ANNUAL
REPORT
2011
ACN 115 845 942
cORPORATE DiREcTORy
ABN 79 115 845 942
DiREcTORs
shARE REgisTRAR
Chris Battye
Executive Chairman
Boardroom Pty Ltd
Robert McCauley Managing Director
Robert Waring
Non-Executive Director
Wesley Harder
Non-Executive Director
cOmPANy sEcRETARy
Keith Taylor
REgisTERED AND PRiNciPAL OfficE
18/47 Neridah Street
CHATSWOOD NSW 2067
Telephone:
Facsimile:
02 9410 3445
02 9410 0458
Level 7, 207 Kent Street
SYDNEY NSW 2000
sOLiciTORs
O’Loughlins Lawyers
Level 2, 99 Frome Street
Adelaide SA 5000
cORPORATE ADvisOR
Spencer Hamilton Limited
Suite 305, Level 3
4 Bridge Street
SYDNEY NSW 2000
AUDiTORs
Web: www.commissionersgold.com.au
Email:
info@commissionersgold.com.au
WHK Audit Services (Central West)
157 George Street
BATHurST NSW 2795
PROjEcT mANAgERs AND
gEOLOgicAL cONsULTANTs
GJN Enterprises Pty Ltd trading as
Geos Mining
Suite 301, 68 Alfred Street
MiLSONS POiNT NSW 2061
BANkERs
St George Bank
AsX cODE cgU
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
Contents
cORPORATE DiREcTORy
chAiRmAN’s REviEw
DiREcTORs’ REPORT
schEDULE Of TENEmENTs
cORPORATE gOvERNANcE sTATEmENT
AUDiTOR’s iNDEPENDENcE DEcLARATiON
sTATEmENT Of cOmPREhENsivE iNcOmE
sTATEmENT Of fiNANciAL POsiTiON
sTATEmENT Of chANgEs iN EqUiTy
sTATEmENT Of cAsh fLOws
NOTEs TO ThE fiNANciAL sTATEmENTs
DiREcTORs’ DEcLARATiON
iNDEPENDENT AUDiTOR’s REPORT
ADDiTiONAL shAREhOLDER iNfORmATiON
PAGE
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cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
chAiRmAN’s REviEw
Commissioners Gold “Cowarra” drilling, September 2011
my Board and i
are very pleased
to present
commissioners
gold Limited’s
Annual Report
for the year to 30
june 2011. This
is our first report
as a listed public
company.
On 1 May 2008 the company changed its name to
Commissioners Gold Limited to explore for gold
deposits in the Lachlan Fold Belt in New South
Wales. After securing a number of tenements,
either by acquisition, farm-in or application, we
released our iPO prospectus on 13 April 2011, and
a Supplementary Prospectus on 22 June 2011. Our
share offer closed on 5 August 2011 and our shares
were listed on the ASX on 2nd September 2011. The
iPO raised just over $2.5 million.
As set out in the Prospectus, we have six excellent
exploration projects in the Lachlan Fold Belt.
Prior to listing the Company carried out soil
geochemistry and rock chip sampling programs
at three of its tenements, and an rC drill program
at its ‘Black Bullock’ project at Oberon. Since we
completed our capital raising, we have begun a
diamond drilling program at Cowarra and a reverse
circulation drilling program at Dalton. As at the date
of this report we do not have any material results from
these programs.
Exploration is a risky business but the rewards for
success can be large.
i would like to thank my fellow Directors robert
McCauley, robert Waring, Wesley Harder; our
Company Secretary Keith Taylor and our key
consultants Geos Mining. Lastly, i would like to thank
my fellow shareholders for supporting the Company’s
vision and for providing the funding to allow us to get
to where we are today.
Chris Battye
Executive Chairman
1
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
DiREcTORs’ REPORT
your Directors present the financial report of the company for
the period ended 30 june 2011.
The following persons hold office as Directors at the date of
this report and throughout the period. Their qualifications and
experience are:
ROBERT jOhN
wARiNg
Non Executive Director
BEc, CA, FCIS, FFin,
FAICD, MAusIMM
Robert Waring has over
30 years experience in
financial accounting and
company secretarial
roles, principally in the
resources industry. Robert
is company secretary for
several public companies
listed on the ASX.
He was a director of ASX
listed PlatSearch NL for 15
years. Robert is a founding
Executive Director of
Spencer Hamilton Limited.
Robert has specialist skills
in the financial assessment
of projects and companies.
He has a keen interest in
the equity markets.
chRisTOPhER
BATTyE
Executive Chairman
BLegS
Chris Battye provided
the impetus in founding
Commissioners Gold in
2005 as a New South
Wales focused gold
exploration company and
identified the Company’s
key project acquisitions
with the assistance of
Geos Mining. His interest
was sparked by a paternal
predecessor who became
a Gold Commissioner in
the Lachlan Fold Belt in the
1850s.
Before admission as a
solicitor in 1984 Chris
had careers in media and
mining, being a machine
sapphire miner on the
Anakie Field, Queensland.
Since admission, Chris
has worked for a major
CBD law firm, as well as
regionally in Bathurst and
Ballina. In the late eighties
he purchased one of
Sydney’s oldest practices.
ROBERT jOhN
mccAULEy
Managing Director
BSc, MRICS(Aust.UK),
MAICD, MIS Aust, Cert.
Prof.SSI,
Robert McCauley was
appointed Managing
Director of Commissioners
Gold in February 2011.
He was the founding
CEO (2006-2010) of
Capital Mining Limited
(“Capital Mining”) and
was instrumental in Capital
Mining’s successful capital
raising and debut on the
ASX in March 2007. He is
currently a Non Executive
Director of Capital Mining.
Robert is a Chartered
Surveyor and Management
Consultant with over 30
years experience in the
mining, engineering and
construction industries.
He is a graduate of Curtin
University, Perth WA; a
Member of the Institution
of Surveyors, Australia; a
Certified Professional of the
Spatial Sciences Institute;
a Member of the Royal
Institution of Chartered
Surveyors and a Member
of the Australian Institute of
Company Directors.
kEiTh TAyLOR
Company
Secretary
MCom, MBA, CPA,
FCIS, F Fin
Keith Taylor is an
experienced company
secretary having previously
served on several ASX
listed company Boards,
and a number of private
companies. He has
a strong knowledge
of resource company
financial requirements and
management.
Keith is a consultant for
Novus Capital Limited,
a licensed dealer in
securities. His previous
positions have included
work at the Australian
Securities Commission
and eight years with an
Australian Merchant
Bank, providing advice on
mergers and acquisitions,
tax effective funding and
corporate restructuring.
wEsLEy
mARTiN
hARDER
Non Executive Director
BSc. Dip SIA. MAus
IMM
Wes Harder is a former
gold analyst with Jackson
Ltd Stockbrokers and
has also worked as
a gold, mining and
resource analyst with
stockbrokers Ord Minnett
and Frank Renouf. He has
also worked as a field
exploration geologist for
some 15 years in Australia
and its near neighbours
including Sumatra, Irian
Jaya in Indonesia, New
Britain and mainland Papua
New Guinea, Solomon
Islands and Fiji.
In Australia Wes has
worked in New South
Wales, Queensland, the
Northern Territory and
Tasmania searching
for a range of mineral
commodities including
gold, copper, uranium and
coal for major companies
such as Placer Prospecting
Pty Ltd, Newmont Mining
Inc. and Pancontinental
Mining Limited. He was a
founding Director and CEO
of Zinico Resources NL and
is a director of Orpheus
Energy.
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
2
mANAgiNg DiREcTOR’s REPORT
AND REviEw Of OPERATiONs
Commissioners Gold “Cowarra” drilling, September 2011
This is my first report
to you as Managing
Director of our publicly
listed company.
Following the
Company’s successful
initial public offering
(“iPO”), which raised in
excess of $2.5 million
in spite of extreme
market volatility,
Commissioners Gold
Limited was listed on the ASX on 2 September 2011.
The Company’s approach, once the ASX listing
was achieved, was to get out into the field and get
on with the work we told our investors we would be
doing. Commissioners immediately commenced
advanced exploration on targets outlined within its
Prospectus. Significantly, drilling has commenced on
the Ambassador and Victoria lodes at the old BHP
gold mine at Cowarra.
The Company’s intial program of field work consists
of over 1000 metres of drilling (5 diamond drill holes)
at Cowarra in south eastern New South Wales. This
drilling will, we anticipate, expand and upgrade the
JOrC compliant inferred resource of 37,000 ounces
of gold at the Cowarra Gold Project.
This diamond drilling has been designed with three
objectives in mind:
Making two intersections at depth on the Victoria lode
below 4 level
Bringing the number of piercing points on the
Ambassador lode to five so as to accurately locate the
structure for any subsequent underground exploration
development
Testing the intervening zone between the Victoria
and Ambassador lodes for a possible third lode
(the “independent” lode), the existence of which is
indicated by an intersection of 6.2m @ 4.75 g/t Au
from 160m in Horizon drill hole DSH10
Of course, Cowarra isn’t the only primary focus for
Commissioners Gold within its suite of six mineral
exploration projects within the Lachlan Fold Belt in
the eastern footprint of New South Wales. Drill targets
have been identified at Dalton tenement (EL 6922),
which sits adjacent the town of the same name, some
50 kilometres west of Goulburn.
3
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
Your Board is focussed on progressing towards an
expanded and upgraded Mineral resource estimation
in the near future, whilst also actively assessing
several other promising gold projects to enhance
shareholder wealth. We look forward to reporting
positive results and outcomes across all projects
and are confident of adding value to Commissioner’s
portfolio over the coming year.
Robert J McCauley
Managing Director
Dalton contains three main groups of historic gold
workings hosted by shear zones. Commissioners
sees this particular project, with its near surface
gold in identified structures, as prospective to rapidly
developing a small scale open cut gold mining
operation. Eleven holes for a total of 850 metres is
planned, to target the shear zones below old workings
to a depth of 100 metres. This will be followed up with
diamond drilling to confirm the geological setting and
widths of mineralisation.
Historically, at least six mines worked the series of
shear-hosted lodes with most development taking
place during the 1930s, although a syndicate
intended to re-open the mine in the 1980s.
records indicate that 60 kilograms of gold was
produced from this field. The gold profile is
associated with dark grey quartz and arsenopyrite
in slates. Parallel lines of lode were worked in many
areas over a total length of 2.4 kilometres.
The largest mine, the Dalton or “Big Mine” included
three adits and boasted production of more than 10
kilograms of gold. The lodes were rich with grades of
more than 50 grams per tonne (g/t) reported, while
typical production grades in the 1930s were 20-30 g/t.
Gold is reported to extend out from the main shears
into the wall rock.
Commissioners has already conducted rock chip
and soil geochemical sampling of the area, at an
exploration cost of $50,000.00. The rock chip work
returned up to 29 g/t gold and confirmed the strong
correlation of gold with arsenic across different lines of
workings. Soil sampling produced anomalous arsenic
over 2.7 kilometres of strike length, and identified an
area of outcropping granite close to the workings.
Commissioners is planning a program of 10 to 12
holes to test the main lines of reef and these soil
geochemical anomalies.
This Dalton goldfield is also associated with a subtle
aeromagnetic high, which may indicate a buried
granite, probably related to the nearby Gunning
Granite. These granites may have been crucial for
localisation of the gold mineralisation. The planned
drilling will test below the workings and soil anomalies,
using angled reverse circulation (rC) drilling, aiming
to target the shear zones to a depth of at least 100
metres.
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
4
DIRECTORS’ REPORT (continued)
Your Directors submit the Annual Report of Commissioners Gold Limited for the financial year ended 30 June 2011. In
order to comply with the provisions of the Corporations Act, the Directors’ report as follows:
Directors
The names of Directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Christopher Battye
Robert J McCauley
Wesley Harder
Robert J Waring
Alan Shepherd
(appointed 19 August 2005)
(appointed 10 February 2011)
(appointed 17 February 2010)
(appointed 29 November 2010)
(resigned 29 November 2010)
A review of the qualifications, experience and special responsibilities of Directors and Company Secretary are set out
earlier in this Annual Report.
Interests in the shares and options of the Company
Directors’ Shareholdings
The number of ordinary shares in the Company held by each Director of the company as at the date of this report is as follows:
30 June 2011
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Total
30 June 2010
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Alan Shepherd
Total
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
Other changes
during the Year
Balance at end
of the Year
8,000,000
-
-
-
8,000,000
-
-
-
-
-
-
-
-
-
-
-
8,000,000
600,000
600,000
200,000
200,000
-
-
800,000
8,800,000
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
Other changes
during the Year
Balance at end
of the Year
8,000,000
-
-
-
-
8,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
-
-
-
-
8,000,000
No ordinary shares were issued by the company during or since the end of the financial year as a result of the exercise
of an option. There are no unpaid amounts on the shares issued.
5
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
3
DIRECTORS’ REPORT (continued)
Directors’ Options and Rights Holdings
The following relevant interests in options of the Company were held by the Directors as at the date of this report.
30 June 2011
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Total
30 June 2010
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Keith Taylor
Alan Shepherd
Total
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at end
of period
-
-
-
-
-
-
1,500,000
-
-
1,500,000
-
-
-
-
-
-
-
-
-
-
-
1,500,000
-
-
1,500,000
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
Vested
Net change
Other
Balance at end
of period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividends
No dividends have been paid or declared since the start of the financial year and/or the Directors do not recommend the
payment of a dividend in respect of the financial year.
Principal Activities
The principal activity of the Company during the year was the exploration for gold resources.
Review of Operations
A Review of Operations for the Company is set out in earlier in this Annual Report.
Significant changes in state of affairs
The Directors are not aware of any significant changes in the state of affairs of the Company occurring
during the financial year, other than as disclosed in this report, and other than the Initial Public Offering (IPO)
Prospectus dated 23 March 2011 and a supplementary Prospectus dated 22 June 2011. The share offer closed on
5 August 2011 and shares were listed on the ASX on 2nd September 2011.
Operating results for the year
The loss of the Company for the financial period, after providing for income tax amounted to $298,175 (2010: $125,978).
Review of financial conditions
The Company has $1,343,844 in cash assets (as at 30 June 2011), which the Directors believe puts the Company in an
adequate financial position with sufficient capital for the next 12 months to complete existing work progress, refer note
1(s). The net assets of Commissioners Gold Limited have increased from $459,165 from 30 June 2010 to $521,815 in
2011. Refer to Subsequent Events note below and the note that IPO provides the Company with sufficient capital for the
next 12 months.
4
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
6
DIRECTORS’ REPORT (continued)
Risk management
Details of the Company’s Risk Management policies are contained within the Corporate Governance Statement in the
Directors’ Report.
Corporate Governance
Details of the Company’s Corporate Governance policies are contained within the Corporate Governance Statement in
the Directors’ Report.
Subsequent events after balance date
On 5 August 2011 the Company closed its Initial Public Offer (IPO) having received applications for 12,713,550 ordinary
shares at 20 cents each providing $2,542,710 in share capital. On the same day 956,142 ordinary shares were issued to
satisfy certain IPO and other performance contractual obligations. On 2 September 2011 the Company was admitted to
the Official List of the Australian Stock Exchange.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or
may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial periods.
Likely developments
As the Company’s areas of interest are at an early stage of exploration, it is not possible to postulate likely
developments and any expected results. The Company is hoping to identify other precious metal exploration
and evaluation targets.
Environmental legislation
The Company is subject to significant environmental and monitoring requirements in respect of its natural resource
exploration activities. The Directors are not aware of any significant breaches of these requirements during the period.
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the Directors of the Company for any liabilities to another person (other than
the Company or related body corporate) that may arise from their position as Directors of the Company, except where
the liability arises out of conduct involving a lack of good faith.
During the financial year the Company paid a premium in respect of a contract insuring the Directors and officers of the
Company against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Options
During the year, the Company granted 1,500,000 Options to its Managing Director on the following terms and conditions:
750,000 of the Options held by the option holder are exercisable on or before 31 December 2013 at the exercise
i.
price of $0.25 per Option. Options not exercised before this date will lapse.
750,000 of the Options held by the option holder are exercisable on or before 31 December 2015 at the exercise
price of $0.30 per Option. Options not exercised before this date will lapse.
Some or all of the Options may be exercised at any one time or times prior to the expiry date provided that no
less than 10,000 Options are exercised at any one time.
The Company will not apply for official quotation on ASX of the Options.
iv.
iii.
ii.
No other options over issued shares or interest in the company were granted during or since the end of the financial year.
Remuneration Report (Audited)
This report outlines the remuneration arrangements in place for Directors and Senior Management of Commissioners
Gold Limited (the “Company”) for the financial year ended 30 June 2011.
The following persons acted as Directors during or since the end of the financial year:
Christopher Battye
Robert McCauley
Wesley Harder
Robert J Waring
Alan Shepherd - resigned 29 November 2010
The term ‘Senior Management’ is used in this remuneration report to refer to the following persons. Except as noted, the
named persons held their current position for the whole of the financial year and since the end of the financial year:
Christopher Battye
Robert McCauley
Wesley Harder
Robert J Waring
Keith Taylor
7
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
5
DIRECTORS’ REPORT (continued)
Remuneration Philosophy
The performance of the Company depends upon the quality of the Directors and executives. The philosophy of the
Company in determining remuneration levels is to:
- set competitive remuneration packages to attract and retain high calibre employees;
-
- establish appropriate, demanding performance hurdles for variable executive remuneration
link executive rewards to shareholder value creation; and
Remuneration Committee
The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing
compensation arrangements for the Directors and the Senior Management team.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and
senior executives on a periodic basis by reference to relevant employment market conditions with an overall objective of
team.
ensuring maximum stakeholder benefit
the retention of a high quality Board and executive
from
Remuneration Structure
In accordance with best practice Corporate Governance, the structure of Non-Executive Director and executive
remuneration is separate and distinct.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Each Director is entitled to such remuneration from the Company as the Directors decide, but the total amount provided
to all non-executive directors must not exceed in aggregate the amount fixed by the Company in a general meeting. The
aggregate remuneration for all non-executive directors has been set at an amount of $300,000 per annum. The Directors
have resolved that non-executive directors’ fees will be $35,000 per annum.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from
time to time by a general meeting.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst Directors is reviewed annually. The Board considers advice from external shareholders as well as
the fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process.
Each Director is entitled to receive a fee for being a Director of the Company.
The remuneration of Non-Executive Directors for the period ended 30 June 2011 is detailed in the Remuneration of
Directors and named executives section of this report on the following page of this report.
Senior Manager and Executive Director Remuneration
Remuneration consists of fixed remuneration and Company options (as determined from time to time). In addition to the
Company employees and Directors’, the Company has contracted key consultants on a contractual basis. These
contracts stipulate the remuneration to be paid to the consultants.
Fixed Remuneration
Fixed remuneration is reviewed annually by the Independent Directors’ Committee (which assumes the role of the
Remuneration Committee). The process consists of a review of relevant comparative remuneration in the market and
internally and, where appropriate, external advice on policies and practices. The Committee has access to external,
independent advice where necessary.
Fixed remuneration is paid in the form of cash payments.
The fixed remuneration component of the most highly remunerated Company executives is detailed in Table 1.
Employment Contracts
The Company and Mr Robert McCauley are parties to an Executive Employment Agreement dated 10 February 2011 by
which the Company will employ Mr McCauley as an executive director from the day that the Company’s shares are listed on
ASX on 2 September 2011. Mr McCauley will work for the Company an average minimum of three days each week. The
Company will pay Mr McCauley a remuneration package of $135,000 per annum, plus superannuation. The Company will
review Mr McCauley’s performance annually and may in its absolute discretion award Mr McCauley a bonus of up to 100%
of the amount of his remuneration package. Either party may terminate the Agreement by six months’ notice to the other or,
in the case of the Company, providing an equivalent payment of the remuneration package in lieu of notice (subject to
obtaining any shareholder approval which may be required under the Corporations Act).
6
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
8
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9
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
DIRECTORS’ REPORT (continued)
Directors’ Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the
number of meetings attended by each Director was as follows:
Director
Attended
Eligible to Attend
Director Meetings
Christopher Battye
Alan Shepherd
Wesley Harder
Robert McCauley
Robert Waring
13
4
12
7
10
13
4
13
8
10
In addition, one circular resolution was signed by the Board during the period.
Auditor Independence
Section 307C of the Corporations Act 2001 requires our auditors to provide the Directors of the Company with an
Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page
15 and forms part of this Directors’ report for the year ended 30 June 2011.
Non-Audit Services
Details of amounts paid or payable to WHK as the auditor for non-audit services provided during the year by the auditor
are outlined in Note 22 to the financial statements. The Directors are satisfied that the provision of non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit
services have been reviewed to ensure that they do not impact the integrity and objectivity of the auditor and none of the
services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.
Signed in accordance with a resolution of the Directors.
Dated this 30th day of September 2011
Christopher Battye
Executive Chairman
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
10
8
SCHEDULE OF TENEMENTS
As at 28 September 2011
Tenement Number
Status
Percentage Interest
1EL 5939
2EL 7702
EL 6922
EL 6919
EL 6920
EL 6921
Granted
Granted
Granted
Granted
Granted
Granted
Notes:
1. EL 5939 is held by Capital Mining Limited.
2. EL 7702 is held by Central West Gold NL.
Earning 50-85%
Earning 70%
100%
100%
100%
100%
11
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
9
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Commissioners Gold Limited is responsible for establishing the corporate governance
framework of the Company having regard to the ASX Corporate Governance Council (‘CGC’) published guidelines as
well as its corporate governance principles and recommendations.
The Board monitors the business and affairs of Commissioners Gold on behalf of the shareholders by whom they are
elected and to whom they are accountable. The Board draws on relevant best practice principles, particularly those
issued by the ASX Corporate Governance Council in August 2007 with 2010 amendments. At a number of its meetings
the Board examines the Commissioners Gold corporate governance practices and the progress towards a review of its
practice compared to the best practice principles proposed by the ASX Corporate Governance Council. While
Commissioners Gold is attempting to adhere to the principles proposed by the ASX, it is mindful that there may be some
instances where compliance is not practicable for a company of Commissioners Gold's size.
The August 2007 ASX Corporate Governance Council publication “Corporate Governance Principles and
Recommendations” second edition, is referred to for guidance purposes, however all listed companies are required to
disclose the extent to which they have followed the recommendations, to identify any recommendations that have not
been followed and reasons for not doing so. The Company’s Board of Directors has reviewed the recommendations.
In many cases the Company was already achieving the standard required. In other cases the Company will have to
consider new arrangements to enable compliance. In a limited number of instances, the Company may determine not to
meet the standard set out in the recommendations, largely due to the recommendation being considered by the Board to
be unduly onerous for a company of this size.
The Commissioners Gold Corporate Governance Committee, consisting of Messrs Waring (Committee Chairman), and
Harder, meets as and when required, including prior to the finalisation of the Annual Report. A summary of the
Company’s written policies on corporate governance matters has been prepared and included in the Corporate
Governance section of the Commissioners Gold website. The following paragraphs set out the Company’s position
relative to each of the eight principles contained in the ASX Corporate Governance Council’s report.
Principle 1: Lay solid foundations for management and oversight
The Company has formalised and disclosed the functions reserved to the Board and those delegated to management,
and has processes in place for evaluating the performance of senior executives. However, the Company has a small
Board of four Directors (two Non-Executive Directors, the Executive Chairman and the Managing Director) and a small
team of staff, so roles and functions have to be flexible to meet specific requirements.
Principle 2: Structure the Board to add value
The Company complies with most of the recommendations within this area as the Chairman is separate from the
Managing Director. The Company also complies with the recommendation that a majority of Directors are independent
however, the Executive Chairman, Mr Chris Battye, is a substantial shareholder. Two of the Company’s four Directors
are Non-Executives and one of the Non-Executives, Mr Robert Waring has provided accounting, taxation, secretarial
services and advice for the Company within the past three years. The Company has a Board Nomination Committee. An
internal performance evaluation of the Board was carried out during the year.
Each Director of the Company has the right to seek independent professional advice at the expense of the Company.
Prior approval of the Chairman is required, but this will not be unreasonably withheld.
Principle 3: Promote ethical and responsible decision-making
The Company has a policy concerning trading in its securities by Directors, management, staff and significant
consultants, which is set out below. The Company has a formal code of conduct.
10
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
12
CORPORATE GOVERNANCE STATEMENT (continued)
Principle 4: Safeguard integrity in financial reporting
At this stage the Company's financial statements are prepared by a contract accountant who confirms to the Audit
Committee in writing that the Company's financial reports represent a true and fair view, in all material respects, of the
Company's financial condition and operational results, and are in accordance with relevant accounting standards. The
Managing Director reviews and approves the financial statements before they are submitted to the Audit Committee and
also meets with and confirms this in writing to the Board. They also comment on whether the financial reports are based
on a sound system of risk management and internal control, and whether the system is operating efficiently and
effectively.
The Company has an Audit and Risk Management Committee which consists of the two Non-Executive Directors:
Messrs Waring (Committee Chairman) and Harder. These Directors have applicable expertise and skills, and are
suitably qualified for this Committee. This structure does not meet the ASX’s guidance regarding independence, in that it
should have a majority of independent directors. The Audit and Risk Management Committee reports to the Board after
each Committee meeting. In conjunction with the full Board, the Committee meets with and reviews the performance of
the external auditors (including scope and quality of the audit).
Principle 5: Make timely and balanced disclosure
The Company, its Directors and consultants are very aware of the ASX’s continuous disclosure requirements, and
operate in an environment where strong emphasis is placed on full and appropriate disclosure to the market. The
Company has adopted formal written policies regarding disclosure. It uses strong informal systems underpinned by
experienced individuals. The Company maintains a register of matters considered for possible market disclosure.
Principle 6: Respect the rights of shareholders
All significant information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the
ASX. When analysts are briefed on aspects of the Company’s operations, the material used in the presentation is
released to the ASX and posted on the Company’s website. Written procedures have also been established for
reviewing whether any price-sensitive information has been inadvertently disclosed, and if so, this information is also
immediately released to the market.
Whilst the Company does not have a communications strategy to promote effective communication with shareholders, as
it believes this is excessive for small companies, the Company does communicate regularly with shareholders.
The Company has requested the external auditor to attend general meetings and this has been supported by the
Company’s audit partner at WHK Audit Services Central West.
Principle 7: Recognise and manage risk
The Company is a small, exploration company and does not believe that at this stage there is significant need for formal
policies on risk oversight and management of material business risks, although these issues are actively considered at
all times in the Company’s activities. Risk management arrangements are the responsibility of the Board of Directors and
senior management collectively. During the year, the Company has established an Audit and Risk Management
Committee of Messrs Waring (Committee Chairman) and Harder that meets as and when required, including prior to the
finalisation of the Annual Report. The Company has also established a Risks Register. Risk Factors are an agenda item
for each Board meeting and the senior management will periodically report to the Board in writing on risk management
and internal controls. The Company has an Occupational Health and Safety policy with which all of the Company’s staff,
contractors and consultants must comply.
13
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
11
CORPORATE GOVERNANCE STATEMENT (continued)
Principle 8: Remunerate fairly and responsibly
The Company has a Remuneration and Board Nomination Committee of Messrs Harder (Committee Chairman) and
Battye that meets as and when required, to review performance matters and remuneration. There has been an internal
performance evaluation of the Board during the past financial year, and its composition will be reviewed at a Board
meeting at least annually by the Remuneration and Board Nomination Committee. The Directors work closely with
management and have full access to all the Company’s files and records.
Directors believe that the size of the Company makes individual salary and consultant negotiations more appropriate
than formal remuneration policies. The Remuneration Committee will seek independent external advice and market
comparisons as necessary. In accordance with Corporations Act requirements, the Company discloses the fees or
salaries paid to all Directors, plus the highest paid officers. The Company has an Employee Share Option Plan.
Ethical standards
The Board’s policy is for the Directors and management to conduct themselves with the highest ethical standards.
All Directors and employees will be expected to act with integrity and objectivity, striving at all times to enhance the
reputation and performance of the Company.
Securities trading and trading windows
Directors, employees and key consultants must consult with the Chairman of the Board or the Managing Director before
dealing in shares of the Company. Purchases or sales in the Company’s shares by Directors, employees and key
consultants may not be carried out in a closed period, but only in the “window”, being the period commencing two days
subsequent to and ending 30 days following the date of announcement of the Company’s annual or half-yearly results,
its quarterly reports or a major announcement leading, in the opinion of the Board, to an informed market. However,
Directors, employees and key consultants are prohibited from buying or selling the Company’s shares at any time if they
are aware of price-sensitive information that has not been made public.
12
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
14
15
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
STATEMENT OF COMPREHENSIVE INCOME
AS AT 30 JUNE 2011
Revenue
Administration costs
Depreciation and amortisation expense
Exploration costs expensed
Finance costs
Marketing expense
Loss before income tax expense
Income tax expense
Net loss for the year attributable to the owners of
Commissioners Gold Limited
Other comprehensive income
Total comprehensive loss for the year attributable to
the owners of Commissioners Gold Limited
Note
2011
$
2010
$
3
4
4
4
4
4
12,114
12,114
12,584
12,584
(157,620)
(19,086)
-
(790)
(116,874)
(109,182)
(400)
(35,395)
-
(9,504)
(298,175)
(125,978)
-
-
(298,175)
(125,978)
-
-
(298,175)
(125,978)
Loss per share
Basic loss per share (cents)
Diluted loss per share (cents)
20
20
(1.62)
(1.62)
(0.78)
(0.78)
The statement of comprehensive income should be read in conjunction with the accompanying notes.
14
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
16
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011
Note
2011
$
2010
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Other liabilities
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
6
7
8
8
9
11
12
13
14
15
16
1,343,844
68,621
430,912
274,847
14,318
60,000
1,843,377
349,165
70,000
120,000
190,000
2,033,377
-
120,000
120,000
469,165
172,715
10,967
1,327,880
1,511,562
1,511,562
-
-
10,000
10,000
10,000
521,815
459,165
1,419,450
1,108,650
50,025
-
(947,660)
(649,486)
521,815
459,165
The statement of financial position should be read in conjunction with the accompanying notes.
17
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
15
STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2011
Share Capital
Reserves Accumulated
Losses
Total
Balance at 1 July 2009
Total comprehensive income / (loss)
Total comprehensive income for
the period
Transactions with owner in their
capacity as owners:
Issue of share capital
Share issue costs
Balance at 30 June 2010
$
500,000
-
500,000
622,750
(14,100)
1,108,650
Balance at 1 July 2010
1,108,650
Total comprehensive income / (loss)
Issue of options at fair value
Total comprehensive income for
the period
Transactions with owner in their
capacity as owners:
-
-
$
-
-
-
-
-
-
-
-
$
$
(523,507)
(23,507)
(125,978)
(125,978)
(649,485)
(149,485)
-
-
(649,485)
622,750
(14,100)
459,165
(649,485)
459,165
(298,175)
(298,175)
50,025
-
50,025
1,108,650
50,025
(947,660)
211,015
Issue of shares
310,800
-
-
Balance at 30 June 2011
1,419,450
50,025
(947,660)
310,800
521,815
The statement of changes in equity should be read in conjunction with the accompanying notes.
16
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
18
STATEMENT OF CASHFLOWS FOR YEAR ENDED 30 JUNE 2011
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Finance costs
Taxes paid
Note
2011
$
2010
$
12,114
6,224
(208,270)
(146,963)
(400)
-
-
-
Net cash provided by (used in) operating activities
26
(196,554)
(140,739)
Cash flows from investing activities
Performance bond deposits (paid)/recovered
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from unallocated shares
Payments for IPO and share issue costs
Proceeds from related party loan accounts
Repayment of related party loan accounts
(10,000)
(10,000)
-
-
310,800
1,327,880
(364,095)
10,967
622,750
10,000
(15,510)
-
-
(202,755)
Net cash provided by (used in) financing activities
1,285,552
414,486
Net increase/(decrease) in cash
and cash equivalents
1,068,997
273,747
Cash and cash equivalents at beginning of financial year
274,847
1,100
Cash and cash equivalents at end of financial year
6
1,343,844
274,847
The statement of cashflows should be read in conjunction with the accompanying notes.
19
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
17
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
This financial report includes the financial statements and notes of Commissioners Gold Limited.
Number
Notes to the Financial Statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Summary of significant accounting policies
Operating segments
Revenue & other income
Expenses
Income tax expense
Current assets – Cash and cash equivalents
Current assets – Trade and other receivables
Current and Non Current assets – Other assets
Non-current assets – Intangible assets
Non-current assets – Property, Plant & Equipment
Current liabilities – Trade and other payables
Current liabilities – Borrowings
Current liabilities – Other liabilities
Contributed equity
Reserves
Accumulated losses
Tax
Related party transactions
Key management personnel disclosures
Loss per share
Financial Risk Management
Auditor’s remuneration
Commitments and contingencies
Dividends and franking credits
Events occurring after the balance sheet date
Reconciliation of (loss) / profit after income tax to net cash flows from operating activities
Share based payments
18
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a.
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in
accordance with Australian Accounting Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in financial statements containing relevant and reliable information about transactions, events
and conditions. Compliance with Australian Accounting Standards ensures that the financial
statements and notes also comply with International Financial Reporting Standards as issued by
the IASB. Material accounting policies adopted in the preparation of these financial statements are
presented below and have been consistently applied unless otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical
costs, modified, where applicable, by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities
b.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
When the company applies an accounting policy retrospectively, makes a retrospective restatement
or reclassifies items in its financial statements, a statement of financial position as at the beginning
of the earliest comparative period will be disclosed.
c.
Impairment of Assets
At the end of each reporting period, the company assesses whether there is any indication that an
asset may be impaired. The assessment will include the consideration of external and internal
sources of information including dividends received from subsidiaries, associates or jointly
controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being
the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying
amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised
immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with
another Standard (eg in accordance with the revaluation model in AASB 116). Any impairment loss
of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
d.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other
short-term highly liquid investments with original maturities of three months or less, and bank
overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities in the
statement of financial position.
e.
Provisions
Provisions are recognised when the company has a legal or constructive obligation, as a result of
past events, for which it is probable that an outflow of economic benefits will result and that outflow
can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at
the end of the reporting period.
21
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
19
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
f.
Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for
goods and services received by the company during the reporting period which remain unpaid. The
balance is recognised as a current liability with the amounts normally paid within 30 days of
recognition of the liability.
g.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income)
and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current
tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss
when the tax relates to items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition
of an asset or liability, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled and their measurement also reflects the
manner in which management expects to recover or settle the carrying amount of the related asset
or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be available against which the benefits of
the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that the reversal will
occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right
of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur in future periods in which significant amounts of deferred tax assets or liabilities
are expected to be recovered or settled.
20
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
h.
Exploration and Development Expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised
as an exploration and evaluation asset in the year in which they are incurred where the following
conditions are satisfied:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
(a)
(b)
the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its
sale; or
exploration and evaluation activities in the area of interest have not at the reporting
date reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to
explore, studies, exploratory drilling, trenching and sampling and associated activities and an
allocation of depreciation and amortised of assets used in exploration and evaluation activities.
General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of
interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of an exploration and evaluation asset may exceed its
recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash
generating unit(s) to which it has been allocated being no larger than the relevant area of interest)
is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the
asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of
interest, the relevant exploration and evaluation asset is tested for impairment and the balance is
then reclassified to development.
Costs of site restoration are provided over the life of the project from when exploration commences
and are included in the costs of that stage. Site restoration costs include the dismantling and
removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the
site in accordance with local laws and regulations and clauses of the permits. Such costs have
been determined using estimates of future costs, current legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining
the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration
due to community expectations and future legislation. Accordingly the costs have been determined
on the basis that the restoration will be completed within one year of abandoning the site.
i.
Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into
account any trade discounts and volume rebates allowed. When the inflow of consideration is
deferred, it is treated as the provision of financing and is discounted at a rate of interest that is
generally accepted in the market for similar arrangements. The difference between the amount
initially recognised and the amount ultimately received is interest revenue.
Interest revenue is recognised using the effective interest rate method.
All revenue is stated net of the amount of goods and services tax (GST).
j.
Earnings (Loss) per share
21
23
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted
to exclude any costs of servicing equity (other than dividends) and preference share dividends,
divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
(i)
(ii)
(iii)
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares
that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result
from the dilution of potential ordinary shares; divided by the weighted average number of
ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
k.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the ATO is included with other receivables or
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to, the ATO are presented
as operating cash flows included in receipts from customers or payments to suppliers.
l.
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where
applicable, any accumulated depreciation and impairment losses.
Property
Freehold land and buildings are recorded at their fair value (being the amount for which an asset
could be exchanged between knowledgeable willing parties in an arm’s length transaction), based
on periodic, but at least triennial, valuations by external independent valuers, less accumulated
depreciation for buildings.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a
revaluation surplus in equity. Decreases that offset previous increases of the same asset are
recognised against fair value reserves directly in equity; all other decreases are recognised in profit
or loss. Each year the difference between depreciation based on the revalued carrying amount of
the asset charged to the statement of comprehensive income and depreciation based on the
asset’s original cost is transferred from the revaluation reserve to retained earnings.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying
amount of the asset and the net amount is restated to the revalued amount of the asset.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less
accumulated depreciation and any accumulated impairment. In the event the carrying amount of
plant and equipment is greater than the estimated recoverable amount, the carrying amount is
written down immediately to the estimated recoverable amount and impairment losses are
recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a
revalued asset. A formal assessment of recoverable amount is made when impairment indicators
are present (refer to Note 1(c) for details of impairment).
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
22
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
l.
Property, Plant and Equipment (continued)
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 Company and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial period in
which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but
excluding freehold land, is depreciated on a straight-line basis over the asset’s useful life to the
Company commencing from the time the asset is held ready for use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives
of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Buildings
Leasehold improvements
Plant and equipment
Leased plant and equipment
Depreciation Rate
2.5%
20%-32%
20%-32%
20%-32%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
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.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains and losses are included in the statement of comprehensive income. When revalued
assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to
retained earnings.
Goodwill and intangibles
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the
cost of the business combination over the Company’s interest in the fair value of the acquirer’s
identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Intangibles
Intangible assets acquired separately are capitalised at cost and from a business combination are
capitalised at fair value as at the date of acquisition. Following initial recognition, the cost model is
applied to the class of intangible assets.
The useful lives of these intangible assets are assessed to be either finite or indefinite.
Where amortisation is charged on assets with finite lives, this expense will be taken to the income
statement.
Intangible assets, excluding development costs, created within the business are not capitalised and
expenditure is charged against profits in the period in which the expenditure is incurred.
Intangible assets are tested for impairment where an indicator of impairment exists and, in the case
of indefinite life intangibles annually, either individually or at the cash generating unit level. Useful
lives are also examined on an annual basis and adjustments, where applicable, are made on a
prospective basis.
25
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m.
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of
the asset, but not the legal ownership that is transferred to entities in the company, are classified as
finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts
equal to the fair value of the leased property or the present value of the minimum lease payments,
including any guaranteed residual values. Lease payments are allocated between the reduction of
the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful
lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the
lessor, are recognised as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-
line basis over the lease term.
n.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that the
company commits itself to either the purchase or sale of the asset (ie trade date accounting is
adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified “at fair value through profit or loss”, in which case transaction costs are
expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at fair value, amortised cost using the effective
interest rate method, or cost.
Amortised cost is the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any
cumulative amortisation of the difference between that initial amount and the maturity amount
calculated using the effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including recent arm’s
length transactions, reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the
relevant period and is equivalent to the rate that discounts estimated future cash payments or
receipts (including fees, transaction costs and other premiums or discounts) through the expected
life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the
net carrying amount of the financial asset or financial liability. Revisions to expected future net cash
flows will necessitate an adjustment to the carrying value with a consequential recognition of an
income or expense item in profit or loss.
The Company does not designate any interests in associates or joint venture entities as being
subject to the requirements of Accounting Standards specifically applicable to financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for
trading for the purpose of short-term profit taking, derivatives not held for hedging purposes,
or when they are designated as such to avoid an accounting mismatch or to enable
performance evaluation where a group of financial assets is managed by key management
personnel on a fair value basis in accordance with a documented risk management or
investment strategy. Such assets are subsequently measured at fair value with changes in
carrying value being included in profit or loss.
24
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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 and are subsequently measured at
amortised cost.
Loans and receivables are included in current assets, where they are expected to mature
within 12 months after the end of the reporting period.
(iii)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities
and fixed or determinable payments, and it is the Company’s intention to hold these
investments to maturity. They are subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets where they are expected to
mature within 12 months after the end of the reporting period. All other investments are
classified as current assets.
(iv)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not
suitable to be classified into other categories of financial assets due to their nature, or they
are designated as such by management. They comprise investments in the equity of other
entities where there is neither a fixed maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (ie gains or
losses) recognised in other comprehensive income (except for impairment losses and
foreign exchange gains and losses). When the financial asset is derecognised, the
cumulative gain or
in other
comprehensive income is reclassified into profit or loss.
that asset previously recognised
loss pertaining
to
Available-for-sale financial assets are included in non-current assets where they are
expected to be sold within 12 months after the end of the reporting period. All other financial
assets are classified as current assets.
(v)
Financial liabilities
Non-derivative
measured at amortised cost.
financial
liabilities (excluding
financial guarantees) are subsequently
Impairment
At the end of each reporting period, the Company assesses whether there is objective evidence
that a financial instrument has been impaired. In the case of available-for-sale financial
instruments, a prolonged decline in the value of the instrument is considered to determine whether
an impairment has arisen. Impairment losses are recognised in profit or loss. Also, any cumulative
decline in fair value previously recognised in other comprehensive income is reclassified to profit or
loss at this point.
Financial guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due
are recognised as a financial liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and
the amount initially recognised less, when appropriate, cumulative amortisation in accordance with
AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is
recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability-weighted
discounted cash flow approach. The probability has been based on:
–
–
the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed
party defaulting; and
–
the maximum loss exposed if the guaranteed party were to default.
25
27
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the
asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset. Financial liabilities are
derecognised where the related obligations are discharged, cancelled or expired. The difference
between the carrying value of the financial liability extinguished or transferred to another party and
the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed,
is recognised in profit or loss.
o. Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by
employees to the end of the reporting period. Employee benefits that are expected to be settled within one
(1) year have been measured at the amounts expected to be paid when the liability is settled. Employee
benefits payable later than one (1) year have been measured at the present value of the estimated future
cash outflows to be made for those benefits. In determining the liability, consideration is given to employee
wages increases and the probability that the employee may satisfy vesting requirements. Those cash flows
are discounted using market yields on national government bonds with terms to maturity that match the
expected timing of cash flows.
Equity-settled compensation
The Company provides benefits to employees (including senior executives) of the Company in the form of
share-based payments, whereby employees render services in exchange for shares or rights over shares
(equity-settled transactions).
The cost of these equity-settled transactions with employees is measured by reference to the fair value of
the equity instruments at the date at which they are granted.
The 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 Company’s best estimate of the
number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is included in the determination of fair
value at grant date. The statement of comprehensive income charge or credit for a period represents the
movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an 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.
p. Rounding of Amounts
The Company has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts
in the financial statements and directors’ report have been rounded off to the nearest one dollar ($1).
q. Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable expectation
of future events and are based on current trends and economic data, obtained both externally and within
the Company.
26
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Key estimates
(i)
Impairment
The Company assesses impairment at the end of each reporting period by evaluating conditions and
events specific to the Company that may be indicative of impairment triggers. Recoverable amounts
of relevant assets are reassessed using value-in-use calculations which incorporate various key
assumptions.
Key judgments
(i) Exploration and evaluation expenditure
The Company capitalises expenditure relating to exploration and evaluation where it is considered
likely to be recoverable or where the activities have not reached a stage that permits a reasonable
assessment of the existence of reserves. While there are certain areas of interest from which no
reserves have been extracted, the directors are of the continued belief that such expenditure should
not be written off since feasibility studies in such areas have not yet concluded.
r. Going concern
The financial statements have been prepared on the going concern basis, the validity of which depends
upon the positive cash position. The Company’s existing projections show that no further funds will be
required to be generated, either by capital raisings, sales of assets or other initiatives, to enable the
Company to fund its currently planned activities for at least the next twelve months from the date of signing
these financial statements. Should new opportunities present that require additional funds the Directors
will take action to reprioritise activities, dispose of assets and or raise further funds.
Notwithstanding this issue, accordingly the Directors have prepared the financial statements of the
Company on a going concern basis. In arriving at this position, the Directors have considered the following
pertinent matter:
-
Australian Accounting Standard, AASB 101 “Accounting Policies”, states that an entity shall
prepare financial statements on a going concern basis unless management either intends to
liquidate the entity or to cease trading, or has no realistic alternative but to do so
In the Directors’ opinion, at the date of signing the financial report, there are reasonable grounds to
believe that the matters set out above will be achieved and therefore the financial statements have
been prepared on a going concern basis.
s. Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
t. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Board of Directors of
Commissioners Gold Limited.
u. Change in accounting policy
The Company has adopted AASB 8 Operating Segments from 1 July 2009. AASB 8 replaces AASB114
Segment Reporting. The new standard requires a ‘management approach’, under which segment
information is presented on the same basis as that used for internal reporting purposes. This has not
resulted in a change in the number of reportable segments presented by the Company as operating
segments are reported in a manner that is consistent with internal reporting provided to the chief
operating decision maker.
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cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
v.
New Accounting Standards for Application in Future Periods
The AASB has issued new and amended Accounting Standards and Interpretations that have
mandatory application dates for future reporting periods and which the Company has decided not to
early adopt. A discussion of those future requirements and their impact on the Company is as
follows:
–
AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods
commencing on or after 1 January 2013).
This Standard is applicable retrospectively and includes revised requirements for the
classification and measurement of financial instruments, as well as recognition and
derecognition requirements for financial instruments. The Company has not yet determined
any potential impact on the financial statements.
The key changes made to accounting requirements include:
-
-
-
-
-
-
-
simplifying the classifications of financial assets into those carried at amortised cost
and those carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for
financial assets carried at amortised cost;
allowing 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;
requiring financial assets to be reclassified where there is a change in an entity’s
business model as they are initially classified based on: (a) the objective of the
entity’s business model for managing the financial assets; and (b) the characteristics
of the contractual cash flows; and
requiring an entity that chooses to measure a financial liability at fair value to present
the portion of the change in its fair value due to changes in the entity’s own credit risk
in other comprehensive income, except when that would create an accounting
mismatch. If such a mismatch would be created or enlarged, the entity is required to
present all changes in fair value (including the effects of changes in the credit risk of
the liability) in profit or loss.
–
AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing
on or after 1 January 2011).
This Standard removes the requirement for government-related entities to disclose details of
all transactions with the government and other government-related entities and clarifies the
definition of a “related party” to remove inconsistencies and simplify the structure of the
Standard. No changes are expected to materially affect the Company.
–
AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2:
Amendments to Australian Accounting Standards arising from Reduced Disclosure
Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121,
123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and
Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052] (applicable for annual reporting periods
commencing on or after 1 July 2013).
28
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
AASB 1053 establishes a revised differential financial reporting framework consisting of two
tiers of financial reporting requirements for those entities preparing general purpose financial
statements:
-
-
-Tier 1: Australian Accounting Standards; and
-Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.
Tier 2 of the framework comprises the recognition, measurement and presentation
requirements of Tier 1, but contains significantly fewer disclosure requirements.
The following entities are required to apply Tier 1 reporting requirements (ie full IFRS):
-
-
-for-profit private sector entities that have public accountability; and
-the Australian Government and state, territory and local governments.
Since the Company is a for-profit private sector entity that has public accountability, it does
not qualify for the reduced disclosure requirements for Tier 2 entities.
AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations
to give effect to the reduced disclosure requirements for Tier 2 entities. It achieves this by
specifying the disclosure paragraphs that a Tier 2 entity need not comply with as well as
adding specific “RDR” disclosures.
–
AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110,
112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable
for annual reporting periods commencing on or after 1 January 2011).
This Standard makes a number of editorial amendments to a range of Australian Accounting
Standards and Interpretations, including amendments to reflect changes made to the text of
IFRSs by the IASB. The Standard also amends AASB 8 to require entities to exercise
judgment in assessing whether a government and entities known to be under the control of
that government are considered a single customer for the purposes of certain operating
segment disclosures. The amendments are not expected to impact the Company.
–
AASB 2009–14: Amendments to Australian Interpretation – Prepayments of a Minimum
Funding Requirement [AASB Interpretation 14] (applicable for annual reporting periods
commencing on or after 1 January 2011).
This Standard amends Interpretation 14 to address unintended consequences that can arise
from the previous accounting requirements when an entity prepays future contributions into
a defined benefit pension plan.
This Standard is not expected to impact the Company.
–
AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the
Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation
13] (applicable for annual reporting periods commencing on or after 1 January 2011).
This Standard details numerous non-urgent but necessary changes to Accounting
Standards arising from the IASB’s annual improvements project. Key changes include:
-
-
clarifying the application of AASB 108 prior to an entity’s first Australian-Accounting-
Standards financial statements;
adding an explicit statement to AASB 7 that qualitative disclosures should be made in
the context of the quantitative disclosures to better enable users to evaluate an entity’s
exposure to risks arising from financial instruments;
31
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
v.
New Accounting Standards for Application in Future Periods (continued)
-
-
-
amending AASB 101 to the effect that disaggregation of changes in each component of
equity arising from transactions recognised in other comprehensive income is required
to be presented, but is permitted to be presented in the statement of changes in equity
or in the notes;
adding a number of examples to the list of events or transactions that require
disclosure under AASB 134; and
making sundry editorial amendments to various Standards and Interpretations.
This Standard is not expected to impact the Company.
–
AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107,
112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112,
115, 127, 132 & 1042] (applicable for annual reporting periods beginning on or after
1 January 2011).
This Standard makes numerous editorial amendments to a range of Australian Accounting
Standards and Interpretations, including amendments to reflect changes made to the text of
IFRSs by the IASB. However, these editorial amendments have no major impact on the
requirements of the respective amended pronouncements.
–
AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers
of Financial Assets [AASB 1 & AASB 7] (applicable for annual reporting periods beginning
on or after 1 July 2011).
This Standard adds and amends disclosure requirements about transfers of financial assets,
especially those in respect of the nature of the financial assets involved and the risks
associated with them. Accordingly, this Standard makes amendments to AASB 1: First-time
Adoption of Australian Accounting Standards, and AASB 7: Financial Instruments:
Disclosures, establishing additional disclosure requirements in relation to transfers of
financial assets.
This Standard is not expected to impact the Company.
–
AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9
(December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131,
132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (applies to
periods beginning on or after 1 January 2013).
This Standard makes amendments to a range of Australian Accounting Standards and
Interpretations as a consequence of the issuance of AASB 9: Financial Instruments in
December 2010. Accordingly, these amendments will only apply when the entity adopts
AASB 9.
As noted above, the Company has not yet determined any potential impact on the financial
statements from adopting AASB 9.
–
AASB 2010–8: Amendments to Australian Accounting Standards – Deferred Tax: Recovery
of Underlying Assets [AASB 112] (applies to periods beginning on or after 1 January 2012).
This Standard makes amendments to AASB 112: Income Taxes.
The amendments brought in by this Standard introduce a more practical approach for
measuring deferred tax liabilities and deferred tax assets when investment property is
measured using the fair value model under AASB 140: Investment Property.
30
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
v.
New Accounting Standards for Application in Future Periods (continued)
Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax
assets depends on whether an entity expects to recover an asset by using it or by selling it.
The amendments introduce a presumption that an investment property is recovered entirely
through sale. This presumption is rebutted if the investment property is held within a
business model whose objective is to consume substantially all of the economic benefits
embodied in the investment property over time, rather than through sale.
The amendments brought in by this Standard also incorporate Interpretation 121 into
AASB 112.
The amendments are not expected to impact the Company.
–
AASB 2010–9: Amendments to Australian Accounting Standards – Severe Hyperinflation
and Removal of Fixed Dates for First-time Adopters [AASB 1] (applies to periods beginning
on or after 1 July 2011).
This Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting
Standards.
The amendments brought in by this Standard provide relief for first-time adopters of
Australian Accounting Standards from having to reconstruct transactions that occurred
before their date of transition to Australian Accounting Standards.
Furthermore, the amendments brought in by this Standard also provide guidance for entities
emerging from severe hyperinflation either to resume presenting Australian-Accounting-
Standards financial statements or to present Australian-Accounting-Standards financial
statements for the first time.
This Standard is not expected to impact the Company.
–
AASB 2010–10: Further Amendments to Australian Accounting Standards – Removal of
Fixed Dates for First-time Adopters [AASB 2009–11 & AASB 2010–7] (applies to periods
beginning on or after 1 January 2013).
This Standard makes amendments to AASB 2009–11: Amendments to Australian
Accounting Standards arising from AASB 9, and AASB 2010–7: Amendments to Australian
Accounting Standards arising from AASB 9 (December 2010).
The amendments brought in by this Standard ultimately affect AASB 1: First-time Adoption
of Australian Accounting Standards and provide relief for first-time adopters from having to
reconstruct transactions that occurred before their transition date.
[The amendments to AASB 2009–11 will only affect early adopters of AASB 2009–11 (and
AASB 9: Financial Instruments that was issued in December 2009) as it has been
superseded by AASB 2010–7.]
This Standard is not expected to impact the Company.
33
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 2: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
During the year the Company operated principally in one business segment being mineral exploration and
in one geographical segment being Australia.
NOTE 3: REVENUE AND OTHER INCOME
a. Revenue from continuing operations
Note
2011
$
2010
$
Other income
–
–
Interest received1
other revenue2
Total other income
1. Interest received from:
–
Bank
2. Other revenue
– Debt forgiveness income
12,114
-
6,225
6,359
12,114
12,584
12,114
6,225
-
6,359
Loans of $6,359 owing to Mr Chris Battye and Mortgage
Shop Pty Ltd at 30 June 2010 were waived by Mr Battye
and Mortgage Shop Pty Ltd and written back as forgiven.
NOTE 4: EXPENSES
Loss before income tax from continuing operations includes the
following specific expenses:
a.
Expenses
Administration costs
Depreciation and amortisation expense
Exploration costs expensed
Finance costs
Marketing expense
Total expenses
Note
2011
$
2010
$
157,620
19,086
-
790
116,874
109,182
400
-
35,395
9,504
310,289
138,562
32
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 5: INCOME TAX EXPENSE
Note
2011
$
2010
$
The prima facie tax on loss t from ordinary activities before
income tax is reconciled to income tax as follows:
Loss before income tax expense
(298,175)
(125,978)
Prima facie tax benefit on loss from ordinary activities
before income tax at 30% (2010: 30%)
(89,453)
(37,793)
Add:
Tax effect of:
–
Other non-allowable items
Less:
Tax effect of:
–
Other deductible expenses
Future tax benefits not brought to account
Income tax attributable to the Company
50,029
(39,424)
34,822
(2,971)
(17,886)
(14,384)
57,310
17,355
-
-
The Company has tax losses arising in Australia of $418,590 (2010: $141,375 that are available
indefinitely to offset against future taxable profits.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank
Short-term bank deposits
Note
2011
$
2010
$
15,642
274,847
1,328,202
-
40
1,343,844
274,847
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of
cash flows is reconciled to items in the statement of financial
position as follows:
Cash and cash equivalents
1,343,844
274,847
1,343,844
274,847
Short term bank deposits represent share application monies received from the investors pursuant to the
Initial Public Offering (“IPO”) Prospectus lodged with the ASX on 13 April 2011.
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are
made for varying periods of between one day and three months, depending on the immediate cash
requirements of the Company, and earn interest at the respective short-term deposit rates. The Company
did not engage in any non-cash financing activities for the period ending 30 June 2011 was not party to
any borrowing facilities for the same period. All cash was available for use, and no restrictions were placed on
the use of it at any time during the period.
35
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 7: TRADE AND OTHER RECEIVABLES
Other receivables
Total current trade and other receivables
NOTE 8: OTHER ASSETS
CURRENT
Performance bonds
Prepaid Initial Public Offering Costs
NON-CURRENT
Performance bonds
Note
2011
$
2010
$
68,621
68,621
14,318
14,318
2011
$
2010
$
-
60,000
430,912
-
430,912
60,000
70,000
70,000
-
-
During the year, transaction costs incurred arising from the IPO prospectus lodged with the ASX on 13 April
were classified as a prepaid current asset.
Performance bonds for tenements of Mongarlowe, Dalton, Muttama, Oberon - Black Bullock, Ophir and
Duckmaloi. The performance bond classified as a current asset in the 2010 financial statements was re-
classified as a non current asset in the 2011 financial statements. These deposits are restricted so that
they are available for any rehabilitation that may be required on exploration tenements.
NOTE 9: INTANGIBLE ASSETS
Exploration licenses:
Cost
Net carrying value
Total intangibles
Year ended 30 June 2010
Balance at the beginning of the year
Additions
Disposals
Amortisation charge
Impairment losses
2011
$
2010
$
120,000
120,000
120,000
120,000
120,000
120,000
Exploration
Licences
Total
$
$
120,000
120,000
-
-
-
-
-
-
-
-
120,000
120,000
34
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 9: INTANGIBLE ASSETS (Continued)
Year ended 30 June 2011
Balance at the beginning of the year
Additions
Disposals
Amortisation charge
Impairment losses
2011
$
2010
$
120,000
120,000
-
-
-
-
-
-
-
-
Closing value at 30 June 2011
120,000
120,000
Exploration licence expenditure requirements
In order to maintain the Company’s tenements in good standing with the various mines departments, the
Company will be required to incur exploration expenditure under the terms of each licence. It is likely that
the granting of new licences and changes in licence areas at renewal or expiry will change the
expenditure commitment to the Company from time to time.
NOTE 10: PROPERTY, PLANT AND EQUIPMENT
PLANT AND EQUIPMENT
Information technology
At cost
Accumulated depreciation
Total Information technology
Total property, plant and equipment
a.
Movements in Carrying Amounts
2011
$
2010
$
-
-
-
-
-
-
-
-
Movements in the carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year:
Balance at 1 July 2009
Additions
Disposals
Depreciation expense
Balance at 30 June 2010
Additions
Disposals
Depreciation expense
Balance at 30 June 2011
Information
Technology
Total
$
$
790
790
-
-
-
-
(790)
(790)
-
-
-
-
-
-
-
-
-
-
37
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 11: TRADE AND OTHER PAYABLES
CURRENT
Unsecured liabilities:
Trade payables and accrued expenses
Amounts payable to Director and related entities
NOTE 12: BORROWINGS
CURRENT
Unsecured liabilities:
Note
2011
$
2010
$
142,638
30,077
172,715
Note
2011
$
2010
$
-
-
-
-
-
Amounts payable to Director and related entities
Total current borrowings
10,967
10,967
NOTE 13: OTHER LIABILITIES
CURRENT
Other liabilities:
Total other liabilities
Note
2011
$
2010
$
1,327,880
1,327,880
10,000
10,000
Other liabilities refer to share application monies received during the year from the investors pursuant to
the Initial Public Offering Prospectus lodged with the ASIC dated 23 March 2011.
36
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 14: CONTRIBUTED EQUITY
20,980,000 (2010: 16,080,000) fully paid ordinary shares
Share issue costs
Total issued capital
a.
Ordinary Shares
2011
$
2010
$
1,433,550
1,122,750
(14,100)
(14,100)
1,419,450
1,108,650
2011
Number
2010
Number
At the beginning of the reporting period:
16,080,000
5,625,000
Shares issued during the year
–
–
–
–
–
–
375,000 ordinary shares issued at 5 cents each
2,000,000 ordinary shares issued at 10 cents each
8,080,000 ordinary shares issued at 5 cents each
800,000 ordinary shares issued at 0.001 cents each
4,000,000 ordinary shares issued at 7.5 cents each
100,000 ordinary shares issued at 10 cents each
375,000
2,000,000
8,080,000
800,000
4,000,000
100,000
At the end of the reporting period
20,980,000 16,080,000
During the year 800,000 fully paid shares were issued at 0.001 cents each to directors
Mr R McCauley and Mr W Harder and the secretary, Mr K Taylor as payment for services
rendered as Directors during the year, including preparation for listing on the Australian Securities
Exchange. There were 4,000,000 fully paid shares issued at 7.5 cents and 100,000 fully paid
shares issued at 10 cents, each issued to sophisticated and professional investors.
Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in
proportion to the number of shares held.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called,
otherwise each shareholder has one vote on a show of hands.
b.
Options
During the year, the Company granted 1,500,000 Options to its Managing Director on the
following terms and conditions:
i.
ii.
iii.
750,000 of the Options held by the option holder are exercisable on or before 31
December 2013 at the exercise price of $0.25 per Option. Options not exercised before
this date will lapse.
750,000 of the Options held by the option holder are exercisable on or before 31
December 2015 at the exercise price of $0.30 per Option. Options not exercised before
this date will lapse.
Some or all of the Options may be exercised at any one time or times prior to the expiry
date provided that no less than 10,000 Options are exercised at any one time.
iv.
The Company will not apply for official quotation on ASX of the Options.
As at 30 June 2011 there were 1,500,000 unissued ordinary shares under option (2010: Nil).
39
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 14: CONTRIBUTED EQUITY (Continued)
c.
Capital Management
Management controls the capital of the Company in order to maintain a good debt to equity ratio,
provide the shareholders with adequate returns and ensure that the Company can fund its
operations and continue as a going concern.
The Company’s debt and capital includes ordinary share capital and financial liabilities, supported
by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Company’s capital by assessing the Company’s financial
risks and adjusting its capital structure in response to changes in these risks and in the market.
These responses include the management of debt levels, budgeting and share issues.
There have been no changes in the strategy adopted by management to control the capital of the
Company since the prior year.
NOTE 15: RESERVES
Reserves
Share Based Payments Reserve
Movement in Reserves
Balance at beginning of year
Recognition of options issued at fair value
Balance at end of year
Nature and purpose of reserves
Note
2011
$
2010
$
50,025
50,025
-
50,025
50,025
-
-
-
-
-
The share based payments reserve records the value of options issued by the Company – Note 27.
NOTE 16: ACCUMULATED LOSSES
Balance at beginning of the financial year
Net loss attributable to members of the Company
Balance at end of financial year
Note
2011
$
2010
$
(649,485)
(523,507)
(298,175)
(125,978)
(947,660)
(649,485)
NOTE 17: TAX
Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for
deductibility set out in Note 1(g) occur.
38
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 18: RELATED PARTY TRANSACTIONS
Related Parties
a.
The Company’s main related parties are as follows:
i.
Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity, are considered key management personnel.
The directors in office during the year were as follows:
Christopher Battye
Robert J. McCauley
Allan Shepherd
Wesley Harder
Robert J. Waring
Appointed 19 August 2005
Appointed 10 February 2011
Resigned 29 November 2010
Appointed 17 February 2010
Appointed 29 November 2010
For details of disclosures relating to key management personnel, refer to Note 19: Interests
of Key Management Personnel (KMP).
ii.
Entities subject to significant influence by the Company:
An entity which has the power to participate in the financial and operating policy decisions of
an entity, but does not have control over those policies, is an entity which holds significant
influence. Significant influence may be gained by share ownership, statute or agreement.
iii.
Other related parties:
Other related parties include entities controlled by the company and entities over which key
management personnel exercise significant influence.
b.
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
2011
$
2010
$
i.
Other related parties:
Purchase of goods and services:
Corporate advisory fees paid to Spencer Hamilton Pty
Ltd, a company associated with Mr Robert Waring a
director of the company.
Provision of office space at no rental charge and
administrative assistance at cost to the Company by The
Conveyancing Shop, a company associated with Mr
Chris Battye, a director of the company.
c.
Amounts payable to related parties:
Trade and other payables:
Amounts payable to Director and related entities, as follows:
Directors fees
Reimbursement of expenses
Corporate advisory services
Total trade and other payable related party amounts
Borrowings:
Unsecured, at-call loans are provided by directors on an arm’s
39
39,192
427
2,000
27,650
16,417
46,067
-
-
-
-
-
-
41
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 18: RELATED PARTY TRANSACTIONS
length basis. Interest is charged at 0% (2010: 0%) is repayable
monthly within the next twelve (12) months.
i.
Loans from key management personnel related entities:
Beginning of the year
Loans advanced
Loan forgiven
Interest charged
End of the year
-
10,967
-
-
10,967
-
6,359-
(6,359)
-
-
NOTE 19: INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or
payable to each member of the Company’s key management personnel for the year ended 30 June 2011.
The totals of remuneration paid to KMP of the company during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
KMP Options and Rights Holdings
2011
$000
24,924
-
-
50,825
75,749
2010
$000
-
-
-
-
-
The number of options over ordinary shares held by each KMP of the Company during the financial year is as follows:
30 June 2011
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Keith Taylor
Total
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at end
of period
-
-
-
-
-
-
-
1,500,000
-
-
-
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
-
-
-
1,500,000
40
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
Vested
Net change
Other
Balance at end
of period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2010
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Keith Taylor
KMP Shareholdings
The number of ordinary shares in the Company held by each KMP of the company during the financial year is as follows:
30 June 2011
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Keith Taylor
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
Other changes
during the Year
Balance at end
of the Year
8,000,000
-
-
-
-
-
400,000
200,000
-
200,000
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
400,000
200,000
-
200,000
8,800,000
Total
8,000,000
800,000
30 June 2010
Chris Battye
Robert McCauley
Wesley Harder
Robert Waring
Keith Taylor
Total
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
Other changes
during the Year
Balance at end
of the Year
8,000,000
-
-
-
-
8,000,000
-
-
-
-
-
-
41
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
-
-
-
-
8,000,000
43
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 19: INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP) (Continued)
Other KMP Transactions
The Company has established the Commissioners Gold Limited Employee Share Option Plan (ESOP) and a summary of
the terms and conditions of the Plan are set out below:
i.
ii.
iii.
All employees (full time and part time) will be eligible to participate in the Plan.
Options are granted under the Plan at the discretion of the board and if permitted by the board, may be
issued to an employee's nominee.
Each option is to subscribe for one fully paid ordinary share in the Company and will expire five years from
its date of issue. An option is exercisable at any time from its date of issue provided all relevant vesting
conditions, if applicable, have been met. Options will be issued free. The exercise price of options will be
determined by the board. The total number of shares the subject of options issued under the Plan, when
aggregated with issues during the previous 5 years pursuant to the Plan and any other employee share plan,
must not exceed 5% of the Company's issued share capital.
iv.
If, prior to the expiry date of options, a person ceases to be an employee of the Company for any
reason other than retirement at age 60 or more (or such earlier age as the board permits),
permanent disability, redundancy or death, the options held by that person (or that person's
nominee) automatically lapse on the first to occur of a) the expiry of the period of 30 days from the
date of such occurrence, and b) the expiry date. If a person dies, the options held by that person will
be exercisable by that person's legal personal representative.
Options cannot be transferred other than to the legal personal representative of a deceased option
holder.
The Company will not apply for official quotation of any options.
Shares issued as a result of the exercise of options will rank equally with the Company's previously
issued shares.
v.
vi.
vii.
viii. Option holders may only participate in new issues of securities by first exercising their options.
ix.
x.
Options are granted under the plan for no consideration.
Each share options converts into one ordinary shares of Commissioners Gold Limited.
The Board may amend the terms and conditions of the plan subject to the requirements of the Listing Rules.
There have been no other transactions involving equity instruments other than those described in the tables above. For
details of other transactions with KMP, refer to Note 18: Related Party Transactions.
NOTE 20: LOSS PER SHARE
a.
I
ii.
iii.
b.
Basic Loss per share
Basic Loss (cents per share)
Net loss used to calculate basic loss per share
Loss used to calculate basic EPS from continuing operations
2011
$
2010
$
(1.62)
(0.78)
(298,175)
(125,978)
No.
No.
Weighted average number of ordinary shares outstanding during the
year used in calculating basic loss per share
18,433,425 16,080,000
Diluted loss per share
The Company’s potential ordinary shares, being its options granted,
are not considered dilutive as the conversion of these options would
result in a decrease in the net loss per share.
42
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
44
NOTE 20: LOSS PER SHARE
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 21: FINANCIAL RISK MANAGEMENT
The Company’s financial instruments consist mainly of deposits with banks, local money market
instruments, short-term investments, accounts receivable and payable, loans to and from related parties,
bills and leases. The following table details the expected maturities for the Company’s non-derivative
financial assets. These have been drawn up based on undiscounted contractual maturities of the financial
assets including interest that will be earned on those assets except where the Company anticipates that
the cash flow will occur in a different period.
Financial Risk Management Policies
The Board has overall responsibility for the establishment and oversight of the risk management
framework. The Board reviews and agrees policies for managing each of these risks as summarised
below. The Finance Risk and Audit Committee (FRAC) has been delegated responsibility by the Board of
Directors for, among other issues, monitoring and managing financial risk exposures of the Company. The
FRAC monitors the Company’s financial risk management policies and exposures and approves financial
transactions within the scope of its authority. It also reviews the effectiveness of internal controls relating to
commodity price risk, counterparty credit risk, currency risk, financing risk and interest rate risk.
The FRAC’s overall risk management strategy seeks to assist the company in meeting its financial targets,
while minimising potential adverse effects on financial performance. Its functions include the review of the
use of hedging derivative instruments, credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Company is exposed to through its financial instruments are credit risk, liquidity risk and
market risk consisting of interest rate risk, foreign currency risk and commodity and equity price risk. This
note presents the information about the Company’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital.
a.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the Company.
Credit risk is managed through the maintenance of procedures (such procedures include the
utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of
exposures against such limits and monitoring of the financial stability of significant customers and
counterparties), ensuring to the extent possible, that customers and counterparties to transactions
are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment.
Depending on the division within the Company, credit terms are generally 14 to 30 days from the
invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high
credit rating, or in entities that the FRMC has otherwise cleared as being financially sound. Where
the Company is unable to ascertain a satisfactory credit risk profile in relation to a customer or
counterparty, the risk may be further managed through title retention clauses over goods or
obtaining security by way of personal or commercial guarantees over assets of sufficient value
which can be claimed against in the event of any default.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the
reporting period excluding the value of any collateral or other security held is equivalent to the
carrying value and classification of those financial assets (net of any provisions) as presented in the
statement of financial position.
All debts are within credit limits (no past dues). Details with respect to credit risk of trade and other
receivables are provided in Note 11.
Trade and other receivables that are neither past due nor impaired are considered to be of high
credit quality. Aggregates of such amounts are as detailed in Note 7.
45
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 21: FINANCIAL RISK MANAGEMENT (Continued)
b.
Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities. The Company manages this
risk through the following mechanisms:
–
preparing forward-looking cash flow analysis in relation to its operational, investing and
financing activities;
obtaining funding from a variety of sources;
–
– maintaining a reputable credit profile;
– managing credit risk related to financial assets;
–
–
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
Cash flows realised from financial assets reflect management’s expectation as to the timing of
realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflects the earliest contractual settlement dates
and does not reflect management’s expectations that banking facilities will be rolled forward.
c.
Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates
and equity prices will affect the Company’s income or value of the holdings of financial instruments.
The Company is exposed to movements in market interest rates on short term deposit. The policy is
to monitor the interest rate yield curve out to 120 days to ensure a balance is maintained between
the liquidity of cash assets and the interest rate return. The Company does not have short or long
term debt, and therefore this risk is minimal. The Company limits its exposure to credit risk by only
investing in liquid securities and only with counterparties that have acceptable credit ratings.
d.
Interest rate risk
The Company is exposed to interest rate risk as the Company deposits the bulk of its cash reserves
in Term Deposits with the bank. The risk is managed by the Company by maintaining an
appropriate mix between short term and medium-term Deposits. The Company’s exposures to
interest rate on financial assets and financial liabilities are detailed in the liquidity risk management
section of this note.
Interest rate sensitivity
At 30 June 2011, the effect on loss and equity as a result of changes in the interest rate, with all
other variable remaining constant would be as follows:
Note
2011
$
2010
$
Change in Loss
Increase in interest rate by 1%
Decrease in interest rate by 1%
Change in Equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
5,214
(5,214)
5,214
(5,214)
68,711
(68,711)
68,711
(68,711)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 21: FINANCIAL RISK MANAGEMENT (Continued)
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed
in the accounting policies to these financial statements, are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Financial liabilities at amortised cost:
–
trade and other payables
– borrowings
– other financial liabilities
Total financial liabilities
Note
2011
$
2010
$
6
7
8
11
12
13
1,343,844
274,847
68,621
70,000
14,318
60,000
1,482,465
349,165
172,715
10,967
1,327,880
1,511,562
-
-
10,000
10,000
The following table details the expected maturities for the Company’s non-derivative financial assets.
These have been drawn up based on undiscounted contractual maturities of the financial assets including
interest that will be earned on those assets except where the Company anticipates that the cash flow will
occur in a different period.
Weighted
average
effective
interest
rate
%
Less
than 1
month
$
-
15,642
4.5
1,328,202
-
-
-
-
-
-
-
68,621
1,412,465
274,847
-
-
-
247,847
1 – 3
Months
$
3 months
– 1 year
$
1 – 5
years
$
5+ years
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70,000
-
-
-
70,000
60,000
-
-
-
60,000
-
-
-
-
-
-
-
-
-
-
2011
Non-interest bearing
Variable interest rate
instruments
Fixed interest rate
instruments
Receivables
2010
Non-interest bearing
Variable interest rate
instruments
Fixed interest rate
instruments
Receivables
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 21: FINANCIAL RISK MANAGEMENT (Continued)
The following tables detail the Company’s remaining contractual maturities’ for its non-derivative financial
liabilities. These are based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Company can be required to pay. The table includes both interest and principal cash
flows.
Weighted
average
effective
interest
rate
%
-
-
-
-
-
Less
than 1
month
$
-
172,725
-
-
172,725
-
-
2011
Non-interest bearing:
- Trade and other payables
- Borrowings
- Other liabilities
2010
Non-interest bearing
NOTE 22: AUDITORS’ REMUNERATION
1 – 3
Months
$
3 months
– 1 year
$
1 – 5
years
$
5+ years
$
-
-
-
-
-
10,967
- 1,327,880
- 1,338,847
-
-
10,000
10,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2011
$
2010
$
Remuneration of the auditor of the Company for:
–
auditing or reviewing the financial report
8,500
2,350
NOTE 23: COMMITMENTS AND CONTINGENCIES
Remuneration Commitments
The Company and Mr Robert McCauley are parties to an Executive Employment Agreement dated 10
February 2011 by which the Company will employ Mr McCauley as an executive director from the day
that the Company’s shares are listed on ASX. Mr McCauley will work for the Company an average
minimum of three days each week. The Company will pay Mr McCauley a remuneration package of
$135,000 per annum, plus superannuation. The Company will review Mr McCauley’s performance annually
and may in its absolute discretion award Mr McCauley a bonus of up to 100% of the amount of his
remuneration package.
The Company has also agreed, if approval is obtained for listing, to grant to Spencer Hamilton Pty Ltd (a
company associated with Mr Robert Waring) a success fee of either 250,000 Shares at an issue price of
$0.001 or 600,000 Options each with an exercise price of $0.25 and expiring on 30 June 2015. Spencer
Hamilton Pty Ltd has elected to receive its success fee by way of Shares (and not by way of Options).
Guarantees
Commissioners Gold Limited did not commit to nor make guarantees of any form as at 30 June 2011.
Contingent liabilities
There are no contingent liabilities as at 30 June 2011 apart from on-going geological services.
Exploration licence expenditure requirements
In order to maintain the Company’s tenements in good standing with the various mines departments, the
Company will be required to incur exploration expenditure under the terms of each licence. It is likely that
the granting of new licences and changes in licence areas at renewal or expiry will change the
expenditure commitment to the Company from time to time. The expenditure requirement for the
upcoming year is $340,000.
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
cOmmissiONERs gOLD LimiTED ANNuAL rEPOrT
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 21: FINANCIAL RISK MANAGEMENT (Continued)
NOTE 24: DIVIDENDS AND FRANKING CREDITS
The following tables detail the Company’s remaining contractual maturities’ for its non-derivative financial
The Directors of the Company have not declared any dividends for the year ended 30 June 2011. There
liabilities. These are based on the undiscounted cash flows of financial liabilities based on the earliest
were no franking credits available to the shareholders of the Company.
date on which the Company can be required to pay. The table includes both interest and principal cash
flows.
NOTE 25: EVENTS SUBSEQUENT TO REPORTING DATE
On 5 August 2011 the Company closed its Initial Public Offer having received applications for 12,713,550
ordinary shares at 20 cents each providing $2,542,710 in share capital. On the same day 956,142
ordinary shares were issued to satisfy certain IPO and other performance obligations. On 2 September
5+ years
2011 the Company was admitted to the Official List of the Australian Stock Exchange.
$
Weighted
average
effective
interest
rate
%
3 months
– 1 year
$
Less
than 1
month
$
1 – 3
Months
$
1 – 5
years
$
2011
There has not been any other matter or circumstance that has arisen after balance date that has
Non-interest bearing:
-
-
significantly affected, or may significantly affect, the operations of the Company, the results of those
-
172,725
- Trade and other payables
operations, or the state of affairs of the Company in future financial periods.
-
-
- Borrowings
-
-
- Other liabilities
-
-
-
-
10,967
-
- 1,327,880
-
-
-
-
-
-
-
172,725
NOTE 26: CASH FLOW INFORMATION
2010
Non-interest bearing
-
-
Reconciliation of Cash Flow from Operations with Profit after
Income Tax
NOTE 22: AUDITORS’ REMUNERATION
Profit after income tax
-
-
-
-
Cash flows excluded from profit attributable to operating activities:
Remuneration of the auditor of the Company for:
Non-cash flows in profit:
–
–
–
auditing or reviewing the financial report
Depreciation
Capitalised expenditure
- 1,338,847
2011
$
10,000
10,000
-
-
-
2010
$
-
-
-
(298,175)
2011
$
(125,978)
2010
$
8,500
-
2,350
790
(66,817)
-
-
50,025
(6,359)
(54,302)
Options expense
(increase)/decrease in trade and term receivables
increase/(decrease) in trade payables and accruals
–
NOTE 23: COMMITMENTS AND CONTINGENCIES
–
debt forgiveness income
Remuneration Commitments
Changes in assets and liabilities
The Company and Mr Robert McCauley are parties to an Executive Employment Agreement dated 10
–
(9,192)
February 2011 by which the Company will employ Mr McCauley as an executive director from the day
that the Company’s shares are listed on ASX. Mr McCauley will work for the Company an average
–
-
minimum of three days each week. The Company will pay Mr McCauley a remuneration package of
Cash flow from operations
(140,739)
$135,000 per annum, plus superannuation. The Company will review Mr McCauley’s performance annually
and may in its absolute discretion award Mr McCauley a bonus of up to 100% of the amount of his
remuneration package.
NOTE 27: SHARE BASED PAYMENTS
The Company has also agreed, if approval is obtained for listing, to grant to Spencer Hamilton Pty Ltd (a
company associated with Mr Robert Waring) a success fee of either 250,000 Shares at an issue price of
In March 2011 the Managing Director was issued with 1,500,000 options with an exercise prices of $0.25
$0.001 or 600,000 Options each with an exercise price of $0.25 and expiring on 30 June 2015. Spencer
and $0.30, and expiry dates of 31 December 2013 and 31 December 2015 respectively (each tranche is
Hamilton Pty Ltd has elected to receive its success fee by way of Shares (and not by way of Options).
750,000 options and the options were vested on issue). The cost of these equity-settled transactions is
measured by reference to the fair value at the date at which they are granted determined by using the
Guarantees
Binomial option valuation methodology model and the following assumptions: expected volatility of
Commissioners Gold Limited did not commit to nor make guarantees of any form as at 30 June 2011.
between 95.48% and 99.35%, risk-free interest rate of between 5.065% and 5.25%, dividend yield nil and
Contingent liabilities
an expected life as detailed above. The estimated fair value of each option at the date of grant was $0.028
and $0.039 per option respectively (total value of 1,500,000 options $50,025).
There are no contingent liabilities as at 30 June 2011 apart from on-going geological services.
(196,554)
172,715
Exploration licence expenditure requirements
In order to maintain the Company’s tenements in good standing with the various mines departments, the
Company will be required to incur exploration expenditure under the terms of each licence. It is likely that
the granting of new licences and changes in licence areas at renewal or expiry will change the
expenditure commitment to the Company from time to time. The expenditure requirement for the
upcoming year is $340,000.
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
49
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47
DIRECTORS’ DECLARATION
In the opinion of the Directors of Commissioners Gold Limited (the Company):
1.
The financial statements and notes thereto, as set out on pages 16 to 49, are in accordance with the Corporations
Act 2001 including:
a.
giving a true and fair view of the Company’s financial position as at 30 June 2011 and of its performance
for the year then ended; and
b.
complying with Accounting Standards and Corporations Regulations 2001; and
2.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
3.
The financial statements also comply with International Financial Reporting Statements as disclosed in Note 1.
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 2011.
This declaration is signed in accordance with a resolution of the Board of Directors.
Chris Battye
Executive Director
30 September 2011
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ADDITIONAL SHAREHOLDER INFORMATION
A.
Corporate Governance
A statement disclosing the extent to which the Company has followed the best practice recommendations set by
the ASX Corporate Governance Council during the period is contained within the Director’s Report.
B.
1.
Shareholding
Substantial Shareholders
Shareholders
1 CHRIS BATTYE
2 HARDIE OCEANIC PTY LTD
3 HARDIE OCEANIC PTY LIMITED
Substantial Holding % of Issued Capital
8,000,000
4,000,000
2,850,000
23.088
11.544
8.225
2.
Number of holders in each class of equity securities and the voting rights attached (as at 18
August 2011)
Ordinary Shares
In accordance with the Company’s Constitution, on a show of hands every number present in person or by
proxy or attorney or duly authorised representative has one vote. On a poll every member present in person or
by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held.
Options
There were two holders of options at 18 August 2011.
3.
Distribution schedule of the number of holders in each class of equity security as at close of business
on 18 August 2011.
Fully Paid Ordinary Shares
SPREAD OF HOLDINGS
HOLDERS
UNITS % OF ISSUED CAPITAL
NIL HOLDING
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
TOTAL ON REGISTER
-
-
-
311
114
41
466
-
-
-
3,110,000
3,944,300
27,595,392
34,649,692
-
-
-
8.98
11.38
79.64
100.00
4.
Marketable Parcel
There were nil non-marketable parcels at 18 August 2011.
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ADDITIONAL SHAREHOLDER INFORMATION (continued)
5.
Twenty largest holders of each class of quoted equity security
The names of the twenty largest holders of each class of quoted security, the number of equity security each
holds and the percentage of capital each holds (as at 18 August 2011) is as follows:
Ordinary Shares Top 20 holders and percentage held
Shareholders
1 CHRIS BATTYE
2 HARDIE OCEANIC PTY LTD
3 HARDIE OCEANIC PTY LIMITED
4 XIAODAN LIN
5
6 MCCAULEY SUPER PTY LTD
7 LEI SHI
8 MR DAVID MICHAEL HARATSIS
9 MR DAMIEN HANNES
JINTING XU
10 CUEFUCHS PTY LTD
11 FROMARNO PTY LTD
12 XUE YING HOU
13 ZHAOHUI XU
14 SHIYONG GU
15 LUCY CONG SUPER FUND
16 ELIZABETH ANN STEPHEN
17 HYSETEE PTY LTD
18
19 NOVUS CAPITAL LTD
20 SPENCER HAMILTON LIMITED
JIAO COMPANY PTY LTD
Substantial
Holding
% of Issued
Capital
8,000,000
4,000,000
2,850,000
1,250,000
1,000,000
650,000
600,000
500,000
500,000
400,000
400,000
400,000
400,000
400,000
400,000
400,000
300,000
299,250
278,378
260,000
23.088
11.544
8.225
3.608
2.886
1.876
1.732
1.443
1.443
1.154
1.154
1.154
1.154
1.154
1.154
1.154
0.866
0.864
0.803
0.750
TOP 20 TOTAL
23,287,628
67.21
6.
Company Secretary
The name of the Company Secretary is Keith Taylor.
Address and telephone details of the Company’s registered administrative office and principle
place of business:
18/47 Neridah Street, Chatswood NSW 2067
Telephone: (02) 9410 3445; Fax: (02) 9410 0458
Address and telephone details of the office at which a registry of securities is kept:
Boardroom Pty Limited
Level 7, 207 Kent Street
SYDNEY NSW 2000,
GPO Box 3993, SYDNEY NSW 2001
Telephone: 1300 737 760
Facsimile: 1300 653 459
Stock exchange on which the Company’s securities are quoted:
The Company’s listed equity securities are quoted on the ASX Limited’s Australian Securities Exchange – code CGU.
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ADDITIONAL SHAREHOLDER INFORMATION (continued)
Restricted Securities
FULLY PAID ORDINARY SHARES
Number
2,500,000
6,312,392
OPTIONS
Number
750,000
750,000
Restriction Date
Restricted for 12 months from date of issue – restricted until
22 December 2011.
Restricted for 24 months from the date of quotation –
restricted until 2 September 2013.
Strike
$0.25
$0.30
Expiry
31 December 2013
31 December 2015
Restricted until
2 September 2013
2 September 2013
Review of Operations
A review of operations is contained in the Directors’ Report.
Consistency with business objectives - ASX Listing Rule 4.10.19
In accordance with Listing Rule 4.10.19, the Company states that it has used the cash and assets in a form readily
convertible to cash that it had at the time of admission in a way consistent with its business objectives. The business
objective is primarily exploration for natural resources and acquisition of resource based projects. The Company believes
it has used its cash in a consistent manner to which was disclosed under the prospectus dated 23 March 2011.
Schedule of Tenements
The Company’s Schedule of Tenements is on page 11 of the Annual Report.
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