsandinterestassociatedwithdilutivepotentialordinarysharesthathavebeenrecognisedasexpenses;and

• othernon-discretionarychangesinrevenuesorexpensesduringtheperiodthatwouldresultfromthedilutionofpotentialordinaryshares,dividedbytheweightedaveragenumberofordinarysharesanddilutivepotentialordinaryshares,adjustedforanybonuselement.

(t) segmentreporting operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperating

decisionmaker.thechiefoperatingdecisionmaker,whoisresponsibleforallocatingresourcesandassessingperformanceofthesegments,hasbeenidentifiedastheBoard.

investmentshavesimilarcharacteristicsandsosegmentsaredeterminedonageographicalbasis.thecompanyinvests only in small and medium mining and exploration companies with gold and base metal activities inAustralia,Africa,southeastAsiaandtheAmericas.


For

per

sona

l use

onl

y



Note3 FiNANCiAlriskMANAGeMeNt

lion’sactivitiesexposeittoavarietyoffinancialrisks:marketrisk(includingforeigncurrencyrisk,interestrateriskandpricerisk),creditriskandliquidityrisk.lion’soverallriskmanagementprogramiscarriedoutunderpoliciesapprovedbytheBoardofdirectors,andfocusesontheunpredictabilityofthefinancialmarketsandseekstominimisepotentialadverseeffectsonthefinancialperformanceofthecompany.theBoardprovideswrittenprinciplesforoverallriskmanagement,aswellaspoliciescoveringspecificareas.theBoardreviewsandagreespoliciesformanagingeachoftheserisksandtheyaresummarisedbelow.lionalsomonitorsthemarketpriceriskarisingfromallfinancialinstruments.

lionholdsthefollowingfinancialinstruments:

(a) Marketrisk

(i) Foreign currency risk

lionoperatesinternationallyandisexposedtoforeignexchangeriskarisingfromvariouscurrencyexposures,primarilywithrespecttotheunitedstatesdollar(usd).

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilitiesdenominatedinacurrencythatisnottheentity’sfunctionalcurrency.tomitigatethecompany’sexposuretoforeignexchangerisk,non-Audcashflowsarecloselymonitored.

thecompany’spost-taxprofitislesssensitivetomovementsintheAud/usdexchangerateinthecurrentyearthanintheprioryear,partlyduetoadecreaseinusdcashholdings.

(ii) price risk

lionisexposedtoequitysecuritiespricerisk,withmanyofthecompany’sequityinvestmentsbeingpubliclytraded.thisarisesfrominvestmentsheldbylionandclassifiedonthebalancesheetasfairvaluethroughprofitorloss.

tomanageitspriceriskarisingfrominvestmentsinequitysecurities,thecompanydiversifiesitsportfolio.diversificationoftheportfolioisdoneinaccordancewiththelimitssetbythecompany,howeverfromtimetotimethecompanymayseektoincreaseexposuretoparticularinvestments.liondoesnothedgeitsequitiessecuritiespricerisk.

Basedonthefinancialinstrumentsheldattheendoftheperiod,ifthevalueofequitysecuritieshadincreasedby10%/decreasedby10%withallothervariablesheldconstant,thecompany’spost-taxprofitfortheyearwouldhavebeen$4,581,370higher/lower(2012:$3,447,324higher/lower)asaresultofgains/lossesonequitysecuritiesclassifiedasfairvaluethroughprofitorloss.


2013$’000

2012$’000

Financialassets

cash 9,438 5,886

Bankbillsanddepositsreceivable 8,500 18,095

investmentsinsecurities 45,813 34,474

tradeandotherreceivables 82 132

63,833 58,587

Financialliabilities

tradeandothercreditors 51 50

51 50

For

per

sona

l use

onl

y



(iii) interest rate risk exposures

lionisexposedtointerestrateriskthroughitsprimaryfinancialassetsandliabilities.theinterestrateriskexposurestogetherwiththeeffectiveinterestrateforeachclassoffinancialassetsandfinancialliabilitiesatbalancedatearesummarisedbelow.Allassetsandliabilitiesarecurrent,maturingwithinoneyear,withtheexceptionofinvestmentsinsecurities,thevalueofwhichwillberealisedatthediscretionofthecompany.nodecisionhasbeenmaderegardingthetimingofthisrealisation.


2013

FloAtiNGiNterest

rAte$’000

FixediNterest

rAte$’000

NoNiNterestbeAriNG

$’000

totAl$’000

AVerAGeiNterestrAte

FloAtiNG% Fixed%

Financialassets

cash–Aud 9,436 - - 9,436 2.23 -

cash–usd - 2 2 - -

Bankbillsanddepositsreceivable - 8,500 - 8,500 - 3.45

otherreceivables - - 82 82 - -

investmentinsecurities - - 45,813 45,813 - -

Financialliabilities:

tradeandothercreditors - - 51 51 - -

2012

Financialassets

cash–Aud 4,546 - - 4,546 2.79 -

cash–usd - - 1,340 1,340 - -

Bankbillsanddepositsreceivable - 18,095 - 18,095 - 5.16

otherreceivables - - 132 132 - -

investmentinsecurities - - 34,474 34,474 - -

Financialliabilities:

tradeandothercreditors - - 50 50 - -

At31July2013,iffloatinginterestrateshadincreased/decreasedby1.0%p.a.fromtheyearendrateswithallothervariablesheldconstant,post-taxprofitfortheyearwouldhavebeen$94,360higher/$94,360lower(2012:$45,460higher/$45,460lower),mainlyasaresultofhigher/lowerinterestincomefromcashandcashequivalents.

(b) Creditrisk

lion is exposed to credit risk. credit risk arises from cash and cash equivalents and deposits with banks aswellascreditexposurestocounterparties,includingoutstandingreceivablesandcommittedtransactions.lionhasapolicyofmaintaining itscashandcashequivalentswiththe“top4”AustralianBanks.Forothercounterparties,ifthereisnoindependentrating,managementassessesthecreditqualityoftheparty,takingintoaccountitsfinancialposition,pastexperienceandotherfactors.themaximumexposuretocreditriskapproximatesthecarryingvaluesasdisclosedabove.

For

per

sona

l use

onl

y



(c) liquidityrisk

prudentliquidityriskmanagementimpliesmaintainingsufficientcashandmarketablesecuritiesandtheabilitytocloseoutmarketpositions.lionmanagesliquidityriskbycontinuouslymonitoringforecastandactualcashflowsandmatchingthematurityprofilesoffinancialassetsandliabilities.surplusfundsaregenerallyonlyinvestedininstrumentsthataretradeableinhighlyliquidmarkets.

(d) Fairvaluemeasurements

thefairvalueoffinancialassetsandfinancialliabilitiesmustbeestimatedforrecognitionandmeasurementorfordisclosurepurposes.

thefairvalueoffinancialinstrumentstradedinactivemarkets(suchaspubliclytradedderivatives,andtradingandavailable-for-salesecurities)isbasedonquotedmarketpricesatthereportingdate.thequotedmarketpriceusedforfinancialassetsheldbythecompanyisthecurrentbidprice.

the fair value of financial instruments that are not traded in an active market (for example, over-the-counterderivatives)isdeterminedusingvaluationtechniques.lionusesavarietyofmethodsandmakesassumptionsthatarebasedonmarketconditionsexistingateachbalancedate.Wherethereisnorecentsalespriceavailable,thefairvalueforunlistedinvestmentsisdeterminedusingadiscountedcashflowanalysis.thefairvalueoftheoptioncontractsisdeterminedusingaBlackscholesvaluationatthereportingdate.

thecarryingvaluelessimpairmentprovisionoftradereceivablesandpayablesareassumedtoapproximatetheirfairvaluesduetotheirshort-termnature.

lionhasadoptedtheamendmenttoAAsB7Financialinstruments:disclosureswhichrequiresdisclosureoffairvaluemeasurementsbylevelofthefollowingfairvaluemeasurementhierarchy:

(a) quotedpriced(unadjusted)inactivemarketsforidenticalassetsorliabilities(level1);

(b) inputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetorliability,eitherdirectly(asprices)orindirectly(derivedfromprices)(level2);and

(c) inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs)(level3).

thefollowingtablespresentthecompany’sassetsandliabilitiesmeasuredandrecognisedatfairvaluefortheyearsended31July2013and31July2012.


leVel1$’000

leVel2$’000

leVel3$’000

totAl$’000

At31july2013

Assets

Financialassetsatfairvaluethroughprofitorloss

investments 12,384 33,429 - 45,813

totalAssets 12,384 33,429 - 45,813

At31july2012

Assets

Financialassetsatfairvaluethroughprofitorloss

investments 11,621 22,853 - 34,474

totalAssets 11,621 22,853 - 34,474

For

per

sona

l use

onl

y



thefollowingtablepresentsthechangesinlevel3instrumentsfortheyearsended31July2013and31July2012.

Note4. iNCoMeANdexPeNses

gross(loss)/profitoninvestmentsrealisedduringtheyearincludesmarktomarketadjustmentsrealisedinthecurrentyearaswellasmarktomarketadjustmentsrecognisedinthestatementofcomprehensiveincomeinprioryearsassetoutinthetablebelow.


2013$’000

2012$’000

investments–level3

openingBalance - 5,263

transfersintolevel3 4,108 -

transfersoutoflevel3 (18,038) (5,263)

otherincreases 5,036 -

(losses)/gainsrecognisedinprofitorloss 8,894 -

Closingbalance - -

(loss)/gainattributabletomovementinfairvalueofinvestments

marktomarketadjustmentforyear–investmentsrealisedduringyear 1,958 (188)

marktomarketadjustmentforyear–investmentsheldatendofyear (4,236) (28,802)

(loss)/gainattributabletomovementinfairvalueofinvestmentsasrecordedinthestatementofComprehensiveincome

(2,278) (28,990)

resultsofinvestmentsrealisedduringyear

proceedsfromsaleofshares 2,781 150

Historicalcostofinvestmentsales (2,876) (1,363)

gross(loss)/profitoninvestmentsrealised (95) (1,213)

representedby:

marktomarketrecognisedinpriorperiods(includingonacquisition) (2,053) (1,025)

marktomarketrecognisedincurrentyear 1,958 (188)

(95) (1,213)

thetotalcomprehensive(loss)/profitisafterchargingthefollowingotherexpenses

investorrelations 344 61

d&oinsurance 49 42

legalexpenses 151 8

othercorporateoverheads 197 243

totalotherexpenses 741 354

For

per

sona

l use

onl

y




2013$’000

2012$’000

currentincometax - -

deferredincometax - -

incometaxexpense/(benefit)reportedinthestatementofComprehensiveincome - -

reconciliationofincometaxexpense

(loss)/profitbeforeincometax (2,027) (27,498)

primafacietaxthereonat30% (608) (8,249)

taxeffectofpermanentandotherdifferences:

non-deductibleexpenses 10 139

nonassessabledividendincome (391) (108)

unrealisedmarktomarketincreaseinthefairvalueofinvestments 655 8,333

deductiblebusinessrelatedcapitalexpenditureundersection40-880 (135) (224)

Amountunderprovided/(overprovided)inprioryears - -

taxbenefitnotrecognisedforaccountingpurposes 469 109

totalcurrentincometax(benefit)/expense - -

Note5. iNCoMetAxexPeNse

(a)statementofComprehensiveincome

Note6. reCeiVAbles(CurreNt)

Accruedinterest 62 126

sundrydebtors 20 6

totalcurrentreceivables,net 82 132

unrecognisedtemporarydifferencesat31Julyrelatetothefollowing:

taxlossesavailable–revenueaccount 5,182 3,628

taxlossesavailable–capitalaccount 59,200 59,105

temporarydifference–unrealisedinvestments note(a) 34,524 34,300

Accruedexpenses/othertemporarydifferences 234 624

unrecognisedtaxlossesandtemporarydifferencesat31july 99,140 97,657

Potentialtaxbenefit@30% 29,742 29,297

note(a)–temporarydifference–unrealisedinvestmentstemporarydifference–unrealisedinvestmentsarisesfromthedifferencebetweenthefairvalueandtaxablevalueoftheinvestment

(b) unrecognisedtemporarydifferences

AdeferredtaxassethasnotbeenrecognisedinthestatementofFinancialpositionasthebenefitswillonlyberealisediftheconditionsfordeductibilityand/orrecognitionsetoutinnote2(h)occur.

For

per

sona

l use

onl

y



Note7. FiNANCiAlAssets


listedsharesarereadilysaleablewithnofixedterms.

lion’sownershipandeconomicinterestinAsianlionltd(“Asianlion”)is62.8%.thedirectorshavedeterminedthatliondoesnotcontrolAsianlionastheAsianlionsubscriptionandshareholdersAgreement(“ssA”)restrictstheabilityofliontoinfluenceanddirectthefinancialandoperatingdecisionsofAsianlion.thessArestrictslion’svotingpowersuchthatitisnotcommensuratewithitsownershipinterestanditisunabletocontroltheappointmentorremovalofdirectorsorofmembersoftheinvestmentcommitteetowhichinvestmentdecisionshavebeendelegated.

lioncontinuestocarryitsinvestmentinAsianlionasafinancialassetatfairvaluethroughprofitandloss.

2013$’000

2012$’000

listedinvestments(atfairvalue) 12,384 11,621

unlistedinvestments(atfairvalue) 33,429 22,853

totalnon-currentfinancialassets 45,813 34,474

sundrycreditorsandaccruals 51 50

totalcurrentpayables 51 50

Note9. retAiNedProFits&reserVes

Movementsinretainedearningswereasfollows:

(Accumulatedlosses)atthebeginningofthefinancialyear (41,572) (14,074)

net(loss)/profitforperiod (2,027) (27,498)

(Accumulatedlosses)attheendofthefinancialyear (43,599) (41,572)

Note10.CoNtributedeQuity

issuedandpaidupcapital(fullypaid)

openingBalance 100,109 100,109

sharesissued 3,918 -

shareissueexpenses (343) -

issuedandpaidupcapital(fullypaid) 103,684 100,109

shareCapital 2013shAres

2012shAres

issuedandpaidupcapital(fullypaid)

openingBalance 89,029,353 88,029,353

sharesissued 7,390,928 -

issuedandpaidupcapital(fullypaid) 95,420,281 88,029,353

Note8. PAyAbles(CurreNt)

For

per

sona

l use

onl

y




Note10.CoNtributedeQuity(continued)

net(loss)/profitafterincometax (2,027) (27,498)

Adjustmentsfornoncashincomeandexpenseitems:

movementinfairvalueofinvestments(increase)/decreaseinassets 2,278 28,990

othernon-cash(income)/expense 42 (541)

(increase)/decreaseinassets:

deferredincometaxasset - -

otherreceivables 51 411

(decrease)/increaseinliabilities:

deferredincometaxliability - -

payables 1 (11)

Netcashflowfromoperatingactivities 345 1,351

(b)reconciliationofNetProfit/(loss)afterincometaxtoNetCashProvidedbyoperatingActivities

shares to be issued

duringthefinancialyearlionundertooka$10millionequitycapitalraising,partofwhichwassettledaftertheyearend.duringthefinancialyearlionreceived$3,697,000aspartoftheraisingforwhich6,975,991shareswereissuedimmediatelyaftertheyearend.thisequitycontributionhasbeenclassifiedassharestobeissued.inaddition,subsequenttoyearendlionreceived$2,393,000andissued4,515,141shares(seenote18eventsoccurringafterthereportingperiod).

capital risk Management

lion’sobjectivewhenmanagingcapital istosafeguarditsabilitytocontinueasagoingconcern,sothat itcancontinuetoprovidereturns forshareholders. inorder tomaintainoradjust thecapitalstructure,lionmayadjust theamountofdividendspaidtoshareholders,returncapitaltoshareholdersorissuenewshares.

Note11.NotestothestAteMeNtoFCAshFlows

(a)reconciliationofcashandcashequivalents

ForthepurposeofthestatementofFinancialpositionandstatementofcashFlows,cashandcashequivalentsincludescash on hand and in banks, term deposits, cash managed by third parties and other bank securities which can beliquidatedatshortnotice,netofoutstandingbankoverdraftsifapplicable.

cashattheendoftheyearasshowninthestatementofcashFlowsisreconciledtotherelatediteminthestatementofFinancialpositionasfollows:

2013$’000

2012$’000

cashonhandandatbank 9,438 5,886

Bankbillsanddeposits 8,500 18,095

Closingcashbalance 17,938 23,981

For

per

sona

l use

onl

y




thecalculationofweightedaveragenumber for thedilutedearningspersharedoesnot includeanypotentialordinaryshareswithrespecttooptionsastheoptionsonissuearenotconsideredtobedilutiveforthecurrentperiod.

Note13.CoMMitMeNts

(a) superannuationCommitments

liondoesnothaveitsownsuperannuationplan.theonlycommitmenttosuperannuationiswithrespecttostatutorycommitments.Atbalancedate,thecompanywascontributingtovariousapprovedsuperannuationfundsatthechoiceofemployeesataminimumrateof9%ofsalariespaid.employeesareabletomakeadditionalcontributionstotheirchosensuperannuationfundsbywayofsalarysacrificeuptotheagebaseddeductiblelimitsfortaxationpurposes.

(b) investmentCommitments

african lion 3 limited (aFl3)

lionenteredintoanagreementinJune2008tocommitus$18.75millioninAFl3,ofwhichus$3.3mremainsundrawnat31July2013(Australiandollarequivalentof$3.6million).

one asia resources limited (one asia)

oneAsiaisanunlistedexplorationcompanyfocusedontheexplorationforgoldresourcesanddevelopmentofgoldmines in sulawesi, indonesia. subsequent to year end lion has agreed to partly underwrite a rights issue for itsinvesteeoneAsia.therightsissueisseekingtoraiseupto$21millionat$0.65/share.lionhascommittedtotakeup$7.5millionintherightsissue,includingbothlion’sandAsianlion’sshareoftherightsissue(seenote18eventsoccurringafterthereportingperiod).inAugust2013lionprovidedshorttermfundingof$1millionaspartofa$5millionfacilitywhichwasrepaidpriortothedateofthisreport.

Asat31July2013,lionhasvaluedoneAsiaat$0.75/share.lionbelievesthisvaluationcontinuestobeappropriate,reflectingthattherightsissuepricingrepresentsasmalldiscounttothisvaluationaswouldnormallybethecaseforalistedcompany,andnotingthattherightsissueislargelyaninternalraisingfromexistingshareholders.inaddition,oneAsiaishavingoutstandingexplorationsuccessatthepaniprojectwhereaninitialJorcresourceof1.88mozwasannouncedon13June2013.

robinWiddupfromthelionteamhasagreedtobecomeanon-executivedirectorofoneAsia.

lion selection limited

underthearrangementsassociatedwiththe2009demergeroflionfromitspreviousholdingcompany,lionselectionlimited,lionprovidedanindemnitytolionselectionlimitedanditssubsidiariesinrespectofcertainliabilitiesthatpre-datethearrangements.thisincludesanytaxliabilitiesoflionselectionlimitedanditssubsidiariesfortheperiodbefore31July2009andanyemployeeandmanagementfeeliabilitiespriortothedemerger.lionisnotawareofanyamountpayableassociatedwiththisindemnityasat31July2013.

Note12.eArNiNGsPershAre2013$’000

2012$’000

(a) (loss)/earningsusedincalculatingearningspershare–basicanddiluted (2,027) (27,498)

2013NuMber

2012NuMber

(b) Weightedaveragenumberofordinarysharesforbasicearningspershare 88,759,383 88,029,353

For

per

sona

l use

onl

y




2013$’000

2012$’000

(a) Auditservices

Auditandreviewoffinancialreports 77,000 69,000

totalremunerationforauditservices 77,000 69,000

(a) Non-auditservices

Afeeof$10,000waspaidtotheexternalauditorsduringtheyearended31July2013forspecificreviewproceduresinrelationtoinvestmentperformancecalculations.

Note14.reMuNerAtioNoFAuditors

Note15.relAtedPArtydisClosures

(a) directors&keyManagementPersonnel

thedirectorsinofficeduringthefinancialyearandupuntilthedateofthisreportareasfollows.

petermaloney(non-executivechairman) Barrysullivan(non-executivedirector) chrismelloy(non-executivedirector)–Appointed1november2012 robinWiddup(director) craigsmyth(managingdirector)–resigned31october2012,remainschiefexecutiveofficer

(b) lionManagerPtyltdContract

during the year ended 31 July 2013, lion entered into a management Agreement with lion manager pty ltd(lion manager), under which lion manager provides the company with management and investment services. thearrangements were approved by shareholders at lion’s Agm on 5 december, with ongoing management fees of1.5%p.a.basedonthedirectinvestmentsundermanagement,currentlyequatingto$645,000perannum+gst.thereisanincentiveapplicablewhichwouldapplywherelion’sperformanceoutperformsabenchmark.inadditionuptoa12monthterminationfeemaybeapplicableshouldlionseektoterminatethemanagementagreement.FurtherdetailsofthemanagementAgreementaresetoutinthenoticeofmeetingforthe2012Agm,availableonlion’swebsite.Asatthedateofthisreportnoincentivefeehadaccruedwithrespecttothelionmanagercontract.

inaddition,from1August2013lionhasrequestedlionmanagerprovidecomprehensiveinvestorrelationsservicesassociatedwithlion’sAsXlistingfor$12,500+gstpermonthfortwelvemonths.thesearrangementswillbereviewedaftertwelvemonths.

shorttermemployeebenefits 152,312 155,717

terminationbenefits - -

d&oinsurance 48,663 42,045

post-employmentbenefits 63,921 29,848

264,896 227,610

(c) keyManagementPersonnelremuneration

For

per

sona

l use

onl

y




CArryiNGAMouNt eNtityowNershiP

2013$’000

2012$’000

2013%

2012%

thecompanyhaddirectownershipofthefollowingmaterialinvestmentsatyearend:

Africanlion2ltd 643 1,263 25 25

Africanlion3ltd 6,410 7,425 24 24

Asianlionltd 10,699 10,425 63 63

Auricupresourcesltd 1,905 1,905 18 20

copperbeltmineralsnl - 663 - 2

doraymineralsltd 5,110 3,396 6 6

mindororesourcesltd 363 670 6 7

oneAsiaresourcesltd 12,766 89 18 -

rumJungleresourcesltd 2,045 1,799 6 5

sihayogoldltd 1,229 2,655 3 2

Ytcresourcesltd 1,699 1,932 4 4

Note16.MAteriAliNVestMeNts

eachoftheabovecompaniesisinvolvedintheminingandexplorationindustry.

For

per

sona

l use

onl

y




2012AustrAliA

$’000AFriCA$’000

AsiA$’000

AMeriCA$’000

uNAlloCAted$’000

totAl$’000

segmentrevenue - 361 - - 2,009 2,370

marktomarketadjustment (7,295) (9,240) (12,091) (364) - (28,990)

segmentincome (7,295) (8,879) (12,091) (364) 2,009 (26,620)

segmentexpense - - - (900) (900)

segmentresultbeforetax (7,295) (8,879) (12,091) (364) 1,109 (27,520)

segmentAssets 9,338 9,577 15,254 305 24,113 58,587

segmentliabilities - - - - 50 50

othersegmentinformation

AssetsAcquiredduringtheperiod 5,574 5,587 2,151 668 - 13,980

CashFlowinformation

netcashinflowfromoperatingactivities - 361 - - 990 1,351

netcashinflowfrominvestingactivities (5,574) (5,575) (2,012) (668) - (13,830)

netcashinflowfromfinancingactivities - - - - - -

Note17.seGMeNtiNForMAtioN

managementhasdetermined thecompany’ssegmentsbasedon the internal reportingreviewedby theBoard tomakestrategicdecisions.thecompanyprovidespatientequitycapitaltocarefullyselectedsmallandmediumminingenterprises.investmentshavesimilarcharacteristicsandsosegmentsaredeterminedonageographicalbasis.lion investsonly inminingandexplorationcompaniesandprojectswithgoldandbasemetalactivitiesinAustralia,Africa,southeastAsiaandtheAmericas.informationwithrespecttogeographicalsegmentsissetoutbelow.

2013AustrAliA

$’000AFriCA$’000

AsiA$’000

AMeriCAs$’000

uNAlloCAted$’000

totAl$’000

segmentrevenue - 1,304 - - 547 1,851

marktomarketadjustment 2,970 (1,227) (2,885) (1,136) - (2,278)

segmentincome 2,970 77 (2,885) (1,136) 547 (427)

segmentexpense - - - - (1,600) (1,600)

segmentresultbeforetax 2,970 77 (2,885) (1,136) (1,053) (2,027)

segmentAssets 11,085 7,754 26,474 500 18,020 64,833

segmentliabilities - - - - 51 51

othersegmentinformation

AssetsAcquiredduringtheperiod 3,552 2,953 9,446 1,332 - 17,283

CashFlowinformation

netcashinflowfromoperatingactivities - 1,304 - - (959) 345

netcashinflowfrominvestingactivities (3,459) 596 (9,423) (1,332) - (13,618)

netcashinflowfromfinancingactivities - - - - 7,272 7,272

For

per

sona

l use

onl

y



Note18.eVeNtsoCCuriNGAFtertherePortiNGPeriod

subsequent to the end of the financial year lion completed a financial raising that spanned the financial year end.Accordingly,lionreceivedanadditional$2.4millionwithrespecttothecompany’ssharepurchaseplan(“spp”),andissuedanadditional11.5millionshareswithrespecttotheplacementandspp.Followingthisissuelionhadissuedcapitalof106,911,413ordinaryFullypaidshares.

inaddition,subsequenttotheendofthefinancialyearoneoflion’sinvesteecompaniesoneAsiaresourceslimitedinitiatedarightsissue.lionhascommittedtopartlyunderwritetherightsissue,withacommitmentof$7.5million.inAugust2013lionprovidedshorttermfundingof$1millionaspartofa$5millionfacilitywhichwasrepaidpriortothedateofthisreport.

otherthantheitemsabove,therehasnotarisenintheintervalbetweentheendoftheyearandthedateofthisreport,anyitem,transactionoreventofamaterialorunusualnaturewhichhasormaysignificantlyaffecttheoperationsofthecompany,theresultsofthoseoperations,orthestateofaffairsofthecompanyinfutureperiods.


For

per

sona

l use

onl

y

For

per

sona

l use

onl

y


Shareholder Information

rANk NAMe No.oFshAres %oFuNits

1 Bnpparibasnomsptyltd‹drp› 18,916,350 17.69

2 rojanaHeroptyltd‹robinWiddupA/c› 7,513,073 7.03

3 nationalnomineeslimited 5,689,428 5.32

4 mrmarkgarethcreasy 4,448,976 4.16

5 JpmorgannomineesAustralialimited‹cashincomeA/c› 4,256,412 3.98

6 mrrobinAnthonyWiddup+mrsJanetWiddup‹WiddupsuperFundA/c› 4,020,845 3.76

7 mirrabookainvestmentslimited 3,154,790 2.95

8 mrmichaeldavidBrook+mrsJennyleeBrook‹md&JlBrooksuperFundA/c› 2,611,107 2.44

9 mrchristopherpaulmelloy+mrsAnnechristinemelloy‹melloysuperFundA/c› 2,555,121 2.39

10 majoliptyltd 2,020,020 1.89

11 gemfieldlakeptyltd‹melloyFamilyA/c› 1,919,686 1.80

12 inconsultareptyltd‹morrisonFamilys/FA/c› 1,650,000 1.54

13 BranjeeFarmptyltd 1,181,642 1.11

14 mrspamelaJuliansargood 978,724 0.92

15 WalAssetsptyltd 830,693 0.78

16 Avanteosinvestmentslimited‹clearviews/pA/c› 830,660 0.78

17 A&lWaitsuperannuationptylimited‹A&lWaitsuperFundA/c› 800,000 0.75

18 mrdominicpaulmccormick 723,715 0.68

19 Yamboonptyltd‹dyfamA/c› 698,302 0.65

20 HsBccustodynominees(Australia)limited 690,414 0.65

totaltop20holdersofordiNAryFullyPAidshAres 65,489,958 61.26

totalremainingholdersbalance 41,421,455 38.74

sizeoFholdiNG(ordiNAryFullyPAidshAres) No.oFshAreholders

1–1,000 277

1,001–5,000 1,231

5,001–10,000 466

10,001–100,000 657

100,001andover 94

totalshareholders 2,725

numberofordinaryshareholderswithlessthanamarketableparcel 195

Top 20 holders of ordinary fully paid shares – 30 September 2013

Distribution of Shareholdings as at 30 September 2013

For

per

sona

l use

onl

y


Shareholder Information

Voting RightsAllordinarysharesissuedbylionselectiongrouplimitedcarryonevotepersharewithoutrestriction.

Substantial Shareholders as at 30 September 2013thefollowinginformationisextractedfromnoticesreceivedbythecompany.

Lion Directors And Lion Manager HoldingsAsat30september2013,themembersofthelionBoardandlionmanagerheldsharesdirectlyand/orindirectlyinlionselectiongrouplimitedasfollows:

NAMe No.oFordiNAryshAres

selectAssetmanagementlimited 18,915,350

robinAnthonyWiddup 11,533,918

NAMe No.oFordiNAryshAres

petermaloney 1,724,847

chrismelloy 4,717,665

Barrysullivan 727,358

robinWiddup 11,533,918

mikeBrook 4,821,780

craigsmyth 375,088

timmarkwell 11,758

HedleyWiddup 128,607

total (22.49%) 24,041,021

For

per

sona

l use

onl

y


Corporate Directory

registeredandPrincipaloffice

level415QueenstreetmelbourneVic3000

tel: +61396148008Fax: +61396148009email: [email protected]: www.lionselection.com.au

directors• petermaloney

non-executivechairman

• Barrysullivannon-executivedirector

• chrismelloynon-executivedirector

• robinWiddupdirector

Lion Selection Group Limited Registry

Youcangainaccesstoyoursecurityholdinginformationinanumberofways.thedetailsaremanagedviaourregistrar,computershareinvestorservices,andcanbeaccessedasoutlinedbelow.

iNVestorPhoNe

investorphoneprovidestelephoneaccess24hoursaday7daysaweek.

steP1 call1300 850 505(withinAustralia)or61 3 9415 4000(outsideAustralia)

steP2 say‘lion selection Group limited’

steP3 Followthepromptstogainsecure,immediateaccesstoyourholdingdetails,registrationdetailsandpaymentinformation.

iNterNetACCouNtACCessViAiNVestorCeNtre

securityholderscanviewtheirdetailsonlineviainvestorcentre:

steP1 gotowww.investorcentre.com

steP2 selectanactione.g.‘Holdingenquiry’

steP3 enterlGporlion selection Group limited

steP4 entersecurityholderreferencenumber(srn)orHolderidentificationnumber(Hin),postcodeorcountryifoutsideAustralia.

Alternatively,updateyourdetailsormanageyourportfoliobyregisteringasamemberofinvestorcentre:

steP1 gotowww.investorcentre.com

steP2 enteruseridandPassword/PiNandloginorclickonthe‘registernow’linktobecomeamember

steP3 Followthepromptstoregister.Forsecuritypurposes,computersharewillgenerateapinandmailittoyourregisteredaddress.

ComputershareinvestorservicesPtylimited

enquirieswithinAustralia 1300850505enquiriesoutsideAustralia +61394154000investorenquiriesFacsimile +61394732500investorenquiriesonline www.investorcentre.com/contact

shareregistry

computershareinvestorservicesptylimitedYarraFalls,452Johnstonstreet,AbbotsfordVic3067postalAddress–gpoBox2975melbourneVic3001

enquirieswithinAustralia 1300850505enquiriesoutsideAustralia +61394154000investorenquiriesFacsimile +61394732500investorenquiriesonline www.investorcentre.com/contactWebsite: www.computershare.com

Chiefexecutiveofficercraigsmyth

CompanysecretaryJanerose

Auditorspricewaterhousecoopers

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y

lionselectionGrouplimitedABN 26 077 729 572

Level 4, 15 Queen StreetMelbourne Vic 3000Tel: +61 3 9614 8008Fax: +61 3 9614 8009

www.lionselection.com.au

For

per

sona

l use

onl

y

building emerging miners for personal use only

Documents