More annual reports from Berkeley Energia Limited:
2023 ReportAnnuAl RepoRt 2012
coRpoRAte DiRectoRy
DiRectoRs
MR iAn MiDDleMAs
Non-Executive Chairman
DR JAMes Ross
Deputy Chairman
MR RobeRt behets
Non-Executive Director
señoR Jose RAMon esteRuelAs
Non-Executive Director
coMpAny secRetARy
MR clint McGhie
ReGisteReD office
Level 9, 28 The Esplanade
Perth WA 6000
Telephone: +61 8 9322 6322
Facsimile: +61 8 9322 6558
spAnish office
Berkeley Minera Espana, S.A.
Carretera SA-451, KM 30
37495 Retortillo
Salamanca, Spain
Telephone: +34 923 193903
Website
www.berkeleyresources.com.au
eMAil
info@berkeleyresources.com.au
AuDitoR
Stantons International
Level 2, 1 Walker Avenue
West Perth WA 6005
solicitoRs
Hardy Bowen Lawyers
Level 1, 28 Ord Street
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Australia and New Zealand
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stock exchAnGe listinGs
Australia
Australian Securities
Exchange Limited
Home Branch – Perth
2 The Esplanade
Perth WA 6000
united kingdom
London Stock Exchange – AIM
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London EC4M 7LS
Asx/AiM coDe
BKY – Fully paid ordinary shares
BKYO – $0.75 Listed options
(ASX only)
noMinAteD ADvisoR
AnD bRokeR
RBC Europe Limited
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2
...ongoing exploration,
appraisal and development
of this outstanding
uranium project...
contents
COMPANY PROFILE 3
YEAR IN REvIEW 4
SALAMANCA PROjECT 6
AGREEMENT WITH ENUSA 11
SUSTAINABLE DEvELOPMENT 12
FINANCIAL REPORT 13
COMPLIANCE WITH ASX CORPORATE GOvERNANCE RECOMMENDATIONS 94
CORPORATE GOvERNANCE STATEMENT 86
ADDITIONAL INFORMATION 95
beRkeley ResouRces liMiteD ANNUAL REPORT 2012
1
Berkeley is currently focused on
advancing it's wholly owned
flagship Salamanca Project...
2
Company profile
company
profile
North
A Coruña
Bilbao
Retortillo Santidad
Alameda
Salamanca
Salamanca Project
Berkeley Resources Limited ('Berkeley' or 'the Company')
is a uranium exploration and development company with
a quality resource base in Spain. The Company has a
significant tenement holding with a broad range of uranium
exploration and development projects in the Salamanca,
Cáceres, Badajoz and Barcelona Provinces. The Company
has a 100% interest in a total Mineral Resource estimated
at 59.2 million pounds of contained U3O8 with an average
grade of 426ppm (at a cut-off grade of 200ppm U3O8).
Berkeley is currently focused on advancing it's wholly owned
flagship integrated Salamanca Project, which comprises the
Retortillo-Santidad and Alameda deposits plus a number of
other Satellite deposits, through the development phase.
The results of a Pre-Feasibility Study completed in early 2012
confirmed the technical and economic viability of a stand-
alone project exploiting the Retortillo-Santidad deposit, whilst
the Alameda deposit formed part of a separate Feasibility
Study completed in 2011. The Company is now undertaking
an assessment of the integrated development of these two
deposits and believes the integrated Salamanca Project has
the potential to support a significant annual production rate
and mine life.
Over the next twelve months, Berkeley’s focus will continue
to be the ongoing exploration, appraisal and development of
this outstanding uranium project in order to fulfil its strategic
objective of becoming the next European uranium producer.
Spain offers an environment conducive to Berkeley's
activities, with no prohibitions on uranium mining, good
mining infrastructure, skills and power, a reliable legal and
mining title jurisdiction and a local energy market which is 18%
nuclear dependent (World Nuclear Association, February
2012). Berkeley's Board and senior management collectively
has considerable corporate and technical expertise, recent
experience in the uranium sector and extensive exploration,
development and production experience in Spain.
FR
A
N
CE
Lisboa
Cáceres
L
A
G
U
T
R
O
P
Madrid
Calaf
Barcelona
Gambuta
S P A I N
Valencia
Sevilla
Palma de
Mallorca
Figure 1: Location of the Salamanca Project, Spain
Salamanca
Project, Spain
3
berkeley resources limited ANNUAL REPORT 2012 year in reVieW
year in
review
The focus during the year in review has been the
continued development of Berkeley’s Retortillo-Santidad
deposit, whilst working towards a successful agreement
with Enusa Industrias Avanzadas S.A. (‘ENUSA’) regarding
the development and exploitation of the State Reserves,
all located in the Salamanca Province, Spain.
Highlights during, and subsequent to, the 2012
financial year end include:
Agreement with ENUSA regarding select uranium
resources within the State Reserves
Advancement of integrated
Salamanca Project
Preliminary Feasibility Study – Retortillo-Santidad
Metallurgical Test Work
Permitting and Licensing Process
4
meTallUrgiCal TeST Work
A further metallurgical test work program was undertaken
on a 4.7 tonne bulk sample, representative of the
Retortillo deposit, at Mintek’s mineral processing facility
in johannesburg. Initial results for 6 metre column tests
for the Retortillo samples indicate metallurgical recoveries
is in the range of 90% (+/- 2%) after 80 days, with acid
consumption of approximately 20 kilograms per tonne for
the bacterial leach columns. These figures are consistent
with the assumptions used in the Retortillo-Santidad PFS.
permiTTing anD liCenSing proCeSS
In October 2011, the Company commenced the permitting
and licensing process for the stand-alone Retortillo-
Santidad Project with the submission of an application
for the conversion of the Pedreras Investigation Permit
into an Exploitation Concession. Following a period of
consultation with the Regional Government of Castilla y
Leon, the applications were accepted and have progressed
to a period of public consultation which was completed in
late September 2012.
year in reVieW (ConTinUeD)
agreemenT WiTh enUSa regarDing SeleCT
UraniUm reSoUrCeS WiThin The STaTe reSerVeS
In july 2012, the Company reached agreement with
ENUSA on terms which provide the Company with a 100%
interest in select uranium resources within State Reserves
held by ENUSA.
Under the agreement, Berkeley holds a 100% interest
in, and the exploitation rights to, State Reserves 28 and
29 (‘Addendum Reserves’) whilst waiving its rights to
mine in State Reserves where ENUSA has undertaken
rehabilitation.
The Addendum Reserves include the substantial unmined
Alameda deposit, the villar deposit and additional
prospects. Total resources for the Addendum Reserves
are currently estimated at 30.6 million pounds of contained
U3O8 at an average grade of 465ppm (at a cut-off grade
of 200ppm U3O8). ENUSA will receive a production fee
equivalent to 2.5% of the net sale value (after marketing
and transport costs) of any uranium produced within the
Addendum Reserves.
The outcome has successfully resolved long standing
difficulties for all parties involved, including termination
of the arbitration proceeding between the Company and
ENUSA.
SalamanCa projeCT
Following the Agreement with ENUSA, Berkeley’s focus is
on the advancement of the integrated Salamanca Project,
which comprises the Retortillo-Santidad and Alameda
deposits plus a number of other Satellite deposits, through
the development phase. With a combined 100% owned
resource base totalling 59.2 million pounds of contained
U3O8 at an average grade of 426ppm (at a cut-off grade
of 200ppm U3O8), the integrated Salamanca Project has
the potential to support a significant annual production rate
and mine life.
preliminary feaSibiliTy STUDy –
reTorTillo-SanTiDaD
In january 2012, the Company announced the results
from the Preliminary Feasibility Study (‘PFS’) for the first
stage of development of Retortillo-Santidad (formerly the
Salamanca I Project) as a stand-alone project. The results
of the Study demonstrated the technical and economic
viability of the project, with competitive operating metrics,
robust economics, and further upside through the
incorporation of additional Satellite deposits.
5
berkeley resources limited ANNUAL REPORT 2012 SalamanCa projeCT
Salamanca
Project
Following agreement with ENUSA in july 2012, Berkeley's
focus is on the advancement of its wholly owned flagship
integrated Salamanca Project, through the development
phase. The integrated Salamanca Project comprises the
Retortillo-Santidad and Alameda deposits plus a number of
other Satellite deposits.
exploraTion anD Drilling
During the year, Berkeley completed over 420 diamond
and reverse circulation (‘RC’) drill holes totalling more than
25,000 metres in drilling campaigns at Retortillo-Santidad,
villares, Gambuta and the State Reserves.
The majority of the drilling completed during the year was at
Retortillo-Santidad and had the aim of:
• Confirming the validity of the historic drilling conducted
by ENUSA;
• To provide additional geological data to support a more
detailed geological model;
• To convert most of the resources, where possible, to
Indicated Resources;
• To extend the existing resources; and
• To complete sterilisation drilling in areas of the proposed
mine and process plant infrastructure.
Figure 2: Salamanca Project Resource Locations (Excluding Gambuta Resource)
6
Salamanca Project
Resource Locations
(Excluding Gambuta Resource)
SalamanCa projeCT (CONTINUED)
Table 1: Drilling Activity in 2011/12
project
Alameda South
Mimbre
Sageras
Retortillo-Santidad
villares
Gambuta
total
total number
of holes
10
6
11
318
59
19
423
total
metres
419
426
422
19,202
3,331
1,498
25,298
number
of holes
(Diamond)
Metres
(Diamond)
number of
holes (Rc)
Metres
(Rc)
18
3
21
1,243
269
1,512
10
6
11
300
59
16
402
419
426
422
17,959
3,331
1,229
23,786
In early 2012, exploration programs targeting select
Satellite deposits within the Retortillo-Santidad area and
the Gambuta deposit were undertaken with the aim of
confirming and extending known resources and testing
new prospect areas.
Drill testing of radiometric anomalies confirmed the
presence of shallow high grade uranium mineralisation at
the villares and villares North prospects (located 7km to
the north of Retortillo-Santidad) resulting in the delineation
of a new mineral resource estimate totalling 0.97Mt at
597ppm U3O8 for 1.28Mlbs U3O8. Select intercepts from
the drilling are summarised in the following table.
Table 3: villares RC Drilling – Significant Intersections
(at 200ppm cut-off)
villares
vIR-001
vIR-007
vIR-011
vIR-042
vIR-043
vIR-044
from
(m)
1.0
6.0
22.0
2.0
26.0
55.0
59.0
14.0
to
(m)
16.0
15.0
28.0
11.0
30.0
59.0
61.0
24.0
thick
(m)
15.0
9.0
6.0
9.0
4.0
4.0
2.0
10.0
u3o8
(ppm)
1,524
2,363
3,685
783
1,277
1,876
1,437
2,096
in confirming known
The drilling was successful
mineralisation and extending the mineralisation in some
areas where local fracture systems were found to be
mineralised outside the previously defined resource.
Following the receipt of all chemical assay results, the
resource estimates were updated resulting in a significant
increase in the Indicated Resource category, with 56% of the
Retortillo resource and 78% of the Santidad resource in this
category. There was however, a 23% and 34% decrease in
contained U3O8 at a 200ppm cut-off grade at Retortillo and
Santidad respectively, due to a combination of two factors:
overestimation of the original Mineral Resource Estimates
as a consequence of the methodology applied (based on a
recovered fraction with grade estimation carried out using
inverse distance) and some discontinuity of mineralisation
in the resource infill drilling.
Diamond drilling at Retortillo-Santidad was also completed
to obtain core samples for geotechnical tests to support
the PFS.
Notable intersections are summarised in the Table 2 below.
Table 2: Retortillo-Santidad – Significant Intersections
(at 200ppm cut-off)
Deposit hole iD
Retortillo
Retortillo
Retortillo
RTR-266
RTR-317
RTR-324
Retortillo
Santidad
RTR-327
SNR-211
Santidad
Santidad
Santidad
SNR-280
SNR-287
SNR-289
Santidad
SNR-297
from
(m)
to
(m)
thick
(m)
u3o8
(ppm)
21
19
31
83
18
26
33
37
0
10
58
73
43
31
47
45
97
32
31
34
39
19
14
68
76
51
10
28
12
12
14
5
1
2
19
4
10
3
8
1,285
273
797
738
624
423
336
604
313
2356
357
656
769
7
berkeley resources limited ANNUAL REPORT 2012
SalamanCa projeCT (CONTINUED)
This drilling highlights the potential to identify additional
uranium resources in outcropping and covered areas in
close proximity to Retortillo-Santidad, with numerous
other radiometric anomalies yet to be adequately tested
by drilling.
Drilling at Gambuta comprised initial infill RC and diamond
drilling to upgrade the resource classification. The drilling
focused on the north-western portion of the deposit
and confirmed the style of mineralisation and suggests
continuity of thick zones of mineralisation, commonly
in the range of 2 to 16m. Assay results for the drill hole
samples are pending.
Other exploration work included a desktop review of the
Company's current tenement holdings and initiation of field
work to assess the potential of several regional licenses.
mineral reSoUrCeS
The current Mineral Resource Estimates for all deposits
is tabulated below (using a 200ppm U3O8 cut-off grade)
incorporating the results from the recent drilling campaigns
and together with previously obtained information. The
resources listed below include only those resources owned
100% by Berkeley following the ENUSA agreement signed
in july 2012.
preliminary feaSibiliTy STUDy
– reTorTillo-SanTiDaD
In january 2012, the Company announced the results from
the PFS for the first stage of the stand-alone development
of the Retortillo-Santidad deposit. This Study demonstrated
a project with competitive operating metrics and robust
economics, with further upside through the incorporation
of additional regional Satellite deposits. The Study also
formed the basis for the Exploitation Plan which was
presented to the Regional Government of Castilla y León.
Under the initial Exploitation Plan, Retortillo-Santidad
is the first deposit into production with a mine life of 10
years. The mine was designed as a conventional open pit
operation, utilising a continuous rehabilitation program,
with waste continuously transferred to backfill and
rehabilitate the operating pit. The deposit is divided into
two zones of mineralisation which are separated by a
distance of 3km. The process plant was situated proximal
to Retotillo where the majority of resources are located.
The layout contemplated ore from Santidad being primary
crushed close to the pit and conveyed to Retortillo for
processing. Whilst the resource estimate uses a cut-off
grade of 200ppm U3O8, the mine design provides for an
optimal and operational cut-off grade of 96ppm U3O8.
Table 4: Mineral Resource Statement as at August 2012 (at a 200ppm cut-off grade)
Deposit name
Retortillo
Santidad
Retortillo – santidad
Zona 7
Las Carbas
Cristina
Caridad
villares
villares North
Retortillo-santidad satellites
Alameda
villar
Alameda Nth Zone 2
Alameda Nth Zone 19
Alameda Nth Zone 21
Alameda satellites
Gambuta
salamanca project
8
Resource category
tonnes (mt)
u3o8
(ppm)
u3o8
(Mlbs)
Indicated
Inferred
total
Indicated
Inferred
total
Indicated
Inferred
total
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
Indicated
Inferred
total
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
indicated
inferred
total
6.1
5.3
11.5
2.8
0.9
3.7
8.9
6.2
15.2
3.9
0.6
0.8
0.4
0.7
0.3
6.7
20.0
0.7
20.7
5.0
1.2
1.1
1.8
9.1
11.3
29.0
34.0
63.0
416
376
397
350
308
340
395
366
383
414
443
460
382
672
388
447
455
657
462
446
472
492
531
472
371
437
418
426
5.6
4.4
10.1
2.2
0.6
2.8
7.8
5.0
12.8
3.6
0.6
0.8
0.4
1.1
0.2
6.6
20.1
1.0
21.1
4.9
1.3
1.2
2.1
9.5
9.2
27.9
31.3
59.2
SalamanCa projeCT (CONTINUED)
Metallurgical test work carried out on the ore has
demonstrated that the mineralisation is amenable to heap
leaching, and more specifically for bacterial leaching, through
naturally occurring bacteria within the ore. Accordingly, the
basic scheme designed for the Retortillo-Santidad was an
on-off pad heap leach. The ripios (heap leach residue) would
be backfilled into lined and isolated areas previously mined
within the pit. Uranium treatment involves Solvent Extraction
(‘SX’) followed by ammonia precipitation, calcination and
packaging. This design allows the footprint of the impacted
area to be minimised and avoids slurry and the requirement
for a tailing dam by placing the ripios encapsulated with
the waste inside the pit, allowing high quality continuous
rehabilitation of the site.
The production schedule contemplated a process recovery
of 87.5%.
The PFS included the following production outcomes:
Full results for the metallurgical test work are expected in
the December quarter of 2012.
permiTTing
In October 2011, Berkeley initiated the licensing and
permitting process for the development of Retortillo-
Santidad with the submission of an application for the
conversion of the Pedreras Investigation Permit into
an Exploitation Concession. The submission included
a Scoping Environmental Impact Assessment and was
subjected to a consultation period. The Company received
confirmation from the Regional Government of Castilla y
Leon that the Scoping Environmental Impact Assessment
was successfully processed in March 2012 following the
consultation period.
In March 2012, the Company submitted key documents for
the permitting process, including:
• 11.5 Mlbs U3O8 produced over a 10 year Life of Mine
(in production); and
• 1.42 Mlbs U3O8 produced per annum on average over
• The Exploitation Plan;
• The Environmental Impact Assessment;
• The Restoration and Closure Plans;
the initial 6 years of production.
• Authorisation for the use of rural land for industrial
meTallUrgiCal TeST Work
A further full-scale metallurgical test work program was
undertaken on a 4.7 tonne bulk sample, representative
of the Retortillo deposit, at Mintek’s mineral processing
facility in johannesburg. The scope of work included:
• Bench scale comminution tests;
•
ISO-pH tests;
• Diagnostic assay and agglomerate acid cure test;
• Geomechanical tests;
• 6m Column tests; and
• Solvent extraction
test work
through
to ADU
precipitation.
The test work was recently completed and initial results
indicate that the assumptions used in the PFS regarding the
process flow sheet, uranium recovery, acid consumption
and leach time will be reinforced. Analytical data of the
pregnant liquor solution (‘PLS’) obtained and SX test work
also indicate that there are no impurities at levels that could
adversely impact the quality of the uranium yellow cake to
be produced. The leach solution has low concentrations of
all common penalty elements.
Uranium recovery, leach times and acid consumption have
been calculated for the nine 6m columns with available
assay results and recovery in the range of 90% (+/- 2%)
after 80 days, with acid consumption of approximately
20 kg/t for the bacterial leach columns. This represents a
20% reduction in acid consumption when compared with
the non-bacterial leach tests for the same recovery and
leach time.
Geomechanical testing has also been completed with the
results indicating that some optimisation of the heap leach
stack height may be required. This may lead to lower lift
heights for the more weathered mineralisation.
purposes; and
•
Initial Authorisation for the treatment plant as a
Radioactive Facility.
The application was approved for public information in May
2012, and the documents are now subject to a period of
public consultation which was completed in late September
2012. The Company’s response to public comment will
be subject to clearance and direction from the authorities
before they are incorporated into the Project.
The documentation submitted for the Initial Authorization
of the process plant as a radioactive facility has also entered
a public information period, in parallel with the public
information period of the application for reclassification
(from rural to mining use) of the surface land area affected
by the Project.
Berkeley expects to commence the permitting process for
the Alameda deposit in the December quarter of 2012.
In October 2011, the Company also signed a co-operation
agreement for the exploitation of the Retortillo-Santidad
uranium deposit located with the municipalities of
Retortillo and villavieja de Yeltes, followed by a co-
operation agreement with the municipality of villares
de Yeltes. These agreements are an important step in
progressing through the permitting phase to production.
As part of the agreements, the municipalities undertake
to actively contribute
the necessary
administrative procedures required for the project to
achieve both
in
turn commits to contribute to the economic and social
development of the municipalities. Similar agreements
are being negotiated with the municipalities associated
with the Alameda deposit.
licensing and permitting. Berkeley
throughout
9
berkeley resources limited ANNUAL REPORT 2012 Figure 3: Addendum Reserves, excluded State Reserves, Berkeley tenements, and unmined deposits in
Salamanca Province
10
agreemenT WiTh enUSa
agreement
with ENUSA
Subsequent to the end of the year, Berkeley reached
agreement with ENUSA on terms which provide the Company
with a 100% interest in select uranium resources within
State Reserves held by ENUSA (refer ASX Announcement
dated 24 july 2012).
Under the agreement, Berkeley holds a 100% interest in,
and the exploitation rights to, State Reserves 28 and 29
(‘Addendum Reserves’) whilst waiving its rights to mine in
State Reserves where ENUSA has undertaken rehabilitation
(Figure 3). The Addendum Reserves include the substantial
unmined Alameda deposit, the villar deposit and additional
prospects. Total resources for the Addendum Reserves are
currently estimated at 30.6 million pounds of contained U3O8
at an average grade of 465ppm.
The new agreement with ENUSA is in the form of an
Addendum to the Consortium Agreement signed with
ENUSA in january 2009, and subsequently approved by
the Council of Ministers of the Spanish Government in April
2009. The Addendum was signed and notarised in Madrid
on 23 july 2012, and includes the following terms:
• The Consortium now consists of State Reserves 28 and
29;
• Berkeley’s stake in the Consortium has increased to
100%;
• ENUSA will remain the owner of State Reserves 28
and 29, however the exploitation rights have now been
assigned to Berkeley, together with authority to submit
all applications for the permitting process;
• The Company is now the sole and exclusive operator in
the Addendum Reserves, with the right to exploit the
contained uranium resources and have full ownership of
any uranium produced;
• ENUSA will receive a production fee equivalent to 2.5%
of the net sale value (after marketing and transport
costs) of any uranium produced within the Addendum
Reserves;
• Berkeley has waived its rights to mining in State
Reserves 2, 25, 30, 31, Hoja 528-1 and the Saelices El
Chico Exploitation Concession. These properties have
combined resources estimated at 21.9 million pounds of
U3O8 (Berkeley’s previous 90% interest equated to 19.7
million pounds);
• Berkeley has waived any rights to management of the
Quercus plant; and
• The Co-operation Agreement with ENUSA, signed on 29
january 2009, has been terminated.
These outcomes successfully
long standing
difficulties for all parties involved, including termination of the
arbitration proceeding between the Company and ENUSA.
resolved
11
berkeley resources limited ANNUAL REPORT 2012 SUSTainable DeVelopmenT
sustainable
development
Berkeley believes that the success of its business is
underpinned by a strong commitment to all aspects of
sustainable development with an integrated approach to
economic, social and environmental management and
effective corporate governance.
enVironmenT anD SUSTainable mining
managemenT
Caring for the environment is an integral part of
Berkeley’s business and the Company is committed
to operating in a responsible manner which minimises
the impact on the environment. The Company seeks to
ensure that throughout all phases of activity, personnel
and contractors give proper consideration to the care of
flora, fauna, land, air, water and the community.
internal policies outline the Company’s
Berkeley’s
commitment
to pollution prevention, safeguarding
the environment, educating our employees and local
communities about our environmental commitments,
and applying proven management practices to prevent
or mitigate any adverse environmental
impacts.
Performance indicators are used to measure and monitor
the Company’s performance.
Mining
Sustainable
including
environmental responsibility, radiological protection and
community awareness, engagement and support are
paramount considerations for Berkeley.
Management,
In September 2012, Berkeley qualified for certification
in accordance with
ISO 14001 of Environmental
Management, which sets out the criteria for an
environmental management system, and UNE 22480
of Sustainable Mining Management, which allows for
the systematic monitoring and tracking of sustainability
indicators, and is useful in the establishment of targets
for constant improvement.
12
These certifications require the review of economic,
environmental and social indicators, and provide assurance
to Company management and employees, as well as
external stakeholders, that environmental impact is being
measured and improved. In ensuring effective environmental
management, Berkeley has a dedicated Environmental
Manager who is responsible for the day to day implementation
of the Company’s environmental guidelines and procedures.
healTh anD SafeTy
The Company believes that sound occupation health and
safety management practices are in the best interests of
its employees, contractors, the communities in which it
operates and its shareholders. Berkeley is committed to
achieving the highest performance in occupational health and
safety to create and maintain a safe and healthy environment
in the workplace.
Berkeley seeks to eliminate work-related incidents, illnesses
and injuries by identifying, assessing and where reasonably
practical, eliminating or otherwise controlling hazards.
In ensuring effective radiation protection management,
Berkeley has a dedicated Manager who is responsible for
the day to day implementation of the legal prescriptions
and guides (i.e. United States NRC Regulatory Guide 4.14
Revision 1) which are being monitored by the Spanish
Nuclear Safety Council. The Company is also assisted by the
leading specialist consulting firm operating in Spain in the
field of radiological protection.
CommUniTy relaTionS
Berkeley seeks to develop and maintain positive, enduring
relationships with its host communities in line with the
Company’s code of Ethics and Conduct by striving for mutual
understanding of each other’s needs and aspirations.
The Company has signed a number of co-operation
agreements with local municipalities, which seek to outline
and optimise the relationship between the Company and
the municipalities. The co-operation agreements allow for
the ongoing contribution of the local communities, and
provide for economic and social development within the
municipalities. Community relations initiatives include:
• Berkeley seeks to employ people from local communities
and to source supplies from local providers where
available. A recruitment and selection process has been
established with a consultant.
• The Company intends to establish a training centre
located at Retortillo, which will provide training for some
of the skills required by the Company and its operations.
• The Company is committed to undertake appropriate
archaeological studies, monitored by the Ministry of
Culture of the junta de Castilla y León.
• Where possible, the Company will avoid the transport
of heavy equipment and personnel through the centre
of towns.
• The Company will contribute to cultural, educational and
sports activities of the directly affected municipalities.
financial report
contents
DIRECTORS' REPORT 14
CONSOLIDATED STATEMENT OF COMPREHENSIvE INCOME 37
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 38
CONSOLIDATED STATEMENT OF CASH FLOWS 39
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 40
NOTES TO THE FINANCIAL STATEMENTS 41
DIRECTORS’ DECLARATION 82
AUDITOR'S INDEPENDENCE DECLARATION 83
INDEPENDENT AUDITOR’S REPORT 84
beRkeley ResouRces liMiteD ANNUAL REPORT 2012
13
DIRECTORS’ REPORT
The Directors of Berkeley Resources Limited submit their report on the Consolidated Entity consisting of Berkeley
Resources Limited (“Company” or “Berkeley” or “Parent”) and the entities it controlled at the end of, or during, the
year ended 30 June 2012 (“Consolidated Entity” or “Group”).
DIRECTORS
The names of Directors in office at any time during the financial year or since the end of the financial year are:
Mr Ian Middlemas – Non-Executive Chairman (appointed 27 April 2012)
Dr James Ross – Non-Executive Deputy Chairman (previously Non-Executive Chairman)
Mr Robert Behets – Non-Executive Director (appointed 27 April 2012)
Señor Jose Ramon Esteruelas - Non-Executive Director
Mr Brendan James – Managing Director (resigned 27 April 2012)
Mr Henry Horne – Non-Executive Director (resigned 1 January 2012)
Mr Laurence Marsland – Non-Executive Director (appointed 25 August 2011, resigned 9 May 2012)
Mr Ian Stalker – Non-Executive Director (resigned 29 November 2011)
Mr Matthew Syme – Non-Executive Director (resigned 2 August 2012)
Unless otherwise disclosed, Directors held their office from 1 July 2011 until the date of this report.
CURRENT DIRECTORS AND OFFICERS
Ian Middlemas
Non-Executive Chairman
Qualifications – B.Com, CA
Mr Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a
Bachelor of Commerce degree. He worked for a large international Chartered Accounting firm before joining the
Normandy Mining Group where he was a senior group executive for approximately 10 years. He has had
extensive corporate and management experience, and is currently a director with a number of publicly listed
companies in the resources sector.
Mr Middlemas was appointed a Director and Chairman of Berkeley Resources Limited on 27 April 2012. During
the three year period to the end of the financial year, Mr Middlemas has held directorships in Prairie Downs
Metals Limited (August 2011 – present), Papillon Resources Limited (May 2011 – present), Pacific Ore Limited
(April 2010 – present), Wildhorse Energy Limited (January 2010 – present), Equatorial Resources Limited
(November 2009 – present), WCP Resources Limited (September 2009 – present), Sovereign Metals Limited
(July 2006 – present), Sierra Mining Limited (January 2006 – present), Odyssey Energy Limited (September 2005
– present), Global Petroleum Limited (April 2007 – December 2011), Coalspur Mines Limited (March 2007 –
October 2011), Mantra Resources Limited (September 2005 – June 2011), Aguia Resources Limited (September
2008 – August 2010), Pacific Energy Limited (June 2006 – August 2010), Indo Mines Limited (December 2006 –
June 2010) and Neon Energy Limited (November 1995 – June 2010).
James Ross AM
Non-Executive Deputy Chairman
Qualifications – B.Sc. (Hons.), PhD, FAusIMM, FAICD
Dr Ross is a leading international geologist whose technical qualifications include an honours degree in Geology
at UWA and a PhD in Economic Geology from UC Berkeley. He first worked with Western Mining Corporation
Limited for 25 years, where he held senior positions in exploration, mining and research. Subsequent
appointments have been at the level of Executive Director, Managing Director and Chairman in a number of small
listed companies in exploration, mining, geophysical technologies, renewable energy and timber. His considerable
international experience in exploration and mining includes South America, Africa, South East Asia and the
Western Pacific.
Dr Ross is a Director of Kimberley Foundation Australia Inc, and chairs its Science Advisory Council. He also
chairs the Boards of a geoscience research centre and two foundations concerned with geoscience education in
Western Australia.
14
He was appointed a Director of Berkeley Resources Limited on 4 February 2005 and appointed Non-Executive
Chairman on 14 January 2011. He has not been a Director of another listed company in the three years prior to
the end of the financial year.
Mr Robert Behets
Non-Executive Director
B.Sc (Hons), FAusIMM, MAIG
Mr Behets is a geologist with over twenty four years’ experience in the mineral exploration and mining industry in
Australia and internationally. He held various senior management positions during a long career with WMC
Resources Limited, including Manager Commercial - St Ives Gold Operations and Group Manager Exploration.
Most recently, he was instrumental in the founding, growth and development of Mantra Resources Limited, an
African focused uranium company, through to its acquisition by ARMZ for approximately A$1 billion in 2011.
Mr Behets has a strong combination of technical, commercial and managerial skills and extensive experience in
exploration, mineral resource and ore reserve estimation, feasibility studies and operations across a range of
commodities, including gold, uranium and base metals. He is a Fellow of The Australasian Institute of Mining and
Metallurgy, a Member of the Australian Institute of Geoscientists and a current member of the Australasian Joint
Ore Reserve Committee (JORC).
Mr Behets was appointed a Director of the Company on 27 April 2012. During the three year period to the end of
the financial year, Mr Behets has held directorships in Papillon Resources Limited (May 2012 – present) and
Mantra Resources Limited (November 2005 – June 2011).
Jose Ramon Esteruelas
Non-Executive Director
Qualifications – BEcon.,LLB., PDipBus
Señor Esteruelas is an economist with vast experience in the managerial field whose senior executive roles have
included Director General of Correos y Telegrafos (the Spanish postal service), Chief Executive Officer of
Compania Espanola de Transformadora de Tabaco en Rama S.A. (Cetarsa), (the leading transformer tobacco
company in Spain) and Executive Chairman of Minas de Almaden y Arrayanes SA (formerly the world's largest
mercury producer).
Señor Esteruelas was appointed a Director of Berkeley Resources Limited on 16 November 2006. Señor
Esteruelas has not held any other directorships of listed companies in the last three years.
Mr Clint McGhie
Company Secretary and Chief Financial Officer
Qualifications – B.Com, CA, ACIS, FFin
Mr McGhie is a Chartered Accountant and Chartered Secretary. He commenced his career at a large
international Chartered Accounting firm, before moving to commerce in the role of financial controller and
company secretary. Mr McGhie now works in the corporate office of a number of public listed companies
focussed on the resources sector.
Mr McGhie was appointed Company Secretary and Chief Financial Officer of Berkeley Resources Limited on 18
May 2012.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year consisted of mineral exploration. There was no
significant change in the nature of those activities.
EMPLOYEES
The number of full time equivalent people employed by the
Consolidated Entity at balance date
2012
38
2011
44
15
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
DIVIDENDS
No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2012
(2011: nil).
EARNINGS PER SHARE
Basic loss per share
Diluted loss per share
CORPORATE STRUCTURE
2012
Cents
(7.70)
(7.70)
2011
Cents
(10.75)
(10.75)
Berkeley Resources Limited is a company limited by shares that is incorporated and domiciled in Australia. The
Company has prepared a consolidated financial report including the entities it acquired and controlled during the
financial year.
CONSOLIDATED RESULTS
2012
$
2011
$
Loss of the Consolidated Entity before income tax expense
(13,487,535)
(16,315,195)
Income tax expense
Net loss
-
-
(13,487,535)
(16,315,195)
Net loss attributable to members of Berkeley Resources Limited
(13,487,535)
(16,315,195)
REVIEW OF OPERATIONS AND ACTIVITIES
Berkeley is a uranium exploration and development company with a quality resource base in Spain. The
Company has a significant tenement holding with a broad range of uranium exploration and development projects
in the Salamanca, Cáceres, Badajoz and Barcelona Provinces.
During the financial year, the Group continued the development of its Retortillo-Santidad deposit, whilst working
towards a successful agreement with Enusa Industrias Avanzadas S.A. (‘ENUSA’) regarding the development
and exploitation of the State Reserves, all located in the Salamanca Province, Spain.
Highlights during, and subsequent to, the financial year end include:
(i) Agreement with ENUSA regarding select uranium resources within the State Reserves
The Company reached agreement with ENUSA on terms which provide the Company with a 100% interest
in select uranium resources within State Reserves held by ENUSA.
Under the agreement, Berkeley holds a 100% interest in, and the exploitation rights to, State Reserves 28
and 29 (‘Addendum Reserves’) whilst waiving its rights to mine in State Reserves where ENUSA has
undertaken rehabilitation.
The Addendum Reserves include the substantial unmined Alameda deposit, the Villar deposit and additional
prospects. Total resources for the Addendum Reserves are currently estimated at 30.6 million pounds of
contained U3O8 at an average grade of 465 ppm (at a cut-off grade of 200 ppm U3O8). ENUSA will receive a
production fee equivalent to 2.5% of the net sale value (after marketing and transport costs) of any uranium
produced within the Addendum Reserves.
16
The outcome has successfully resolved long standing difficulties for all parties involved, including termination
of the arbitration proceeding between the Company and ENUSA.
(ii) Salamanca Project
Following the Agreement with ENUSA, Berkeley’s focus is on the advancement of the integrated Salamanca
Project, which comprises the Retortillo-Santidad and Alameda deposits plus a number of other Satellite
deposits, through the development phase. With a combined 100% owned resource base totalling 59.2
million pounds of contained U3O8 at an average grade of 426 ppm (at a cut-off grade of 200 ppm U3O8), the
integrated Salamanca Project has the potential to support a significant annual production rate and mine life.
(iii) Preliminary Feasibility Study – Retortillo-Santidad
In January 2012, the Company announced the results from the Preliminary Feasibility Study (‘PFS’) for the
first stage of development of Retortillo-Santidad (formerly the Salamanca I Project) as a stand-alone project.
The results of the Study demonstrated the technical and economic viability of the project, with competitive
operating metrics, robust economics, and further upside through the incorporation of additional Satellite
deposits.
(iv) Metallurgical Test Work
Further metallurgical test work program was undertaken on a 4.7 tonne bulk sample, representative of the
Retortillo deposit, at Mintek’s mineral processing facility in Johannesburg. Initial results for 6 metre column
tests for the Retortillo samples indicate metallurgical recoveries is in the range of 90% (+/- 2%) after 80
days, with acid consumption of approximately 20 kilograms per tonne for the bacterial leach columns. These
figures are consistent with the assumptions used in the Retortillo-Santidad PFS.
(v) Permitting and Licensing Process
In October 2011, the Company commenced the permitting and licensing process for the stand-alone
Retortillo-Santidad Project with the submission of an application for the conversion of the Pedreras
Investigation Permit into an Exploitation Concession. Following a period of consultation with the regional
government of Castilla y Leon, the application was accepted and has progressed to a period of public
consultation ending in September 2012.
Activities during the year
Exploration and Drilling
During the year, Berkeley completed over 400 drill holes totalling more than 25,000 metres in drilling campaigns
at Retortillo-Santidad, Villares, Gambuta and the State Reserves.
Table 1: Drilling Activity in 2011/12
Project
Alameda South
Mimbre
Sageras
Retortillo-Santidad
Villares
Gambuta
Total
Total
Number
Holes
10
6
11
318
59
19
423
Total
Metres
419
426
422
19,202
3,331
1,498
25,298
Number
holes
Diamond
Metres
Diamond
18
3
21
1,243
269
1,512
Number
holes
RC
10
6
11
300
59
16
402
Metres
RC
419
426
422
17,959
3,331
1,229
23,786
17
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
The majority of the drilling completed during the year was at Retortillo-Santidad and had the aim of:
Confirming the validity of the historic drilling conducted by ENUSA;
To provide more geological data to support a more detailed geological model;
To convert most of the resources, where possible, to Indicated Resources;
To extend the existing resources; and
To complete sterilisation drilling in areas of the proposed mine and process plant infrastructure.
The drilling was successful in confirming known mineralisation and extending the mineralisation in some areas
where local fracture systems were found to be mineralised outside the previously defined resource. Following the
receipt of all chemical assay results, the resource estimates were updated resulting in a significant increase in the
Indicated Resource category, with 56% of the Retortillo resource and 78% of the Santidad resource in this
category. There was however, a 23% and 34% decrease in contained U3O8 at a 200ppm cut-off grade at Retortillo
and Santidad respectively, due to a combination of two factors: overestimation of the original Mineral Resource
Estimates as a consequence of the methodology applied (based on a recovered fraction with grade estimation
carried out using inverse distance) and lesser continuity of the mineralisation zone as observed in the resource
infill drilling.
Diamond drilling at Retortillo-Santidad was also completed to obtain core samples for geotechnical tests to
support the PFS.
Notable intersections are summarised in the Table 2 below:
Table 2: Retortillo-Santidad - Significant Intersections (at 200ppm cut-off)
Deposit
Hole ID
Retortillo
Retortillo
Retortillo
RTR-266
RTR-317
RTR-324
Retortillo
Santidad
RTR-327
SNR-211
Santidad
Santidad
Santidad
SNR-280
SNR-287
SNR-289
Santidad
SNR-297
From
(m)
21
19
31
83
18
26
33
37
0
10
58
73
43
To
(m)
31
47
45
97
32
31
34
39
19
14
68
76
51
Thick
(m)
10
28
12
12
14
5
1
2
19
4
10
3
8
U3O8
(ppm)
1,285
273
797
738
624
423
336
604
313
2356
357
656
769
In early 2012, exploration programs targeting select satellite deposits within the Retortillo-Santidad area and the
Gambuta deposit were undertaken with the aim of confirming and extending known resources and testing new
prospect areas.
18
Drill testing of radiometric anomalies confirmed the presence of shallow high grade uranium mineralisation at the
Villares and Villares North prospects (located 7 km to the north of Retortillo-Santidad) resulting in the delineation
of a new mineral resource estimate totalling 0.97Mt at 597ppm U3O8 for 1.28Mlbs U3O8. Select intercepts from the
drilling are summarised in the following table.
Table 3: Villares RC Drilling - Significant Intersections (200ppm cut-off)
Villares
From
VIR-001
VIR-007
VIR-011
VIR-042
VIR-043
VIR-044
(m)
1.0
6.0
22.0
2.0
26.0
55.0
59.0
14.0
To
(m)
16.0
15.0
28.0
11.0
30.0
59.0
61.0
24.0
Thick
(m)
15.0
9.0
6.0
9.0
4.0
4.0
2.0
10.0
U3O8
(ppm)
1,524
2,363
3,685
783
1,277
1,876
1,437
2,096
This drilling highlights the potential to identify additional uranium resources in outcropping and covered areas in
close proximity to Retortillo-Santidad, with numerous other radiometric anomalies yet to be adequately tested by
drilling.
Drilling at Gambuta comprised initial infill reverse circulation (‘RC’) and diamond drilling to upgrade the resource
classification. The drilling focused on the north-western portion of the deposit and confirmed the style of
mineralisation and suggests continuity of thick zones of mineralisation, commonly in the range of 2 to 16m. Assay
results for the drill hole samples are pending.
Other exploration work included a desktop review of the Company's current tenement holdings and initiation of
field work to assess the potential of several regional licenses.
19
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
Mineral Resources
The current Mineral Resource Estimates for all deposits is tabulated below (using a 200ppm U3O8 cut-off grade)
incorporating the results from the recent drilling campaigns and together with previously obtained information.
The resources listed below include only those resources owned 100% by Berkeley following the ENUSA
agreement signed in July 2012.
Table 4: Mineral Resource Statement as at August 2012 (at a 200ppm cut-off grade)
Deposit
Name
Resource
Category
Tonnes
(Mt)
U3O8
(ppm)
U3O8
(Mlbs)
Category
(%)
Retortillo
Santidad
Retortillo - Santidad
Zona 7
Las Carbas
Cristina
Caridad
Villares
Villares North
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
Retortillo-Santidad Satellites
Inferred
Alameda
Villar
Alameda Nth Zone 2
Alameda Nth Zone 19
Alameda Nth Zone 21
Alameda Satellites
Gambuta
Integrated Salamanca Project
Measured
Indicated
Inferred
Total
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
Measured
Indicated
Inferred
Total
0.0
6.1
5.3
11.5
0.0
2.8
0.9
3.7
0.0
8.9
6.2
15.2
3.9
0.6
0.8
0.4
0.7
0.3
6.7
0.0
20.0
0.7
20.7
5.0
1.2
1.1
1.8
9.1
11.3
0.0
29.0
34.0
63.0
0
416
376
397
0
350
308
340
0
395
366
383
414
443
460
382
672
388
447
0
455
657
462
446
472
492
531
472
371
0
437
418
426
0.0
5.6
4.4
0%
56%
44%
10.1
100%
0.0
2.2
0.6
2.8
0.0
7.8
5.0
12.8
3.6
0.6
0.8
0.4
1.1
0.2
6.6
0.0
20.1
1.0
21.1
4.9
1.3
1.2
2.1
9.5
9.2
0.0
27.9
31.3
59.2
0%
78%
22%
100%
0%
61%
39%
100%
100%
100%
100%
100%
100%
100%
100%
0%
95%
5%
100%
100%
100%
100%
100%
100%
100%
0%
47%
53%
100%
20
Preliminary Feasibility Study – Retortillo-Santidad
In January 2012, the Company announced the results from the PFS for the first stage of the stand-alone
development of the Retortillo-Santidad deposit (formerly the Salamanca I Project). This Study demonstrated a
project with competitive operating metrics and robust economics with further upside through the incorporation of
additional regional satellite deposits. The Study also formed the basis for the Exploitation Plan which was
presented to the Regional Government of Castilla y Leon.
Under the initial Exploitation Plan, Retortillo-Santidad is the first deposit into production with a mine life of 10 year.
The mine was designed as a conventional open pit operation, utilising a continuous rehabilitation program, with
waste continuously transferred to backfill and rehabilitate the operating pit. The deposit is divided into two zones
of mineralisation which are separated by a distance of 3km. The process plant was situated at Retotillo where the
majority of resources are located. The layout contemplated ore from Santidad being primary crushed close to the
pit and conveyed to Retortillo for processing. Whilst the resource estimate uses a cut-off grade of 200 ppm, the
mine design provides for an optimal and operational cut-off grade of 96 ppm U3O8.
The test work carried out on the ore has demonstrated that the mineralisation is amenable to heap leaching, and
more specifically for bacterial leaching, with the required natural bacteria already existing in the ore. Accordingly,
the basic scheme designed for the Retortillo-Santidad was an on-off pad heap leach. The ripios (heap leach
residue) would be backfilled into lined and isolated areas previously mined within the pit. Uranium treatment
involves Solvent Extraction (‘SX’) followed by ammonia precipitation, calcinations and packaging. This design
allows the footprint of the affected area to be minimised and avoids slurry and the requirement for a tailing dam by
placing the ripios encapsulated with the waste inside the pit, allowing high quality continuous rehabilitation of the
site.
The production schedule contemplated a process recovery of 87.5%.
The PFS included the following production outcomes:
11.5 Mlbs U3O8 produced over a 10 year Life of Mine (in production); and
1.42 Mlbs U3O8 produced per annum on average over the initial 6 years of production.
Further details on the results of the Study are available in the ASX Announcement dated 30 January 2012.
Metallurgical Test Work
A further full-scale metallurgical test work program was undertaken on a 4.7 tonne bulk sample, representative of
the Retortillo deposit, at Mintek’s mineral processing facility in Johannesburg. The scope of work of the test work
program included:
Bench scale comminution tests;
ISO-pH tests;
Diagnostic assay and agglomerate acid cure test;
Geomechanical tests;
6m Column tests; and
Solvent extraction test work through to ADU precipitation.
The test work was recently completed and initial results indicate that the assumptions used in the PFS regarding
the process flow sheet, uranium recovery, acid consumption and leach time will be reinforced. Analytical data of
the pregnant liquor solution (‘PLS’) obtained and solvent extraction (‘SX’) text work also indicate that there are no
impurities at levels that could adversely impact the quality of the uranium yellow cake to be produced. The leach
solution has low concentrations of all common penalty elements.
Uranium recovery, leach times and acid consumption have been calculated for the nine 6m columns with
available assay results and recovery is in the range of 90% (+/- 2%) after 80 days, with acid consumption of
approximately 20 kg/t for the bacterial leach columns. This represents a 20% reduction in acid consumption when
compared with the non-bacterial leach tests for the same recovery and leach time.
21
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
Geomechanical testing has also been completed with the results indicating that some optimisation of the heap
leach stack height may be required. This may lead to lower lift heights for the more weathered mineralisation.
Full results for the metallurgical test work are expected in the December quarter of 2012.
Permitting
In October 2011, Berkeley initiated the licensing and permitting process for the development of Retortillo-Santidad
with the submission of an application for the conversion of the Pedreras Investigation Permit into an Exploitation
Concession. The submission included a Scoping Environmental Impact Assessment and was subjected to a
consultation period. The Company received confirmation from the Regional Government of Castilla y Leon that
the Scoping Environmental Impact Assessment was successfully processed in March 2012 following the
consultation period.
In March 2012, the Company submitted key documents for the permitting process, including:
The Exploitation Plan;
The Environmental Impact Assessment;
The Restoration and Closure Plans;
Authorisation for the use of rural land for industrial purposes; and
Initial Authorisation for the Radioactive Facility Application.
The application was approved for public information in May 2012, and the documents are now subject to a period
of public consultation which is expected to be completed in September 2012. The Company’s response to public
comment will be subject to clearance and direction from the authorities before they are incorporated into the
Project.
The documentation submitted for the Initial Authorization of the process plant as a radioactive facility has also
entered a public information period, in parallel with the public information period of the application for
reclassification (from rural to mining use) of the surface land area affected by the Project.
Berkeley expects to commence the permitting process for the Alameda deposit in the December quarter of 2012.
In October 2011, the Company also signed a co-operation agreement for the exploitation of the Retortillo-
Santidad uranium deposit located with the municipalities of Retortillo and Villavieja de Yeltes. The agreement is
an important step in progressing through the permitting phase to production. As part of the agreement, the
municipalities undertake to actively contribute throughout the necessary administrative procedures required for
the project to achieve both licensing and permitting. Berkeley in turn commits to contribute to the economic and
social development of the municipalities.
Salamanca Project
Agreement with ENUSA
Subsequent to the end of the year, Berkeley reached agreement with ENUSA on terms which provide the
Company with a 100% interest in select uranium resources within State Reserves held by ENUSA (refer ASX
Announcement dated 24 July 2012).
Under the agreement, Berkeley holds a 100% interest in, and the exploitation rights to, State Reserves 28 and 29
(‘Addendum Reserves’) whilst waiving its rights to mine in State Reserves where ENUSA has undertaken
rehabilitation (Figure 1). The Addendum Reserves include the substantial unmined Alameda deposit, the Villar
deposit and additional prospects. Total resources for the Addendum Reserves are currently estimated at 30.6
million pounds of contained U3O8 at an average grade of 465 ppm.
22
The new agreement with ENUSA is in the form of an Addendum to the Consortium Agreement signed with
ENUSA in January 2009, and subsequently approved by the Council of Ministers of the Spanish Government in
April 2009. The Addendum was signed and notarised in Madrid on 23 July 2012, and includes the following terms:
The Consortium now consists of State Reserves 28 and 29;
Berkeley’s stake in the Consortium has increased to 100%;
ENUSA will remain the owner of State Reserves 28 and 29, however the exploitation rights have now
been assigned to Berkeley, together with authority to submit all applications for the permitting process;
The Company is now the sole and exclusive operator in the Addendum Reserves, with the right to exploit
the contained uranium resources and have full ownership of any uranium produced;
ENUSA will receive a production fee equivalent to 2.5% of the net sale value (after marketing and
transport costs) of any uranium produced within the Addendum Reserves;
Berkeley has waived its rights to mining in State Reserves 2, 25, 30, 31, Hoja 528-1 and the Saelices El
Chico Exploitation Concession. These properties have combined resources estimated at 21.9 million
pounds of U3O8 (Berkeley’s previous 90% interest equated to 19.7 million pounds);
Berkeley has waived any rights to management of the Quercus plant; and
The Co-operation Agreement with ENUSA, signed on 29 January 2009, has been terminated.
These outcomes successfully resolved long standing difficulties for all parties involved, including termination of
the arbitration proceeding between the Company and ENUSA.
Figure 1: Addendum Reserves, excluded State Reserves, Berkeley tenements, and unmined deposits in
Salamanca Province
23
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
Project Integration
Following the agreement with ENUSA in July 2012, Berkeley's current focus is on the advancement of its, wholly
owned, flagship integrated Salamanca Project, through the development phase. The integrated Salamanca
Project comprises the Retortillo-Santidad and Alameda deposits plus a number of other Satellite deposits.
The results of a PFS completed in early 2012 confirmed the technical and economic viability of a stand-alone
project exploiting the Retortillo-Santidad deposit, whilst the Alameda deposit formed part of a separate Feasibility
Study completed in 2011. The Company is now undertaking an initial assessment of the integrated development
of these two deposits and believes the integrated Salamanca Project has the potential to support a significant
annual production rate and mine life.
Corporate
At 30 June 2012, the Group had cash reserves of over A$37.5 million, with no debt. This puts the Group in a
strong financial position as it looks to progress the development of its Integrated Salamanca Project.
There were a number of changes to the Board and Management team during the year.
Former executives, Mr Ian Stalker and Mr Henry Horne resigned as Non Executive Directors effective 29
November 2011 and 1 January 2012 respectively. Mr Laurie Marsland, who was appointed a Non Executive
Director on 25 August 2011, subsequently resigned effective 10 May 2012.
Mr Brendan James resigned as CEO and Managing Director of the Company effective 27 April 2012 for personal
reasons.
Mr Ian Middlemas was appointed Non Executive Chairman and Mr Robert Behets a Non Executive Director on 27
April 2012. These appointments significantly strengthened the Board’s corporate and technical capacity following
the departure of Mr James as Managing Director.
Prior to joining the Board, Mr Middlemas and Mr Behets agreed to participate in a placement of 5 million shares at
an issue price of $0.30 each to raise $1.5 million before costs. Each share had a free attaching option exercisable
at $0.45 each on or before 30 June 2016.
Mr Clint McGhie was appointed Company Secretary and Chief Financial Officer on 18 May 2012, replacing Mr
Sam Middlemas as Company Secretary.
Business Strategies and Prospects
The Consolidated Entity currently has the following business strategies and prospects over the medium to long
term:
to conduct studies into the feasibility of exploiting the Integrated Salamanca Project in Spain;
to continue to explore its portfolio of mineral permits in Spain; and
continue to examine new opportunities in minerals and energy exploration and development.
Risk Management
The Board is responsible for the oversight of the Consolidated Entity's risk management and control framework.
Responsibility for control and risk management is delegated to the appropriate level of management with
Directors having the ultimate responsibility for the risk management and control framework.
Arrangements put in place by the Board to monitor risk management include monthly reporting to the Board in
respect of operations and the financial position of the Group.
24
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as disclosed below, there were no significant changes in the state of affairs of the Consolidated Entity
during the year.
On 25 August 2011 Laurence Marsland was appointed Non Executive Director of the Company. Mr
Marsland subsequently resigned as a Director effective 10 May 2012.
Following shareholder approval on 20 September 2011, the Company has issued 2,000,000 Incentive
Options to Mr Brendan James each with an exercise price of 41 cents, with an expiry date of 1 May
2016. All of these Options vest on 30 May 2014, or on the date a Change of Control event occurs.
These Options were all subsequently forfeited following the resignation of Mr James.
In addition to the above, a further 1,000,000 options were issued to employees on 23 September 2011
under the Berkeley Employee Option Scheme with an exercise price of $0.41 each and an expiry date of
21 September 2015, vesting in three equal tranches on 21 September 2012, 21 September 2013 and 21
September 2014.
Mr Ian Stalker resigned as a Non Executive Director of the Company effective 29 November 2011.
Mr Steven Turner was appointed Chief Financial Officer of the Company effective 12 December 2012.
He resigned from this position on 27 April 2012.
Mr Henry Horne resigned as a Non Executive Director of the Company effective 1 January 2012.
500,000 options were issued to employees on 20 February 2012 under the Berkeley Employee Option
Scheme with an exercise price of $0.475 each and an expiry date of 22 December 2015, with 300,000
vesting on 22 December 2013 and 200,000 vesting on 22 December 2014.
On 2 April 2012, Berkeley advised that its wholly-owned subsidiary, Berkeley Minera Espana S.A.
(‘BME’) had initiated International Arbitration proceedings against Enusa Industrias Avanzadas, S.A
(‘ENUSA’), through the Paris-based International Court of Arbitration of the International Chamber of
Commerce.
1,500,000 options were issued to Mr Turner on 11 April 2012 under the Berkeley Employee Option
Scheme with an exercise price of $0.475 each and an expiry date of 22 December 2015, vesting in three
equal tranches on 12 December 2012, 12 December 2013 and 12 December 2014. Following his
resignation from the Company, the Board agreed to allow Mr Turner to retain 500,000 options. The
remaining options were forfeited.
Mr Brendan James resigned as CEO and Managing Director of the Company effective 27 April 2012.
On 26 April 2012, the Company made a placement of 5 million shares at $0.30 each to raise $1.5 million
(before costs) to the nominees of Mr Ian Middlemas and Mr Robert Behets. Each share had a free
attaching option exercisable at $0.45 each on or before 30 June 2016. In addition, a further 500,000
options on the same terms and conditions were issued as part of the placement fee arrangement.
Mr Ian Middlemas was appointed Non Executive Chairman and Mr Robert Behets a Non Executive
Director on 27 April 2012.
Mr Clint McGhie was appointed Company Secretary on 18 May 2012, replacing Mr Sam Middlemas.
25
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
SIGNIFICANT POST BALANCE DATE EVENTS
Since the end of the financial year, the following events have significantly affected, or may significantly affect, the
operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated
Entity in future financial years:
On 24 July 2012, the Company advised that it has reached agreement with Enusa Industrias Avanzadas
S.A. (‘ENUSA’) on terms which provide the Company with a 100% interest in select uranium resources
within State Reserves held by ENUSA. The agreement successfully resolved long standing difficulties for
all parties involved, including termination of the arbitration proceeding between the Company and
ENUSA.
Mr Matthew Syme resigned as a Non Executive Director of the Company on 2 August 2012.
Other than the above there are no matters or circumstances, which have arisen since 30 June 2012 that have
significantly affected or may significantly affect:
the operations, in financial years subsequent to 30 June 2012, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2012, of the Consolidated
Entity; or
the state of affairs, in financial years subsequent to 30 June 2012, of the Consolidated Entity.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Consolidated Entity's operations are subject to various environmental laws and regulations under the relevant
government's legislation. Full compliance with these laws and regulations is regarded as a minimum standard for
all operations to achieve.
Instances of environmental non-compliance by an operation are identified either by external compliance audits or
inspections by relevant government authorities.
There have been no significant known breaches by the Consolidated Entity during the financial year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
It is the Board's current intention that the Consolidated Entity will continue with development of its Spanish
uranium projects. The Company will also continue to examine new opportunities in mineral exploration, including
uranium.
All of these activities are inherently risky and the Board is unable to provide certainty that any or all of these
activities will be able to be achieved. In the opinion of the Directors, any further disclosure of information
regarding likely developments in the operations of the Consolidated Entity and the expected results of these
operations in subsequent financial years may prejudice the interests of the Company and accordingly no further
information has been disclosed.
26
INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF BERKELEY
Current Directors
Ian Middlemas
James Ross
Robert Behets
Interest in Securities at the Date of this Report
Ordinary
Shares(i)
$0.75 Listed
Options(ii)
$0.45 Unlisted
Options(iii)
5,300,000
315,000
1,000,000
-
4,000,000
257,500
-
-
1,000,000
Jose Ramon Esteruelas
-
500,000
Current Directors
Ian Middlemas
James Ross
Robert Behets
Jose Ramon Esteruelas
Former Director
Brendan James
Interest in Securities issued during the year
Ordinary
Shares(i)
$0.45 Unlisted
Options(iii)
$0.41 Incentive
Options(iv)
4,000,000(v)
4,000,000(vi)
-
1,000,000(v)
-
1,000,000(vi)
-
-
-
-
-
-
-
-
-
2,000,000(vii)
Notes
(i)
(ii)
(iii)
(iv)
(v)
“Ordinary Shares” means fully paid ordinary shares in the capital of the Company.
“$0.75 Listed Options” means an option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise
price of $0.75 each on or before 15 May 2013.
“$0.45 Unlisted Options” means an option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise
price of $0.45 each on or before 30 June 2016.
“$0.41 Incentive Options” means an option to subscribe for 1 Ordinary Share in the capital of the Company at an
exercise price of $0.41 each on or before 1 May 2016.
These shares were subscribed for in a placement in April 2012 at a price of $0.30 each, prior to Mr Middlemas and Mr
Behets joining the board.
The $0.45 Unlisted Options were issued as free attaching options on a one for one basis in the April 2012 placement.
(vi)
(vii) Mr James was granted the $0.41 Incentive Options as part of his remuneration package as an incentive to perform.
These options were forfeited upon Mr James’ resignation in April 2012.
SHARE OPTIONS
At the date of this report the following options have been issued over unissued capital:
Listed Options
•
11,894,428 listed options at an exercise price of $0.75 each that expire on 15 May 2013.
Unlisted Options
•
•
•
•
•
1,000,000 unlisted options at an exercise price of $1.25 each that expire on 1 December 2013.
2,258,333 unlisted options at an exercise price of $1.35 each that expire on 18 June 2014.
1,000,000 unlisted options at an exercise price $0.41 each that expire on 21 September 2015.
1,000,000 unlisted options at an exercise price of $0.475 each that expire on 22 December 2015.
5,500,000 unlisted options at an exercise price of $0.45 each that expire on 30 June 2016.
27
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
These options do not entitle the holders to participate in any share issue of the Company or any other body
corporate. During the financial year, there were no new shares issued as a result of the exercise of listed or
unlisted options. There were 5,509,167 unlisted options that lapsed during the year (2,455,834 expired and
3,053,333 forfeited). Since 30 June 2012, there have been 95,000 shares issued as a result of the exercise of
listed options and no new shares issued as a result of the exercise of unlisted options on issue.
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company's Directors and the Audit Committee and
Remuneration Committee held during the year ended 30 June 2012, and the number of meetings attended by
each director.
Board
Meetings
Number
Eligible to
Attend
Board
Meetings
Number
Attended
Audit
Committee
Meetings
Number
Eligible to
Attend
Audit
Committee
Meetings
Number
Attended
Remuneration
Committee
Meetings
Number
Eligible to
Attend
Remuneration
Committee
Meetings
Number
Attended
Current Directors
Ian Middlemas
James Ross
Robert Behets
Jose Ramon Esteruelas
Former Directors
Brendan James
Henry Horne
Laurence Marsland
Ian Stalker
Matthew Syme
-
10
-
10
10
6
9
4
10
-
10
-
10
9
6
9
4
10
-
3
-
3
-
-
-
-
3
-
3
-
2
-
-
-
-
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28
REMUNERATION REPORT (AUDITED)
This report details the amount and nature of remuneration of each director and executive officer of the Company.
Details of Key Management Personnel
The Key Management Personnel of the Group during or since the end of the financial year were as follows:
Directors
Mr Ian Middlemas
Dr James Ross
Mr Robert Behets
Señor Jose Ramon Esteruelas
Mr Matthew Syme
Mr Laurence Marsland
Mr Brendan James
Mr Henry Horne
Mr Ian Stalker
Executives
Francisco Bellón del Rosal
Javier Colilla Peletero
Clint McGhie
Sam Middlemas
Steven Turner
Non-Executive Chairman (appointed 27 April 2012)
Non-Executive Deputy Chairman (previously Non-Executive Chairman)
Non-Executive Director (appointed 27 April 2012)
Non-Executive Director
Non-Executive Director (resigned 2 August 2012)
Non-Executive Director (appointed 25 August 2011, resigned 9 May 2012)
Managing Director (resigned 27 April 2012)
Non-Executive Director (resigned 1 January 2012)
Non-Executive Director (resigned 29 November 2011)
General Manager Operations
Senior Vice President Corporate
Chief Financial Officer and Company Secretary (appointed 18 May 2012)
Company Secretary (resigned 18 May 2012)
Chief Financial Officer (appointed 12 December 2011, resigned 27 April 2012)
There were no other key management personnel of the Company or the Group. Unless otherwise disclosed, the
Key Management Personnel held their position from 1 July 2011 until the date of this report.
Remuneration Policy
The remuneration policy for the Group's Key Management Personnel (including the Managing Director) has been
developed by the Board taking into account:
the size of the Group;
the size of the management team for the Group;
the nature and stage of development of the Group's current operations; and
•
•
•
• market conditions and comparable salary levels for companies of a similar size and operating in similar
sectors.
In addition to considering the above general factors, the Board has also placed emphasis on the following specific
issues in determining the remuneration policy for key management personnel:
•
•
•
the Group is currently focused on undertaking exploration and development activities with a view to
expanding and developing its resources. In line with the Group's accounting policy, all exploration
expenditure prior to a feasibility study is expensed. The Group continues to examine new business
opportunities in the energy and resources sector;
risks associated with resource companies whilst exploring and developing projects; and
other than profit which may be generated from asset sales (if any), the Group does not expect to be
undertaking profitable operations until sometime after the successful commercialisation, production and
sales of commodities from one or more of its current projects, or the acquisition of a profitable mining
operation.
Remuneration Policy for Executives
The Group's remuneration policy is to provide a fixed remuneration component and a performance based
component (options and a cash bonus, see below). The Board believes that this remuneration policy is
appropriate given the considerations discussed in the section above and is appropriate in aligning Key
Management Personnel objectives with shareholder and business objectives.
29
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (Continued)
Performance Based Remuneration – Incentive Options
The Board has chosen to issue incentive options to Key Management Personnel as a key component of the
incentive portion of their remuneration, in order to attract and retain the services of the Key Management
Personnel and to provide an incentive linked to the performance of the Company. The Board considers that each
Key Management Personnel's experience in the resources industry will greatly assist the Company in progressing
its projects to the next stage of development and the identification of new projects. As such, the Board believes
that the number of incentive options granted to Key Management Personnel is commensurate to their value to the
Company.
The Board has a policy of granting options to Key Management Personnel with exercise prices at and/or above
market share price (at time of agreement). As such, incentive options granted to Key Management Personnel will
generally only be of benefit if the Key Management Personnel perform to the level whereby the value of the
Company increases sufficiently to warrant exercising the incentive options granted.
Other than service-based vesting conditions, there are no additional performance criteria on the incentive options
granted to Key Management Personnel, as given the speculative nature of the Group's activities and the small
management team responsible for its running, it is considered the performance of the Key Management
Personnel and the performance and value of the Company are closely related.
Performance Based Remuneration – Cash Bonus
In addition, some Key Management Personnel are entitled to an annual cash bonus upon achieving various key
performance indicators, to be determined by the Board. On an annual basis, after consideration of performance
against key performance indicators, the Board determines the amount, if any, of the annual cash bonus to be paid
to each Key Management Personnel.
Impact of Shareholder Wealth on Key Management Personnel Remuneration
During the Group's exploration and development phases of its business, the Board anticipates that it will retain
future earnings (if any) and other cash resources for the operation and development of its business. Accordingly
the Company does not currently have a policy with respect to the payment of dividends and returns of capital.
Therefore there was no relationship between the Board’s policy for determining, or in relation to, the nature and
amount of remuneration of KMP and dividends paid and returns of capital by the Company during the current and
previous four financial years.
The Board does not directly base remuneration levels on the Company's share price or movement in the share
price over the financial year and the previous four financial years. However, as noted above, a number of Key
Management Personnel have received options which generally will only be of value should the value of the
Company's shares increase sufficiently to warrant exercising the incentive options granted.
Impact of Earnings on Key Management Personnel Remuneration
As discussed above, the Group is currently undertaking exploration and development activities, and does not
expect to be undertaking profitable operations until sometime after the successful commercialisation, production
and sales of commodities from one or more of its current projects.
Accordingly the Board does not consider earnings during the current and previous four financial years when
determining, and in relation to, the nature and amount of remuneration of KMP.
Remuneration Policy for Non-Executive Directors
The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time,
commitment and responsibilities. Given the current size, nature and risks of the Company, incentive options have
been used to attract and retain Non-Executive Directors. The Board determines payments to the Non-Executive
Directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by
shareholders at a General Meeting. Fees for Non-Executive Directors are not linked to the performance of the
economic entity. However, to align Directors' interests with shareholder interests, the Directors are encouraged to
hold shares in the Company and Non-Executive Directors have received incentive options in order to secure their
services and as a key component of their remuneration.
30
REMUNERATION REPORT (AUDITED) (Continued)
General
Where required, Key Management Personnel receive superannuation contributions (or foreign equivalent),
currently equal to 9% of their salary, and do not receive any other retirement benefit. From time to time, some
individuals have chosen to sacrifice part of their salary to increase payments towards superannuation.
All remuneration paid to Key Management Personnel is valued at cost to the company and expensed. Incentive
options are valued using the Binomial option valuation methodology and validated by the Black Scholes option
pricing model. The value of these incentive options is expensed over the vesting period.
Key Management Personnel Remuneration
Details of the nature and amount of each element of the remuneration of each Director and executive of the
Company or Group for the financial year are as follows:
Post
Employ-
ment
Benefits
$
Share-
Based
Payments
$
Other Non-
Cash
Benefits(11)
$
Total
$
17,857
134,267
29,329
70,002
50,000
38,402
-
-
-
-
-
-
Salary
& Fees
$
17,857
134,267
29,329
70,002
50,000
38,402
-
-
-
-
-
-
2012
Directors
Ian Middlemas(1)
James Ross
Robert Behets(2)
Jose Ramon Esteruelas
Matthew Syme(3)
Laurence Marsland(4)
Brendan James(5)
Henry Horne(6)
Ian Stalker(7)
-
-
-
-
-
-
-
-
-
267,320
7,851
25,000
24,625
-
-
63,719
338,890
-
-
25,000
24,625
Executives
Francisco Bellón del Rosal 245,751
15,638
95,166
15,160
371,715
Javier Colilla Peletero
Clint McGhie(8)
Sam Middlemas(9)
Steven Turner(10)
246,611
15,402
150,377
-
176,200
-
-
-
-
184,410
16,521
101,000
-
-
-
-
412,390
-
176,200
301,931
1,509,774
55,412
346,543
78,879 1,990,608
Percentage
of Total
Remunerat-
ion that
Consists of
Options
%
Percentage
Performance
Related
%
-
-
-
-
-
-
-
-
-
25.60
36.46
-
-
33.45
17.41
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
Notes
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Mr Ian Middlemas was appointed a Non-Executive Director and Chairman of the Company on 27 April 2012;
Mr Behets was appointed a Non-Executive Director of the Company on 27 April 2012;
Mr Syme resigned as a Non-Executive Director of the Company on 2 August 2012;
Mr Marsland was appointed as a Non-Executive Director on 25 August 2011 and resigned on 9 May 2012;
Mr James resigned as Managing Director of the Company on 27 April 2012 (2,000,000 incentive options issued on 23
September 2011 were cancelled at this time as they had not vested);
Mr Horne resigned as a Non-Executive Director of the Company on 1 January 2012;
Mr Stalker resigned as a Non-Executive Director of the Company on 29 November 2011;
Mr McGhie was appointed Company Secretary and Chief Financial Officer of the Company on 18 May 2012. Mr
McGhie provides services as the Company Secretary and Chief Financial Officer through a services agreement
between Berkeley and Apollo Group Pty Ltd. Under the agreement, Apollo Group Pty Ltd provides administrative,
company secretarial and accounting services, and the provision of a fully serviced office to the Company for a monthly
retainer of $24,000;
Mr Sam Middlemas resigned as Company Secretary on 18 May 2012;
(9)
(10) Mr Steven Turner was appointed Chief Financial Officer of the Company on 12 December 2012 and resigned on 27
April 2012 (1,500,000 incentive options were issued on 11 April 2012, of which 1,000,000 were forfeited on
resignation; and
(11) Other Non-Cash Benefits includes payments made for housing, car-parking and insurance premiums on behalf of the
KMP, including Directors & Officers insurance, and in some instances, working directors insurance.
31
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (Continued)
Key Management Personnel Remuneration (Continued)
2011
Directors
James Ross
Brendan James
Henry Horne
Scott Yelland
Ian Stalker
Jose Ramon Esteruelas
Matthew Syme
Robert Hawley
Sean James
Executives
Sam Middlemas
Post
Employ-
ment
Benefits
$
Share-
Based
Payments
$
Other
Non-
Cash
Benefits
$
Salary &
Fees
$
Total
$
138,025
25,000
349,649
2,100
1,500
9,025
-
-
-
-
140,125
26,500
415,982
40,682
815,338
286,891
13,127
15,442
33,505
348,965
278,043
69,488
35,000
73,677
7,334
170,011
-
-
-
-
-
-
724,886
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,002,929
69,488
35,000
73,677
7,334
170,011
26,390
594,403
Francisco Bellón del Rosal
23,996
2,394
Javier Colilla Peletero
250,491
-
343,912
Total
1,707,605
28,146
1,500,222
74,187
3,310,160
Percentage
of Total
Remunerati
on that
Consists of
Options
%
Percentage
Performance
Related
%
-
-
51.02
4.43
72.28
-
-
-
-
-
-
57.86
45.32
-
-
-
-
-
-
-
-
-
-
-
-
Options Granted to Key Management Personnel
Details of Unlisted Options granted by the Company to each Key Management Personnel of the Group during the
financial year are as follows:
Grant
Date
Expiry
Date
Exercise
Price
$
Grant Date
Fair Value
$
No.
Granted
Total
Value of
Options
Granted
$
No.
Vested
2012
Directors
Brendan James
23-Sep-11
1-May-16
0.41
0.216
2,000,000(3)
432,000
Executives
Francisco Bellón
del Rosal
23-Sep-11
21-Sep-15
Steven Turner
12-Mar-12
22-Dec-15
0.41
0.475
0.203
0.202
1,000,000
1,500,000(4)
-
-
203,000
303,000
500,000
Notes
(1)
(2)
(3)
(4)
For details on the valuation of the options, including models and assumptions used, please refer to Note 18 to the
financial statements.
Each unlisted option converts into one Ordinary Share of Berkeley Resources Limited.
All of the options granted to Mr James were forfeited upon his resignation.
1,000,000 of the options granted to Mr Turner were forfeited upon his resignation. The Board agreed to allow Mr
Turner to retain 500,000 options.
No options were granted as part of their remuneration to Key Management Personnel during the 2011 financial
year.
32
REMUNERATION REPORT (AUDITED) (Continued)
Details of the value of options granted, exercised or lapsed for each Key Management Person of the Company or
Group during the financial year are as follows:
Value of
options
granted during
the year
$
Value of options
exercised
during the year
$
Value of options
lapsed during
the year
$
Value of options
included in
remuneration
for the year
$
Percentage of
remuneration
that consists
of options
%
432,000
203,000
303,000
-
-
-
(517,340)
-
-
-
(237,120)
95,166
101,000
25.60
33.45
Value of
options
granted during
the year
$
Value of options
exercised
during the year
$
Value of options
lapsed during
the year
$
Value of options
included in
remuneration
for the year
$
Percentage of
remuneration
that consists
of options
%
-
-
-
-
(2,476,700)
(81,666)
724,866
415,982
72.28
51.02
2012
Directors
Brendan James
Executives
Francisco Bellón del
Rosal
Steven Turner
2011
Directors
Ian Stalker
Henry Horne
Employment Contracts with Directors and Executive Officers
Current Directors
Dr James Ross, Non Executive Director has a letter of engagement with Berkeley Resources Limited that was
last updated on 15 January 2011 when he was appointed Chairman. Following the appointment of Mr Ian
Middlemas as Chairman on 27 April 2012, Dr Ross became the Deputy Chairman of the Company. From 27 April
2012, Dr Ross receives a fixed remuneration component of $50,000 per annum inclusive of superannuation which
is the standard fixed remuneration previously set by the Board for Non-Executive Directors.
For the period that Dr Ross was Chairman, he received a fixed remuneration component of $100,000 per annum
inclusive of superannuation. The letter of engagement also includes a consultancy arrangement which provides
for a consultancy fee at the rate of $1,200 per day for technical geological work done. The consultancy
arrangement has a rolling term and may be terminated by the Company by giving 1 months notice.
From the date of his appointment, Mr Ian Middlemas will receive a fixed remuneration component of $100,000 per
annum inclusive of superannuation which is the amount previously set by the Board for the position of Chairman.
Mr Robert Behets has a services agreement with the Company dated 18 June 2012, which provides for a
consultancy fee at the rate of $1,200 per day for management and technical services provided by Mr Behets.
Either party may terminate the agreement without penalty or payment by giving 2 months notice. In addition, Mr
Behets also receives the fixed remuneration component of $50,000 per annum inclusive of superannuation as
previously set by the Board for Non-Executive Directors.
Señor Jose Ramon Esteruelas, Non Executive Director, was appointed a Director of the Company on
1 November 2006. Señor Esteruelas has a letter of employment with Berkeley Resources Limited dated
16 November 2006. Señor Esteruelas receives a fixed remuneration component of €48,000 per annum. The
letter also includes a consultancy agreement which provides for a consultancy fee of €1,000 per day. The
consultancy agreement has a rolling term and may be terminated by Señor Esteruelas or by the Company by
giving 1 months notice.
33
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (Continued)
Former Directors
Mr Matthew Syme had a letter engagement dated 1 February 2010 relating to his appointment as a Non
Executive Director. Mr Syme resigned as a Non Executive Director effective 2 August 2012. The letter specifies
the duties and obligations to be fulfilled as a Non Executive Director, and the remuneration was fixed at $50,000
per annum. The letter also included a consultancy arrangement which provided for a consultancy fee at the rate
of $1,200 per day, on an as required basis. The consultancy arrangement had a rolling term and may be
terminated by the Company by giving 1 months notice.
Mr Laurence Marsland was appointed a Non-Executive Director on 25 August 2011 and he subsequently
resigned on 10 May 2012. He had a letter engagement specifying the duties and obligations to be fulfilled as a
Non-Executive Director, and the remuneration was fixed at $50,000 per annum. The letter also included a
consultancy arrangement which provided for a consultancy fee at the rate of $1,200 per day, on an as required
basis. The consultancy arrangement had a rolling term and may be terminated by the Company by giving 1
months notice.
Mr Brendan James terminated his employment contract as Managing Director effective 27 April 2012. He had a
contract of employment with Berkeley Resources Limited dated 10 March 2011. The contract specified the duties
and obligations to be fulfilled by the Managing Director. The contract had a rolling term and may be terminated by
the Company by giving three months notice. No amount was payable in the event of termination for neglect of
duty or gross misconduct. Mr James received a fixed remuneration component of $300,000 per annum plus 9%
superannuation and the provision of accommodation in Spain and a motor vehicle.
Following shareholder approval on 20 September 2011, Mr James was granted 2,000,000 unlisted incentive
options exercisable at $0.41 each on or before 1 May 2016 (36 months vesting period). These options were
forfeited upon Mr James resignation effective 27 April 2012.
Mr Ian Stalker, terminated his employment contract as Managing Director on 30 December 2010, and entered into
a new letter agreement as a Non-Executive Director. The letter specified the duties and obligations to be fulfilled
as a Non-Executive Director, and the remuneration was fixed at $50,000 per annum. The letter also included a
consultancy arrangement which provided for a consultancy fee at the rate of $1,200 per day, on an as required
basis. The consultancy arrangement had a rolling term and may be terminated by the Company by giving 1
months notice.
Mr Henry Horne, terminated his employment contract as Chief Financial Officer and Acting Managing Director on
30 June 2011, and entered into a new letter agreement as a Non-Executive Director. The letter specified the
duties and obligations to be fulfilled as a Non-Executive Director, and the remuneration was fixed at $50,000 per
annum. The letter also included a consultancy arrangement which provides for a consultancy fee at the rate of
$1,200 per day, on an as required basis. The consultancy arrangement had a rolling term and may be terminated
by the Company by giving 1 months notice.
The Board granted Mr Horne 1,250,000 unlisted options exercisable at $1.35 each on or before 18 June 2014 on
his appointment. The unvested 833,334 options lapsed on 30 June 2011.
Current Executive
Mr Francisco Bellón, has a contract of employment dated 14 April 2011 and amended on 1 July 2011. The
contract specifies the duties and obligations to be fulfilled by the General Manager Operations. The contract has
a rolling term and may be terminated by the Company giving 6 months notice, or 12 months in the event of a
change of control of the Company. No amount is payable in the event of termination for neglect of duty or gross
misconduct. Mr Bellón receives a fixed remuneration component of €190,000 (increased from €140,000 effective
1 November 2011) per annum plus compulsory social security contributions regulated by Spanish law, as well as
the provision of accommodation in Salamanca and a motor vehicle.
The Board granted Mr Bellón 1,000,000 unlisted options exercisable at $0.41 each on or before 21 September
2015 under the employee share option scheme. These options vest in three equal tranches on 21 September
2012, 21 September 2013 and 21 September 2014.
34
REMUNERATION REPORT (AUDITED) (Continued)
Mr Javier Colilla Peletero, has a contract of employment dated 1 July 2010. The contract specifies the duties
and obligations to be fulfilled by the Senior Vice President Corporate Affairs. The contract has a rolling term and
may be terminated by the Company giving 3 months notice, or 12 months in the event of a change of control of
the Company or if the appointment becomes redundant. No amount is payable in the event of termination for
neglect of duty or gross misconduct. Mr Colilla receives a fixed remuneration component of €190,000 (increased
from €142,000 effective 1 November 2011) per annum plus compulsory social security contributions regulated by
Spanish law, as well as an allowance for the use of his private motor vehicle.
The Board granted Mr Colilla 1,000,000 unlisted options exercisable at $1.35 each on or before 18 June 2014
under the employee share option scheme. These options vest in three equal tranches on 18 June 2011, 18 June
2012 and 18 June 2013.
Former Executive
Mr Sam Middlemas had a letter agreement dated 31 May 2010 and revised 26 October 2010 relating to his
services as Company Secretary. The letter specified the duties and obligations to be fulfilled as Company
Secretary, and the monthly remuneration is fixed at $9,600 for 8 days work per month. The letter also included a
consultancy arrangement which provided for additional work to be charged at the rate of $1,200 per day, on an as
required basis. The consultancy arrangement had a rolling term and may be terminated by the Company by
giving 3 months notice and termination payment.
Mr Steven Turner had a contract of employment with Berkeley Resources Limited dated 12 December 2011. The
contract specified the duties and obligations to be fulfilled by the Chief Financial Officer. The contract had a
rolling term and may be terminated by the Company by giving three months notice or 12 months in the event of a
change of control of the Company or if the appointment becomes redundant. No amount was payable in the
event of termination for neglect of duty or gross misconduct. Mr Turner received a fixed remuneration component
of $250,000 per annum plus 9% superannuation and the provision of a motor vehicle.
The Board granted Mr Turner 1,500,000 unlisted options exercisable at $0.475 each on or before 22 December
2015 under the employee share option scheme. Upon Mr Turner’s resignation effective 27 April 2012, the Board
agreed that Mr Turner could retain 500,000 of these options (vesting 12 December 2012) whilst the remaining
1,000,000 were forfeited.
Exercise of Options Granted as Remuneration
During the financial year ended 30 June 2012, there were no options that were exercised by Key Management
Personnel (2011: Nil).
35
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS’ REPORT
AUDITOR’S AND OFFICERS' INDEMNITIES AND INSURANCE
Under the Constitution the Company is obliged, to the extent permitted by law, to indemnify an officer (including
Directors) of the Company against liabilities incurred by the officer in that capacity, against costs and expenses
incurred by the officer in successfully defending civil or criminal proceedings, and against any liability which arises
out of conduct not involving a lack of good faith.
During the financial year, the Company has paid an insurance premium to insure Directors and officers of the
Company against certain liabilities arising out of their conduct while acting as a Director or Officer of the
Company. The net premium paid was $18,112 (2011: $25,874). Under the terms and conditions of the insurance
contract, the nature of liabilities insured against cannot be disclosed.
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify an auditor
of the Company or of any related body corporate against any liability incurred.
NON-AUDIT SERVICES
There were no non-audit services provided by the auditor (or by another person or firm on the auditor's behalf)
during the financial year.
AUDITOR'S INDEPENDENCE DECLARATION
The auditor's independence declaration is on page 83 of the Annual Financial Report.
This report is made in accordance with a resolution of the Directors made pursuant to section 298(2) of the
Corporations Act 2001.
For and on behalf of the Directors
ROBERT BEHETS
Non-Executive Director
27 September 2012
The information in this report that relates to Exploration Results and Mineral Resources is based on information
compiled by Mr Craig Gwatkin, who is a Member of The Australian Institute of Mining and Metallurgy and is a full-
time employee of Berkeley Resources Limited. Mr Gwatkin has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (‘The JORC Code’). Mr. Gwatkin consents to the inclusion in the
announcement of the matters based on his information in the form and context in which it appears.
36
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2012
Note
2012
$
2011
$
2
3
4
Revenue from continuing operations
Administration costs
Exploration costs
Business development costs
Other share based payments expense
Loss on disposal of assets
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other Comprehensive Income
Exchange differences arising on translation of
foreign operations
Income tax on other comprehensive income
2,610,300
1,291,197
(1,000,845)
(14,531,985)
(40,254)
(497,111)
(27,640)
(2,015,255)
(15,271,759)
-
(319,378)
-
(13,487,535)
(16,315,195)
-
-
(13,487,535)
(16,315,195)
(1,055,300)
(795,406)
-
-
Total Comprehensive Loss
(14,542,835)
(17,110,601)
Loss attributable to:
Members of Berkeley Resources Limited
Loss after income tax expense
Total comprehensive loss attributable to:
Members of Berkeley Resources Limited
Total Comprehensive Loss
(13,487,535)
(13,487,535)
(16,315,195)
(16,315,195)
(14,542,835)
(17,110,601)
(14,542,835)
(17,110,601)
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
22
22
(7.70)
(7.70)
(10.75)
(10.75)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying Notes
37
berkeley resources limited ANNUAL REPORT 2012
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2012
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepaid expenditure
Total Current Assets
Non-current Assets
Exploration expenditure
Property, plant and equipment
Other financial assets
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Other financial liabilities
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Equity attributable to equity holders of the
Company
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
5
6
7
8
9
10
11
12
13
14
Note
2012
$
2011
$
23(b)
37,716,585
621,269
85,256
50,599,785
699,544
-
38,423,110
51,299,329
13,011,723
1,209,771
100,504
14,321,998
13,646,937
437,945
115,583
14,200,465
52,745,108
65,499,794
1,049,812
104,524
1,154,336
1,187,881
109,148
1,297,029
1,154,336
1,297,029
51,590,772
64,202,765
118,930,526
585,382
(67,925,136)
117,624,295
3,471,780
(56,893,310)
51,590,772
64,202,765
The above Statement of Financial Position should be read in conjunction with the accompanying Notes
38
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2012
Note
2012
$
2011
$
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Rebates received
(15,836,784)
2,439,166
153,635
(18,098,813)
1,265,904
-
Net cash inflow/(outflow) from operating
activities
23
(13,243,983)
(16,832,909)
Cash flows from investing activities
Exploration acquisition costs
Security bond deposit
Proceeds from sale of exploration assets
Proceeds from sale of property, plant and
equipment
(92,797)
(1,697,864)
3,000
-
2,422
-
60,000
Payments for property, plant and equipment
(1,021,888)
(147,023)
Net cash inflow/(outflow) from investing
activities
(1,109,263)
(1,784,887)
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs from issue of shares and
options
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash
equivalents held
Cash and cash equivalents at the
beginning of the financial year
1,500,000
(6,270)
1,493,730
(12,859,516)
50,599,785
61,974,633
(2,968,380)
59,006,253
40,388,457
10,244,114
Effects of exchange rate changes on
cash and cash equivalents
Cash and cash equivalents at the end of
the financial year
23
(23,684)
(32,786)
37,716,585
50,599,785
The above Statement of Cash Flows should be read in conjunction with the accompanying Notes
39
berkeley resources limited ANNUAL REPORT 2012
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012
Issued
Capital
Option
Premium
Reserve
$
$
Foreign
Currency
Translation
Reserve
$
Accumul-
ated
Losses
$
Total Equity
$
As at 1 July 2010
58,618,042
6,761,551
(1,927,542)
(41,464,315)
21,987,736
Net loss for the year
Other Comprehensive Income:
Exchange differences arising on
translation of foreign operations
Total comprehensive loss
Transactions with owners,
recorded directly in equity
Issue of shares
Share issue costs
Share based payments exercised
Adjustment for lapsed options
Cost of share based payments
-
-
-
62,264,633
(3,258,380)
-
-
-
-
-
-
-
-
(886,200)
(1,568,475)
1,887,852
-
(16,315,195)
(16,315,195)
(795,406)
-
(795,406)
(795,406)
(16,315,195)
(17,110,601)
-
-
-
-
-
-
-
62,264,633
(3,258,380)
886,200
-
-
-
(1,568,475)
1,887,852
As at 30 June 2011
117,624,295
6,194,728
(2,722,948)
(56,893,310)
64,202,765
As at 1 July 2011
117,624,295
6,194,728
(2,722,948)
(56,893,310)
64,202,765
Net loss for the year
Other Comprehensive Income:
Exchange differences arising on
translation of foreign operations
Total comprehensive loss
Transactions with owners,
recorded directly in equity
Issue of shares
Share issue costs
Adjustment for lapsed options
Cost of share based payments
-
-
-
1,500,000
-
-
-
-
(193,769)
127,500
-
-
(2,455,709)
497,111
-
(13,487,535)
(13,487,535)
(1,055,300)
-
(1,055,300)
(1,055,300)
(13,487,535)
(14,542,835)
-
-
-
-
-
-
1,500,000
(66,269)
2,455,709
-
-
497,111
As at 30 June 2012
118,930,526
4,363,630
(3,778,248)
(67,925,136)
51,590,772
The above Statement of Changes in Equity should be read in conjunction with the accompanying Notes
40
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in preparing the financial report of Berkeley Resources Limited
(“Berkeley” or “Company” or “Parent”) and its consolidated entities (“Consolidated Entity” or “Group”) for the year
ended 30 June 2012 are stated to assist in a general understanding of the financial report.
Berkeley is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange, and the Alternative Investment Market (AIM) on the London Stock Exchange.
The financial report of the Company for the year ended 30 June 2012 was authorised for issue in accordance with
a resolution of the Directors.
(a)
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with Australian
Accounting Standards (“AASBs”) adopted by the Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001. The financial statements comprise the consolidated financial statements of the Group.
For the purposes of preparing the consolidated financial statements, the Company is a for profit entity.
The financial report has also been prepared on a historical cost basis, except for available-for-sale investments
and other financial assets, which have been measured at fair value.
The financial report is presented in Australian dollars.
(b)
Statement of Compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). The financial report also complies with International
Financial Reporting Standards (IFRS).
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
AASB that are relevant to its operations and effective for the current annual reporting period. These new
accounting standards have not had any significant impact on the Group’s financial report. Further details of these
new accounting standards are set out in the individual accounting policy notes below.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective have not been adopted by the Group for the annual reporting period ended 30 June 2012. These are
outlined in the table below:
Reference
Title
Summary
2010-8
AASB 2011-9
Amendments to
Australian
Accounting
Standards –
Deferred Tax:
Recovery of
Underlying Assets
[AASB 112]
Amendments to
Australian
Accounting
Standards –
Presentation of
Other
Comprehensive
Income
[AASB 1, 5, 7, 101,
112, 120, 121, 132,
133, 134, 1039 &
1049]
Application
Date of
Standard
1 Jan 2012
Impact on Group
Financial Report
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
Application
Date for
Group
1 July 2012
tax on
These amendments address the determination of
deferred tax on investment property measured at
fair value and introduce a rebuttable presumption
that deferred
investment property
measured at fair value should be determined on
the basis
the carrying amount will be
recoverable through sale. The amendments also
incorporate SIC-21 Income Taxes – Recovery of
Revalued Non-Depreciable Assets into AASB
112.
that
This Standard requires entities to group items
presented in other comprehensive income on the
basis of whether they might be reclassified
subsequently to profit or loss and those that will
not.
1 July 2012
1 July 2012
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
41
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Application
Date of
Standard
1 January 2013
Application
Date for
Group
1 July 2013
Impact on Group
Financial Report
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
(b)
Statement of Compliance (Continued)
Reference
Title
Summary
AASB 9
Financial
Instruments
AASB 9 includes requirements for the
classification and measurement of financial
assets. It was further amended by AASB 2010-7
to reflect amendments to the accounting for
financial liabilities.
These requirements improve and simplify the
approach for classification and measurement of
financial assets compared with the requirements
of AASB 139. The main changes are described
below.
(a)
(b)
(c)
Financial assets that are debt instruments
will be classified based on (1) the
objective of the entity’s business model for
managing the financial assets; (2) the
characteristics of the contractual cash
flows.
Allows an irrevocable election on initial
recognition to present gains and losses on
investments in equity instruments that are
not held for trading in other
comprehensive income. Dividends in
respect of these investments that are a
return on investment can be recognised in
profit or loss and there is no impairment or
recycling on disposal of the instrument.
Financial assets can be designated and
measured at fair value through profit or
loss at initial recognition if doing so
eliminates or significantly reduces a
measurement or recognition inconsistency
that would arise from measuring assets or
liabilities, or recognising the gains and
losses on them, on different bases.
(d)
Where the fair value option is used for
financial liabilities the change in fair value
is to be accounted for as follows:
► The change attributable to changes
in credit risk are presented in other
comprehensive income (OCI)
► The remaining change is presented
in profit or loss
If this approach creates or enlarges an accounting
mismatch in the profit or loss, the effect of the
changes in credit risk are also presented in profit
or loss.
Consequential amendments were also made to
other standards as a result of AASB 9, introduced
by AASB 2009-11 and superseded by AASB
2010-7 and 2010-10.
AASB 10
Consolidated
Financial
Statements
AASB 10 establishes a new control model that
applies to all entities. It replaces parts of AASB
127 Consolidated and Separate Financial
Statements dealing with the accounting for
consolidated financial statements and UIG-112
Consolidation – Special Purpose Entities.
1 January 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
The new control model broadens the situations
when an entity is considered to be controlled by
another entity and includes new guidance for
applying the model to specific situations, including
when acting as a manager may give control, the
impact of potential voting rights and when holding
less than a majority voting rights may give control.
Consequential amendments were also made to
other standards via AASB 2011-7.
42
Reference
Title
Summary
AASB 11
Joint
Arrangements
AASB 12
Disclosure of
Interests in Other
Entities
AASB 13
Fair Value
Measurement
AASB 119
Employee
Benefits
AASB 11 replaces AASB 131 Interests in Joint
Ventures and UIG-113 Jointly- controlled Entities
– Non-monetary Contributions by Ventures. AASB
11 uses the principle of control in AASB 10 to
define joint control, and therefore the
determination of whether joint control exists may
change. In addition it removes the option to
account for jointly controlled entities (JCEs) using
proportionate consolidation. Instead, accounting
for a joint arrangement is dependent on the nature
of the rights and obligations arising from the
arrangement. Joint operations that give the
venturers a right to the underlying assets and
obligations themselves is accounted for by
recognising the share of those assets and
obligations. Joint ventures that give the venturers
a right to the net assets is accounted for using the
equity method.
Consequential amendments were also made to
other standards via AASB 2011-7 and
amendments to AASB 128.
AASB 12 includes all disclosures relating to an
entity’s interests in subsidiaries, joint
arrangements, associates and structures entities.
New disclosures have been introduced about the
judgments made by management to determine
whether control exists, and to require summarised
information about joint arrangements, associates
and structured entities and subsidiaries with non-
controlling interests.
AASB 13 establishes a single source of guidance
for determining the fair value of assets and
liabilities. AASB 13 does not change when an
entity is required to use fair value, but rather,
provides guidance on how to determine fair value
when fair value is required or permitted.
Application of this definition may result in different
fair values being determined for the relevant
assets.
AASB 13 also expands the disclosure
requirements for all assets or liabilities carried at
fair value. This includes information about the
assumptions made and the qualitative impact of
those assumptions on the fair value determined.
Consequential amendments were also made to
other standards via AASB 2011-8.
The main change introduced by this standard is to
revise the accounting for defined benefit plans.
The amendment removes the options for
accounting for the liability, and requires that the
liabilities arising from such plans is recognized in
full with actuarial gains and losses being
recognized in other comprehensive income. It
also revised the method of calculating the return
on plan assets.
The revised standard changes the definition of
short-term employee benefits. The distinction
between short-term and other long-term employee
benefits is now based on whether the benefits are
expected to be settled wholly within 12 months
after the reporting date.
Consequential amendments were also made to
other standards via AASB 2011-10.
Application
Date of
Standard
1 January 2013
Application
Date for
Group
1 July 2013
Impact on Group
Financial Report
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
1 January 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
1 January 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
1 January 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
43
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Application
Date of
Standard
1 January 2013
Application
Date for
Group
1 July 2013
Impact on Group
Financial Report
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
1 January 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
(b)
Statement of Compliance (Continued)
Reference
Title
Summary
Interpretation
20
Stripping Costs in
the Production
Phase of a
Surface Mine
Annual
Improvements
2009–2011
Cycle
Annual
Improvements to
IFRSs 2009–2011
Cycle
This interpretation applies to stripping costs
incurred during the production phase of a surface
mine. Production stripping costs are to be
capitalised as part of an asset, if an entity can
demonstrate that it is probable future economic
benefits will be realised, the costs can be reliably
measured and the entity can identify the
component of an ore body for which access has
been improved. This asset is to be called the
“stripping activity asset”.
The stripping activity asset shall be depreciated or
amortised on a systematic basis, over the
expected useful life of the identified component of
the ore body that becomes more accessible as a
result of the stripping activity. The units of
production method shall be applied unless
another method is more appropriate.
Consequential amendments were also made to
other standards via AASB 2011-12.
This standard sets out amendments to
International Financial Reporting
Standards (IFRSs) and the related bases for
conclusions and guidance made during the
International Accounting Standards Board’s
Annual Improvements process. These
amendments have not yet been adopted by the
AASB.
The following items are addressed by this
standard:
IFRS 1 First-time Adoption of International
Financial Reporting Standards
•
•
Repeated application of IFRS 1
Borrowing costs
IAS 1 Presentation of Financial Statements
•
Clarification of the requirements for
comparative information
IAS 16 Property, Plant and Equipment
•
Classification of servicing equipment
IAS 32 Financial Instruments: Presentation
•
Tax effect of distribution to holders of
equity instruments
IAS 34 Interim Financial Reporting
•
Interim financial reporting and
segment information for total assets
and liabilities
AASB 2011-4
Amendments to
Australian
Accounting
Standards to
Remove
Individual Key
Management
Personnel
Disclosure
Requirements
[AASB 124]
This Amendment deletes from AASB 124
individual key management personnel disclosure
requirements for disclosing entities that are not
companies.
1 July 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
44
Application
Date of
Standard
1 July 2013
Impact on Group
Financial Report
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
Application
Date for
Group
1 July 2013
Reference
Title
Summary
AASB 1053
Application of
Tiers of Australian
Accounting
Standards
This Standard establishes a differential financial
reporting framework consisting of two Tiers of
reporting requirements for preparing general
purpose financial statements:
(a) Tier 1: Australian Accounting Standards
(b) Tier 2: Australian Accounting Standards –
Reduced Disclosure Requirements
Tier 2 comprises the recognition, measurement
and presentation requirements of Tier 1 and
substantially reduced disclosures corresponding
to those requirements.
The following entities apply Tier 1 requirements in
preparing general purpose financial statements:
(a) For-profit entities in the private sector that
have public accountability (as defined in this
Standard)
(b) The Australian Government and State,
Territory and Local Governments
The following entities apply either Tier 2 or Tier 1
requirements in preparing general purpose
financial statements:
(a) For-profit private sector entities that do not
have public accountability
(b) All not-for-profit private sector entities
(c) Public sector entities other than the
Australian Government and State, Territory
and Local Governments.
Consequential amendments to other standards to
implement the regime were introduced by AASB
2010-2, 2011-2, 2011-6, 2011-11 and 2012-1.
AASB 2012-2
Amendments to
Australian
Accounting
Standards –
Disclosures –
Offsetting
Financial Assets
and Financial
Liabilities
AASB 2012-2 principally amends AASB 7
Financial Instruments: Disclosures to require
disclosure of information that will enable users of
an entity’s financial statements to evaluate the
effect or potential effect of netting arrangements,
including rights of set-off associated with the
entity’s recognised financial assets and
recognised financial liabilities, on the entity’s
financial position.
1 January 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
AASB 2012-4
Amendments to
Australian
Accounting
Standards –
Government
Loans
AASB 2012-4 adds an exception to the
retrospective application of Australian Accounting
Standards under AASB 1 First-time Adoption of
Australian Accounting Standards to require that
first-time adopters apply the requirements in
AASB 139 Financial Instruments: Recognition and
Measurement (or AASB 9 Financial Instruments)
and AASB 120 Accounting for Government Grants
and Disclosure of Government Assistance
prospectively to government loans (including
those at a below-market rate of interest) existing
at the date of transition to Australian Accounting
Standards.
1 January 2013
1 July 2013
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
45
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b)
Statement of Compliance (Continued)
Reference
Title
Summary
AASB 2012-5
Amendments to
Australian
Accounting
Standards arising
from Annual
Improvements
2009–2011 Cycle;
and
AASB 2012-5 makes amendments resulting from
the 2009-2011 Annual Improvements Cycle. The
Standard addresses a range of improvements,
including the following:
• repeat application of AASB 1 is permitted (AASB
1); and
• clarification of the comparative information
requirements when an entity provides a third
balance sheet (AASB 101 Presentation of
Financial Statements).
Application
Date of
Standard
1 January 2013
Application
Date for
Group
1 July 2013
Impact on Group
Financial Report
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
AASB 2012-3
Amendments to
Australian
Accounting
Standards –
Offsetting
Financial Assets
and Financial
Liabilities;
AASB 2012-3 adds application guidance to AASB
132 Financial Instruments: Presentation to
address inconsistencies identified in applying
some of the offsetting criteria of AASB 132,
including clarifying the meaning of “currently has a
legally enforceable right of set-off” and that some
gross settlement systems may be considered
equivalent to net settlement.
1 January 2014
1 July 2014
These amendments
are not expected to
have any significant
impact on the
Group’s financial
report
(c)
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Berkeley Resources Limited at reporting date. A controlled entity is any entity over which Berkeley Resources
Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities.
Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the
voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and
potential voting rights are also considered.
Where controlled entities have entered or left the group during the year, the financial performance of those
entities are included only for the period of the year that they were controlled. A list of controlled entities is
contained in the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in
the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with those adopted by the parent entity.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are
shown separately within the Equity section of the consolidated Statement of Financial Position and Statement of
Comprehensive Income. The non-controlling interest’s interest in the net assets comprise their interests at the
date of the original business combination and their share of changes in equity since that date.
(d)
Business Combinations
The purchase method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired. The cost of a business combination is measured as the fair value of the
assets given, shares issued or liabilities incurred or assumed at the date of exchange and the amount of any non-
controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling
interest in the acquiree either at fair value or at the proportionate share of the acquiree's identifiable net assets.
Acquisition-related costs are expensed as incurred.
Where equity instruments are issued in a business combination, the fair value of the instruments is their published
market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published
price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation
methods provide a more reliable measure of fair value.
46
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling
interest. The excess of the cost of the business combination over the fair value of the Group’s share of the
identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the
net assets acquired, the difference is recognised directly in the income statement, but only after a reassessment
of the identification and measurement of the net assets acquired.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held
equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing
rate, being the rate at which a similar borrowing could be obtained from an independent financier under
comparable terms and conditions.
(e)
Operating Segments
The Consolidated Entity adopted AASB 8 Operating Segments with effect from 1 July 2009. AASB 8 requires
operating segments to be identified on the basis of internal reports about components of the Consolidated Entity
that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment
and to assess its performance.
The Consolidated Entity operates in one operating segment and one geographical segment, being uranium
exploration in Spain. This is the basis on which internal reports are provided to the Directors for assessing
performance and determining the allocation of resources within the Consolidated Entity.
The Consolidated Entity’s corporate headquarters in Australia have previously been reported in the Australian
geographical segment, however, the corporate and administrative functions based in Australia are considered
incidental to Consolidated Entity’s uranium exploration activities in Spain.
(f)
Significant Accounting Judgements, Estimates and Assumptions
(i)
Significant accounting judgements
In the process of applying the Group's accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most significant effect on the amounts recognised in the
financial statements:
Exploration and evaluation expenditure
The Group's accounting policy for exploration and evaluation expenditure is set out below. The application of this
policy necessarily requires management to make certain estimates and assumptions as to future events and
circumstances, in particular, the assessment of whether economic quantities of reserves are found. Any such
estimates and assumptions may change as new information becomes available. If, after having capitalised
expenditure under the policy, it is determined that it is unlikely to recover the expenditure by future exploitation or
sale, then the relevant capitalised amount will be written off to the income statement.
Investment in controlled entities
In prior years, the Parent made a significant judgement about the impairment of a financial asset (investment in
subsidiary). The Parent follows the guidance of AASB 136: Impairment of Assets in determining whether its
investment in subsidiaries is impaired. This determination requires significant judgement. In making this
judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an
investment is less than its cost and the financial health of and near term business outlook for the investee
including factors such as industry and operational and financing cash flows.
47
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f)
Significant Accounting Judgements, Estimates and Assumptions (Continued)
Recovery of Deferred Tax Assets
Judgement is required in determining whether deferred tax assets are recognised on the statement of financial
position. Deferred tax assets, including those arising from un-utilised tax losses require management to assess
the likelihood that the Group will generate taxable earnings in future periods, in order to utilise recognised
deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and
the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income
differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the
reporting date could be impacted. At balance date the net deferred tax assets are not recognised on the
statement of financial position.
Additionally, future changes in tax laws in the jurisdictions in which the Group operates could limit the ability of the
Group to obtain tax deductions in future periods.
Inter Company Loans
The parent company advances loans to its subsidiaries to fund exploration and other activities. A provision is
made for the loans outstanding at year end where the ultimate recoverability of the loans advanced is uncertain.
Recoverability will depend on the successful exploitation or sale of the exploration assets of the subsidiaries.
(ii)
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions
of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of certain assets and liabilities within the next reporting period are:
Share based payments
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined by an external valuer using a binomial model or
Black-Scholes model.
(g)
Revenue Recognition
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or
receivable. The following specific recognition criteria must also be met before revenue is recognised:
(i)
Sale of Goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the
buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of
delivery of the goods to the customer.
(ii)
Interest
Interest revenue is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net
carrying value amount of the financial asset.
48
(h)
Foreign Currency Translation
Both the functional and presentation currency of Berkeley at 30 June 2012 was Australian Dollars.
The following table sets out the functional currency of the subsidiary (unless dormant) of the Group:
Company Name
Functional Currency
Minera de Rio Alagon, S.L.
Berkeley Exploration Limited
Berkeley Minera Espana, S.A.
Geothermal Energy Sources, S.L.
Euro
A$
Euro
Euro
Each entity in the Group determines its own functional currency and items included in the financial statements of
each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at
the rate of exchange ruling at the balance sheet date.
All exchange differences in the consolidated financial report are taken to the income statement with the exception
of differences in foreign currency borrowings that provide a hedge against a net investment in a foreign entity and
exchange differences on intercompany loans which are not expected or planned to be repaid. These are taken
directly to equity until the disposal of the net investment, at which time they are recognised in the income
statement. Tax charges and tax credits attributable to exchange differences on those borrowings are also
recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction. Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value was determined.
Where the functional currency of a subsidiary of Berkeley Resources Limited is not Australian Dollars the assets
and liabilities of the subsidiary at reporting date are translated into the presentation currency of Berkeley at the
rate of exchange ruling at the balance sheet date and the income statements are translated by applying the
average exchange rate for the year.
Any exchange differences arising on this retranslation are taken directly to the foreign currency translation reserve
in equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity and relating to that
particular foreign operation is recognised in the Income Statement.
(i)
Income Tax
The income tax expense for the year is the tax payable on the current period's taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply
when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made
for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset
or liability is recognised in relation to these temporary differences if they arose on goodwill or in a transaction,
other than a business combination, that at the time of the transaction did not affect either accounting profit or
taxable profit or loss.
49
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
(i)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Tax (Continued)
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the Parent Entity is able to control the timing of the reversal
of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised
directly in equity.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable entity and the same
taxation authority.
The Board of Berkeley Resources Limited has not yet resolved to consolidate eligible entities within the Group for
tax purposes. The Board will review this position annually, before lodging of that years income tax return.
(j)
Cash and Cash Equivalents
“Cash and cash equivalents” includes cash on hand, deposits held at call with financial institutions, other short-
term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. For the purposes of the Statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
(k)
Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets of groups of assets and the asset's value in use cannot be
estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-
generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its
recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its
recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent
with the function of the impaired asset unless the asset is carried at a revalued amount (in which case the
impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset's recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That
increase amount cannot exceed the carrying amount that would have been determined, net of depreciation, had
no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss
unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life.
50
(l)
Trade and Other Receivables
Trade receivables are initially recognised and carried at original invoice amount less an allowance for any
uncollectible amounts. Trade receivables are due for settlement no more than 30 days from the date of
recognition. An allowance for doubtful debts is made when there is objective evidence that the Group will not be
able to collect the debts. Bad debts are written off when identified.
(m)
Fair Value Estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading
and available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market
price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for
financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active market (for example, over the counter
derivatives) is determined using valuation techniques. The Group uses a variety of methods and makes
assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer
quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as
discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of
interest-rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward
exchange contracts is determined using forward exchange market rates at the balance sheet date.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to
approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the Group for
similar financial instruments.
(n)
Investments and Other Financial Assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value through profit or loss, loan and receivables, held-to-maturity investments, or
available-for-sale investments, as appropriate. When financial assets are recognised initially they are measured
at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction
costs. The Group determines the classification of its financial assets after initial recognition and, when allowed
and appropriate, re-evaluates this designation at each financial year-end.
(i)
Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for trading, and those designated at fair value through
profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the
purpose of selling in the short term or if so designated by management. The policy of management is to designate
a financial asset at fair value through profit or loss if there exists the possibility it will be sold in the short term and
the asset is subject to frequent changes in value. Derivatives are also categorised as held for trading unless they
are designated as hedges. Assets in this category are classified as current assets if they are either held for
trading or are expected to be realised within twelve months of the statement of financial position.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They arise when the Group provides money, goods or services directly to a debtor with no
intention of selling the receivable. They are included in current assets, except for those with maturities greater
than twelve months after the balance sheet date which are classified as non-current assets. Loans and
receivables are included in receivables in the statement of financial position.
51
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(n)
Investments and Other Financial Assets (Continued)
(iii)
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-
maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held
for an undefined period are not included in this classification. Investments that are intended to be held-to-
maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount
initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective
interest method of any difference between the initially recognised amount and the maturity amount. This
calculation includes all fees and points paid or received between parties to the contract that are an integral part of
the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at
amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or
impaired, as well as through the amortisation process.
(iv)
Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are
either designated in this category or not classified in any of the other categories. They are included in non-current
assets unless management intends to dispose of the investment within twelve months of the balance date.
Purchases and sales of investments are recognised on trade-date – the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial
assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
Available-for-sale financial assets and financial assets designated through profit or loss are subsequently carried
at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the
effective interest rate method. Realised and unrealised gains and losses arising from changes in the fair value of
the 'financial assets at fair value through profit or loss' category are included in the income statement in the period
in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities
classified as available-for-sale are recognised in equity in the net unrealised gains reserve. When securities
classified as available-for-sale are sold or impaired, the accumulated fair value adjustments previously reported in
equity are included in the income statement as gains and losses on disposal of investment securities.
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of
financial assets is impaired. In the case of equity securities classified as available for sale, a significant or
prolonged decline in the fair value of a security below its cost is considered in determining whether the security is
impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as
the difference between the acquisition cost and the current fair value, less any impairment loss on that financial
asset previously recognised in profit and loss – is transferred from equity to the income statement. Impairment
losses recognised in the income statement on equity instruments classified as held for sale are not reversed
through the income statement.
(o)
Property, Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are charged to the income statement
during the financial period in which they are incurred.
Plant and equipment are depreciated on a reducing balance or straight line basis at rates based upon their
effective lives as follows:
52
Plant and equipment
Life
2 - 13 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
An item of plant and equipment is derecognised upon disposal or when no further economic benefits are expected
from its use or disposal. Gains and losses on disposals are determined by comparing the net disposal proceeds
with carrying amount of the asset. These are included in the profit or loss in the period the asset is derecognised.
(p)
Trade and Other Payables
Trade payables and other payables are carried at amortised cost and represent liabilities for the goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts
are unsecured and are usually paid within 30 days.
(q)
Employee Leave Benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
twelve months of the reporting date are recognised in provisions in respect of employees' services up to the
reporting date, and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities
for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or
payable.
(r)
Issued Capital
Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
(s)
Dividends
Provision is made for the amount of any dividend declared on or before the end of the year but not distributed at
balance date.
(t)
Earnings per Share (EPS)
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares
and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
53
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(u)
Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method and
with AASB 6 Exploration for and Evaluation of Mineral Resources, which is the Australian equivalent of IFRS 6.
For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as
tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets
are measured at cost at recognition. Exploration and evaluation expenditure incurred by the Group subsequent to
acquisition of the rights to explore is expensed as incurred.
A provision for unsuccessful exploration and evaluation is created against each area of interest by means of a
charge to the income statement.
The recoverable amount of each area of interest is determined on a bi-annual basis and the provision recorded in
respect of that area adjusted so that the net carrying amount does not exceed the recoverable amount. For areas
of interest that are not considered to have any commercial value, or where exploration rights are no longer
current, the capitalised amounts are written off against the provision and any remaining amounts are charged
against profit or loss.
Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
(v)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the Statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which are recoverable from, or payable to, the taxation authority,
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(w)
Share Based Payments
(i)
Equity settled transactions:
The Group provides benefits to directors, employees, consultants and other advisors of the Group in the form of
share-based payments, whereby the directors, employees, consultants and other advisors render services in
exchange for shares or rights over shares (equity-settled transactions).
The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined by an external valuer using a binomial model or
Black-Scholes model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of Berkeley (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).
54
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group's best estimate of the number of
equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
The income statement charge or credit for a period represents the movement in cumulative expense recognised
as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value of
the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
(x)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the income statement net of any reimbursement.
55
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
2.
REVENUE AND OTHER INCOME FROM
CONTINUING OPERATIONS
Revenue – Interest Income
Rebate received
Other Income
3.
EXPENSES AND
CONTINUING OPERATIONS
LOSSES
FROM
Loss from ordinary activities before income tax expense
includes the following specific expenses:
Expenses
(a)
Depreciation and amortisation
- Plant and equipment
(b) Employee Benefits Expense
Net movement in provisions for
- Employee entitlements
Employee Benefits Expense
- Salaries, wages and fees
- Defined contribution/Social Security
- Share-based payments (refer Note 18)
Total Employee Benefits Expense
2012
$
2011
$
2,448,221
153,635
8,444
2,610,300
1,231,197
-
60,000
1,291,197
159,318
169,227
-
(22,068)
3,011,542
450,525
497,111
3,959,178
3,306,350
442,185
319,378
4,045,845
56
4.
INCOME TAX EXPENSE
(a)
Recognised in the Income Statement
Current income tax
Current income tax expense/(benefit)
Adjustments in respect of current income tax of
previous years
Deferred income tax
Origination and reversal of temporary differences
Deferred tax asset not brought to account
Income tax expense reported in the income statement
(b)
Recognised Directly in Equity
Deferred income tax related to items charged or
credited directly to equity
Unrealised gain on available for sale financial assets
Transfer from equity to profit and loss on sale
Temporary differences not brought to account
Income tax expense reported in equity
2012
$
2011
$
(286,097)
(4,753,372)
(1,526,543)
(3,628,520)
5,441,160
-
-
4,753,372
-
-
-
-
-
-
-
-
-
-
(c)
Reconciliation Between Tax Expense and
Accounting Profit/(Loss) Before Income Tax
Accounting profit/(loss) before income tax
(13,487,535)
(16,315,195)
At the domestic income tax rate of 30% (2011: 30%)
Expenditure not allowable for income tax purposes
Income not assessable for income tax purposes
Foreign currency exchange gains and other translation
adjustments
Adjustments in respect of current income tax of
previous years
Previously unrecognised tax losses brought to account
Temporary differences not previously brought to
account
(4,046,260)
174,983
(55,934)
12,594
(1,526,543)
-
-
(4,894,559)
140,813
-
-
-
-
-
Deferred tax assets not brought to account
5,441,160
4,753,746
Income tax expense reported in the income statement
-
-
57
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
4.
INCOME TAX EXPENSE (Continued)
(d)
Deferred Income Tax
Deferred income tax at 30 June 2012 relates to the
following:
Deferred Tax Liabilities
Accrued interest
Exploration and evaluation assets
Deferred tax assets used to offset deferred tax liabilities
Deferred Tax Assets
Other financial assets
Accrued expenditure
Provisions
Exploration and evaluation assets
Tax losses available to offset against future taxable
income
Deferred tax assets used to offset deferred tax liabilities
2012
$
2011
$
2,717
-
(2,717)
-
-
18,600
-
4,065,604
6,176,566
(2,717)
-
-
-
-
-
12,600
-
-
4,804,294
-
Deferred tax assets not brought to account
(10,258,053)
(4,816,894)
-
-
This future income tax benefit will only be obtained if:
•
•
•
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Company in realising the benefit.
(e)
Tax Consolidations
As Berkeley Resources Limited is the only Australian company in the Group, tax consolidations are not
applicable.
58
5.
CURRENT ASSETS – TRADE AND
OTHER RECEIVABLES
GST and other taxes receivable
Interest receivable
Other
All trade and other receivables are current and there are no
amounts impaired
6.
CURRENT ASSETS – PREPAYMENTS
2012
$
2011
$
299,814
9,055
312,400
621,269
686,076
-
13,468
699,544
Prepaid expenses
85,256
-
7.
NON-CURRENT ASSETS –
EXPLORATION EXPENDITURE
The group has mineral exploration costs carried forward
in respect of areas of interest:
Areas in exploration at cost:
Balance at the beginning of year
Net Additions
Foreign exchange differences
Capitalised exploration expenditure written off
13,646,937
91,744
(726,958)
13,011,723
-
12,843,327
1,162,964
(359,354)
13,646,937
-
Balance at end of year
13,011,723
13,646,937
The value of the exploration interests is dependent upon the discovery of commercially viable reserves and the successful
development or alternatively sale, of the respective tenements. An amount of €6m (A$7.43m) relates to the capitalisation of the
fees paid to ENUSA under the Co-operation Agreement relating to the tenements within the State Reserves. The Company
reached agreement with ENUSA in July 2012 in the form of an Addendum to the Consortium Agreement signed in January
2009. The Addendum includes the following terms:
The Consortium now consists of State Reserves 28 and 29;
Berkeley's stake in the Consortium has increased to 100%;
ENUSA will remain the owner of State Reserves 28 and 29, however the exploitation rights have been assigned to
Berkeley, together with authority to submit all applications for the permitting process;
The Company is now the sole and exclusive operator in the Addendum Reserves, with the right to exploit the contained
uranium resources and have full ownership of any uranium produced;
ENUSA will receive a production fee equivalent to 2.5% of the net sale value (after marketing and transport costs) of any
uranium produced within the Addendum Reserves;
Berkeley has waived its rights to mining in State Reserves 2,25, 30, 31, Hoja 528-1 and the Saelices El Chico Exploitation
Concession, and has waived any rights to management of the Quercus plant; and
The Co-operation Agreement with ENUSA, signed on 29 January 2009, has been terminated.
59
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
8.
NON-CURRENT ASSETS – PROPERTY,
PLANT AND EQUIPMENT
(a)
Plant and equipment
At beginning of financial year, net of accumulated
depreciation and impairment
Additions
Depreciation charge for the year
Disposals
Foreign exchange differences
At end of financial year, net of accumulated
depreciation and impairment
At beginning of financial year
Cost
Accumulated depreciation and impairment
Net carrying amount
At end of financial year
Cost
Accumulated depreciation and impairment
Net carrying amount
(b)
Property
At beginning of financial year, net of accumulated
depreciation and impairment
Additions
Depreciation charge for the year
Foreign exchange differences
At end of financial year, net of accumulated
depreciation and impairment
At beginning of financial year
Cost
Accumulated depreciation and impairment
Net carrying amount
At end of financial year
Cost
Accumulated depreciation and impairment
Net carrying amount
2012
$
2011
$
437,945
127,524
(159,318)
(12,293)
(36,448)
482,287
179,111
(169,227)
(32,653)
(21,573)
357,410
437,945
1,068,428
(630,483)
437,945
1,079,797
(722,387)
357,410
-
894,362
-
(42,001)
852,361
-
-
-
852,361
-
852,361
965,349
(483,062)
482,287
1,068,428
(630,483)
437,945
-
-
-
-
-
-
-
-
-
-
-
60
(c)
Reconciliation
At beginning of financial year, net of accumulated
depreciation and impairment
Additions
Depreciation charge for the year
Disposals
Foreign exchange differences
At end of financial year, net of accumulated
depreciation and impairment
9.
NON-CURRENT ASSETS – OTHER
FINANCIAL ASSETS
2012
$
2011
$
437,945
1,021,886
(159,318)
(12,293)
(78,449)
482,287
172,168
(169,227)
(5,327)
(41,956)
1,209,771
437,945
Security bonds
100,504
115,583
10. CURRENT LIABILITIES – TRADE AND
OTHER PAYABLES
Trade creditors
Accrued expenses
All trade and other payables are current. There are no
overdue amounts.
11. CURRENT LIABILITIES – OTHER
FINANCIAL LIABILITIES
987,812
62,000
1,049,812
1,145,881
42,000
1,187,881
Other Financial Liabilities
104,524
109,148
12.
ISSUED CAPITAL
(a)
Issued and Paid up Capital
179,298,273 (2011: 174,298,273) fully paid ordinary
shares
Note
118,930,526
117,624,295
Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par
(i)
value shares. Accordingly, the Parent Entity does not have authorised capital nor par value in respect of its issued
shares.
61
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
12.
ISSUED CAPITAL (Continued)
(b)
Movements in Ordinary Share Capital During the Past Two Years:
Details
Number of
Shares
Issue
Price
$
Opening Balance 1 July 2010
136,090,319
-
58,618,042
Issue of Shares – via Placement (Jan 11)
32,360,000
1.70
55,012,000
Issue of Shares – via Placement (Nov 10) (note 24(d))
3,500,000
1.45
5,075,000
Issue of Shares – Unlisted option conversions
Issue of Shares – Listed option conversions
1,666,666
681,288
1.00
0.75
1,666,666
510,967
Share issue expenses
Closing Balance 30 June 2011
174,298,273
(3,258,380)
117,624,295
Opening Balance 1 July 2011
174,298,273
117,624,295
Issue of Shares – via Placement (Apr 12)
5,000,000
0.30
1,500,000
Share issue expenses
Closing Balance 30 June 2012
179,298,273
(193,769)
118,930,526
(c)
Terms and conditions of Ordinary Shares
(i)
General
The ordinary shares (“Shares”) are ordinary shares and rank equally in all respects with all ordinary shares in the
Company.
The rights attaching to the Shares arise from a combination of the Company's Constitution, statute and general
law. Copies of the Company's Constitution are available for inspection during business hours at its registered
office.
(ii)
Reports and Notices
Shareholders are entitled to receive all notices, reports, accounts and other documents required to be furnished to
shareholders under the Company's Constitution, the Corporations Act and the Listing Rules.
(iii)
Voting
Subject to any rights or restrictions at the time being attached to any class or classes of shares, at a general
meeting of the Company on a show of hands, every ordinary Shareholder present in person, or by proxy, attorney
or representative (in the case of a Company) has one vote and upon a poll, every Shareholder present in person,
or by proxy, attorney or representative (in the case of a Company) has one vote for any Share held by the
Shareholder.
A poll may be demanded by the Chairperson of the meeting, any 5 Shareholders entitled to vote in person or by
proxy, attorney or representative or by any one or more Shareholders holding not less than 5% of the total voting
rights of all Shareholders having the right to vote.
(iv)
Variation of Shares and Rights Attaching to Shares
Shares may be converted or cancelled with member approval and the Company's share capital may be reduced
in accordance with the requirements of the Corporations Act.
Class rights attaching to a particular class of shares may be varied or cancelled with the consent in writing of
holders of 75% of the shares in that class or by a special resolution of the holders of shares in that class.
62
(v)
Unmarketable Parcels
The Company may procure the disposal of Shares where the member holds less than a marketable parcel of
Shares within the meaning of the Listing Rules (being a parcel of shares with a market value of less than $500).
To invoke this procedure, the Directors must first give notice to the relevant member holding less than a
marketable parcel of Shares, who may then elect not to have his or her Shares sold by notifying the Directors.
(vi)
Changes to the Constitution
The Company's Constitution can only be amended by a special resolution passed by at least three quarters of the
members present and voting at a general meeting of the Company. At least 28 days' written notice specifying the
intention to propose the resolution as a special resolution must be given.
(vii)
Listing Rules
Provided the Company remains admitted to the Official List of the Australian Securities Exchange Ltd, then
despite anything in the Constitution, no act may be done that is prohibited by the Listing Rules, and authority is
given for acts required to be done by the Listing Rules. The Company's Constitution will be deemed to comply
with the Listing Rules as amended from time to time.
2012
$
2011
$
13. RESERVES
Balances
a)
Option Premium Reserve
11,989,428 (2011: 11,989,428) $0.75 listed options
2,008,800
Nil (2011: 1,960,000) $1.86 incentive options
Nil (2011: 495,834) $1.00 incentive options
1,000,000 (2011: 1,000,000) $1.25 incentive options
2,258,333 (2011: 2,311,666) $1.35 incentive options
1,000,000 (2011: Nil) $0.41 incentive options
1,000,000 (2011: Nil) $0.475 incentive options
5,500,000 (2011: Nil) $0.45 unlisted options
-
-
862,600
1,142,059
95,166
127,505
127,500
2,008,800
2,197,160
243,454
862,600
882,464
-
-
-
Foreign Currency Translation Reserve
Nature and Purpose of Reserves
Option Premium Reserve
4,363,630
6,194,728
(3,778,248)
585,382
(2,722,948)
3,471,780
The option premium reserve records the fair value of share based payments made by the Company.
Foreign currency translation reserve
Exchange differences arising on translation of a foreign controlled entity are taken to the foreign currency
translation reserve, as described in note 1(h). The reserve is recognised in profit and loss when the net
investment is disposed of.
63
berkeley resources limited ANNUAL REPORT 2012
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3
13. RESERVES (Continued)
(b) Movements During the Past Two Years
Foreign Currency Translation Reserve
Opening balance
Translation of foreign operations
Closing balance
14. ACCUMULATED LOSSES
Balance at beginning of year
Transfer from option premium reserve
Net loss
Balance at end of year
(a)
Dividends
2012
$
2011
$
(2,722,948)
(1,055,300)
(3,778,248)
(1,927,542)
(795,406)
(2,722,948)
(56,893,310)
(41,464,315)
2,455,709
(13,487,535)
(67,925,136)
886,200
(16,315,195)
(56,893,310)
No dividends were declared or paid during or since the end of the financial year.
(b)
Franking Credits
In respect to the payment of dividends by Berkeley in subsequent reporting periods (if any), no franking credits
are currently available, or are likely to become available in the next 12 months.
15. PARENT ENTITY INFORMATION
Current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Issued Capital
Reserves
Accumulated losses
Total equity
Profit/(Loss) of the parent entity
Total comprehensive Profit/(Loss) of the parent entity
Parent
2012
$
2011
$
37,614,940
43,981,714
324,840
324,840
50,376,888
56,749,601
157,635
157,635
43,656,874
56,591,966
118,930,526
4,363,630
(79,637,282)
43,656,874
(14,865,932)
(14,865,932)
117,624,295
6,194,728
(67,227,057)
56,591,966
(17,507,792)
(17,507,792)
The Parent Company had no commitments or contingencies at 30 June 2012.
65
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
16. RELATED PARTY DISCLOSURES
(a)
Subsidiaries
The consolidated financial statements include the financial statements of the Company and the subsidiaries listed
in the following table:
Name of Controlled Entity
Place of
Incorporation
Equity Interest
Investment
Minera de Rio Alagon. S.L.
Berkeley Exploration Ltd
Berkeley Minera Espana, S.A.
Geothermal Energy Sources, S.L.
Spain
UK
Spain
Spain
2012
%
100(1)
100
100(2)
100(3)
2011
%
100(1)
100
100(2)
100(3)
2012
$
2011
$
5,481,411
5,481,411
-
-
-
-
-
-
5,481,411
5,481,411
Notes
(1)
In the opinion of the directors the above named investments in controlled entities have a carrying value in the Company at
balance date of $5,481,412 (2011: $5,481,412), being the cost of the investment less provision for impairment.
(2) Berkeley Minera Espana, S.A. was incorporated on 12 May 2009 and is a wholly owned subsidiary of Berkeley Exploration
Limited. Berkeley Minera Espana, S.A.’s issued and paid up capital is $26,750 (€15,025).
(3) Berkeley Exploration Limited acquired 100% of the issued shares in Geothermal Energy Sources, S.L. on 15 May 2009.
Geothermal Energy Sources SL issued and paid up capital is $36,036 (€20,000).
(b)
Ultimate Parent
Berkeley Resources Limited is the ultimate parent of the Group.
(c)
Key Management Personnel
Details relating to Key Management Personnel, including remuneration paid, are included at Note 17.
(d)
Transactions with Related Parties in the Consolidated Group
The group consists of Berkeley Resources Limited (the parent entity in the wholly owned group) and its controlled
entities.
The following loan transactions were entered into during the year within the wholly owned group:
• Berkeley Resources Limited advanced $1,169,728 to Berkeley Minera Espana, S.A. by way of
intercompany loan (2011: $1,515,769). The total balance at 30 June 2012 of $3,464,205 (2011:
$2,294,477) has been provided for. The loan is denominated in Australian dollars (A$);
• Berkeley Resources Limited advanced $14,623,577 to Berkeley Exploration Limited by way of
intercompany loan (2011: $14,920,250). The total balance at 30 June 2012 of $47,902,593 (2011:
$33,279,016) has been provided for. The loan is denominated in Australian dollars (A$);
• Berkeley Exploration Limited advanced $14,654,840 to Berkeley Minera Espana, S.A. by way of
intercompany loan (2011: $14,936,722). The total balance at 30 June 2012 of $47,797,684 (2011:
$33,142,844) has been provided for. The loan is denominated in Australian dollars (A$).
These transactions were undertaken on commercial terms and conditions, except that:
(i)
(ii)
There is no fixed repayment of the loans; and
No interest is payable on the loans prior to the completion of a feasibility study.
66
17. DIRECTOR AND EXECUTIVE DISCLOSURES
(a)
Details of Key Management Personnel
The Key Management Personnel of the Group during or since the end of the financial year were as follows:
Directors
Ian Middlemas
James Ross
Robert Behets
Jose Ramon Esteruelas
Brendan James
Henry Horne
Laurence Marsland
Ian Stalker
Matthew Syme
Executives
Francisco Bellón del Rosal
Javier Colilla Peletero
Clint McGhie
Sam Middlemas
Steven Turner
Non-Executive Chairman (appointed 27 April 2012)
Non-Executive Deputy Chairman (previously Non-Executive Chairman)
Non-Executive Director (appointed 27 April 2012)
Non-Executive Director
Managing Director (resigned 27 April 2012)
Non-Executive Director (resigned 1 January 2012)
Non-Executive Director (appointed 25 August 2011, resigned 9 May 2012)
Non-Executive Director (resigned 29 November 2011)
Non-Executive Director (resigned 2 August 2012)
General Manager Operations
Senior Vice President Corporate
Chief Financial Officer and Company Secretary (appointed 18 May 2012)
Company Secretary (resigned 18 May 2012)
Chief Financial Officer (appointed 12 December 2011, resigned 27 April 2012)
There were no other key management personnel of the Company or the Group. Unless otherwise disclosed, the
Key Management Personnel held their position from 1 July 2011 to 30 June 2012.
(b)
Key Management Personnel Compensation
Short-term benefits
Post-employment benefits
Share-based payments
Other non-cash benefits
2012
$
2011
$
1,509,774
55,412
346,543
78,879
1,990,608
1,707,605
28,146
1,500,222
74,187
3,310,160
67
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
17. DIRECTOR AND EXECUTIVE DISCLOSURES (Continued)
(c)
Option holdings of Key Management Personnel
2012
Directors
Ian Middlemas
James Ross
Robert Behets
Jose Ramon Esteruelas
Matthew Syme
Laurence Marsland
Brendan James
Henry Horne
Ian Stalker
Executives
Granted
as
Compen-
sation
Held at
1 July 2011
Options
Lapsed
Net Other
Changes
4,000,000(1)
257,500
1,000,000(2)
500,000
1,069,002
-(3)
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
(2,000,000)
416,666
1,900,000
-
-
Francisco Bellón del Rosal
-
1,000,000
Javier Colilla Peletero
1,000,000
Clint McGhie
Sam Middlemas
Steven Turner
Notes
-(7)
-
(9)
-
-
-
1,500,000
(1,000,000)
-
-
-
-
-
-
Held at
30 June
2012
Vested and
exercisable
at 30 June
2012
4,000,000
4,000,000
257,500
257,500
1,000,000
1,000,000
500,000
500,000
1,069,002
1,069,002
-(3)
-(4)
-
-
416,666(5)
1,900,000(6)
416,666
1,900,000
1,000,000
-
1,000,000
666,666
-
-(8)
-
-
500,000(9)
500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1) Mr Ian Middlemas was appointed a Director on 27 April 2012 and this balance refers to the number of Options held as at
27 April 2012. Mr Middlemas was issued 4,000,000 free attaching options as part of a placement prior to his appointment.
(2) Mr Behets was appointed a Director on 27 April 2012 and this balance refers to the number of Options held as at 27 April
2012. Mr Behets was issued 1,000,000 free attaching options as part of a placement prior to his appointment.
(3) Mr Marsland was appointed a Director on 25 August 2011 and resigned on 9 May 2012. These balances refer to the
number of Options held on these dates.
(4) Mr James was issued 2,000,000 incentive options as part of his remuneration package on 23 September 2011. Following
his resignation on 27 April 2012, these options were cancelled in accordance with the terms and conditions.
(5) Mr Horne resigned as a Director on 1 January 2012 and this balance refers to the number of Options held at this date.
(6) Mr Stalker resigned as a Director on 29 November 2012 and this balance refers to the number of Options held at this date.
(7) Mr McGhie was appointed Company Secretary on 18 May 2012 and this balance refers to the number of Options held at
this date.
(8) Mr Sam Middlemas resigned as Company Secretary on 18 May 2012 and this balance refers to the number of Options
held at this date.
(9) Mr Turner was appointed Chief Financial Officer on 12 December 2011 and resigned on 27 April 2012. The balances refer
to the number of Options held on these dates. Mr Turner was issued 1,500,000 incentive options on 5 April 2012.
1,000,000 incentive options were cancelled upon his resignation and the remaining 500,000 incentive options vested by
agreement of the Board.
68
Held at
1 July 2010
Granted
as
Compen-
sation
Options
Lapsed
Net Other
Changes
Held at
30 June
2011
Vested and
exercisable
at 30 June
2011
2011
Directors
James Ross
Brendan James
Jose Ramon Esteruelas
Henry Horne
Laurence Marsland
Ian Stalker
Matthew Syme
Robert Hawley
Scott Yelland
Sean James
Executives
Sam Middlemas
Francisco Bellón del Rosal
257,500
-
500,000
1,250,000
-
3,900,000
1,069,002
500,000
1,500,000
250,000
-
-
Javier Colilla Peletero
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(833,334)
-
(2,000,000)
-
-
-
-
-
-
-
257,500
257,500
-
-
500,000
500,000
416,666
416,666
-
-
1,900,000
1,900,000
1,069,002
1,069,002
-
-
-
-
-
(500,000)1
(1,500,000)1
(250,000)1
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
333,333
(d)
Shareholdings of Key Management Personnel
2012
Directors
Ian Middlemas
James Ross
Robert Behets
Jose Ramon Esteruelas
Matthew Syme
Laurence Marsland
Brendan James
Henry Horne
Ian Stalker
Executives
Francisco Bellón del Rosal
Javier Colilla Peletero
Clint McGhie
Sam Middlemas
Steven Turner
Held at
1 July 2011
Granted as
Compen-
sation
On Exercise of
Options
Net Other
Changes
Held at
30 June 2012
5,300,000(1)
315,000
1,000,000(2)
-
2,168,105
-(3)
-
-
-
-
-
-(7)
25,000
-(9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
-
-
-
103,200
350,000
-
-
-
5,300,000
315,000
1,000,000
-
2,168,105
500,000(3)
-(4)
-(5)
-(6)
103,200
350,000
-
25,000(8)
-(9)
69
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
17. DIRECTOR AND EXECUTIVE DISCLOSURES (Continued)
(d)
Shareholdings of Key Management Personnel (Continued)
Notes
(1) Mr Ian Middlemas was appointed a Director on 27 April 2012 and this balance refers to the number of Shares held as at 27
April 2012. Mr Middlemas subscribed for 4,000,000 Shares at $0.30 each as part of a placement prior to his appointment.
(2) Mr Behets was appointed a Director on 27 April 2012 and this balance refers to the number of Shares held as at 27 April
2012. Mr Behets subscribed for 1,000,000 Shares at $0.30 each as part of a placement prior to his appointment.
(3) Mr Marsland was appointed a Director on 25 August 2011 and resigned on 9 May 2012. These balances refer to the
number of Shares held on these dates.
(4) Mr James resigned as a Director on 27 April 2012 and this balance refers to the number of Shares held as at this date.
(5) Mr Horne resigned as a Director on 1 January 2012 and this balance refers to the number of Shares held at this date.
(6) Mr Stalker resigned as a Director on 29 November 2011 and this balance refers to the number of Shares held at this date.
(7) Mr McGhie was appointed Company Secretary on 18 May 2012 and this balance refers to the number of Shares held at
this date.
(8) Mr Sam Middlemas resigned as Company Secretary on 18 May 2012 and this balance refers to the number of Shares held
at this date.
(9) Mr Turner was appointed Chief Financial Officer on 12 December 2011 and resigned on 27 April 2012. The balances refer
to the number of Shares held on these dates.
2011
Directors
James Ross
Brendan James
Jose Ramon Esteruelas
Henry Horne
Laurence Marsland
Ian Stalker
Matthew Syme
Robert Hawley
Scott Yelland
Sean James
Executives
Sam Middlemas
Francisco Bellón del Rosal
Javier Colilla Peletero
Held at
1 July 2010
Granted as
Compen-
sation
On Exercise of
Options
Net Other
Changes
Held at
30 June 2011
315,000
-
-
-
-
-
2,898,105
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
315,000
-
-
-
-
-
(730,000)
2,168,105
-
-
-
-
-
-
25,000
25,000
-
-
-
-
70
18. SHARE-BASED PAYMENTS
(a)
Recognised Share-Based Payment Expense
2012
$
2011
$
Expense arising from equity-settled share-based
payment transactions to:
Employees
(497,111)
(319,377)
Total expense arising from share-based payment
transactions
(497,111)
(319,377)
Equity-settled share-based payment transaction
recognised directly in Equity:
Share issue costs
Total share-based payment transactions recognised
directly in Equity
(b)
Summary of Options Granted
The following share-based payment arrangements were granted in 2012:
127,500
127,500
-
-
Option Series
Number
Grant Date
Note
Expiry Date
Exercise Price
$
Fair Value
$
2,000,000
23-Sep-11
1,000,000
23-Sep-11
500,000
22-Dec-11
1,500,000
12-Mar-12
500,000
27-Apr-12
(1)
(2)
(3)
(4)
(5)
1-May-16
21-Sep-15
22-Dec-15
22-Dec-15
30-Jun-16
0.41
0.41
0.475
0.475
0.45
0.216
0.203
0.235
0.202
0.255
Series 1
Series 2
Series 3
Series 4
Series 5
Notes
(1) These options were yet to vest and were forfeited during the year.
(2) 333,333 of these options vest on 21 September 2012, 333,333 of these options vest on 21 September 2013 and 333,334
of these options vest on 21 September 2014.
(3) 300,000 of these options vest on 22 December 2013 and 200,000 of these options vest on 22 December 2014.
(4) 500,000 of these options were fully vested as at 30 June 2012 following agreement by the Board. The remaining
1,000,000 options were forfeited.
(5) There were no vesting conditions on these options.
There were no incentive options issued during 2011.
71
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
18. SHARE-BASED PAYMENTS (Continued)
(b)
Summary of Options Granted (Continued)
The following table illustrates the number and weighted average exercise prices (WAEP) of share options issued
as share-based payments at the beginning and end of the financial year:
2012
Number
2012
WAEP
2011
Number
2011
WAEP
Outstanding at beginning of year
Granted by the Company during the year
8,767,500
5,500,000
$1.23
$0.44
13,732,500
$1.22
-
-
Exercised during the year
Expired during the year
Forfeited during the year
Outstanding at end of year
-
-
(1,666,666)
$1.00
(2,455,834)
(3,053,333)
8,758,333
$1.69
$0.45
$0.87
-
(3,298,334)
8,767,500
-
$1.31
$1.23
The outstanding balance of options issued as share-based payments on issue as at 30 June 2012 is represented
by:
•
•
•
•
•
•
3,000,000 listed options at an exercise price of $0.75 each that expire on 15 May 2013;
1,000,000 unlisted options at an exercise price of $1.25 each that expire on 1 December 2013;
2,258,333 unlisted options at an exercise price of $1.35 each that expire on 18 June 2014;
1,000,000 unlisted options at an exercise price of $0.41 each that expire on 21 September 2015;
1,000,000 unlisted options at an exercise price of $0.475 each that expire on 22 December 2015; and
500,000 unlisted options at an exercise price of $0.45 each that expire on 30 June 2016.
(c)
Weighted Average Remaining Contractual Life
The weighted average remaining contractual life for share options issued as share-based payments outstanding
as at 30 June 2012 is 1.96 years (2011: 2.74 years).
(d)
Range of Exercise Prices
The range of exercise prices for share options issued as share-based payments outstanding as at 30 June 2012
was $0.41 to $1.35 (2011: $0.75 to $1.86).
(e)
Weighted Average Fair Value
The weighted average fair value of options granted by the Group as equity-settled share-based payments during
the year ended 30 June 2012 was $0.215 (2011: nil).
72
(f)
Option Pricing Model
The fair value of the equity-settled share options granted is estimated as at the date of grant using the Binomial
option valuation model taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the valuation model used for share options granted by the Group during the
year ended 30 June 2012:
2012
Inputs
Exercise price
Grant date share price
Dividend yield (i)
Volatility (ii)
Risk-free interest rate
Grant date
Expiry date
Expected life of option (iii)
Fair value at grant date
Series 1
$0.41
$0.34
-
85%
3.63%
23-Sep-11
1-May16
4.61
$0.216
Series 2
$0.41
$0.34
-
85%
3.63%
23-Sep-11
21-Sep-15
4.00
$0.203
Series 3
$0.475
$0.395
-
85%
3.31%
22-Dec-11
22-Dec-15
4.00
$0.235
Series 4
$0.475
$0.36
-
85%
3.62%
12-Mar-12
22-Dec-15
3.78
$0.202
Series 5
$0.45
$0.41
-
85%
3.14%
27-Apr-12
30-Jun-16
4.18
$0.255
Notes
(i)
(ii)
(iii)
The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that
may occur.
There were no share options granted by the Group during the year ended 30 June 2011.
19. REMUNERATION OF AUDITORS
Amounts received by Stantons International for:
- an audit or review of the financial reports of the
Company
- other services in relation to the Company
Other auditors for:
- an audit or review of the financial reports
- other services
Total Auditors Remuneration
2012
$
2011
$
60,398
-
60,398
23,385
-
83,783
66,652
-
66,652
34,000
-
100,652
73
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
20. COMMITMENTS FOR EXPENDITURE
The Consolidated Entity has the following commitments at 30 June 2012:
Operating Lease Commitment
Minera de Rio Alagon, S.L. has a non-cancellable operating lease agreement expiring 9 November 2012. This
operating lease is for the office premises for the Group’s operations in Salamanca, Spain.
Minimum lease payments payable:
- Not longer than 1 year
- Longer than 1 year and not longer than 5 years
- Longer than 5 years
21. SEGMENT INFORMATION
2012
$
2011
$
16,670
42,337
-
-
-
-
16,670
42,337
The Consolidated Entity operates in one operating segment and one geographical segment, being uranium
exploration in Spain. This is the basis on which internal reports are provided to the Directors for assessing
performance and determining the allocation of resources within the Consolidated Entity.
The Consolidated Entity’s corporate headquarters in Australia have previously been reported in the Australian
geographical segment, however, the corporate and administrative functions based in Australia are considered
incidental to Consolidated Entity’s uranium exploration activities in Spain. As a result, following the adoption of
AASB 8, the Consolidated Entity is not required to report the geographical segments reported in previous periods.
22. EARNINGS PER SHARE
Basic Profit/(Loss) per Share
(a)
From continuing operations
From discontinued operations
Total basic profit/(loss) per share
(b)
Diluted Profit/(Loss) per Share
From continuing operations
From discontinued operations
Total diluted profit/(loss) per share
2012
Cents per Share
2011
Cents per Share
(7.70)
-
(7.70)
(7.70)
-
(7.70)
(10.75)
-
(10.75)
(10.75)
-
(10.75)
74
(c)
Earnings Used in Calculating Earnings per Share
The following reflects the income data used in the calculations of basic and diluted earnings per share:
Consolidated
2012
$
2011
$
Net loss used in calculating basic and diluted earnings per
share
(13,487,535)
(16,315,195)
(d)
Weighted Average Number of Shares
The following reflects the share data used in the calculations of basic and diluted earnings per share:
Weighted average number of ordinary shares used
calculating basic earnings per share
Effect of dilutive securities (i)
in
Adjusted weighted average number of ordinary shares and
potential ordinary shares used in calculating basic and diluted
earnings per share
Number of Shares
2012
Number of Shares
2011
175,172,590
151,724,695
-
-
175,172,590
151,724,695
(i)
(e)
At 30 June 2012, 22,747,761 options (which represent 22,747,761 potential ordinary shares) were
considered not dilutive as they would decrease the loss per share for the year ended 30 June 2012.
Conversions, Calls, Subscriptions or Issues after 30 June 2012
Since 30 June 2012, no Employee Incentive Options have been issued which represent potential ordinary shares.
Since 30 June 2012, 95,000 shares have been issued as a result of the exercise of options.
Other than the 95,000 options exercised, there have been no other conversions to, calls of, or subscriptions for
ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this
financial report.
75
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
2012
$
2011
$
23. CASH FLOW STATEMENT
(a)
Reconciliation of Net Loss Before Income Tax
Expense to Net Cash Flows from Operating
Activities
Net loss before income tax expense
(13,487,535)
(16,315,195)
Adjustment for non-cash income and expense items
Provision for employee entitlements
Profit on sale of tenements
Loss on sale of asset
Depreciation
Share based payments expensed
Other non-cash expenses
Changes in assets and liabilities -
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
-
-
9,871
159,318
497,111
292
(303,678)
(119,362)
(22,068)
(60,000)
169,227
319,377
-
(260,816)
(663,434)
Net cash outflow from operating activities
(13,243,983)
(16,832,909)
(b)
Reconciliation of Cash and Cash Equivalents
Cash at bank and on hand
Bank short term deposits
2,051,719
35,664,866
37,716,585
596,181
50,003,604
50,599,785
(c)
Credit Standby Arrangements with Banks
At balance date, the Company had no used or unused financing facilities.
(d)
Non-cash Financing and Investment Activities
During the year there were 500,000 unlisted options exercisable for $0.45 each on or before 30 June 2016,
issued as a fee for the placement of 5,000,000 shares at $0.30 per share.
24. FINANCIAL INSTRUMENTS
(a)
Overview
The Group's principal financial instruments comprise receivables, payables, available-for-sale investments, cash
and short-term deposits. The main risks arising from the Group's financial instruments are interest rate risk,
equity price risk, foreign currency risk, credit risk and liquidity risk.
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have
been no significant changes since the previous financial year to the exposure or management of these risks.
76
The Group manages its exposure to key financial risks in accordance with the Group's financial risk management
policy. Key risks are monitored and reviewed as circumstances change (e.g. acquisition of a new project) and
policies are revised as required. The overall objective of the Group's financial risk management policy is to
support the delivery of the Group's financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and
outflows, the Group does not enter into derivative transactions to mitigate the financial risks. In addition, the
Group's policy is that no trading in financial instruments shall be undertaken for the purposes of making
speculative gains. As the Group's operations change, the Directors will review this policy periodically going
forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board reviews and agrees policies for managing the Group's financial risks as summarised
below.
(b)
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. This risk arises principally from cash and cash equivalents and trade and other
receivables.
There are no significant concentrations of credit risk within the Group. The carrying amount of the Group's
financial assets represents the maximum credit risk exposure, as represented below:
Current Assets
Cash and cash equivalents
Trade and other receivables
Non-current Assets
Other financial assets
2012
$
2011
$
37,716,585
621,269
38,337,854
100,504
100,504
50,599,785
699,544
51,299,329
115,583
115,583
38,438,358
51,414,912
The Group does not have any significant customers and accordingly does not have any significant exposure to
bad or doubtful debts.
Trade and other receivables comprise GST/VAT receivable, accrued interest and other miscellaneous
receivables. Where possible the Group trades only with recognised, creditworthy third parties. It is the Group's
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad
debts is not significant.
With respect to credit risk arising from cash and cash equivalents, the Group's exposure to credit risk arises from
default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.
77
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
24. FINANCIAL INSTRUMENTS (Continued)
(c)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Board's approach to managing liquidity is to ensure, as far as possible, that the Group will always have sufficient
liquidity to meet its liabilities when due. At 30 June 2012 and 2011, the Group has sufficient liquid assets to meet
its financial obligations.
The contractual maturities of financial assets and financial liabilities, including estimated interest payments, are
provided below. There are no netting arrangements in respect of financial liabilities.
≤ 6 months
$
6 - 12
months
$
1 - 5 years
$
≥ 5 years
$
Total
$
2012
Group
Financial Assets
Cash and cash equivalents
37,716,585
Trade and other receivables
621,269
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 - 5 years
$
≥ 5 years
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,716,585
621,269
100,504
38,438,358
1,049,812
104,524
1,154,524
Total
$
50,599,785
699,544
115,583
51,414,912
1,187,881
109,148
1,297,029
Security bonds
Financial Liabilities
Trade and other payables
Other financial liabilities
2011
Group
Financial Assets
-
38,337,854
100,504
100,504
1,049,812
104,524
1,154,524
≤ 6 months
$
6 - 12
months
$
Cash and cash equivalents
50,599,785
Trade and other receivables
699,544
Security bonds
Financial Liabilities
Trade and other payables
Other financial liabilities
-
51,299,329
115,583
115,583
1,187,881
109,148
1,297,029
-
-
-
78
(d)
Interest Rate Risk
The Group's exposure to the risk of changes in market interest rates relates primarily to the cash and short-term
deposits with a floating interest rate.
These financial assets with variable rates expose the Group to cash flow interest rate risk. All other financial
assets and liabilities, in the form of receivables, security deposits, investments in securities, and payables are
non-interest bearing.
At the reporting date, the interest rate profile of the Group's interest-bearing financial instruments was:
Interest-bearing Financial Instruments
Cash at bank and on hand
Bank short term deposits
2012
$
2011
$
2,051,719
35,664,866
37,716,585
596,180
50,003,605
50,599,785
The Group's cash at bank and on hand and short term deposits had a weighted average floating interest rate at
year end of 4.99% (2011: 5.88%).
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
Interest rate sensitivity
A sensitivity of 10 per cent has been selected as this is considered reasonable given the current level of both
short term and long term interest rates. A 10% movement in interest rates at the reporting date would have
increased (decreased) equity and profit and loss by the amounts shown below based on the average amount of
interest bearing financial instruments held. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant. The analysis is performed on the same basis for 2011.
Profit or Loss
Equity
10%
Increase
$
10%
Decrease
$
10%
Increase
$
10%
Decrease
$
2012
Group
Cash and cash equivalents
220,129
(220,129)
220,129
(220,129)
2011
Group
Cash and cash equivalents
297,527
(297,527)
297,527
(297,527)
79
berkeley resources limited ANNUAL REPORT 2012
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
24. FINANCIAL INSTRUMENTS (Continued)
(e)
Foreign Currency Risk
As a result of activities overseas, the Group's statement of financial position can be affected by movements in
exchange rates.
The Group also has transactional currency exposures. Such exposure arises from transactions denominated in
currencies other than the functional currency of the entity.
The Group currently does not engage in any hedging or derivative transactions to manage foreign currency risk.
The Group's exposure to foreign currency risk throughout the current and prior year primarily arose from the
Group's wholly owned subsidiaries Berkeley Minera Espana, S.L., Minera del Rio Alagon, S.L., and Geothermal
Energy Sources, S.L whose functional currency is the Euro. Foreign currency risk arises on translation of the net
assets of these controlled entities to Australian dollars. The foreign currency gains or losses arising from this risk
are recorded through the foreign currency translation reserve. There is no hedging of this risk.
Sensitivity analysis for currency risk
A sensitivity of 10 per cent has been selected as this is considered reasonable given historic and potential future
changes in foreign currency rates. This has been applied to the net financial instruments of Minera de Rio
Alagon, S.L., Berkeley Minera Espana, S.A. and Geothermal Energy Sources, S.L. This sensitivity analysis is
prepared as at balance date.
A 10% strengthening/weakening of the Australian dollar against the Euro at 30 June 2012 would have
increased/(decreased) the net financial assets of the Spanish controlled entities by A$7,198 and (A$8,798) (2011:
(A$24,322) and A$24,322).
There would be no impact on profit or loss arising from these changes in the currency risk variables as all
changes in value are taken to a reserve.
The above analysis assumes that all other variables, in particular interest rates and equity prices, remain
constant. The analysis for 2011 has been performed on the same basis.
(f)
Equity Price Risk
The Group is not exposed to equity price risk as it does not hold any equity interests other than interests in
subsidiaries.
Equity price sensitivity
There is no effect on the net loss or equity reserves as at 30 June 2012 as the group does not have an exposure
to equity price risk from equity investments at that date.
The Group's sensitivity to equity prices has not changed significantly from the prior years.
(g)
Commodity Price Risk
The Group is exposed to uranium commodity price risk. These commodity prices can be volatile and are
influenced by factors beyond the Group's control. As the Group is currently engaged in exploration and business
development activities, no sales of commodities are forecast for the next 12 months, and accordingly, no hedging
or derivative transactions have been used to manage commodity price risk.
(h)
Capital Management
The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Given the stage of development of the Group, the Board's
objective is to minimise debt and to raise funds as required through the issue of new shares. There were no
changes in the Group's approach to capital management during the year. The Group is not subject to externally
imposed capital requirements.
(i)
Fair Value
The net fair value of financial assets and financial liabilities approximates their carrying value. The methods for
estimating fair value are outlined in the relevant notes to the financial statements.
80
25. CONTINGENT LIABILITIES
The Group had no contingent liabilities at 30 June 2012 (2011: Nil).
26. SUBSEQUENT EVENTS
Since the end of the financial year, the following events have significantly affected, or may significantly affect, the
operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated
Entity in future financial years:
On 24 July 2012, the Company advised that it has reached agreement with Enusa Industrias Avanzadas
S.A. (‘ENUSA’) on terms which provide the Company with a 100% interest in select uranium resources
within State Reserves held by ENUSA. The agreement successfully resolved long standing difficulties for
all parties involved, including termination of the arbitration proceeding between the Company and
ENUSA.
Mr Matthew Syme resigned as a Non Executive Director of the Company on 2 August 2012.
Other than the above there are no matters or circumstances, which have arisen since 30 June 2012 that have
significantly affected or may significantly affect:
•
•
•
the operations, in financial years subsequent to 30 June 2012, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2012, of the Consolidated
Entity; or
the state of affairs, in financial years subsequent to 30 June 2012, of the Consolidated Entity.
81
berkeley resources limited ANNUAL REPORT 2012
DIRECTORS DECLARATION
FOR THE YEAR ENDED 30 JUNE 2012
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Berkeley Resources Limited, I state that:
(1)
In the opinion of the Directors:
(a)
the financial statements, notes and the additional disclosures included in the directors' report
designated as audited of the Consolidated Entity are in accordance with the Corporations Act 2001
including:
(i)
giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2012
and of its performance for the year ended on that date; and
(ii)
complying with accounting standards and the Corporations Act 2001;
(iii)
complying with International Financial Reporting Standards; and
(b)
there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as
and when they become due and payable.
(2)
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.
On behalf of the Board.
ROBERT BEHETS
Non Executive Director
27 September 2012
82
AUDITOR’S INDEPENDENCE DECLARATION
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
27 September 2012
Board of Directors
Berkeley Resources Limited
Level 9, BGC Centre, 28 The Esplanade,
PERTH, WA 6000
AUSTRALIA
Dear Directors
RE: BERKELEY RESOURCES LIMITED
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Berkeley Resources Limited.
As the Audit Director for the audit of the financial statements of Berkeley Resources Limited for the
year ended 30 June 2012, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours faithfully
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(Authorised Audit Company)
John Van Dieren
Director
Liability limited by a scheme approved
under Professional Standards Legislation
83
berkeley resources limited ANNUAL REPORT 2012
INDEPENDENT AUDITOR’S REPORT
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
BERKELEY RESOURCES LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Berkeley Resources Limited, which
comprises the consolidated statement of financial position as at 30 June 2012, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information and the directors’ declaration of
the consolidated entity comprising the company and the entities it controlled at the year’s end or
from time to time during the financial year.
Directors’ responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error. In note 1, the directors also state, in accordance with Australian
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements
comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the
audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the company’s preparation of the financial report that gives a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Liability limited by a scheme approved
under Professional Standards Legislation
84
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Opinion
In our opinion:
(a)
the financial report of Berkeley Resources Limited is in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2012 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
(b)
the consolidated financial report also complies with International Financial Reporting
Standards as disclosed in note 1.
Report on the Remuneration Report
We have audited the remuneration report included in pages 29 to 35 of the directors’ report for the
year ended 30 June 2012. The directors of the Company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion the remuneration report of Berkeley Resources Limited for the year ended 30 June
2012 complies with section 300A of the Corporations Act 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
John P Van Dieren
Director
West Perth, Western Australia
27 September 2012
85
berkeley resources limited ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Berkeley Resources Limited is responsible for its corporate governance, that is, the
system by which the Group is managed. This statement outlines the main corporate governance practices in
place during the financial year, which comply with the ASX Corporate Governance recommendations unless
otherwise stated.
1. BOARD OF DIRECTORS
1.1 Role of the Board and Management
The Board represents shareholders' interests in continuing a successful business, which seeks to optimise
medium to long-term financial gains for shareholders. By not focusing on short-term gains for shareholders, the
Board believes that this will ultimately result in the interests of all stakeholders being appropriately addressed
when making business decisions.
The Board is responsible for ensuring that the Group is managed in such a way to best achieve this desired
result. Given the current size and operations of the business, the Board currently undertakes an active, not
passive role.
The Board is responsible for evaluating and setting the strategic directions for the Group, establishing goals for
management and monitoring the achievement of these goals. The Managing Director is responsible to the Board
for the day-to-day management of the Group.
The Board has sole responsibility for the following:
• Appointing and removing the Managing Director and any other executives and approving their
remuneration;
• Appointing and removing the Company Secretary / Chief Financial Officer and approving their
remuneration;
• Determining the strategic direction of the Group and measuring performance of management against
approved strategies;
• Review of the adequacy of resources for management to properly carry out approved strategies and
business plans;
• Adopting operating and capital expenditure budgets at the commencement of each financial year and
monitoring the progress by both financial and non-financial key performance indicators;
• Monitoring the Group's medium term capital and cash flow requirements;
• Approving and monitoring financial and other reporting to regulatory bodies, shareholders and other
organisations;
• Determining that satisfactory arrangements are in place for auditing the Group's financial affairs;
• Review and ratify systems of risk management and internal compliance and control, codes of conduct
and compliance with legislative requirements; and
• Ensuring that policies and compliance systems consistent with the Group's objectives and best practice
are in place and that the Company and its officers act legally, ethically and responsibly on all matters.
The Board's role and the Group's corporate governance practices are being continually reviewed and improved as
required.
1.2 Composition of the Board
The Company currently has the following Board members:
Mr Ian Middlemas
Dr James Ross
Mr Robert Behets
Non-Executive Chairman
Non-Executive Deputy Chairman
Non-Executive Director
Snr Jose Ramon Esteruelas
Non-Executive Director
Details of the directors, including their qualifications, experience and date of appointment are set out in the
Directors’ Report.
86
The Company's Constitution provides that the number of directors shall not be less than three and not more than
ten. There is no requirement for any share holding qualification.
The Board has assessed the independence status of the directors and has determined that there are three
independent directors, being Mr Middlemas, Mr Behets and Senor Esteruelas.
The Board has followed the ASX Corporate Governance Principles and Recommendations when assessing the
independence of the directors which define an independent director to be a director who:
•
•
•
is non-executive;
is not a substantial shareholder (i.e. greater than 5%) of the Company or an officer of, or otherwise
associated, directly or indirectly, with a substantial shareholder of the Company;
has not within the last three years been employed in an executive capacity by the Company or another
Group member, or been a director after ceasing to hold such employment;
• within the last three years has not been a principal or employee of a material professional adviser or a
•
•
•
material consultant to the Company or another Group member;
is not a significant supplier or customer of the Company or another Group member, or an officer of or
otherwise associated, directly or indirectly, with a significant supplier or customer;
has no material contractual relationship with the Company or another Group member other than as a
director of the Company; and
is free from any interest and any business or other relationship which could, or could reasonably be
perceived to, materially interfere with the director’s ability to act in the best interests of the Company.
Materiality for these purposes is determined on both quantitative and qualitative bases. An amount which is
greater than five percent of either the net assets of the Company or an individual director's net worth is
considered material for these purposes.
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the
appointment and further expense of additional independent Non-Executive Directors. The Board believes that the
individuals on the Board can make, and do make, quality and independent judgments in the best interests of the
Company on all relevant issues.
If the Group's activities increase in size, nature and scope, the size of the Board will be reviewed periodically and
the optimum number of directors required for the Board to properly perform its responsibilities and functions will
be appointed.
The membership of the Board, its activities and composition is subject to periodic review. The criteria for
determining the identification and appointment of a suitable candidate for the Board shall include quality of the
individual, background of experience and achievement, compatibility with other Board members, credibility within
the Group's scope of activities, intellectual ability to contribute to the Board's duties and physical ability to
undertake the Board's duties and responsibilities.
Directors are initially appointed by the full Board subject to election by shareholders at the next annual general
meeting. Under the Company's Constitution the tenure of directors (other than managing director, and only one
managing director where the position is jointly held) is subject to reappointment by shareholders not later than the
third anniversary following his last appointment. Subject to the requirements of the Corporations Act 2001, the
Board does not subscribe to the principle of retirement age and there is no maximum period of service as a
director. A managing director may be appointed for any period and on any terms the directors think fit and, subject
to the terms of any agreement entered into, the Board may revoke any appointment.
1.3 Committees of the Board
The following committees of the Board were in place until 25 September 2012:
• Audit Committee (formed 22 September 2010)
• Remuneration Committee (formed 22 September 201)
Following changes to the composition of the Board in 2012, the Board considers that the Group is not currently of
a size, nor are its affairs of such complexity to justify the formation of separate or special committees at this time.
The Board as a whole is able to address the governance aspects of the full scope of the Group’s activities and to
ensure that it adheres to appropriate ethical standards. As a result, these committees are no longer in place.
87
berkeley resources limited ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENT
1. BOARD OF DIRECTORS (Continued)
1.3 Committees of the Board (Continued)
The Board has also established a framework for the management of the Group including a system of internal
controls, a business risk management process and the establishment of appropriate ethical standards.
The full Board currently holds meetings at such times as may be necessary to address any general or specific
matters as required.
If the Group’s activities increase in size, scope and nature, the appointment of separate or special committees will
be reviewed by the Board and implemented if appropriate. The Company continues to monitor its compliance
with Listing Rule 12.7 with respect to the requirement to have an Audit Committee and to comply with the best
practice recommendations set by the AASX Corporate Governance Council in relation to the composition,
operation and responsibility of the Audit Committee.
1.4 Conflicts of Interest
In accordance with the Corporations Act and the Company's Constitution, Directors must keep the Board advised,
on an ongoing basis, of any interest that could potentially conflict with those of the Group. Where the Board
believes that a significant conflict exists the Director concerned does not receive the relevant board papers and is
not present at the meeting whilst the item is considered.
1.5
Independent Professional Advice
The Board has determined that individual Directors have the right in connection with their duties and
responsibilities as Directors, to seek independent professional advice at the Company's expense. The
engagement of an outside adviser is subject to prior approval of the Chairman and this will not be withheld
unreasonably. If appropriate, any advice so received will be made available to all Board members.
2. ETHICAL STANDARDS
The Board acknowledges the need for continued maintenance of the highest standard of corporate governance
practice and ethical conduct by all Directors and employees of the Group.
2.1 Code of Conduct for Directors
The Board has adopted a Code of Conduct for Directors to promote ethical and responsible decision-making by
the Directors. The code is based on a code of conduct for Directors prepared by the Australian Institute of
Company Directors.
The principles of the code are:
• A director must act honestly, in good faith and in the best interests of the company as a whole.
• A director has a duty to use due care and diligence in fulfilling the functions of office and exercising the
powers attached to that office.
• A director must use the powers of office for a proper purpose, in the best interests of the company as a
whole.
• A director must recognise that the primary responsibility is to the Company's shareholders as a whole
but should, where appropriate, have regard for the interest of all stakeholders of the company.
• A director must not make improper use of information acquired as a director.
• A director must not take improper advantage of the position of director.
• A director must not allow personal interests, or the interests of any associated person, to conflict with the
interests of the company.
• A director has an obligation to be independent in judgment and actions and to take all reasonable steps
to be satisfied as to the soundness of all decisions taken as a Board.
• Confidential information received by a director in the course of the exercise of directorial duties remains
the property of the Company and it is improper to disclose it, or allow it to be disclosed, unless that
disclosure has been authorised by the Company, or the person from whom the information is provided,
or is required by law.
88
• A director should not engage in conduct likely to bring discredit upon the company.
• A director has an obligation at all times, to comply with the spirit, as well as the letter of the law and
with the principles of the Code.
The principles are supported by guidelines as set out by the Australian Institute of Company Directors for their
interpretation. Directors are also obliged to comply with the Company's Code of Ethics and Conduct, as outlined
below.
2.2 Code of Ethics and Conduct
The Group has implemented a Code of Ethics and Conduct, which provides guidelines aimed at maintaining high
ethical standards, corporate behaviour and accountability within the Group.
All employees and Directors are expected to:
•
•
•
•
•
•
•
•
•
respect the law and act in accordance with it;
respect confidentiality and not misuse Group information, assets or facilities;
value and maintain professionalism;
avoid real or perceived conflicts of interest;
act in the best interests of shareholders;
by their actions contribute to the Group's reputation as a good corporate citizen which seeks the
respect of the community and environment in which it operates;
perform their duties in ways that minimise environmental impacts and maximise workplace safety;
exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace
and with customers, suppliers and the public generally; and
act with honesty, integrity, decency and responsibility at all times.
An employee that breaches the Code of Ethics and Conduct may face disciplinary action. If an employee
suspects that a breach of the Code of Ethics and Conduct has occurred or will occur, he or she must report that
breach to management. No employee will be disadvantaged or prejudiced if he or she reports in good faith a
suspected breach. All reports will be acted upon and kept confidential.
2.3 Dealings in Company Securities
The Company's share trading policy imposes basic trading restrictions on all Directors and employees of the
Group. Directors and employees must not:
•
•
•
deal in the Company’s securities on considerations of a short term nature and must also take reasonable
steps to prevent any person connected with them from doing the same;
deal in the Company’s securities during a close period; and
deal in any of the Company’s securities if they have unpublished price-sensitive information.
A ‘close period’ is:
•
•
•
the period of two months immediately preceding the preliminary announcement of the Company’s annual
results;
the period of two months immediately preceding the announcement of the Company’s half-year results;
and
the period of one month immediately preceding the announcement of the quarterly activities and
cashflow report.
’Unpublished price sensitive information' is information that:
•
•
is not generally available; and
if it were generally available, it would, or would be likely to have a significant effect on the price or value
of the Company’s securities.
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berkeley resources limited ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENT
2. ETHICAL STANDARDS (Continued)
2.3 Dealings in Company Securities (Continued)
If an employee possesses inside information, the person must not:
•
•
•
trade in the Company's securities;
advise others or procure others to trade in the Company's securities; or
pass on the inside information to others - including colleagues, family or friends - knowing (or where the
employee or Director should have reasonably known) that the other persons will use that information to
trade in, or procure someone else to trade in, the Company's securities.
This prohibition applies regardless of how the employee or Director learns the information (e.g. even if the
employee or Director overhears it or is told in a social setting).
In addition to the above, clearance must be obtained from the Chairman before dealing in any securities and
Directors must notify the Company Secretary as soon as practicable, but not later than 5 business days, after they
have bought or sold the Company's securities or exercised options. In accordance with the provisions of the
Corporations Act and the Listing rules of the ASX, the Company on behalf of the Directors must advise the ASX of
any transactions conducted by them in the securities of the Company.
Breaches of this policy will be subject to disciplinary action, which may include termination of employment.
2.4
Interests of Other Stakeholders
The Group's objective is to leverage into resource projects to provide a solid base in the future from which the
Group can build its resource business and create wealth for shareholders. The Group's operations are subject to
various environmental laws and regulations under the relevant government's legislation. Full compliance with
these laws and regulations is regarded as a minimum standard for the Group to achieve.
To assist in meeting its objective, the Group conducts its business within the Code of Ethics and Conduct, as
outlined in 2.2 above.
3.
DISCLOSURE OF INFORMATION
3.1 Continuous Disclosure to ASX
The continuous disclosure policy requires all executives and Directors to inform the Managing Director (or
Chairman where there is no Managing Director) or in their absence the Company Secretary of any potentially
material information as soon as practicable after they become aware of that information.
Information is material if it is likely that the information would influence investors who commonly acquire securities
on ASX in deciding whether to buy, sell or hold the Company's securities.
Information need not be disclosed if:
1.
It is not material and a reasonable person would not expect the information to be disclosed, or it is
material but due to a specific valid commercial reason is not to be disclosed; and
2. The information is confidential; or
3. One of the following applies:
It would breach a law or regulation to disclose the information;
i.
ii. The information concerns an incomplete proposal or negotiation;
iii. The information comprises matters of supposition or is insufficiently definite to warrant disclosure;
iv.
v. The information is a trade secret;
vi.
It would breach a material term of an agreement, to which the Group is a party, to disclose the
information;
The information is generated for internal management purposes;
vii. The information is scientific data that release of which may benefit the Group's potential
competitors.
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The Managing Director (or Chairman where there is no Managing Director) is responsible for interpreting and
monitoring the Group's disclosure policy and where necessary informing the Board. The Company Secretary is
responsible for all communications with ASX.
3.2 Communication with Shareholders
The Group places considerable importance on effective communications with shareholders.
The Group's communication strategy requires communication with shareholders and other stakeholders in an
open, regular and timely manner so that the market has sufficient information to make informed investment
decisions on the operations and results of the Group. The strategy provides for the use of systems that ensure a
regular and timely release of information about the Group is provided to shareholders. Mechanisms employed
include:
• Announcements lodged with ASX;
• ASX Quarterly Cash Flow Reports;
• Half Yearly Report;
• Presentations at the Annual General Meeting/General Meeting's; and
• Annual Report.
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of
accountability and understanding of the Group's strategy and goals.
The Group also posts all reports, ASX and media releases and copies of significant business presentations on the
Company's website.
4.
RISK MANAGEMENT AND INTERNAL CONTROL
4.1 Approach to Risk Management and Internal Control
The identification and effective management of risk, including calculated risk-taking, is viewed as an essential part
of the Group's approach to creating long-term shareholder value.
The Group operates a standardised risk management process that provides a consistent framework for the
identification, assessment, monitoring and management of material business risks. This process is based on the
Australian/New Zealand Standard for Risk Management (AS/NZS 4360 Risk Management) and the Committee of
Sponsoring Organisations of the US Treadway Commission (COSO) control framework for enterprise risk
management.
Strategic and operational risks are reviewed at least annually as part of the annual strategic planning, business
planning, forecasting and budgeting process.
The Group has developed a series of operational risks which the Group believes to be inherent in the industry in
which the Group operates having regard to the Group’s circumstances (including financial resources, prospects
and size). These include:
•
•
•
•
•
fluctuations in commodity prices and exchange rates;
accuracy of mineral reserve and resource estimates;
reliance on licenses, permits and approvals from governmental authorities;
ability to obtain additional financing; and
changed operating, market or regulatory environments.
These risk areas are provided here to assist investors to understand better the nature of the risks faced by our
Group and the industry in which the Group operates. They are not necessarily an exhaustive list.
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berkeley resources limited ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENT
4.
RISK MANAGEMENT AND INTERNAL CONTROL (Continued)
4.2 Risk Management Roles and Responsibilities
Management is responsible for designing, implementing and reporting on the adequacy of the Group's risk
management and internal control system. Management reports to the Board annually, or more frequently as
required, on the Group’s key risks and the extent to which it believes these risks are being managed.
The Board is responsible for reviewing and approving the Group’s risk management and internal control system
and satisfying itself annually, or more frequently if required, that management has developed and implemented a
sound system of risk management and internal control.
In 2012 the Board reviewed the overall risk profile for the Group and received reports from management on the
effectiveness of the Group’s management of its material business risks.
4.3
Integrity of Financial Reporting
The Board also receives a written assurance from the Chief Executive Officer or equivalent (CEO) and the Chief
Financial Officer or equivalent (CFO) that to the best of their knowledge and belief, the declaration provided by
them in accordance with section 295A of the Corporations Act is founded on a sound system of risk management
and internal control and that the system is operating effectively in relation to financial reporting risks.
The Board notes that due to its nature, internal control assurance from the CEO and CFO can only be reasonable
rather than absolute. This is due to such factors as the need for judgement, the use of testing on a sample basis,
the inherent limitations in internal control and because much of the evidence available is persuasive rather than
conclusive and therefore is not and cannot be designed to detect all weaknesses in control procedures.
4.4 Role of External Auditor
The Group's practice is to invite the auditor (who now must attend) to attend the annual general meeting and be
available to answer shareholder questions about the conduct of the audit and the preparation and content of the
auditor's report.
5. PERFORMANCE REVIEW
The Board has adopted a self-evaluation process to measure its own performance and the performance of its
committees (if any) during each financial year. Also, an annual review is undertaken in relation to the composition
and skills mix of the Directors of the Company.
Arrangements put in place by the Board to monitor the performance of the Group's executives include:
•
•
•
•
a review by the Board of the Group's financial performance;
annual performance appraisal meetings incorporating analysis of key performance indicators with
each individual to ensure that the level of reward is aligned with respective responsibilities and
individual contributions made to the success of the Group;
an analysis of the Group’s prospects and projects; and
a review of feedback obtained from third parties, including advisors.
The Remuneration Report discloses the process for evaluating the performance of senior executives, including
the Managing Director.
In 2012, performance evaluations for senior executives took place in accordance with the process disclosed
above and in the Remuneration Report.
92
6. REMUNERATION ARRANGEMENTS
The broad remuneration policy is to ensure that remuneration properly reflects the relevant person's duties and
responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the
highest quality. The Board believes that the best way to achieve this objective is to provide Executive Directors
and executives with a remuneration package consisting of fixed components that reflect the person's
responsibilities, duties and personal performance.
In addition to the above, the Group has developed a limited equity-based remuneration arrangement for key
executives and consultants.
The remuneration of Non-Executive Directors is determined by the Board as a whole having regard to the level of
fees paid to non-executive directors by other companies of similar size in the industry.
The aggregate amount payable to the Company's Non-Executive Directors must not exceed the maximum annual
amount approved by the Company's shareholders.
93
berkeley resources limited ANNUAL REPORT 2012
COMPLIANCE WITH ASX CORPORATE
GOVERNANCE RECOMMENDATIONS
During the 2012 financial year, the Company complied with the ASX Principles and Recommendations other than
in relation to the matters specified below.
Recommendation
Ref
Notification of
Departure
Explanation for Departure
2.1
A majority of the
Board are not
independent
directors.
2.4
A separate
Nomination
Committee has not
been formed.
3.2, 3.3
A policy concerning
diversity has not
been established
4.2
The Audit
Committee does not
have a majority of
independent
directors.
following Directors are
The Board considers
independent directors in accordance with the ASX Corporate
Governance Council's definition of independence:
that
the
Mr Ian Middlemas (Independent Non-Executive Chairman –
appointed 27 April 2012)
Mr Robert Behets (Independent Non-Executive Director –
appointed 27 April 2012)
Senor Jose Ramon Esteruelas (Independent Non-Executive
Director)
Mr Laurence Marsland (Independent Non-Executive Director
– resigned 10 May 2012)
Following the changes to the composition of the Board in April
2012, a majority of the Board are now independent directors.
The Board believes that the individuals on the Board can make,
and do make, quality and independent judgements in the best
interests of the Company on all relevant issues. Directors
having a conflict of interest in relation to a particular item of
business must absent themselves from the Board meeting
before commencement of discussion on the topic.
The Board considers that the Company is not currently of a size
to justify the formation of a Nomination Committee. The Board
as a whole undertakes process of reviewing the skill base and
experience of existing Directors to enable identification or
attributes
in new Directors. Where appropriate
independent consultants are engaged to identify possible new
candidates for the Board.
required
The Company had 38 employees at 30 June 2012, of which
there were 14 female employees. The Company currently has
no female executives, or directors. The Board’s policy is to
employ the best candidate for a specific position, regardless of
gender, and considers that the Company is not currently of a
size to justify a policy regarding diversity and objectives
regarding gender diversity.
The Board had established an Audit Committee in 2012,
although it did not have a majority of independent directors.
Refer comments above
from
Recommendation 2.
the departure
regarding
As the Company's activities increase in size, scope and/or nature, the Company's corporate governance
principles will be reviewed by the Board and amended as appropriate.
Further details of the Company's corporate governance policies and practices are available on the Company's
website at www.berkeleyresources.com.au.
94
ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 30 September 2012.
1.
TWENTY LARGEST HOLDERS OF LISTED SECURITIES
The names of the twenty largest holders of each class of listed securities are listed below:
Ordinary Shares
Name
Pershing Australia Nominees Pty Ltd
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