GEOPACIFIC RESOURCES NL
ACN 003 208 393
and controlled entities
ASX code: GPR
Financial Statements
for the year ended 31 December 2011
CONTENTS
Corporate Directory
Directors Report
Remuneration Report
Lead Auditor’s Independence Declaration Under Section 307C of the
Corporations Act 2001
Independent Auditors' Report
Directors' Declaration
Financial Report
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Page
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GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE DIRECTORY
GEOPACIFIC RESOURCES NL
(a public, listed Company incorporated in New South Wales in 1986)
ACN 003 208 393
Directors in Office
(as at the date of this
Report)
S T Biggs, Chairman
C B Bass, The Executive Director
I N A Simpson, Non-Executive Director
R J Fountain Non-Executive Director
R H Probert, (Alternate Director to Mr I N A Simpson)
Registered Office
Suite 6, 125 Melville Parade, Como, WA 6152, Australia
Postal Address
P.O. Box 111, South Perth, WA 6152
Joint Company Secretaries
Mr Mark Pitts
Mr Grahame Clegg
Auditor
K.S. Black & Co., Level 6, 350 Kent Street
Sydney, NSW, 2000, Australia
Bankers
Westpac Banking Corporation, 50 Pitt Street, Sydney, NSW
GEOPACIFIC LIMITED
(a private Company incorporated in Fiji)
Directors
R H Probert (Chairman)
I N A Simpson
Fiji Operations Office
3 Brewer Street, Martintar, Nadi, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
All mail to: P O Box 9975, Nadi Airport, Fiji
E-mail: gpl@connect.com.fi
Company Secretary
I N A Simpson, P.O. Box 9975, Nadi Airport, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
E-mail: gpl@connect.com.fi
Registered Office
3 Brewer Street, Martintar, Nadi, Fiji
Banker
Westpac Banking Corporation, Main Street, Nadi, Fiji
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GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE DIRECTORY
BETA LIMITED
(a private company incorporated in Fiji)
Directors
I N A Simpson
Company Secretary
I N A Simpson, P.O. Box 9975, Nadi Airport, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
E-mail: gpl@connect.com.fi
Registered Office
3 Brewer Street, Martintar, Nadi, Fiji
MILLENNIUM MINING (FIJI) LIMITED
(a private company incorporated in Fiji)
Directors
Company Secretary
I N A Simpson
R H Probert
I N A Simpson, P.O. Box 9975, Nadi Airport, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
E-mail: gpl@connect.com.fi
Registered Office
3 Brewer Street, Martintar, Nadi, Fiji
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
The Directors present their report together with the financial report of the Geopacific Group, being
Geopacific Resources N.L. (“Geopacific”) (“the Company”) and its controlled entities for the financial
year ended 31 December 2011, and the auditors’ report thereon.
1 DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
Stephen Timothy Biggs – Chairman,
Tim Biggs has been involved in the financing of listed companies in Australia since 1993.
Tim commenced his career with Pembroke Josephson Wright stockbrokers in Brisbane, Australia –
the firm specialised in raising equity capital for natural resource companies. In 1997 Tim moved to
Sydney to work for Robert Fleming and Company and subsequently for Credit Suisse First Boston
gaining valuable experience in equity derivatives, convertible and Equity capital markets functions.
Since departing CSFB in 2003, Tim has worked privately investing in junior and mid-cap listed
companies.
Mr Biggs is the Chairman of the Board of Directors and a member of the audit committee.
Charles Bennett Bass, The Executive Director
Charles Bass has well over 35 years of experience in mineral exploration, development and
production in Australia, Canada and the United States. He has been actively involved as executive
and director or several publicly listed companies since the early 1990’s.
In March 2001, Mr Bass co-founded Australian-listed Aquila Resources Limited (AQA:ASX), remains a
director and substantial shareholder in the multi-billion dollar market capitalisation coal and iron
ore company.
Between 1993 and 1997, Mr. Bass was co-founder, substantial shareholder and a Managing Director
of Eagle Mining Corporation Pty Ltd. Under Mr Bass, Eagle discovered, developed and built the
Nimary gold mine and plant in Western Australia. The mine and plant were built in a record four
months from ground breaking to first pour, and produced at over 100,000 oz/yr. Nimary was one of
Australia’s highest grade and lowest cost producers of its time.
Mr Bass is also currently the CEO and an executive director of an unlisted Canadian-based
exploration company, Exploration Syndicate Inc. which has a major VMS Cu/Zn/Pb/Au discovery in
the Flin Flon district of Manitoba/Saskatchewan, Canada,
Mr Bass has a B.Sc. Geology from Michigan Technological University and a M.Sc. Mining Engineering
from Queen’s University, Canada. He is a Fellow of the Institute of Geoscientists and the AusIMM.
He is also a member of the Australian Institute of Company Directors
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
Ian Neville Aston Simpson, Non - Executive Director
Mr Simpson was appointed a Director of the Company in March 2001. Ian recently retired as the
Managing Director of Pacific Crown Aviation (Fiji) Ltd, which operates a helicopter service based out
of Nadi Airport in Fiji. Ian received his training as a helicopter pilot and engineer in the Royal Navy,
and as such has been involved with the exploration industry in Fiji since 1970. Ian has been
associated with GPL since 1981 and has been a Director since 1994. He is also a Director of Beta Ltd
and Millennium Mining Fiji Ltd. Mr Simpson is a citizen of Fiji.
Mr Simpson is a member of the audit committee.
Russell John Fountain, B.Sc., Ph.D, F.A.I.G., Non-executive Director
Dr Fountain was appointed a Director and Chairman of the Company on 23 September, 2005.
Russell is a Sydney-based consulting geologist with 42 years of international experience in all
aspects of mineral exploration, project feasibility and mine development. Previous positions include
President, Phelps Dodge Exploration Corporation; Exploration Manager, Nord Pacific Ltd and Chief
Geologist, CSR Minerals. Russell has had global responsibility for corporate exploration programs
with portfolios targeting copper, gold, nickel and mineral sands.
Russell has played a key role in the grassroots discovery of mines at Granny Smith (Au in WA),
Osborne (Cu-Au in Qld) and Lerokis (Au-Cu in Indonesia) and the development of known prospects
into mines at Girilambone (Cu in NSW) and Waihi (Au in NZ). Russell holds a PhD in Geology from
the University of Sydney (1973), with a thesis based on his work at the Panguna Mine (Cu-Au in
PNG). He worked as a project geologist on the Namosi porphyry copper deposit in Fiji from 1972 to
1976. Russell is a Fellow of the Australian Institute of Geoscientists, and Non-Executive Chairman of
Finders Resources Ltd.
Mr Fountain is the Chairman of the audit committee.
Roger Harvie Probert, - Alternate Director to Mr Simpson
Harvie Probert was elected chairman of GPL in 1997. In 1970-71 he served for one year as a field
manager for Barringer Research in a mineral exploration programme in Fiji. In 1972 he joined The
Fiji Gas Co. Ltd., and was appointed general manager and chief executive in 1983. He is also general
manager and a Director of the associated companies, Fiji Chemicals Ltd and Tonga Gas Ltd. Harvie
served as a Board member of the Civil Aviation Authority of Fiji, Capital Markets Development
Authority, Fiji Islands Revenue and Customs Authority and chairman of Airports Fiji Ltd. He is also
chairman of the Mining Council of Fiji and was president of the Fiji Institute of Management (1989-
91) and the Fiji Employees Federation (1993-95). He is Chairman of Geopacific Ltd and a Director of
Millennium Mining Fiji Ltd. Mr Probert is a citizen of Fiji.
Former Director
Ian James Pringle, B.Sc. (Hons.), Ph.D, Managing Director
(Resigned as Director 15 September 2011)
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
JOINT COMPANY SECRETARIES
Mr Mark Pitts (appointed 17 February 2012)
Mr Pitts was appointed to the position of Company Secretary on 17 February 2012.
Mr Pitts is a Fellow of the Institute of Chartered Accountants with more than 25 years experience in
statutory reporting and business administration. He has been directly involved with, and consulted
to a number of public companies holding senior financial management positions.
He is a Partner in the corporate advisory firm Endeavour Corporate providing company secretarial
support; corporate and compliance advice to a number of ASX listed public companies.
Mr Grahame Clegg, JP, BCom., CA, ACIS, MAICD, FTIA, AFAIM, FNTAA, SAFin.
Mr Clegg was appointed to the position of Company Secretary on 14 July 2006 and has over 38 years
experience in audit, financial and corporate roles including 18 years in Company secretarial roles for
ASX-listed companies. He is a director of Oakhill Hamilton Pty Ltd, and Taen Pty Ltd, companies
which provide secretarial, accounting and corporate advisory services to a range of listed and
unlisted companies.
2 Principal Activity
The principal activity of the Group is exploration for gold and gold-copper deposits in Fiji.
There was no significant change in the nature of this activity of the Group during the financial year.
3 Operating Results and Financial Review
The loss of the Group for the year ended 31 December 2011 was $1,723,299 (2010: loss $432,882).
Information on the operation and financial position of the Group and its business strategies and
prospects are set out following.
Review of Operations
The first half of the 2011 year was spent primarily on reprocessing the 2010 ZTEM airborne
electromagnetic data by Mira Geosciences of Canada using their state-of-the art 3D inversions. The
collation of most historical data was used to help validate the interpretations.
Significant ZTEM anomalies were developed for the Sabeto, Vuda and Nabila tenements, and a new
area on the island of Vanua Levu. The Company lodged a tenement application over this new area,
called Cakaudrove, which subsequent has been granted as SPL1493.
Nabila (SPL 1216)
A deep diamond drill hole with a target depth of 850m vertical was commenced in November and
was directed at the “core” of the Nabila ZTEM anomaly. This anomaly is the 4th ranked of the ZTEM
anomalies, and was chosen for the first deep hole due to ease of logistics. By the end of 2011, the
hole had reached a depth of 245 metres before stopping for the Christmas/New Year break. It
subsequently finished at a total depth of 846m on 9th March.
The alteration, mineralisation and fracturing observed in the upper portion of the drill hole is
consistent with the outer zones of a porphyry copper system, but at depth the hole passed through
variably altered volcanoclastic rocks and no core zone porphyry mineralization was encountered.
Significant pyrite with trace amounts of zinc mineralization occurs below 500m to the end of hole
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
and is believed to be the cause of the ZTEM anomaly. Assays remain outstanding for the lower
portion of the hole.
Sabeto (SPL1361)
Mapping, trenching and soil auger sampling was carried out over the Sabeto ZTEM anomaly, which
is the highest ranked anomaly. This work defined a multiphase intrusive with well zoned alteration,
comprising a core of weak biotite alteration with minor chalcopyrite. The soil auger sampling
identified anomalous copper, gold and molybdenum within the biotite core. Outcrop sampling
returned values up to 1.71 g/t Au and 1.23% Cu. Drill targets have been identified by year-end.
Vuda (SPL1368)
Vuda hosts the second ranked ZTEM anomaly. Ridge and spur soil auger sampling identified a core
of Au-As-Mo anomalism, which coincides with the centre of the resistive ZTEM anomaly. At year
end, further work remains to be done on Vuda before diamond drill locations can be reasonably
established.
Cakaudrove (SPL1493)
This area, on Vanua Levu, was identified with the initial ZTEM survey and was re-interpreted using
the Mira 3D inversion. A resistive body similar to Sabeto was identified, with a conductive body
immediately to the north, possibly representing a conductive shell surrounding a porphyry
intrusion.
Other Prospects
Field visits were made to the other Company prospects in order to plan future field work.
4 Financial Position
The net assets of the consolidated group have decreased to $9,105,039 at 31 December 2011 from
$10,146,769 at 31 December 2010 as a result of the following factors:
• Share Purchase Plan Underwriting
On 24th June 2010 the Company initiated a Share Purchase Plan in which each existing eligible
Geopacific Shareholder was able to purchase up to $15,000 worth of shares at 60 cents per
share, free of brokerage and commissions. The shortfall of 544,834 shares was underwritten by
two of the company’s directors, Tim Biggs and Charles Bass. This raised $326,900
• Exercise of Options
1,275,672 options expiring 16 December 2011 were exercised at an exercise price of 30 cents
per share raising $382,702.
• Capitalised Exploration Expenditure
Capitalised mineral exploration and evaluation expenditure carried forward was $7,133,974
(2010 $7,547,611). Due to the unsuccessful application for the Mt Kasi tenements and the
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
decision to relinquish the Nadi South tenement, $1,275,080 was written off exploration
expenditure.
5 Dividends
The Directors do not recommend the payment of a dividend.
No dividends have been paid or declared since the end of the previous year.
6 State of Affairs
In the opinion of the Directors there were no significant changes in the state of affairs of the Group
that occurred during the financial year under review, not otherwise disclosed in this report.
7 Events Subsequent to Reporting Date
Bonus issue of options
On 4 February 2012 18,927,269 bonus options were issued to shareholders on the basis of one new
option for every two shares held. The exercise price is 35 cents with an expiry date of 19 January
2013. The options are listed on ASX (Code GPRO).
Share placement
On 17 February the company announced a share placement agreement to raise $1,200,000 through
the issue of up to 5,461,364 ordinary shares at 22 cents per share to institutional and sophisticated
investors.
On 2 March 2012 the company announced the placement of the first tranche of 3,000,000 ordinary
shares and 1,500,000 listed options under the share placement agreement.
The second tranche of 2,461,364 ordinary shares and 1,230,682 listed options will be issued
following approval at an Extraordinary General Meeting to be held on 2 April 2012.
Other matters
No other matter or circumstance has arisen since 31 December 2011 that has significantly affected,
or may significantly affect:
(a) the Group’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the Group’s state of affairs in future financial years.
8 Directors’ Interests and Benefits
The beneficial interest of each Director in the ordinary share capital of the Company as at the date
of this report is:
R J Fountain
I N A Simpson
R H Probert (Alternate)
C B Bass (note)
S T Biggs
Direct
Indirect
Shares
Options
Shares
Options
4,000
718,539
647,545
Nil
Nil
7
2,000
859,270
323,773
Nil
Nil
62,000
36,380
Nil
2,815,753
5,597,417
31,000
18,190
Nil
1,407,877
2,798,709
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
Note – The notice of meeting for the Extraordinary General Meeting to be held on 2 April 2012
contains resolutions which, if passed, will grant Mr C B Bass a further 1,136,364 ordinary shares and
568,182 listed options under the terms of a share placement announced on 17 February 2012.
In addition, the EGM will also consider a resolution to grant 2,000,000 options at an exercise price of
30 cents and an expiry date of 16 February 2015 to Mr Bass.
9 Directors’ Meetings
During the year ended 31 December 2011 a total of five Directors’ Meetings and two Audit
Committee Meetings were held. Directors’ attendance record is tabulated below.
Record of Directors’ Attendance at Meetings
Directors
Meetings
Audit Committee
Meetings
Service
All year
Resigned 19.9.2011
All year
All year
All year
Attended *
5
5
4
5
5
Eligible to
Attend
5
5
5
5
5
Attended *
-
-
2
2
2
Eligible to
Attend
-
-
2
2
2
All year
5
5
-
-
Director
S T Biggs
I J Pringle
C B Bass
R J Fountain
I N A Simpson
R H Probert (alternate
to I. Simpson)
*
Either in person, or by electronic means.
The Board of Directors takes ultimate responsibility for corporate governance including the functions
of establishing compensation arrangements of the Executive Director and its senior executives and
officers, appointment and retirement of non-executive Directors, appointment of auditors, areas of
business risk, maintenance of ethical standards and Audit and Remuneration/Nomination
Committees. The Board seeks independent professional advice as necessary in carrying out its duties
and responsibilities.
10 Likely Developments, Prospects and Business Strategies
The Group will continue to develop its existing exploration tenements and seek to increase its
tenement holdings by acquiring further projects.
11 Environment Regulations
Entities in the Group are subject to normal environmental regulations in areas of operations. There
has been no breach of these regulations during the financial year, or in the period subsequent to the
end of the financial year and up to the date of this report.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
12 Share Options
There were 2,410,000 options over unissued shares unexercised at 31 December 2011 (2010 –
9,152,106).
Issues in current year
500,000 options exercisable at 30 cents and expiring on 30th September 2014 were issued to Steven
Whitehead on 30th September 2011.
On 19th December 2011 1,275,672 options expiring on that date were exercised at an issue price of
30 cents raising $382,702. The 5,966,434 options which remained unexercised lapsed.
Issues since the end of the financial year
18,927,269 bonus options exercisable at 35 cents and expiring on 19th January 2013 were issued to
existing shareholders on 3rd February 2012.
On 2 March 2012 the company announced the placement of the first tranche of 1,500,000 listed
options under the share placement agreement.
The second tranche of 1,230,682 listed options will be issued following approval at an Extraordinary
General Meeting to be held on 2 April 2012.
13 Insurance of Officers
The Company has, by Deed of Access, Indemnity and Insurance, paid a premium to insure the
Directors and Company Secretary of the Group in respect of certain legal liabilities, including costs
and expenses in successfully defending legal proceedings, whilst they remain as Directors and for
seven years thereafter. The insurance contract prohibits the disclosure of the total amount of the
premiums and a summary of the nature of the liabilities.
14 Lead Auditor’s Independence Declaration
The lead auditor’s independence declaration is set out on page 17 and forms part of the Directors’
report for the financial year ended 31 December 2011.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
15 Auditor
KS Black & Co was appointed as auditor on 22 September 2009 and continues in office in
accordance with section 327 of the Corporations Act 2001.
During the year the following fees were paid or payable for services provided by the auditor of the
Company, its related practices and non-related audit firms:
Assurance services
1. Audit services
KS Black & Co Australian firm:
Audit of the financial report and other audit work under the
Corporations Act 2001
- Current year
Total remuneration for audit services
16 Non-audit Services
Consolidated
2011
$
2010
$
34,450
30,600
34,450
30,600
The Group may decide to employ the auditor on assignments additional to their statutory audit
duties where the auditor's expertise and experience with the Company and/or the Group are
important.
There were no non-audit services provided during the year.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
17 Remuneration Report (Audited)
The remuneration report is set out under the following main headings:
A Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Service agreements
D Share-based compensation
The information provided under headings A-D includes remuneration disclosures that are required
under Accounting Standard AASB 124 Related Party Disclosures. These disclosures have been
transferred from the financial report and have been audited.
A Principles used to determine the nature and amount of remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance, being
the development of the Geopacific Resources exploration tenements. The framework aligns executive
reward with achievement of strategic objectives and the creation of value for shareholders, and
conforms with market best practice for delivery of reward. The Board ensures that executive reward
satisfies the following key criteria for good reward governance practices:
competitiveness and reasonableness;
•
• acceptability to shareholders;
• performance linkage / alignment of executive compensation;
•
•
transparency; and
capital management.
The Group has structured an executive remuneration framework that is market competitive and
complimentary to the reward strategy of the organisation.
Alignment to shareholders’ interests:
• has economic profit as a core component of plan design;
•
focuses on sustained growth in shareholder wealth, consisting of dividends and growth in
share price, and delivering constant return on assets as well as focusing the executive on
key non-financial drivers of value; and
• attracts and retains high calibre executives.
Alignment to programme participants’ interests:
rewards capability and experience;
reflects competitive reward for contribution to growth in shareholder wealth;
•
•
• provides a clear structure for earning rewards; and
• provides recognition for contribution.
The framework provides a mix of fixed and variable pay, and a blend of short and long-term incentives.
As executives gain seniority with the Group, the balance of this mix shifts to a higher proportion of ''at
risk'' rewards.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
Non-executive Directors
Fees and payments to non-executive Directors reflect the demands, which are made on, and the
responsibilities of, the Directors. The Board reviews Non-executive Directors’ fees and payments
annually. The Board may from time to time seek the advice of independent remuneration consultants
to ensure non-executive Directors’ fees and payments are appropriate and in line with the market. The
Chairman’s fees are determined independently to the fees of non-executive Directors based on
comparative roles in the external market. The Chairman is not present at any discussions relating to
determination of his own remuneration.
Directors’ fees
The current base remuneration was last reviewed with effect from 1 January 2011 and will be reviewed
in September 2012.
Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is
periodically recommended for approval by shareholders. The maximum currently stands at $200,000
per year in aggregate.
Executive pay
The executive pay and reward framework has four components:
• base pay and benefits;
•
•
short-term performance incentives;
long-term incentives through participation in the Geopacific Resources NL Employee Option
Plan (Geopacific Resources Option Plan); and
• other remuneration such as superannuation.
The combination of these comprises the executive’s total remuneration.
Base pay
Structured as a total employment cost package, which may be delivered as a combination of cash and
prescribed non-financial benefits at the executives’ discretion.
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards.
Base pay for senior executives is reviewed annually to ensure the executive’s pay is competitive with
the market. An executive’s pay is also reviewed on promotion.
There are no guaranteed base pay increases included in any senior executives’ contracts.
Geopacific Resources NL Employee Option Plan
Information on the Geopacific Resources Option Plan is set out in note 23.
B Details of remuneration
Details of the remuneration of the Directors and the key management personnel (as defined in AASB
124 Related Party Disclosures) of Geopacific Resources and the Geopacific Resources NL Group are set
out in the following tables.
The key management personnel of Geopacific Resources and the Group include the Directors and the
Exploration Manager.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
Remuneration paid to key management personnel of Geopacific Resources and of the Group
2011
Name
Non-executive Directors
S T Biggs
I N A Simpson
R J Fountain
R H Probert (alt. to I.
Simpson)
Sub-total non-
executive Directors
Executive Directors
I J Pringle (resigned
15.9.11)
C B Bass
Total directors
Other Key management
Personnel
S Whitehead
Totals
2010
Non-executive Directors
C B Bass
S T Biggs
I N A Simpson
R J Fountain
R H Probert
C K McCabe (alt. to I.
Simpson)
Sub-total non-
executive Directors
Executive Directors
I J Pringle
W A Brook (note 1)
Totals
Short-term benefits
Post-employment
benefits
Share-based
payments
Directors’
Fees
$
Consulting
Fees
$
Super-
annuation
$
Termination
Payments
(note 2)
$
Options
$
Total
$
-
42,000
42,000
42,000
-
-
25,000
-
126,000
25,000
-
-
126,000
75,000
-
100,000
-
126,000
76,367
176,367
-
-
-
6,250
-
-
6,250
-
-
6,250
-
-
-
-
-
-
-
170,796
-
170,796
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42,000
67,000
42,000
- 151,000
75,000
-
-
-
- 226,000
83,413
7,046
7,046 309,413
-
-
-
-
-
-
-
-
-
-
6,250
-
-
6,250
-
60,000
60,000
- 170,796
-
60,000
- 237,046
Note 1 Mr Brook was paid by Geopacific Ltd.
Note 2 A termination payment of A$60,000 was made to Mr Brook on his retirement as a director.
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GEOPACIFIC RESOURCES NL
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DIRECTORS REPORT
REMUNERATION REPORT
C Service agreements
(i) Non-executive Directors
Directors are entitled to remuneration out of the funds of the Company but the remuneration of the
non-executive Directors may not exceed in any year the amount fixed by the Company in general
meeting for that purpose. Directors are also entitled to be paid reasonable travelling, accommodation
and other expenses incurred in consequence of their attendance at Board meetings and otherwise in
the execution of their duties as Directors.
D Share-based compensation
Options
Options are granted on the recommendation of the Directors.
Options are granted for no consideration.
Options granted carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share.
500,000 options over ordinary shares in the Company were provided as remuneration to directors of
Geopacific Resources and the key management personnel of the Group as set out below. Further
information on the options is set out in notes 15 and 21 to the financial statements.
The notice of meeting for the Extraordinary General Meeting to be held on 2 April 2012 contains
resolutions which, if passed, will grant Mr C B Bass a further 1,136,364 ordinary shares and 568,182
listed options under the terms of a share placement announced on 17 February 2012.
In addition, the EGM will also consider a resolution to grant 2,000,000 options at an exercise price of 30
cents and an expiry date of 16 February 2015 to Mr Bass.
Directors of Geopacific Resources NL
Name
I J Pringle
I N A Simpson
R J Fountain
R H Probert
Other Key management Personnel
S Whitehead
Number of options granted
during the year
Number of options vested
during the year
2011
-
-
-
-
500,000
2010
-
-
-
-
2011
-
-
-
-
-
2010
-
-
-
-
-
The assessed fair value at grant date of options granted is allocated equally over the period from grant
date to vesting date, and the amount is included in the remuneration tables below. Fair values at grant
date are independently determined using a Black-Scholes option pricing model that takes into account
the exercise price, the term of the option, the impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk-free interest
rate for the term of the option.
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DIRECTORS REPORT
REMUNERATION REPORT
D Share-based compensation (continued)
Options (continued)
(i)
Options issued to Mr Steven Whitehead
The options issued to Mr Steven Whitehead vest on the first, second and third anniversaries of the
commencement of his engagement.
The terms and conditions of each grant of options affecting remuneration in the previous, this or future
reporting periods are as follows:
Grant date
Expiry date
30 September 2011
30 September 2011
30 September 2011
30 September 2011
30 September 2014
30 September 2014
30 September 2014
30 September 2014
Number of
Options
83,333
83,333
83,334
250,000
Exercise
price
$0.30
$0.30
$0.30
$0.30
Value per option
at grant date
$0.1029
$0.1029
$0.1029
$0.1029
Date vesting
1 July 2012
1 July 2013
1 July 2014
N/A*
* Options vest after successful exploration results as a consequence of his direct management of the
exploration efforts, such success deemed in the Board’s discretion.
Share options granted to Directors and other key management personnel
Options over unissued ordinary shares of the Company granted during or since the end of the financial
year to the Directors and other key management personnel of the Company as part of their
remuneration were as follows:
Directors of Geopacific
Resources NL
Name
C B Bass
S T Biggs
I J Pringle
I N A Simpson
R J Fountain
R H Probert
Other Key management
Personnel
S Whitehead
A
Remuneration
consisting of
options
-
-
-
-
-
-
B
Value at
vesting date
$
-
-
-
-
-
-
C
Value at
exercise date
$
-
-
-
-
-
-
D
Value at
lapse date
$
-
-
-
-
-
-
E
Total of
columns B-D
$
-
-
-
-
-
-
7,046
-
-
-
-
A = That portion of remuneration consisting of options, based on the value at grant date set out in
column B.
B = The value at grant date calculated in accordance with AASB 2 Share-based Payments of options
granted during the year as part of remuneration.
C = The value at exercise date of options that were granted as part of remuneration and were
exercised during the year.
D = The value at lapse date of options that were granted as part of remuneration and that lapsed
during the year.
15
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
Shares provided on exercise of remuneration options
No ordinary shares in the Company were provided as a result of the exercise of remuneration options
to each director of Geopacific Resources NL and other key management personnel of the Group.
Shares issued on the exercise of options
No ordinary shares of the Company were issued during the year ended 31 December 2011 on the
exercise of options granted to key management personnel under the Employee Share Option Plan. No
further shares have been issued since that date. No amounts are unpaid on any of the shares.
The Directors Report, including the Remuneration Report, is signed in accordance with a resolution of the
Directors:
C B Bass
The Executive Director
Perth, Australia
Dated: 27 March 2012
16
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ DECLARATION
The Directors of Geopacific Resources NL declare that:
1
the financial statements and notes, set out on pages 21 to 63 are in accordance with the Corporations
Act 2001, including:
a. comply with Accounting Standards, which, as stated in Accounting Policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial
Reporting Standards (IFRS); and
b. give a true and fair view of the financial position as at 31 December 2011 and of the
performance for the year ended on that date of the company and consolidated group;
2
the Executive Director and Chief Finance Officer have each declared that:
a. the financial records of the company for the financial year have been properly maintained in
accordance with s 286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with Accounting Standards;
and
c.
the financial statements and notes for the financial year give a true and fair view;
3
in the directors’ opinion there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors:
C B Bass
The Executive Director
Perth, Australia
Dated: 27 March 2012
20
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2011
Revenue from continuing operations
Administration expenses
Consultancy expense
Depreciation expense
Employee benefits expense
Exploration expenditure written off
Occupancy Expenses
Other expenses
(Loss) profit before income tax
Note
Consolidated
2010
$
2011
$
5
6
6
6
93,533
136,124
(198,329)
(77,556)
(27,176)
(144,488)
(1,275,080)
(46,367)
(47,835)
(280,337)
(144,447)
(13,471)
(69,775)
-
(40,660)
(20,316)
(1,816,831)
(569,006)
(1,723,299)
(432,882)
Income tax expense
8
-
-
(Loss) profit for the year attributable to members of the
parent company
(1,723,299)
(432,882)
Other comprehensive income:
Exchange differences on translating foreign controlled
entities
(35,079)
(486,029)
Other comprehensive income for the year, net of tax
(35,079)
(486,029)
Total comprehensive income for the year attributable to
members of the parent entity
Basic loss per share
Diluted loss per share
24
24
(1,758,378)
(918,911)
(4.87)
(1.33)
(4.87)
(1.33)
The above statement of comprehensive income should be read
in conjunction with the accompanying notes.
21
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration expenditure
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
Consolidated
2010
$
2011
$
9
10
11
12
13
1,687,134
194,754
2,173,259
358,460
1,881,888
2,531,719
7,133,975
154,217
7,547,611
113,052
7,288,192
7,660,663
9,170,080
10,192,382
65,741
65,741
65,741
45,613
45,613
45,613
9,105,039
10,146,769
14
16
17
15,925,556
89,441
(6,909,958)
15,215,954
117,474
(5,186,659)
9,105,039
10,146,769
The above statement of financial position should be read
in conjunction with the accompanying notes.
22
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDING 31 DECEMBER 2011
Consolidated
Issued
Capital
Forfeited
Shares
Reserve
Share Based
Payments
Reserve
$
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
Equity
$
$
At 1 January 2010
11,976,191
4,623
429,217
169,663
(4,753,777)
7,825,917
Transactions with
owners in their capacity
as owners
Shares issued during the
year
3,453,100
Capital raising costs
(213,337)
-
-
-
-
-
-
-
-
3,453,100
(213,336)
15,215,954
4,623
429,217
169,663
(4,753,777) 11,065,680
Comprehensive loss for
the period
-
-
-
(486,029)
(432,882)
(918,911)
At 31 December 2010
15,215,954
4,623
429,217
(316,366)
(5,186,659) 10,146,769
At 1 January 2011
15,215,954
4,623
429,217
(316,366)
(5,186,659) 10,146,769
Transactions
with
owners in their capacity
as owners
Shares
the year
issued during
Share based payments
Comprehensive loss for
the period
709,602
-
-
-
-
7,046
-
-
-
-
709,602
7,046
15,925,556
4,623
436,263
(316,366)
(5,186,659) 10,864,317
-
-
-
(35,079)
(1,723,299)
(1,758,378)
At 31 December 2011
15,925,556
4,623
436,263
(351,445)
(6,909,958)
9,105,039
The above statement of changes in equity should be read
in conjunction with the accompanying notes.
23
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDING 31 DECEMBER 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Cash payments in the course of operations
Interest received
Other income
Note
Consolidated
2010
$
2011
$
(323,695)
89,559
3,973
(925,177)
99,692
15,668
Net Cash used in Operating Activities
28(c)
(230,163)
(809,817)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Proceeds from sale of plant and equipment
Exploration expenditure
Net Cash used in Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue
Share issue costs
Net Cash from Financing Activities
NET (DECREASE)/INCREASE IN CASH HELD
Effect of exchange rates on cash held in foreign currencies
Cash and Cash Equivalents at the Beginning of the Financial
Year
CASH AND CASH EQUIVALENTS AT THE END OF THE
FINANCIAL YEAR
(68,230)
-
(900,051)
(109,440)
7,596
(2,461,846)
(968,281)
(2,563,690)
709,602
-
3,453,100
(213,337)
709,602
3,239,763
(488,842)
(3,417)
(133,744)
(26,240)
2,173,259
2,333,243
28(a)
1,687,834
2,173,259
The above statement of cash flows should be read
in conjunction with the accompanying notes.
24
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Contents of the 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
28
Summary of significant accounting policies
Financial risk management
Critical accounting estimates and judgments
Parent company information
Revenue
Expenses
Remuneration of auditors
Taxation
Current assets - Cash and cash equivalents
Current assets - Trade and other receivables
Non-current assets – Exploration expenditure
Non-current assets - Property, plant and equipment
Current liabilities - Trade and other payables
Contributed equity
Options
Reserves
Accumulated losses
Contingent Liabilities
Commitments
Particulars relating to controlled entities
Key management personnel disclosures
Related party transactions
Share-based payments
Loss per share
Events occurring after the year end
Financial reporting by segment
Financial instruments disclosures
Notes to the statement of cash flows
25
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial report are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. These
consolidated financial statements and notes represent those of Geopacific Resources NL and its
controlled entities (the “Group”).
The separate financial statements of the parent entity, Geopacific Resources NL, have not been presented
within this financial report as permitted by amendments made to the Corporations Act 2001 effective as
at 28 June 2011. A summary of financial information of Geopacific Resources NL as an individual entity is
contained in Note 4.
Basis of preparation
The financial report is a general purpose financial report that has 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 a
financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting Standards ensures that the financial statements
and the notes thereto also comply with International Financial Reporting Standards.
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.
Changes to accounting policies
Adoption of New and Revised Accounting Standards
During the current year the Group adopted all of the new and revised Australian Accounting Standards
and Interpretations applicable to its operations which became mandatory.
The adoption of these Standards has not impacted the recognition, measurement and disclosure of any
transactions.
Significant accounting policies
Material accounting policies adopted in the preparation of this financial report are presented below. They
have been consistently applied unless otherwise stated.
(a) Cash and cash equivalents
For statement of cash flows presentation purposes, cash and cash equivalents includes cash at
bank.
(b)
Contributed equity
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 from the proceeds.
26
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
Employee benefits
(i) Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be
settled within 12 months of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date and are measured at the amounts expected to be paid
when the liabilities are settled.
(ii)
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and
measured as the present value of expected future payments to be made in respect of services
provided by employees up to the reporting date. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on national government bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash
outflows.
(ii)
Share-based payments
The fair value of options granted to Directors and employees is recognised as an employee benefit
expense with a corresponding increase in equity. The fair value is measured at grant date and
recognised over the period during which the employees become unconditionally entitled to the
options.
The fair value at grant date is independently determined using a Black-Scholes option pricing model
that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option
The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes
the impact of any non-market vesting conditions (for example, profitability and sales growth
targets). Non-market vesting conditions are included in assumptions about the number of options
that are expected to become exercisable. At each year end, the Company revises its estimate of
the number of options that are expected to become exercisable. The employee benefit expense
recognised each period takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to those
options is transferred to share capital and the proceeds received, net of any directly attributable
transaction costs, are credited to share capital.
(d)
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed
to approximate their fair values. The fair value of financial liabilities for disclosure purposes is
estimated by discounting the future contractual cash flows at the current market interest rate that
is available to the Group for similar financial instruments.
27
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Financial Instruments
Recognition and 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 (i.e. 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.
Derecognition
Financial assets are derecognised when the right to receive cash flows from the financial assets
have expired or been transferred. Financial liabilities are derecognised when the related obligations
are either transferred, discharged 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.
Classification and subsequent measurement
Financial assets are categorised as either financial assets at fair value through profit or loss, loans
and receivables, held-to-maturity investments, or available-for-sale financial assets. The
classification depends on the purpose for which the investments were acquired. Designation is re-
evaluated at each financial year end, but there are restrictions on reclassifying to other categories.
(i)
Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category “financial assets at fair
value through profit or loss”. Financial assets are classified as held for trading if they are acquired
for the purpose of selling in the near term with the intention of making a profit. Gains or losses on
financial assets held for trading are recognised in profit or loss and the related assets are classified
as current assets in the statement of financial position.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are
classified as held-to-maturity when the Group has the positive intention and ability to hold to
maturity. Investments intended to be held for an undefined period are not included in this
classification.
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Such assets are carried at amortised cost using the effective
interest method.
28
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Financial Instruments (continued)
(iv) Available-for-sale securities
Available-for-sale investments are those non-derivative financial assets that are designated as
available-for-sale or are not classified as any of the three preceding categories. They comprise
investments in the equity of other entities where there is neither a fixed maturity nor fixed or
determinable payments.
(v)
Financial liabilities
Non derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost using the effective interest method.
Fair values
Fair values are determined by reference to market bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities including recent arm's
length market transactions, reference to the current market value of similar instruments and
option pricing models.
Impairment
At each reporting date the Group 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 financial instrument is considered to determine whether an impairment
has arisen. Impairment losses are recognised in the statement of comprehensive income.
(f)
(i)
Foreign currency transactions and balances
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional
currency’). The consolidated financial statements are presented in Australian dollars, which is
Geopacific Resources NL’s functional and presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the statement of
comprehensive income.
(iii) Group companies
The financial results and position of foreign operations, whose functional currency is different from
the Group’s presentation currency, are translated as follows:
— assets and liabilities are translated at year-end exchange rates prevailing at that reporting
date;
— accumulated losses are translated at average exchange rates for the period; and
— income and expenses are translated at the exchange rates prevailing at the date of the
transaction.
29
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currency transactions and balances (continued)
(f)
Exchange differences arising on translation of foreign operations are transferred directly to the
Group’s foreign currency translation reserve in the statement of comprehensive income. These
differences are recognised in the statement of comprehensive income in the period in which the
operation is disposed.
(g) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the
cost of acquisition of the asset or as part of the expense.
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 taxation authority 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 taxation authority,
are presented as operating cash flows.
(h)
Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at each reporting date.
(i)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable
income based on the national income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates
expected to apply when the assets are recovered or liabilities are settled, based on those tax rates.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is made for certain
temporary differences arising from the initial recognition of an asset or a liability. No deferred tax
asset or liability is recognised in relation to these temporary differences if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect
either accounting profit or taxable profit or loss.
Deferred tax liabilities and assets are not recognised for temporary differences between the
carrying amount and tax bases of investments in controlled entities where the Company is able to
control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
30
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j)
Loss per share
(i)
Basic loss per share
Basic loss per share is calculated by dividing the result attributable to equity holders of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
(ii)
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take
into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary shares.
(k) Mineral Tenements and Deferred Mineral Exploration Expenditure
The Group has adopted the area of interest method for capitalising the costs of procurement,
exploration and evaluation of areas where applications have been made for Prospecting Licences.
The ultimate recoupment of such costs is dependent on sale of the tenement(s) or successful
development and commercial exploitation of the areas. Amortisation charges are to be made over
the life of the areas of interest and will be determined on a basis so that the rate of amortisation
shall not lag behind the rate of depletion of the economically recoverable reserves in the areas of
interest.
The areas of interest are each of the Special Prospecting Licences in which companies in the Group
have an interest. Where exploration expenditure has been incurred during the period, it will be
carried forward in the Statement of financial position together with procurement costs as deferred
mineral exploration expenditure until the Directors are of the opinion that a tenement should be
abandoned as it shows no potential for recovery of expenditure incurred, in which case the said
expenditure is written off in the Statement of Comprehensive Income.
(l)
Plant and equipment
Plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Cost may also include
transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial period in
which they are incurred.
Depreciation on assets is calculated using the straight-line method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful lives, as follows:
- Plant, vehicles and equipment 10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each year
end.
31
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Plant and equipment (continued)
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 (note 1(j)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These
are included in the statement of comprehensive income. When revalued assets are sold, it is Group
policy to transfer the amounts included in other reserves in respect of those assets to retained
earnings.
(m) Principles of consolidation
(i)
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Geopacific Resources NL (“the Company”) as at 31 December 2011 and the results of all subsidiaries
for the year then ended. Geopacific Resources NL and its subsidiaries together are referred to in
this financial report as the Group.
Subsidiaries are all those entities over which the Group has the power to govern the financial and
operating policies, generally accompanying a shareholding of more than one-half of the voting
rights. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
Investments in subsidiaries are accounted for at cost in the individual financial statements of
Geopacific Resources NL.
A list of subsidiaries is contained in note 20.
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses and
results in the consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The acquisition method
requires that for each business combination one of the combining entities must be identified as the
acquirer (i.e. parent entity). The business combination will be accounted for as at the acquisition
date, which is the date that control over the acquiree is obtained by the parent entity. At this date,
the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions,
the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent
liabilities of the acquiree will be recognised where a present obligation has been incurred and its
fair value can be reliably measured.
32
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Principles of consolidation (continued)
Business combinations (continued)
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The
method adopted for the measurement of goodwill will impact on the measurement of any non-
controlling interest to be recognised in the acquiree where less than 100% ownership interest is
held in the acquiree.
Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess
of the sum of:
(i)
the consideration transferred;
(ii) any non-controlling interest; and
(iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus the
acquisition date fair value of any previously held equity interest shall form the cost of the
investment. Consideration may comprise the sum of the assets transferred by the acquirer,
liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests
issued by the acquirer.
Included in the measurement of consideration transferred is any asset or liability resulting from a
contingent consideration arrangement. Any obligation incurred relating to contingent consideration
is classified as either a financial liability or equity instrument, depending upon the nature of the
arrangement. Rights to refunds of consideration previously paid are recognised as a receivable.
Subsequent to initial recognition, contingent consideration classified as equity is not remeasured
and its subsequent settlement is accounted for within equity. Contingent consideration classified as
an asset or a liability is remeasured each reporting period to fair value through the statement of
comprehensive income unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the
consolidated statement of comprehensive income.
The value of goodwill recognised on acquisition of each subsidiary in which the Group holds less
than a 100% interest will depend on the method adopted in measuring the aforementioned non-
controlling interest. The Group can elect to measure the non-controlling interest in the acquiree
either at fair value (full goodwill method) or at the non-controlling interest’s proportionate share of
the subsidiary’s identifiable net assets (proportionate interest method). The Group determines
which method to adopt for each acquisition.
33
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Principles of consolidation (continued)
Goodwill (continued)
Under the full goodwill method, the fair values of the non-controlling interests are determined
using valuation techniques which make the maximum use of market information where available.
Under this method, goodwill attributable to the non-controlling interests is recognised in the
consolidated financial statements.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of
associates is included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group’s cash-generating units or
groups of cash-generating units, which represent the lowest level at which goodwill is monitored
but where such level is not larger than an operating segment. Gains and losses on the disposal of an
entity include the carrying amount of goodwill related to the entity sold.
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do
not affect the carrying values of goodwill.
(n)
(i)
Revenue recognition
Sale of Goods and Disposal of Assets
Revenue from the sale of goods and disposal of other assets is recognised when the Group has
passed the risks and rewards of ownership to the buyer.
(ii)
Interest Income
Interest income is recognised on an accrual basis.
(iii) Other Income
Other income is recognised on receipt.
(iv) General
All revenue is stated net of goods and services tax (GST).
(o)
Trade receivables
Trade receivables are recognised initially at fair value.
(p)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
New accounting standards and UIG interpretations 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.
The Group has decided against early adoption of these standards.
34
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1.
New accounting standards and UIG interpretations for application in future periods (continued)
A discussion of those future requirements and their impact on the Group follows:
Operative date 1 July 2011 with an application date for the group of 1 January 2012.
AASB
Summary
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.
AASB 1054 sets out the Australian-specific
disclosures that are additional to IFRS disclosure
requirements.
The disclosure requirements in AASB 1054 were
previously located in other Australian Accounting
Standards.
AASB 2010–6: Amendments
to Australian Accounting
Standards – Disclosures on
Transfers of Financial Assets
[AASB 1 & AASB 7]
AASB 1054: Australian
Additional Disclosures and
AASB 2011–1: Amendments
to Australian Accounting
Standards arising from the
Trans-Tasman Convergence
Project [AASB 1, AASB 5,
AASB 101, AASB 107,
AASB 108, AASB 121,
AASB 128, AASB 132 &
AASB 134 and
Interpretations 2, 112 & 113]
Impact on group
This Standard
will only affect
certain
disclosures
relating to
financial
instruments and
is not expected
to significantly
impact the
Group.
These Standards
are not expected
to significantly
impact the
Group.
Operative date 1 January 2012 with an application date for the group of 1 January 2012.
Impact on group
The amendments
are not expected
to significantly
impact the
Group.
AASB
Summary
AASB 2010–8: Amendments
to Australian Accounting
Standards – Deferred Tax:
Recovery of Underlying
Assets [AASB 112]
This Standard makes amendments to AASB 112:
Income Taxes and incorporates Interpretation 121 into
AASB 112.
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.
35
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1.
New accounting standards and UIG interpretations for application in future periods (continued)
Operative date 1 July 2012 with an application date for the group of 1 January 2013.
AASB
Summary
Impact on group
AASB 2011–9: Amendments
to Australian Accounting
Standards – Presentation of
Items of Other
Comprehensive Income
[AASB 1, 5, 7, 101, 112, 120,
121, 132, 133, 134, 1039 &
1049]
The main change arising from this Standard is the
requirement for entities to group items presented in
other comprehensive income (OCI) on the basis of
whether they are potentially reclassifiable to profit
or loss subsequently.
This Standard
affects
presentation
only and is not
expected to
significantly
impact the
Group.
Operative date 1 January 2013 with an application date for the group of 1 January 2013.
AASB
Summary
AASB
10:
Financial Statements,
Consolidated
AASB 10 replaces parts of AASB 127: Consolidated
and Separate Financial Statements (March 2008, as
amended) and Interpretation 112: Consolidation –
Special Purpose Entities. AASB 10 provides a revised
definition of control and additional application
guidance so that a single control model will apply to
all investees.
AASB 11: Joint Arrangements, AASB 11 replaces AASB 131: Interests
in Joint
Ventures (July 2004, as amended). AASB 11 requires
joint arrangements to be classified as either “joint
operations” (whereby the parties that have joint
control of the arrangement have rights to the assets
and obligations for the liabilities) or “joint ventures”
(where the parties that have joint control of the
arrangement have rights to the net assets of the
arrangement). Joint ventures are required to adopt
the equity method of accounting (proportionate
consolidation is no longer allowed).
Impact on group
The Group has
not yet been able
reasonably
to
the
estimate
this
impact of
Standard on
its
financial
statements.
The amendments
are not expected
significantly
to
the
impact
Group.
12: Disclosure of
AASB
Interests in Other Entities,
joint venture,
AASB 12 contains the disclosure requirements
applicable to entities that hold an interest in a
subsidiary,
joint operation or
associate. AASB 12 also introduces the concept of a
“structured entity”, replacing the “special purpose
entity” concept currently used in Interpretation 112,
and requires specific disclosures in respect of any
investments in unconsolidated structured entities.
This
Standard
will only affect
disclosures and is
not expected to
significantly
impact
Group.
the
36
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1.
New accounting standards and UIG interpretations for application in future periods (continued)
Operative date 1 January 2013 with an application date for the group of 1 January 2013.
Impact on group
The amendments
are not expected
significantly
to
impact
the
Group.
The amendments
are not expected
significantly
to
impact
the
Group.
The amendments
are not expected
significantly
to
impact
the
Group.
These Standards
are not expected
significantly
to
impact
the
Group.
AASB
Summary
AASB 127: Separate Financial
Statements (August 2011),
To facilitate the application of AASBs 10, 11 and 12,
revised versions of AASB 127 and AASB 128 have also
been issued.
Investments
AASB 128:
in
Associates and Joint Ventures
(August 2011)
To facilitate the application of AASBs 10, 11 and 12,
revised versions of AASB 127 and AASB 128 have also
been issued.
&
13:
and
1038
AASB 2011–7: Amendments
to Australian Accounting
Standards arising from the
Consolidation
Joint
Standards
Arrangements
[AASB 1, 2, 3, 5, 7, 9, 2009–
11, 101, 107, 112, 118, 121,
124, 132, 133, 136, 138, 139,
and
1023
Interpretations 5, 9, 16 & 17]
Value
AASB
AASB
Measurement
2011–8: Amendments
to
Australian
Accounting
Standards arising from AASB
13 [AASB 1, 2, 3, 4, 5, 7, 9,
2009–11, 2010–7, 101, 102,
108, 110, 116, 117, 118, 119,
120, 121, 128, 131, 132, 133,
134, 136, 138, 139, 140, 141,
1004, 1023 & 1038 and
Interpretations 2, 4, 12, 13,
14, 17, 19, 131 & 132]
Fair
and
To facilitate the application of AASBs 10, 11 and 12,
revised versions of AASB 127 and AASB 128 have also
been issued.
AASB 13 defines fair value, sets out in a single
Standard a framework for measuring fair value, and
requires disclosures about fair value measurements.
AASB 13 requires:
-
-
inputs to all fair value measurements to be
categorised in accordance with a fair value
hierarchy; and
enhanced disclosures regarding all assets
and liabilities (including, but not limited to,
liabilities)
financial assets and
measured at fair value.
financial
37
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1.
New accounting standards and UIG interpretations for application in future periods (continued)
Operative date 1 January 2013 with an application date for the group of 1 January 2013.
Impact on group
The Group has
not yet been able
reasonably
to
estimate
the
impact of these
changes on
its
financial
statements.
AASB
Summary
119:
AASB
Employee
AASB
Benefits (September 2011)
and
2011–10:
Amendments to Australian
Standards
Accounting
arising
from AASB 119
[AASB 1, AASB 8, AASB 101,
AASB 134,
AASB 124,
AASB 1049 & AASB 2011–8
and Interpretation 14]
These Standards introduce a number of changes to the
presentation and disclosure of defined benefit plans,
including:
-
removal of the “corridor” approach from AASB
119, thereby requiring entities to recognise all
changes in a net defined benefit liability (asset)
when they occur;
liability
- disaggregation of changes in a net defined
benefit
into service cost
(asset)
(including past service cost and gains and losses
on non-routine settlements and curtailments),
net interest expense (interest based on the net
defined benefit
(asset) using the
discount rate applicable to post-employment
benefits) and remeasurements
(comprising
actuarial gains and losses, return on plan assets
less the “revenue” component of the net
interest expense, and any change in the limit on
a defined benefit asset).
liability
In addition, AASB 119 (September 2011) requires
recognition of:
-
service cost and net interest expense in profit
or loss; and
remeasurements in OCI; and
introduction
disclosure
requirements to facilitate the provision of more
useful information in relation to an entity’s
defined benefit plans.
enhanced
-
-
of
AASB 119 (September 2011) also includes changes to
the accounting for termination benefits that require an
entity to recognise an obligation for such benefits at the
earlier of:
(i) for an offer that may be withdrawn – when the
employee accepts;
(ii) for an offer that cannot be withdrawn – when the
offer is communicated to affected employees; and
(iii)
is associated with a
restructuring of activities under AASB 137: Provisions,
Contingent Liabilities and Contingent Assets, and if
earlier than the first two conditions – when the related
restructuring costs are recognised.
where the termination
38
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1.
New accounting standards and UIG interpretations for application in future periods (continued)
Operative date 1 July 2013 with an application date for the group of 1 January 2014.
Impact on group
These Standards
are
applicable
retrospectively
and amend the
classification and
measurement of
financial assets.
The Group has
not
yet
determined
potential
impact
on the financial
statements.
AASB
Summary
AASB 9: Financial Instruments
and
AASB 2009–11: Amendments
Accounting
to
Standards arising from AASB 9
Australian
-
-
-
-
the
requirements
for embedded
The 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
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;
initial
allowing an
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; and
reclassifying financial assets where there
is a
change in an entity’s business model as they are
initially classified based on the objective of the
entity’s business model for managing the financial
assets and the characteristics of the contractual
cash flows.
irrevocable election on
-
AASB 1053: Application of
Tiers of Australian Accounting
Standards and AASB 2010–2:
to Australian
Amendments
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,
and
1050
Interpretations 2, 4, 5, 15, 17,
127, 129 & 1052]
1052
&
This Standard 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.
Standard
This
deems the Group
to be a Tier 1
entity and hence
there
no
is
accounting
impact
be
to
considered going
forward.
39
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
The Group does not anticipate the early adoption of any of the above reporting requirements.
FINANCIAL RISK MANAGEMENT
2
The Group's activities expose it to a variety of financial risks; market risk (including currency risk, fair value
interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's
overall risk management programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group.
(a) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and
liabilities are denominated in a currency that is not the Group’s functional currency.
(b) Credit risk
There is negligible credit risk on financial assets of the Group since there is no exposure to
individual customers or countries.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of
funding through an adequate amount of committed finance facilities.
(d) Cash flow and fair value interest rate risk
The Group is exposed to a risk of changes to cash flows due to changes in interest rates.
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
3
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the Group and that
are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. There are no estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
Key judgments
Exploration and evaluation expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to
be recoverable or where the activities have not reached a stage which 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. Such capitalised expenditure is carried at the end
of the reporting period at $7,133,975.
40
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Parent Information
4.
The following information has been extracted from the books and
records of the parent and has been prepared in accordance with
Accounting Standards.
2011
$
2010
$
STATEMENT OF FINANCIAL POSITION
ASSETS
Current assets
Non current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Forfeited shares reserve
Share based payments reserve
Accumulated losses
TOTAL EQUITY
STATEMENT OF COMPREHENSIVE INCOME
Total loss
TOTAL COMPREHENSIVE INCOME (LOSS)
1,691,975
6,319,162
8,011,137
2,306,160
6.724.889
9,031,049
57,402
57,402
37,349
37,349
15,925,556
4,623
436,263
(8,412,707)
7,953,735
15,215,954
4,623
429,217
(6,656,094)
8,993,701
(1,756,614)
(1,756,614)
(892,198)
(892,198)
Guarantees
Geopacific Resources NL has not entered into any guarantees, in the current or previous financial year, in
relation to the debts of its subsidiary.
Contingent liabilities
At 31 December 2011, Geopacific Resources NL had no contingent liabilities.
Contractual commitments
At 31 December 2011, Geopacific Resources NL had not entered into any contractual commitments for the
acquisition of property, plant and equipment.
41
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
5 REVENUE
Interest income – other persons
Management Fees Raki Raki Joint Venture
Gain on disposal of plant and equipment
Other income
6
EXPENSES
Consultancy expenses
Consultants Fees
Less allocated to exploration expenditure
Employee benefits expense
Wages and salaries
Directors Fees
Termination payments
Share based payments
Less allocated to exploration expenditure
Consolidated
2011
$
89,559
2,691
-
1,283
93,533
213,347
(135,791)
77,556
119,528
126,000
-
7,046
252,574
(108,086)
144,488
2010
$
116,150
14,084
4,306
1,584
136,124
304,941
(160,494)
144,447
133,957
-
60,000
-
193,597
(123,822)
69,775
Depreciation
27,176
13,471
7
REMUNERATION OF AUDITORS
Assurance services
Audit services
A.
KS Black & Co Australian firm:
Audit of the financial report and other audit work under the
Corporations Act 2001
- Current year
- Prior year
Review of the half-year financial report
Total remuneration for audit services
-
24,950
9,500
-
21,650
8,950
34,450
30,600
42
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
8
INCOME TAX
(a)
Income tax expense
Prima facie income tax benefit calculated at 30% on the loss / (profit)
from ordinary activities
Loss from ordinary activities
Income tax expense calculated at 30% of operating loss
Decrease in income tax benefit due to:
Tax benefit on losses not recognised
Income tax expense
(b) Deferred tax balances not recognised
Deferred tax balances not recognised
Calculated at 30% not brought to account as assets:
Deferred tax assets
Accruals
Capital raising costs capitalised
Revenue tax losses available for offset against future tax income
Deferred tax assets not recognised
Net deferred tax asset (liability) not recognised
Deferred tax balances not recognised
Deferred tax balances not recognised
Calculated at 30% not brought to account as assets:
Deferred tax assets
Accruals
Capital raising costs capitalised
Revenue tax losses available for offset against future tax income
Deferred tax assets not recognised
Net deferred tax asset (liability) not recognised
Consolidated
2011
$
2010
$
(1,723,229)
(516,990)
(432,882)
(129,865)
516,990
129,865
-
-
Statement of
Financial
Position
2011
$
Statement of
Comprehensive
Income
2011
$
4,500
57,953
2,329,930
-
2,392,383
-
(29,739)
450.932
(421,193)
-
Statement of
Financial
Position
2010
$
Statement of
Comprehensive
Income
2010
$
4,500
87,692
1,878,998
-
1,966,690
(750)
6,958
1,397,791
(1,403,999)
-
The taxation benefits of revenue tax losses and temporary differences not brought to account will only be
obtained if:
(i)
the company and the consolidated entity derive further assessable income of a nature and of an
amount sufficient to enable the benefit from the deductions to be realised;
the company and the consolidated entity continue to comply with the conditions for deductibility
imposed by the law; and
no changes in tax legislation adversely affect the company's and the consolidated entity's ability
in realising the benefit from the deductions.
(ii)
(iii)
43
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
9
CASH AND CASH EQUIVALENTS
Current
Cash at bank
10
TRADE AND OTHER RECEIVABLES
Current
Security deposits
Sundry debtors
Interest receivable
GST receivable
11
EXPLORATION EXPENDITURE
Non-Current
Consolidated
2011
$
2010
$
1,687,134
2,173,259
19,444
41,141
-
134,169
194,754
19,328
174,834
16,458
147,840
358,460
Capitalised exploration expenditure carried forward
7,133,975
7,547,611
Movement during year
Carrying value – beginning of year
Additions
Exchange rate variations
Recoveries from joint venture parties
Amounts written off
Carrying value – end of year
During the year the Company expensed previously capitalized exploration expenditure amounting to
$1,275,080 (2010: nil) on the relinquishment of the Nadi South tenement SPL 1434 and the
unsuccessful applications for the Mt Kasi tenements.
7,547,611
900,051
(11,817)
(26,790)
(1,275,080)
7,133,975
5,545,554
2,461,848
(319,948)
(139,843)
-
7,547,611
12 PROPERTY, PLANT AND EQUIPMENT
Non-Current
Plant, vehicles and equipment
At Cost
Less: Provision for depreciation
Movement
Carrying value – beginning of year
Additions
Disposals
Depreciation (included in profit and loss)
Exchange rate variations
201,297
(47,080)
154,217
113,052
68,230
-
(27,176)
111
133,298
(20,246)
113,052
20,373
109,440
(2,800)
(13,471)
(490)
Carrying value – end of year
154,217
113,052
13 TRADE AND OTHER PAYABLES
Current
Trade creditors and accruals
65,741
45,613
44
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
14 ISSUED CAPITAL
Issued Capital
Consolidated
2011
$
2010
$
15,925,556
15,215,954
Reconciliation of movements during the period:
2011
2010
Balance as at 1 January
Shares issued pursuant to a placement at 6 cents
(2010 - 3 cents)
Share consolidation (1 for 5)
Shares issued on exercise of options at 30 cents
per share
Shares issued pursuant to shortfall underwriting
agreement in regard to the 2010 Share Purchase
Plan at 60 cents
Shares issued under Share Purchase Plan at 60
cents (2010 - 4 cents)
Shares issued pursuant to a placement at 6 cents
Less share issue costs
$
Shares
issued
Shares
issued
36,033,957 15,215,954 144,893,717
13,000,000
$
11,976,191
780,000
157,893,717
(126,314,929)
31,578,788
1,275,672
382,702
544,834
326,900
-
-
-
-
-
-
-
-
-
288,500
173,100
4,166,669
2,500,000
(213,337)
Balance as at 31 December
37,854,463
15,925,556
36,033,957
15,215,954
15 OPTIONS
Consolidated 2011
Issue
Date
Expiry
Date
23.12.2009 16.12.2011
08.05.2006 08.05.2012
08.05.2006 08.05.2013
18.09.2009 01.08.2013
08.05.2006 08.05.2014
30.09.2011 30.09.2014
06.06.2009
06.06.2009
(a)
(b)
Exercise
Price (c)
$0.30
$1.00
$1.25
$0.50
$1.50
$0.30
$2.50
$5.00
Number
on issue
31 December
2010
7,242,106
100,000
100,000
610,000
100,000
-
800,000
200,000
9,152,106
Granted
during
year
-
-
-
-
-
500,000
-
-
-
Lapsed
during
year
(5,966,434)
-
-
-
-
-
-
-
-
Exercised
during
year
(1,275,672)
-
-
-
-
-
-
-
-
Number
on issue
31 December
2011
-
100,000
100,000
610,000
100,000
500,000
800,000
200,000
2,410,000
45
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
15 OPTIONS (CONTINUED)
(a) The Options are exercisable in whole or in part, not later than five years after the defining on
Faddy’s Gold Deposit of a JORC compliant ore reserve of over 200,000 ounces of contained gold.
(b) The Options are exercisable in whole or in part, not later than ten years after the defining on
Faddy’s Gold Deposit of a JORC compliant ore reserve of over 1,000,000 ounces of contained gold.
(c) The notice of meeting for the Extraordinary General Meeting to be held on 2 April 2012 contains
resolutions which, if passed, will grant Mr C B Bass a further 1,136,364 ordinary shares and
568,182 listed options under the terms of a share placement announced on 17 February 2012.
(d) In addition, the EGM will also consider a resolution to grant 2,000,000 options at an exercise price
of 30 cents and an expiry date of 16 February 2015
16 RESERVES
(a) Reserves
Forfeited share reserve
Foreign currency translation reserve
Share-based payments reserve
(b) Movements
Share-based payments reserve
Balance 1 January
Option expense
Balance 31 December
Foreign currency translation reserve
Balance 1 January
Exchange gains (losses) during year
Balance 31 December
Forfeited share reserve
Balance 1 January
Balance 31 December
Total reserves
(c) Nature and purpose of reserves
Consolidated
2011
$
4,623
(351,445)
436,263
2010
$
4,623
(316,366)
429,217
89,441
117,474
429,217
7,046
429,217
-
436,263
429,217
(316,366)
(35,079)
(351,445)
169,663
(486,029)
(316,366)
4,623
4,623
4,623
4,623
89,441
117,474
Share-based payments reserve
The share-based payments reserve records the value of options issued to employees and Directors
which have been taken to expenses and the value of options issued on acquisition of Millennium
Mining (Fiji) Ltd and the value of options granted pursuant to the Employee Share Option Plan.
Foreign currency translation reserve
The foreign currency translation reserve records unrealised exchange gains and losses on translation
of subsidiaries accounts during the year.
Forfeited shares reserve
The forfeited shares reserve records the amount of paid up capital received on shares which have
been forfeited due to non payment of calls.
46
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
17
ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Profit (loss) for the year
Other comprehensive income (loss) for the year
Accumulated losses at the end of the year
18
CONTINGENT LIABILITIES
There are no contingent liabilities.
19
(a)
COMMITMENTS
Tenement Commitments
2011
$
(5,186,659)
(1,723,299)
-
(6,909,958)
Consolidated
2010
$
(4,753,777)
(432,882)
-
(5,186,659)
Entities in the Group are committed for expenditure by way of cash expenditure to retain their
interest in areas over which Special Prospecting Licenses are held.
The following expenditure proposals for 2012 are being considered.
Tenement
SPL1216
SPL 1231/1373
Renewal Application
lodged to
31 December, 2012
31 December, 2012
SPL 1361
SPL 1368
SPL 1377
SPL 1415
SPL 1436
31 December, 2012
31 December, 2012
31 December, 2012
Kavukavu Project
16 March 2012
Expenditure $F
Comments
600,000
200,000
800,000
800,000
400,000
50,000
50,000
50% to be met by JV partner
Imperial Mining (Fiji) Ltd
50% to be met by JV partner
Imperial Mining (Fiji) Ltd
SPL 1493
31 December, 2012
80,000
(b) Option acquisition commitments
The company has entered into an agreement with a landowner to acquire the following tenements
- SP1361 Sabeto for FJD116,555 plus interest, to be paid by payments of FJD15,000 per quarter.
- SP1368 Vuda for AUD353,669 plus interest, to be paid by payments of AUD40,000 per quarter.
Payable not later than one year
Payable later than one year, but not later than two years
Consolidated
2011
$
151,756
71,893
223,649
2010
$
191,805
223,649
415,454
47
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
20 PARTICULARS RELATING TO CONTROLLED ENTITIES
Class of Share
Ordinary
Beta Limited
Geopacific Limited
Ordinary
Millennium Mining (Fiji) Limited Ordinary
Holding Company
2010
2011
%
%
100
100
100
100
100
100
Amount of Investment
2011
$
15,372
1,866,993
684,907
2,567,272
2010
$
15,372
1,866,993
684,907
2,567,272
Geopacific Limited, Beta Limited and Millennium Mining (Fiji) Limited are companies incorporated and
carrying on business in Fiji.
21 KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors
The names of each person holding the position of Director of Geopacific Resources NL during the
financial year were:
C B Bass
S T Biggs
R J Fountain
I N A Simpson
R H Probert (alternate for I N A Simpson)
I J Pringle (resigned 19 September 2011)
(b) Other key management personnel
All Directors are identified as key management personnel under AASB 124 “Related Party Disclosures”.
The Acting Exploration Manager, S Whitehead, also meets the definition of key management
personnel.
(c) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2011
$
302,367
-
7,046
2010
$
177,046
58,046
-
309,413
235,092
The Company has taken advantage of the relief provided by the Corporations Regulations and has
transferred the detailed remuneration disclosures to the Directors’ Report. The relevant information
can be found in the remuneration report included in the Directors Report.
(d) Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options,
together with terms and conditions of the options, can be found in the remuneration report
included in the Directors Report.
48
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
21
(d)
KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
Equity instrument disclosures relating to key management personnel (continued)
(ii) Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by
each Director of the Company and other key management personnel of the Group, including their
personally related parties, are set out below.
2011
Balance at
the start of
the year(1)
Name
Directors of Geopacific Resources Ltd
833,334
2,000,000
4,000
5,800
562,845
C B Bass
S T Biggs
R J Fountain
R H Probert
I N A Simpson
Other Key
management
Personnel
S Whitehead
Granted
during the
year as
compensation
Exercised
during the
year
Lapsed
during the
year
Balance
at the
end of
the year
Vested and
exercisable
at the end
of the year
-
-
-
-
-
(833,334)
(300,000)
-
-
(60,000)
-
-
-
(1,700,000)
-
(4,000)
(5,800)
-
(2,845) 500,000
-
-
-
-
500,000
-
500,000
-
- 500,000
-
The notice of meeting for the Extraordinary General Meeting to be held on 2 April 2012 contains
resolutions which, if passed, will grant Mr C B Bass a further 1,136,364 ordinary shares and 568,182 listed
options under the terms of a share placement announced on 17 February 2012.
In addition, the EGM will also consider a resolution to grant 2,000,000 options at an exercise price of 30
cents and an expiry date of 16 February 2015.
No options are vested and unexercisable at the end of the year.
2010
Balance at
the start of
the year
Name
Directors of Geopacific Resources Ltd
333,600
833,334
2,000,000
4,000
5,800
562,845
I J Pringle
C B Bass
S T Biggs
R J Fountain
R H Probert
I N A Simpson
Granted
during the
year as
compensation
Exercised
during the
year
Lapsed
during the
year
Balance at
the end of
the year
Vested and
exercisable
at the end
of the year
-
-
-
-
-
-
333,600
-
-
833,334
- 2,000,000
4,000
-
5,800
-
562,845
-
333,600
833,334
2,000,000
4,000
5,800
562,845
-
-
-
-
-
-
49
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
21 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(d) Equity instrument disclosures relating to key management personnel (continued)
(iii)
Share holdings
2011
Name
I N A Simpson
R J Fountain
R H Probert
C B Bass
S T Biggs
Other Key management
Personnel
Balance at the
start of the year
694,919
66,000
647,545
1,680,002
5,025,000
Received during
the year on the
exercise of
options
Other changes
during the year
60,000
-
-
833,334
300,000
-
-
-
302,417
272,417
Balance at the
end of the year
754,919
66,000
647.545
2,815,573
5,597,417
S Whitehead
-
-
-
-
2010
Name
I J Pringle
I N A Simpson
R J Fountain
R H Probert
C B Bass
S T Biggs
Balance at
the start of
the year
Received
during the year
on the exercise
of options
Share
consolidation
(1 for 5)
Other changes
during the
year
Balance at
the end of
the year
869,250
6,349,595
80,000
3,327,725
6,925,010
24,957,115
-
-
-
-
-
-
(695,400)
(2,679,676)
(64,000)
(2,590,180)
(5,515,008)
(19,965,692)
-
(2,975,000)
50,000
-
270,000
33,577
173,850
694,919
66,000
647,545
1,680,002
5,025,000
22 RELATED PARTY TRANSACTIONS
All transactions with related parties are on normal commercial terms and conditions.
Consolidated
(a)
Transactions with directors and associates of directors
The Bass Group Pty Ltd, a Company in which Mr Bass is a Director
and shareholder, is utilised to provide services in relation to
Geopacific Resources NL.
Office Rental
Dr Ian Pringle provided office services in relation to Geopacific
Resources NL.
Office Rental
50
2011
$
2010
$
13,144
-
9,018
19,725
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
22 RELATED PARTY TRANSACTIONS (CONTINUED)
(b)
Transactions with controlled entities
INTERCOMPANY LOANS
The Holding Company, Geopacific Resources NL, advanced funds to
controlled entities for exploration and administration expenditure
incurred on the company's tenements.
- Geopacific Limited
- Beta Limited
- Millennium Mining (Fiji) Limited
INTERCOMPANY LOAN BALANCES
The balance of loans advanced to controlled entities at the end of the
year are:
- Geopacific Limited
- Beta Limited
- Millennium Mining (Fiji) Limited
These balances are eliminated on consolidation.
2011
$
2010
$
433,192
2,688
2,016
1,592,470
2,470
2,470
4,425,545
1,818,290
1,328,940
4,014,170
1,847,113
1,329,019
23 SHARE-BASED PAYMENTS
(a) Employee Option Plan
The establishment of the Geopacific Resources NL Employee Option Plan was approved by
shareholders at the 2001 annual general meeting. All staff and consultants are eligible to participate
in the plan.
Options are granted under the plan for no consideration. Options are granted for a five year period.
Options granted under the plan carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share.
The exercise price of options is based on the weighted average price at which the Company’s shares
are traded on the Australian Stock Exchange during the five trading days immediately before the
options are granted.
Set out below are summaries of options granted under the plan:
Expiry date
Grant date
Exercise price Value per option at
8 May 2006
8 May 2006
8 May 2006
30 September 2011
30 September 2011
30 September 2011
30 September 2011
8 May 2012
8 May 2013
8 May 2014
30 September 2014
30 September 2014
30 September 2014
30 September 2014
$1.00
$1.25
$1.50
$0.30
$0.30
$0.30
$0.30
grant date
$0.4215
$0.3785
$0.3540
$0.1029
$0.1029
$0.1029
$0.1029
Date vesting
8 May 2007
8 May 2008
8 May 2009
1 July 2012
1 July 2013
1 July 2014
N/A*
*
Options vest after successful exploration results as a consequence of his direct managemen
Board’s discretion.
51
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
23
SHARE-BASED PAYMENTS (CONTINUED)
No options were exercised or forfeited during the periods covered by the above tables.
The weighted average remaining contractual life of share options outstanding at the end of the period
was 2.81 years (2010 – 1.54 years).
The assessed fair value at grant date of options granted to the individuals is allocated equally over the
period from grant date to vesting date, and the amount is included in the remuneration tables above.
Fair values at grant date are independently determined using a Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the impact of dilution, the share price at
grant date and expected price volatility of the underlying share, the expected dividend yield and the
risk-free interest rate for the term of the option.
The fair value of the options granted to Steven Whitehead is deemed to represent the value of the
services rendered.
The fair value of options granted was $51,454
These values were calculated using the Black-Scholes option pricing model applying the following
inputs:
Share price
Exercise price:
Expected exercise date
Expected share price volatility:
Risk-free interest rate:
$0.19
$0.30
30/09/14
98.8%
4.20%
$0.19
$0.30
30/09/14
98.8%
4.20%
$0.19
$0.30
30/09/14
98.8%
4.20%
$0.19
$0.30
30/09/14
98.8%
4.20%
Historical volatility of the company has been the basis for determining expected share price volatility
as it is assumed that this is indicative of future movements.
24 LOSS PER SHARE
(a) Basic and diluted loss per share
Consolidated
2011
Cents
2010
Cents
Loss attributable to the ordinary equity holders of the Company
(4.87)
(1.33)
(b) Reconciliation of loss used in calculating loss per share
Basic and diluted loss per share
2011
$
2010
$
Loss attributable to the ordinary equity holders of the Company used in
calculating basic and diluted loss per share
(1,758,378)
(432,882)
(c) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted loss per share.
The options on issue as stated in note 15 have not been taken into account
for dilution purposes as they are not considered to be dilutive due to the
exercise prices being in excess of the current share price.
52
2011
Number
2010
Number
36,079,978
32,557,927
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
25 EVENTS OCCURRING AFTER THE YEAR END
Bonus issue of options
On 4 February 2012 18,927,269 bonus options were issued to shareholders on the basis of one new
option for every two shares held. The exercise price is 35 cents with an expiry date of 19 January
2013. The options are listed on ASX (Code GPRO).
Share placement
On 17 February the company announced a share placement agreement to raise $1,200,000 through
the issue of up to 5,461,364 ordinary shares at 22 cents per share to institutional and sophisticated
investors.
On 2 March 2012 the company announced the placement of the first tranche of 3,000,000 ordinary
shares and 1,500,000 listed options under the share placement agreement.
The second tranche of 2,461,364 ordinary shares will be issued following approval at an
Extraordinary General Meeting to be held on 2 April 2012.
Other matters
No other matters or circumstances have arisen since 31 December 2011 that have significantly affected
or may significantly affect the Group’s operations in future financial years, or the results of those
operations in future financial years, or the Group’s state of affairs in future financial years.
26 OPERATING SEGMENTS
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the Board of Directors (chief operating decision makers) in assessing performance and
determining the allocation of resources.
The group is managed primarily on the basis of mineral exploration in Fiji and Head Office
administration in Australia. Operating segments are therefore determined on the same basis.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision
makers with respect to operating segments, are determined in accordance with accounting policies
that are consistent to those adopted in the annual financial statements of the Group.
Inter-segment transactions
An internally determined transfer price is set for all inter-segment sales. This price is reset quarterly
and is based on what would be realised in the event the sale was made to an external party at arm’s
length. All such transactions are eliminated on consolidation of the Group’s financial statements.
Corporate charges are allocated to reporting segments based on the segments overall proportion of
revenue generation within the Group. The Board of Directors believes this is representative of likely
consumption of head office expenditure that should be used in assessing segment performance and
cost recoveries.
53
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
26 OPERATING SEGMENTS (CONTINUED)
Basis of accounting for purposes of reporting by operating segments (continued)
Inter-segment loans payable and receivable are initially recognised at the consideration received/to
be received net of transaction costs. If inter-segment loans receivable and payable are not on
commercial terms, these are not adjusted to fair value based on market interest rates. This policy
represents a departure from that applied to the statutory financial statements.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives
majority economic value from the asset. In the majority of instances, segment assets are clearly
identifiable on the basis of their nature and physical location.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the
liability and the operations of the segment. Borrowings and tax liabilities are generally considered to
relate to the Group as a whole and are not allocated. Segment liabilities include trade and other
payables and certain direct borrowings.
Unallocated items
The following items of revenue, expenses, assets and liabilities are not allocated to operating
segments as they are not considered part of the core operations of any segment:
•
impairment of assets and other non-recurring items of revenue or expense;
•
income tax expense;
• deferred tax assets and liabilities;
•
current tax liabilities;
• other financial liabilities;
•
intangible assets;
(a) Operating and geographical segments
2011
Segment performance
Interest received
Raki Raki joint venture management fee
Other income
Total revenue from continuing operations
Head Office
Australia
$
89,316
-
-
89,316
Exploration
Fiji
$
1,968
2,691
1,282
4,216
Intersegment
Total
$
-
-
-
-
$
91,285
2,691
1,282
93,533
Segment net loss from continuing
operations before tax
Reconciliation of segment result to group
net profit/loss before tax:
Amounts not included in segment result but
reviewed by the Board:
— depreciation and amortisation
— foreign currency gains/(losses)
Net
operations
from continuing
loss before
tax
(1,291,461)
(1,425,904)
1,024,634
(1,692,731)
(27,176)
(3,391)
(1,723,299)
54
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
26 FINANCIAL REPORTING BY SEGMENTS (CONTINUED)
(a) Operating and geographical segments(continued)
Head Office
Australia
$
2011
Exploration
Fiji
$
Intersegment
$
Total
$
Segment Assets
Reconciliation of segment assets to
group assets:
Unallocated assets
Group assets
Segment Liabilities
Reconciliation of segment liabilities to
group liabilities:
Unallocated liabilities
Group liabilities
2010
Segment performance
Interest received
Raki Raki joint venture management fee
Gain on sale of plant and equipment
Other income
Total revenue from continuing operations
Segment net loss from continuing
operations before tax
Reconciliation of segment result to group
net profit/loss before tax:
Amounts not included in segment result but
reviewed by the Board:
— depreciation and amortisation
tax
from continuing
loss before
Net
operations
2010
Segment Assets
Reconciliation of segment assets to
group assets:
Unallocated assets
Group assets
Segment Liabilities
Reconciliation of segment liabilities to
group liabilities:
Unallocated liabilities
Group liabilities
9,960,780
8,261,614
(9,051,614)
9,170,080
57,402
9,059,953
(9,051,614)
65,741
-
9,170,080
Head Office
Australia
$
115,122
-
-
115,122
Exploration
Fiji
$
1,028
14,084
4,306
1,584
21,002
-
65,741
Intersegment
Total
$
$
116,150
14,084
4,306
1,584
136,124
-
-
-
-
(339,939)
(149,910)
70,438
(419,411)
(13,471)
(432,882)
Head Office
Australia
$
10,362,394
Exploration
Fiji
$
Intersegment
$
8,457,786
(8,627,798)
Total
$
10,192,382
37,349
8,636,062
(8,627,798)
45,613
-
9,170,780
55
-
45,613
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
27
FINANCIAL INSTRUMENTS DISCLOSURES
(a)
Capital management
The Group considers its capital to comprise its ordinary share capital and accumulated retained
earnings.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide
a consistent return for its equity shareholders through a combination of capital growth and
distributions. In order to achieve this objective, the Group seeks to maintain a gearing ratio that
balances risks and returns at an acceptable level and also to maintain a sufficient funding base to
enable the Group to meet its working capital and strategic investment needs. In making decisions
to adjust its capital structure to achieve these aims, either through altering its dividend policy,
new share issues, or reduction of debt, the Group considers not only its short-term position but
also its long-term operational and strategic objectives.
It is the Group’s policy to maintain its gearing ratio within the range of 0-25% (2010: 0-25%). The
Group’s gearing ratio at the statement of financial position date is shown below:
Cash and cash equivalents
Net debt
Share capital
Reserves
Accumulated losses
Total capital
Gearing ratio
Consolidated
2011
$
1,687,834
1,687,834
2010
$
2,173,259
2,173,259
15,925,556
89,441
(6,909,958)
9,105,039
15,215,954
117,474
(5,186,659)
10,146,769
0.00%
0.00%
(b)
Financial instrument risk exposure and management
In common with all other businesses, the Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
56
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
27
(c)
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises,
are as follows:
Financial assets:
Cash assets
Receivables
Financial liabilities:
Payables
Net financial assets (liabilities)
(d)
General objectives, policies and processes
2011
2010
1,687,834
194,754
1,882,588
2,173,259
358,460
2,531,719
(65,741)
(65,741)
(45,613)
(45,613)
1,816,847
2,486,106
The Board has overall responsibility for the determination of the Group’s risk management
objectives and policies and has the responsibility for designing and operating processes that
ensure the effective implementation of the objectives and policies to the Group’s finance
function. The Board receives monthly reports through which it reviews the effectiveness of the
processes put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible
without unduly affecting the Group’s competitiveness and flexibility. Further details regarding
these policies are set out below:
(i) Credit risk
Credit risk arises principally from the Group’s trade receivables and investments in corporate
bonds. It is the risk that the counterparty fails to discharge its obligation in respect of the
instrument.
Other receivables
Other receivables comprise GST receivable, security deposits and sundry receivables. Credit
worthiness of debtors is undertaken when appropriate.
The maximum exposure to credit risk at balance date is as follows:
Security Deposits
Other receivables
GST receivables
57
Consolidated
2011
$
19,444
41,141
134,169
194,754
2010
$
19,328
191,292
147,840
358,460
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(ii)
Liquidity risk
The Board receives cash flow projections on a quarterly basis as well as information
regarding cash balances. At the year end, these projections indicated that the Group
expected to have sufficient liquid resources to meet its obligations under all reasonably
expected circumstances.
The risk implied from the values shown in the table below, reflects a balanced view of
cash inflows and outflows. Trade payables and other financial liabilities mainly originate
from the financing of assets used in our ongoing operations such as property, plant,
equipment and investments in working capital (e.g., trade receivables). These assets are
considered in the Group's overall liquidity risk.
Carrying
Amount
$
Contractual
Cash flows
$
< 6 mths
$
6- 12
mths
$
1-3
years
$
> 3 years
$
Maturity Analysis - Consolidated - 2011
Financial Liabilities
Trade Creditors
TOTAL
65,741
65,741
Maturity Analysis - Consolidated - 2010
Financial Liabilities
Trade Creditors
TOTAL
45,613
45,613
(iii) Market risk
65,741
65,741
65,741
65,741
45,613
45,613
45,613
45,613
-
-
-
-
-
-
-
-
-
-
-
-
Market risk does not arise as the Group does not use interest bearing, tradable and foreign
currency financial instruments.
(iv)
Interest rate risk
The Group has limited exposure to fluctuations in interest rates that are inherent in financial
markets. The Board makes investment decisions after considering advice received from
professional advisors.
The Group's exposure to interest rate risk and the effective weighted average interest rate for
classes of financial assets and financial liabilities is set out below:
58
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(ii)
Interest rate risk (continued)
Floating
Interest
Rate
Fixed interest rate maturing in:
More
Over 1
than 5
to 5
years
years
1 Year
or Less
Non-
interest
bearing
Total
2011
Note
Financial assets:
Cash assets 9
Receivables 10
Weighted average interest rate
Financial liabilities:
Payables 13
Net financial assets (liabilities)
2010
Note
Financial assets:
Cash assets 9
Receivables 10
1,687,834
-
1,687,834
0.55%
-
-
1,687,834
Floating
Interest
Rate
2,173,259
-
2,173,259
0.50%
Weighted average interest rate
Financial liabilities:
Payables 13
-
-
Net financial assets (liabilities)
2,173,259
Sensitivity Analysis
-
-
-
-
-
-
1 Year
or Less
-
-
-
-
-
-
Over 1
to 5
years
-
-
-
-
-
-
More
than 5
years
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
194,754
194,754
1,687,834
194,754
1,882,588
65,741
65,741
129,013
Non-
interest
bearing
65,741
65,741
1.816,487
Total
-
358,460
358,460
2,173,259
358,460
2,531,719
(45,613)
(45,613)
(45,613)
(45,613)
312,847
2,486,106
2011
Cash assets
Carrying amount
1,687,834
1,687,834
Tax charge of 30%
Post tax profit increase / (decrease)
2010
Cash assets
Tax charge of 30%
Post tax profit increase / (decrease)
2,173,259
2,173,259
59
Consolidated
+2% interest rate
Profit & Loss
-2% interest rate
Profit & Loss
33,757
33,757
(10,127)
23,630
43,465
43,465
(13,040)
30,425
(33,757)
(33,757)
10,127
23,630
(43,465)
(43,465)
13,040
(30,425)
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(v) Currency risk
The Group’s policy is, where possible, to allow Group entities to settle liabilities denominated in
their functional currency (AUD) with the cash generated from their own operations in that
currency. Where Group entities have liabilities denominated in a currency other than their
functional currency (and have insufficient reserves of that currency to settle them) cash already
denominated in that currency will, where possible, be transferred from elsewhere.
The Group’s exposure to foreign currency risk is as follows:
Cash at bank
Net Exposure
Consolidated
2011
$FJ
2010
$FJ
60,061
60,061
55,222
55,222
The following sensitivity analysis is based on the foreign currency risk exposures in existence at the year
end. The below analysis assumes all other variables remain constant.
Sensitivity Analysis
2011
Cash at bank
Tax charge of 30%
Post tax profit increase / (decrease)
2010
Cash at bank
Tax charge of 30%
Post tax profit increase / (decrease)
Carrying amount
$FJ
60,061
60,061
55,222
55,222
Consolidated
+10% FJD/AUD
Profit & Loss
AUD$
-10% FJD/AUD
Profit & Loss
AUD$
3,179
3,179
(954)
2,225
2,928
2,928
(878)
19,434
(3,179)
(3,179)
954
(2,225)
(2,928)
(2,928)
878
2,050
Sovereign risk
(vi)
Country or sovereign risk relates to the likelihood that changes in the business environment will
occur that reduce the profitability of doing business in a country. These changes can adversely
affect operating profits as well as the value of assets. Types of country risk include;
Political changes. Governments may change economic policies. Changes in the ruling party in
Australia or Fiji (brought about by elections, coups or wars) may result in major policy changes.
This could result in expropriation of the Company’s exploration leases, inability to repatriate
future profits, higher taxes, higher tariffs and import costs, elimination of FDI incentives, domestic
ownership requirements and local content requirements.
60
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(vi)
Sovereign risk (continued)
Macroeconomic mismanagement. The Australian and Fiji governments may pursue unsound
monetary and fiscal policies which may lead to inflation, higher interest rates, recession and hard
currency shortage.
Other types of country risk include war and labour unrest which could result in higher costs and
work stoppages.
The Group has maintained a working policy of keeping all relevant Government offices informed
and updated on activities to allow clear avenues of communication with Government authorities
and an understanding of any policy changes and any affects that they may have on the Group’s
work. Regular meetings, field visits and discussion Groups are held with staff of the Mineral
Resources Department of Fiji and these include Ministerial and senior management briefings.
(e)
Accounting policies
(i)
Financial assets
The Group’s financial assets fall into the categories discussed below, with the allocation
depending to an extent on the purpose for which the asset was acquired. The Group does not use
derivative financial instruments in economic hedges of currency or interest rate risk. The Group
has not classified any of its financial assets as held to maturity.
Unless otherwise indicated, the carrying amounts of the Group’s financial assets are a reasonable
approximation of their fair values.
Loans and other receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They arise principally though the sale of assets and GST receivable.
They are initially recognised at fair value plus transaction costs that are directly attributable to the
acquisition or issue and subsequently carried at amortised cost using the effective interest rate
method, less provision for impairment.
The effect of discounting on these financial instruments is not considered to be material.
Impairment provisions are recognised when there is objective evidence (such as significant
financial difficulties on the part of the counterparty or default or significant delay in payment that
the Group will be unable to collect all of the amounts due under the terms receivable, the amount
of such a provision being the difference between the net carrying amount and the present value
of the future such provisions are recorded in a separate allowance account with the loss being
recognised within administrative expenses in the statement of comprehensive income. On
confirmation that the trade receivable will not be collectable, the gross carrying value of the asset
is written off against the associated provision.
61
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
27
(e)
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
Accounting policies (Continued)
(i)
Financial assets (Continued)
Available for sale
Non-derivative financial assets not included in the above categories are classified as available for
sale. They are carried at fair value with changes in fair value recognised directly in the available
for sale reserve. Where there is a significant or prolonged decline in the fair value of an available
for sale financial asset (which constitutes objective evidence of impairment), the full amount of
the impairment, including any amount previously charged to equity, is recognised in the
statement of comprehensive income. Purchases and sales of available for sale financial assets are
recognised on settlement date with any change in fair value between trade date and settlement
date being recognised in the available for sale reserve. On sale, the amount held in the available
for sale reserve associated with that asset is removed from equity and recognised in the
statement of comprehensive income. Interest on corporate bonds classified as available for sale
is calculated using the effective interest method and is recognised in finance income in the
statement of comprehensive income.
(ii)
Financial liabilities
The Group classifies its financial liabilities as measured at amortised cost. The Group does not use
derivative financial instruments in economic hedges of currency or interest rate risk.
Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a
reasonable approximation of their fair values.
These financial liabilities include trade payables and other short-term monetary liabilities, which
are initially recognised at fair value and subsequently carried at amortised cost using the effective
interest method.
(iii)
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do
not meet the definition of a financial liability. The Groups ordinary shares are classified as equity
instruments.
For the purposes of these disclosures, the Group considers its capital to comprise its ordinary
share capital, and accumulated retained earnings. Neither the available for sale reserve nor the
translation reserve is considered as capital. There have been no changes in what the Group
considers to be capital since the previous period.
The Group is not subject to any externally imposed capital requirements.
62
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
28 NOTES TO THE STATEMENT OF CASH FLOWS
(a)
For the purpose of the Statement of Cash Flows, cash and cash equivalents includes cash at bank.
Cash and cash equivalents at the end of the financial year as shown in the Statement of Cash Flows is
reconciled to the related items in the Statement of Financial Position as follows:
Cash at Bank
1,687,834
2,173,259
Consolidated
2011
$
2010
$
(b) Non Cash Financing
Shares issued in lieu of payment for services rendered
Exchange rate fluctuations in exploration expenditure
Share based payments
(c)
Reconciliation of Cash Flows from Operating Activities
Profit (loss) for the year
Depreciation
Options expense
Exploration expenditure written off
Profit on sale of plant and equipment
Changes in Assets and Liabilities:
(Decrease)/increase in receivables
(Decrease)/increase in payables
Net Cash from Operating Activities
(11,817)
7,086
-
(319,948)
-
(1,723,299)
(432,882)
27,176
7,046
1,275,080
-
13,471
-
-
(4,306)
163,706
20,128
(287,526)
(98,574)
(230,163)
(809,817)
63