GEOPACIFIC RESOURCES NL
ACN 003 208 393
and controlled entities
ASX code: GPR
Financial Statements
for the year ended 31 December 2012
CONTENTS
Corporate Directory
Directors Report
Remuneration Report
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, Non-Executive Chairman
C B Bass, Managing 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
Company Secretary
Mr Mark Pitts
Auditor
William Buck, Level 3, 15 Labouchere Road, (corner Mill Point Road)
South Perth, WA 6151, Australia
Bankers
Westpac Banking Corporation, 50 Pitt Street, Sydney, NSW
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
1
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 NL (“Geopacific”) (“the Company”) and its controlled entities for the financial
year ended 31 December 2012, 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, ADSA – 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
(CSFB) 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.
Mr Biggs has held no other directorships of listed companies in the last 3 years.
Charles Bennett Bass, B.Sc(Geol), M.Sc(Mining & Mineral Processing), FAusIMM, FAIG, FAICD,
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 of several publicly listed companies since the early 1990’s.
In March 2001, Mr Bass co-founded Australian-listed Aquila Resources Limited (AQA:ASX), and
remains as 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,
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
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
Mr Bass is a Non-Executive Director on the Board of Aquila Resources Limited (appointed March
2000)
Ian Neville Aston Simpson, Non – 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.
Mr Simpson has held no other directorships of listed companies in the last 3 years.
Russell John Fountain, BSc, PhD, FAIG, 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.
Dr Fountain has held no other directorships of listed companies in the last 3 years.
Roger Harvie Probert, - Alternate Director to Mr Simpson
Harvie Probert was elected chairman of Geopacific Limited 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
3
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
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.
Harvie Probert has held no other directorships of listed companies in the last 3 years.
COMPANY SECRETARY
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.
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 for the Group for the year ended 31 December 2012 was $2,672,619 (2011: loss
$1,723,299). Included in the loss for the year is expensed and written off exploration and evaluation
expenditure of $1,464,577 (2011: $1,275,080).
Review of Operations
Exploration activity during the year was primarily focussed on drill testing ZTEM anomalies at Nabila
and Sabeto, and geochemical testing of the Cakaudrove and Kavukavu prospects. A summary of the
main exploration activities
Nabila
Diamond drilling testing a ZTEM anomaly target at Nabila was completed to a depth of
approximately 846 metres early in the year. The identified ZTEM anomaly was consistent with a
change in alteration and an increase in sulphide mineralisation.
Mineralisation identified by the drilling reflects that of a major hydrothermal alteration system, the
source of the intrusive yet to be identified.
Following a technical review of the project area, high gold values were noted in unsampled intervals
of several historic drill holes in the Mistry mine area, approximately 2km south of the Faddy’s
prospect. Subsequent trench sampling of the southern 400 metres of the 2km arcuate
geochemically anomalous trend identified various zones of anomalous gold mineralisation.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
Sabeto
Drill testing of the ZTEM anomaly commenced during the first half of the year, with the 2 hole
diamond drill program intersecting a 32 metre zone of gold and copper anomalism within a sanidine
porphyry intrusive, plus epithermal gold-base metal mineralisation.
A third diamond hole intersected a wide zone of strong chlorite-pyrite alteration overprinting weak
early biotite-magnetite alteration and minor gold-copper mineralisation. Separate stream sediment
testing has identified copper anomalism extending southeast of the current drilling.
The work carried confirms the prospectivity of Sabeto for disseminated porphyry related gold
copper mineralisation and low temperature epithermal vein style gold-base metal deposits.
Cakaudrove
This prospect was initially identified with the initial ZTEM survey and was subsequently re-
interpreted using the Mira 3D inversion. Following the licence grant early in the year the Company
carried out a broad stream sampling program at the Cakaudrove prospect, identifying four distinct
geochemically gold-copper anomalous zones.
Kavukavu
During the year the Company commenced geochemical mapping and sampling of its new Kavukavu
prospect, located about 10km south of Nabila. Assays from the soil sampling program have
highlighted three zones of anomalism for Au-Ag-As-Hg-Mo-Sb. Geological mapping has identified a
number of skarn outcrops associated with Cu-Zn-Fe mineralisation. In addition, gold mineralisation
within rock chips is spatially associated with radiometric highs.
RakiRaki JV
A 15 metre wide zone of gold mineralisation, hosted within quartz veining, was identified from
assaying trenching at the JV project over a 200 metre strike length. Similar mineralisation has been
noted, slightly offset, to the south of the trenching and follow up trenching will be conducted to test
this potential extension.
A ground magnetic survey has been completed aimed at identifying the structural framework of the
prospect area – this data will be compiled in 2013.
Competent Persons Statement
The review of exploration activities and results contained in this report are based on information
compiled by Dr Russell Fountain, B.Sc., Ph.D, F.A.I.G., a director of the Company. He has sufficient
experience which is relevant to the style of mineralisation and types of deposits under consideration,
and to the activity which he is undertaking to qualify as a Competent Person as defined in the
December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (the JORC Code). Russell John Fountain has consented to the inclusion in
this report of the matters based on his information in the form and context in which it appears.
4 Financial Position
At the end of the financial year the Group had $696,841 (2011: $1,687,834) in cash and cash
equivalent. Capitalised exploration and evaluation expenditure was $6,980,234 (2011: $7,133,975).
Expenditure on exploration of tenements during the year was $1,310,836 (2011: $900,051).
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
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
There were no significant changes in the state of affairs of the Group during the financial year
except for the following:
• During the year, the Company completed a placement of 5,461,364 ordinary fully paid
shares at 22 cents each to raise $1,201,500 before capital raising costs. The placement
shares were issued with a free attaching option on the basis of one (1) free option for every
two (2) shares subscribed for pursuant to the placement. This resulted in 2,730,682 listed
options being issued exercisable at 35 cents each on or before 19 January 2013.
7 Events Subsequent to Reporting Date
Other than the following, there has not arisen in the interval between the end of the financial year
and the date of this report any item, transaction or event of a material and unusual nature likely, in
the opinion of the Directors of the Company to affect substantially the operations of the Group, the
results of those operations or the state of affairs of the Group in subsequent financial years.
• On 3 January 2013, the Company announced that it had entered into an agreement with
unlisted public company World Wide Mining Projects Limited (“WWM”) to undertake an
off-market, target board-recommended 1:1 scrip takeover bid for 100% of WWM’s issued
capital by issuing of up to 53,700,000 GPR shares. A successful takeover will result in GPR
having the option to take an 85% interest in the Kou Sa Copper Project.
On 7 February 2013 a Bidder Statement was lodged with ASIC and ASX, and a
Supplementary Bidder Statement lodged on 26 February 2013.
On 11 March 2013 the Company announced that the takeover offer had been extended to 2
April 2013.
On 18 March 2013 the Company advised WWM that it had received acceptances from
WWM shareholders amounting to 92.5% of total WWM shares on issue.
• On 10 January 2013 the company announced the issue of 700,000 ordinary shares to
consultants in lieu of cash consideration for their services.
• On 19 January 2013 21,657,951 listed options exercisable at 35 cents each expired in
accordance with their terms.
• On 20 February 2013, the Company announced a placement of 4,250,000 ordinary fully paid
shares at 10 cents each, raising $425,000 before costs.
Other matters
No other matter or circumstance has arisen since 31 December 2012 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.
6
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
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
S T Biggs
9 Directors’ Meetings
Direct
Indirect
Shares
4,000
718,539
647,545
Nil
Nil
Options
Nil
500,000
Nil
Nil
Nil
Shares
62,000
36,380
Nil
4,152,117
5,632,417
Options
Nil
Nil
Nil
2,000,000
Nil
During the year ended 31 December 2012 a total of four Directors’ Meetings and two Audit
Committee Meetings were held. Directors’ attendance record is tabulated below.
Record of Directors’ Attendance at Meetings
Director
S T Biggs
C B Bass
R J Fountain
I N A Simpson
R H Probert (alternate to I.
Simpson)
Directors
Meetings
Audit Committee
Meetings
Attended
*
Eligible to
Attend
Attended *
Eligible to
Attend
4
4
3
4
2
4
4
4
4
4
2
-
2
2
-
2
-
2
2
-
Service
All year
All year
All year
All year
All year
*
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 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.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
11 Environment Regulations
Entities in the Group are subject to normal environmental regulations in areas of operations In Fiji.
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.
12 Share Options
There were 26,367,951 options over unissued shares unexercised at 31 December 2012 (2011 –
2,310,000).
Issues in current year
Listed options
18,927,269 bonus options exercisable at 35 cents and expiring on 19th January 2013 were issued to
existing shareholders on 3rd February 2012.
During the year 2,730,682 listed options exercisable at 35 cents each and expiring on 19 January
2013, were issued under a share placement agreement.
Unlisted Options
During the financial year the Company granted the following unlisted options over unissued shares:
of
Number
Options Issued
250,000
2,000,000
250,000
Date of Issue
7 September 2012
5 April 2012
5 April 2012
Exercise
Price
$0.35
$0.30
$0.30
Expiry Date
30 November 2015
5 April 2015
30 September 2014
The Company did not issue any ordinary shares during the financial year on the exercise of unlisted
options.
Since the end of the financial year, no unlisted options have been exercised.
As at the date of this report unlisted options over unissued shares in the Company are:
Number of Options on
Issue
250,000
2,000,000
250,000
610,000
100,000
800,000
200,000
Exercise Price
Expiry Date
30 November 2015
5 April 2015
30 September 2014
1 August 2013
8 May 2013
(i)
(ii)
$0.35
$0.30
$0.30
$0.50
$1.50
$2.50
$5.00
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
(i) 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.
(ii) 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.
Subsequent to the end of the financial year
21,657,951 listed options exercisable at 35 cents each expired on 19 January 2013.
Option holders do not have any rights to participate in any issues of shares or other interest in the
Company or any other entity.
There have been no unissued shares or interests under option of any controlled entity within the
Group during or since the end of the reporting period.
13 Insurance of Officers
The Company has 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 Proceedings on behalf of Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company, or to intervene in any proceedings to which the
Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part
of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the
Court under section 237 of the Corporations Act 2001.
15 Lead Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 31 December 2012 is set out on
page 17.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
16 Auditor
KS Black & Co resigned as auditor on 31 May 2012 and William Buck Audit (WA) Pty Ltd was
appointed as auditor on 31 May 2012.
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
William Buck Audit (WA) Pty Ltd:
Audit and review of the financial report and other audit work
under the Corporations Act 2001
- Current year
Total remuneration for audit services
17 Non-audit Services
Consolidated
2012
$
2011
$
-
34,450
34,225
-
34,225
34,450
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.
No non-audit services were provided by the external auditors in respect of the current or preceding
financial year.
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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
18 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
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 executive directors’ 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.
11
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
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.
A Director may also be paid fees or other amounts as the Directors determine, if a Director performs
special duties or otherwise performs duties outside the scope of normal duties of a Director. A Director
may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any
special duties.
Geopacific Resources NL Employee Option Plan
Information on the Geopacific Resources Option Plan is set out in note 22.
B Details of remuneration
Details of the remuneration of 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 comprises of the Directors and
the Exploration Manager.
12
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
Remuneration paid to key management personnel of Geopacific Resources and of the Group
2012
Short-term benefits
Post-employment
benefits
Share-based
payments
Salaries and Fees
$
Other
$
Super-
annuation
$
Termination
Payments
$
Options
$
Total
$
Share based
payments as %
of
remuneration
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
C B Bass
Total directors
Other Key
management
Personnel
S Whitehead
Totals
-
24,000
54,000
24,000
102,000
-
102,000
109,327
211,327
2011
Short-term benefits
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
Salaries and Fees
$
Other
$
-
42,000
67,000
42,000
151,000
75,000
-
226,000
76,367
302,367
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,840
9,840
-
-
-
-
-
-
-
-
-
-
-
-
-
-
114,639
114,639
-
24,000
54,000
24,000
102,000
114,639
216,639
-
-
-
-
100%
22,280
136,919
141,447
358,086
15.75%
Post-employment
benefits
Share-based
payments
Termination
Payments
(note 2)
$
Options
$
Total
$
Super-
annuation
$
Share based
payments as %
of
remuneration
-
-
-
-
-
-
-
-
-
-
13
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42,000
67,000
42,000
151,000
75,000
226,000
-
-
-
-
-
-
-
7,046
7,046
83,413
309,413
8.44%
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
C Service agreements
At the date of this report the Company has not entered into any service agreement with Directors.
D Share-based compensation
Options
Options are granted on the recommendation of the Board.
Options are granted for no consideration.
Options granted carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share.
2,000,000 options over ordinary shares in the Company were provided as remuneration to one of the
directors of Geopacific Resources as set out below. Further information on the options is set out in
notes 16 and 22 to the financial statements.
During the year 2,000,000 options were granted at an exercise price of 30 cents and an expiry date of 5
April 2015 to Mr Bass.
Directors of Geopacific Resources NL
Name
S T Biggs
I N A Simpson
R J Fountain
R H Probert
C B Bass
Other Key management Personnel
S Whitehead
Number of options granted
during the year
Number of options vested
during the year
2012
-
-
-
-
2,000,000
2011
-
-
-
-
-
2012
-
-
-
-
333,333
2011
-
-
-
-
-
-
500,000
83,333
-
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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GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
D Share-based compensation (continued)
Options (continued)
(i)
Options issued to Mr Charles Bass
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
5 April 2012
5 April 2012
5 April 2012
5 April 2012
5 April 2015
5 April 2015
5 April 2015
5 April 2015
Number of
Options
333,333
333,333
333,334
1,000,000
Exercise
price
$0.30
$0.30
$0.30
$0.30
Value per option at
grant date
$0.1347
$0.1347
$0.1347
$0.1347
Date vesting
15 September 2012
15 September 2013
15 September 2014
N/A1
1 Options vest after successful exploration results arising from the ZTEM geophysics, such success
deemed in the Board’s discretion or a corporate transaction benefitting the Company has been
successfully negotiated.
(ii)
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/A2
2 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.
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 2012 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.
15
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
The Directors Report, including the Remuneration Report, is signed in accordance with a resolution of the
Directors:
C B Bass
Executive Director
Perth, Australia
Dated: 22nd March 2013
16
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ DECLARATION
The Directors of Geopacific Resources NL declare that:
a)
the financial statements and notes, set out on pages 21 to 60 are in accordance with the
Corporations Act 2001, including:
i.
ii.
complying with Australian Accounting Standards and Corporations Regulations
2001 and other mandatory professional reporting requirements; and
giving a true and fair view of the Group’s financial position as at 31 December 2012
and of their performance for the year then ended; and
iii.
complying with International Financial Reporting Standards as disclosed in Note 1.
b)
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 has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 31 December
2012.
This declaration is made in accordance with a resolution of the Directors:
C B Bass
Executive Director
Perth, Australia
Dated: 22nd March 2013
20
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2012
Note
2012
$
Consolidated
2011
$
Revenue from continuing operations
5
48,994
93,533
Administration expenses
Consultancy expense
Depreciation expense
Employee benefits expense
Equity based payments
Exploration expenditure written off
Occupancy Expenses
Provision for VAT expense
Other expenses
(Loss) before income tax
Income tax expense
(352,818)
(30,000)
(48,487)
(215,912)
(148,491)
(1,464,577)
(69,578)
(282,004)
(109,746)
(198,329)
(77,556)
(27,176)
(137,442)
(7,046)
(1,275,080)
(46,367)
-
(47,835)
(2,721,613)
(1,816,831)
(2,672,619)
(1,723,299)
-
-
6
8
(Loss) for the year attributable to members of the parent
company
(2,672,619)
(1,723,299)
Other comprehensive income:
Exchange differences on translating foreign controlled
entities
(10,743)
(35,079)
Other comprehensive income for the year, net of tax
(10,743)
(35,079)
Total comprehensive income for the year attributable to
members of the parent entity
Basic loss per share
Diluted loss per share
23
23
(2,683,362)
(1,758,378)
(6.34)
(4.78)
(6.34)
(4.78)
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 2012
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration expenditure
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
9
10
11
12
13
14
14
Consolidated
2011
$
2012
$
696,841
99,582
1,687,834
194,754
796,423
1,882,588
6,980,234
197,794
7,133,975
154,217
7,178,028
7,288,192
7,974,451
9,170,780
253,385
6,990
260,375
19,323
19,323
65,741
-
65,741
-
-
279,698
65,741
7,694,753
9,105,039
15
16
17,050,141
(46,334)
(9,309,054)
15,925,556
89,441
(6,909,958)
7,694,753
9,105,039
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 2012
Consolidated
Issued Capital
Forfeited
Shares
Reserve
Share Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Equity
$
$
$
$
$
$
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 issued during the year
709,602
Share based payments
-
-
7,046
-
-
-
-
709,602
7,046
15,925,556
4,623
436,263
(316,366)
(5,186,659)
10,864,317
Other Comprehensive
the year
loss for
-
-
-
(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
At 1 January 2012
15,925,556
4,623
436,263
(351,445)
(6,909,958)
9,105,039
Transactions with owners
their capacity as owners
in
Shares issued during the year
1,201,500
Share issue costs
(76,915)
Options issued
Options expired
Transfer of
reserve
forfeited shares
-
-
-
17,050,141
Other Comprehensive loss for
the year
-
At 31 December 2012
17,050,141
-
-
-
-
-
-
148,491
(268,900)
(4,623)
-
-
-
-
-
-
-
-
1,201,500
(76,915)
148,491
268,900
4,623
-
-
-
-
-
315,854
(351,445)
(6,636,435)
10,378,115
-
(10,743)
(2,672,619)
(2,683,362)
315,854
(362,188)
(9,309,054)
7,694,753
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 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Cash payments in the course of operations
Interest received
Other income
Note
Consolidated
2011
$
2012
$
(684,529)
47,716
1,278
(323,695)
89,559
3,973
Net Cash used in Operating Activities
27(c)
(635,535)
(230,163)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Proceed from disposal 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 IN CASH AND CASH EQUIVALENTS
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
(104,934)
14,845
(1,373,382)
(68,230)
-
(900,051)
(1,463,471)
(968,281)
1,201,500
(76,915)
709,602
-
1,124,585
709,602
(974,421)
(16,572)
(488,842)
3,417
1,687,834
2,173,259
27(a)
696,841
1,687,834
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 2012
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
Summary of significant accounting policies
Financial risk management
Critical accounting estimates and judgments
Parent company information
Revenue
Loss before income tax
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
Financial Liabilities
Issued equity
Reserves
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
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 2012
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Geopacific Resources NL (‘the Company’) is a listed public company domiciled in Australia. The
consolidated financial report of the Company for the financial year ended 31 December 2012 comprises
the Company and its controlled entities (together referred to as the ‘Group’).
The separate financial statements of the parent entity, Geopacific Resources NL, have not been presented
within this financial report as permitted by the Corporation Act 2001.
The financial report was authorized for issue by the directors on 21 March 2012.
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Interpretations, other authoritative
Australian Accounting Standards, Australian Accounting
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.
Except for cash flow information, 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.
Going concern basis for preparation of financial statements
During the year the Company incurred a net loss of $2,672,619 (2011: $1,723,299) and net operating cash
outflows of $635,535 (2011: $230,163).
The financial statements have been prepared on the going concern basis which contemplates the
continuity of normal business activities and the realisation of assets and discharge of liabilities in the
normal course of business. The ability of the Group to continue to adopt the going concern assumption
will depend on future successful capital raisings, the successful exploration and subsequent exploitation
of the Group’s tenements and/or sale of non-core assets.
Should the Group not be successful in raising additional funding by capital raisings or other alternative
funding arrangements fail to eventuate, there is a material uncertainty as to whether the Group will be
able to continue as a going concern. If the Group is unable to continue as a going concern, it will be
required to realise its assets and extinguish its liabilities other than in the normal course of business and
at amounts that may be different to those stated in the final report
The Directors are cognisant of the fact that future exploration and administration activities may be
constrained by available cash assets, and believe that the current cash reserves of the Group and
proposed future fund raisings will be sufficient to fund forecast exploration.
Subsequent to the end of financial year, the Group completed a share placement raising $425,000 by issuing
4,250,000 ordinary fully paid shares at 10 cents each.
The directors consider that the use of the going concern basis is appropriate for the preparation of these
financial statements.
26
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Standards for Application in Future Periods
In the year ended 31 December 2012, the Group has reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to its operations and effective for the current annual
reporting period. It has been determined by the Group that there is no impact, material or otherwise, of
the new and revised Standards and Interpretations on its business and, therefore, no change is necessary
to Group accounting policies.
The AASB has issued a number of new and amended Accounting Standards and Interpretations that have
mandatory application dates for future reporting periods, some of which are relevant to the Group. The
Group has decided not to early adopt any of the new and amended pronouncements. The Group’s
assessment of the new and amended pronouncements that are relevant to the Group but applicable in
future reporting periods is set out below:
AASB 9: Financial Instruments (December 2010) and AASB 2010–7: Amendments to Australian Accounting
Standards arising from AASB 9 (December 2010).
These Standards are applicable retrospectively and include revised requirements for the classification and
measurement of financial instruments, as well as recognition and derecognition requirements for
financial instruments.
The key changes made to accounting requirements include:
-
-
-
-
-
-
-
simplifying the classifications of financial assets into those carried at amortised cost and those
carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets
carried at amortised cost;
allowing an irrevocable election on initial recognition to present gains and losses on investments in
equity instruments that are not held for trading in other comprehensive income. Dividends in
respect of these investments that are a return on investment can be recognised in profit or loss and
there is no impairment or recycling on disposal of the instrument;
requiring financial assets to be reclassified where there is a change in an entity’s business model as
they are initially classified based on: (a) the objective of the entity’s business model for managing
the financial assets; and (b) the characteristics of the contractual cash flows; and
requiring an entity that chooses to measure a financial liability at fair value to present the portion
of the change in its fair value due to changes in the entity’s own credit risk in other comprehensive
income, except when that would create an accounting mismatch. If such a mismatch would be
created or enlarged, the entity is required to present all changes in fair value (including the effects
of changes in the credit risk of the liability) in profit or loss.
These Standards were mandatorily applicable for annual reporting periods commencing on or after
1 January 2013. However, AASB 2012–6: Amendments to Australian Accounting Standards –
Mandatory Effective Date of AASB 9 and Transition Disclosures (issued September 2012) defers the
mandatory application date of AASB 9 from 1 January 2013 to 1 January 2015. This amendment is a
consequence of the deferral of IFRS 9 to allow the IASB to complete its revision of that Standard. In
light of this change of mandatory effective date, the Group is expected to adopt AASB 9 and AASB
27
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Standards for Application in Future Periods (continued)
2010–7 for the annual reporting period ending 31 December 2015. Although the directors anticipate that
the adoption of AASB 9 and AASB 2010–7 may have a significant impact on the Group’s financial
instruments, it is impracticable at this stage to provide a reasonable estimate of such impact particularly
considering the changes that are expected to be made to IFRS 9 in the future.
AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of
Interests in Other Entities, AASB 127: Separate Financial Statements (August 2011), AASB 128:
Investments in Associates and Joint Ventures (August 2011) and AASB 2011–7: Amendments to Australian
Accounting Standards arising from the Consolidation and Joint Arrangements Standards (applicable for
annual reporting periods commencing on or after 1 January 2013).
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. This standard is not expected to have significant impact on the Group’s financial statements.
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” (where 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).
AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary,
joint venture, 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 affect
disclosures only and is not expected to significantly impact the Group.
To facilitate the application of AASBs 10, 11 and 12, revised versions of AASB 127 and AASB 128 have also
been issued.
These Standards are not expected to significantly impact the Group’s financial statements.
AASB 13: Fair Value Measurement and AASB 2011–8: Amendments to Australian Accounting Standards
arising from AASB 13 (applicable for annual reporting periods commencing on or after 1 January 2013).
AASB 13 defines fair value, sets out in a single Standard a framework for measuring fair value, and
requires disclosures about fair value measurement.
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, financial
assets and financial liabilities) to be measured at fair value.
These Standards are expected to result in more detailed fair value disclosures, but are not expected to
significantly impact the amounts recognised in the Group’s financial statements.
28
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Standards for Application in Future Periods (continued)
AASB 2011–4: Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirements (applicable for annual reporting periods beginning on or after 1 July
2013).
This Standard makes amendments to AASB 124: Related Party Disclosures to remove the individual key
management personnel disclosure requirements (including paras Aus29.1 to Aus29.9.3). These
amendments serve a number of purposes, including furthering trans-Tasman convergence, removing
differences from IFRSs, and avoiding any potential confusion with the equivalent Corporations Act 2001
disclosure requirements.
This Standard is not expected to significantly impact the Group’s financial report as a whole because:
-
-
–
some of the disclosures removed from AASB 124 will continue to be required under s 300A of the
Corporations Act, which is applicable to the Group; and
AASB 2011–4 does not affect the related party disclosure requirements in AASB 124 applicable to
all reporting entities, and some of these requirements require similar disclosures to those removed
by AASB 2011–4.
AASB 2011–9: Amendments to Australian Accounting Standards – Presentation of Items of Other
Comprehensive Income (applicable for annual reporting periods commencing on or after 1 July
2012).
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 therefore not expected to significantly impact the Group.
AASB 119: Employee Benefits (September 2011) and AASB 2011–10: Amendments to Australian
Accounting Standards arising from AASB 119 (September 2011) (applicable for annual reporting periods
commencing on or after 1 January 2013).
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; and
disaggregation of changes in a net defined benefit liability/(asset) into service cost, net interest
expense and remeasurements and recognition of:
(i)
(ii)
service cost and net interest expense in profit or loss; and
remeasurements in other comprehensive income.
AASB 119 (September 2011) also includes changes to the criteria for determining when termination
benefits should be recognised as an obligation.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2012–2: Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets
and Financial Liabilities (applicable for annual reporting periods commencing on or after 1 January 2013).
29
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Standards for Application in Future Periods (continued)
AASB 2012–2 principally amends AASB 7: Financial Instruments: Disclosures to require entities to include
information that will enable users of their financial statements to evaluate the effect or potential effect of
netting arrangements, including rights of set-off associated with the entity’s recognised financial assets
and recognised financial liabilities, on the entity’s financial position.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2012–3: Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial
Liabilities (applicable for annual reporting periods commencing on or after 1 January 2014).
This Standard adds application guidance to AASB 132: Financial Instruments: Presentation to address
potential inconsistencies identified in applying some of the offsetting criteria of AASB 132, including
clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross
settlement systems may be considered equivalent to net settlement.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2012–5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009–
2011 Cycle (applicable for annual reporting periods commencing on or after 1 January 2013).
This Standard amends a number of Australian Accounting Standards as a consequence of the issuance of
Annual Improvements to IFRSs 2009–2011 Cycle by the International Accounting Standards Board,
including:
-
-
-
-
-
AASB 1: First-time Adoption of Australian Accounting Standards to clarify the requirements in
respect of the application of AASB 1 when an entity discontinues and then resumes applying
Australian Accounting Standards;
AASB 101: Presentation of Financial Statements and AASB 134: Interim Financial Reporting to clarify
the requirements for presenting comparative information;
AASB 116: Property, Plant and Equipment to clarify the accounting treatment of spare parts, stand-
by equipment and servicing equipment;
AASB 132 and Interpretation 2: Members’ Shares in Co-operative Entities and Similar Instruments
to clarify the accounting treatment of any tax effect of a distribution to holders of equity
instruments; and
AASB 134 to facilitate consistency between the measures of total assets and liabilities an entity
reports for its segments in its interim and annual financial statements.
This Standard is not expected to significantly impact the Group’s financial statements
30
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Significant accounting policies
The following is a summary of the material accounting policies adopted by the Group in the preparation
of the financial report. The accounting policies have been consistently applied, unless otherwise stated.
(a) Cash and cash equivalents
Cash and short-term deposits in the consolidated statement of financial position comprise cash at
bank and in hand. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of
cash and cash equivalents as defined above, net of outstanding bank overdrafts.
(b)
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction from the proceeds.
(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.
(iii) 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.
31
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
Employee benefits (continued)
(iii)
Share-based payments (continued)
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.
(e)
Financial Instruments
Initial 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 instruments are subsequently measured at fair value, amortised cost using the effective
interest method, or cost.
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.
32
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Financial Instruments (continued)
(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 being
measured at fair value 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. Gain or losses are recognized in profit or loss through the amortization process and
when the financial asset is derecognised.
(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. Gain or losses are recognized in profit or loss through the amortization process
and when the financial asset is derecognised.
(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. Gain or losses are recognized in profit or loss
through the amortization process and when the financial asset is derecognised.
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.
33
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Financial Instruments (continued)
Impairment
At each reporting date the Group assesses whether there is objective evidence that a financial
instrument has been
in the statement of
comprehensive income.
(f)
Foreign currency transactions and balances
losses are recognised
Impairment
impaired.
(i)
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;
— income and expenses are translated at average exchange rates for the period; and
— retained earnings are translated at the exchange rates prevailing at the date of the
transaction.
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 of.
(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.
34
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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 year is the tax payable on the current year’s taxable
income based on the notional 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.
(j)
(i)
Loss per share
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.
35
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) Mineral Tenements and Deferred Mineral Exploration Expenditure
Mineral exploration and evaluation expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are carried forward only if they relate to an area of
interest for which rights of tenure are current and in respect of which:
such costs are expected to be recouped through the successful development and exploitation
•
of the area of interest, or alternatively by its sale; or
• exploration and/or evaluation activities in the area have not reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves and
active or significant operations in, or in relation to, the area of interest are continuing.
In the event that an area of interest is abandoned or if the Directors consider the expenditure to be
of reduced value, accumulated costs carried forward are written off in the year in which that
assessment is made. A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of interest.
Immediate restoration, rehabilitation and environmental costs necessitated by exploration and
evaluation activities are expensed as incurred and treated as exploration and evaluation
expenditure. Exploration activities resulting in future obligations in respect of restoration costs
result in a provision to be made by capitalising the estimated costs, on a discounted cash basis, of
restoration and depreciating over the useful life of the asset. The unwinding of the effect of the
discounting on the provision is recorded as a finance cost in the income statement.
(l)
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial year 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 and equipment
5% to 37.5%
- Computer software
- Motor vehicles
25%
25%
- Furniture and fittings
7% to 20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each year
end.
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(h)).
36
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Plant and equipment (continued)
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These
gain and losses 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)
Controlled entities
The consolidated financial statements incorporate the assets and liabilities of all controlled entities
of Geopacific Resources NL (“the Company”) as at 31 December 2012 and the results of all
controlled entities for the year then ended. Geopacific Resources NL and its controlled entities
together are referred to in this financial report as the Group.
Controlled entities 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.
Controlled entities 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 controlled entities have
been changed where necessary to ensure consistency with the policies adopted by the Group.
A list of controlled entities is contained in note 19.
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.
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.
37
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Principles of consolidation (continued)
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.
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 controlled entities is included in intangible assets.
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.
38
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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 using the effective interest method.
(iii) General
All revenue is stated net of goods and services tax (GST).
(o)
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
(p)
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessor) are charged to the income statement on a straight line basis
over the period of the lease.
(q)
Provisions
Provisions are recognised when the Group has legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow
can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settled the obligation
at the end of the reporting period.
39
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
FINANCIAL RISK MANAGEMENT
2
The Group has exposure to a variety of risks arising from its use of financial instruments. This note
presents information about the Group’s exposure to the specific risks, and the policies and processes for
measuring and managing those risks. Further quantitative disclosures are included throughout this
financial report. The Board of Directors has overall responsibility for the risk management framework.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from transactions with
customers and investments.
Trade and other receivables
The Group has no investments and the current nature of the business activity does not result in
trading receivables. The receivables that the Group recognises through its normal course of business
are short term in nature and the most significant (in quantity) is the receivable from security deposits
for tenements. The risk of non recovery of receivables from this source is considered to be negligible.
Cash deposits
The Group’s primary banker is Westpac. At balance date all operating accounts and funds held on
deposit are with this bank. The Directors believe any risk associated with the use of only one bank is
mitigated by its size and reputation. Except for this matter the Group currently has no significant
concentrations of credit risk.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending.
Management is cognisant of the future demands for liquid finance resources to finance the Group’s
current and future operations, and consideration is given to the liquid assets available to the Group
before commitment is made to future expenditure or investment.
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising any return.
Foreign exchange risk
The Group and the parent entity operated in Fiji and are exposed to foreign exchange risks arising
from the fluctuations between the exchange rates of the Australian and Fijian Dollar. The Group does
not have any further material foreign currency dealings other than the above.
40
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk (continued)
Foreign exchange risk arises when future commercial transactions and recognized assets and liabilities
denominated in a currency that is not the Group’s functional currency. The Group has not formalised
a foreign currency risk management policy however, it monitors its foreign currency expenditure in
light of exchange rate movements.
Interest rate risk
As the Group has significant interest bearing assets, the Group’s income and operating cash flows are
materially exposed to changes in market interest rates. The assets are short term interest bearing
deposits, and no financial instruments are employed to mitigate risk (Note 26 – Financial
Instruments).
(d) Capital management
The Board’s policy is to maintain a sound capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitors capital
expenditure and cash flows as mentioned in (b).
The Group’s objectives when managing capital is to safeguard the Group’s ability to continue as a
going concern, so as to maintain a strong capital base sufficient to maintain future exploration and
development of its projects. In order to maintain or adjust the capital structure, the Group may return
capital to shareholders issue new shares or sell assets to reduce debt. The Group’s focus has been to
raise sufficient funds through equity to fund exploration and evaluation activities.
There were no changes in the Group’s approach to capital management during the year. Risk
management policies and procedures are established with regular monitoring and reporting.
Neither the Company nor any of its controlled entities are subject to externally imposed capital
requirements.
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.
Key judgments
Exploration and evaluation expenditure
The Company’s accounting policy is stated at Note 1(k). There is some subjectivity involved in the carrying
forward as capitalised or writing off to the income statement exploration and evaluation expenditure,
however the Board and management give due consideration to areas of interest on a regular basis and are
confident that decisions to either write off or carry forward such expenditure reflect fairly the prevailing
situation. In the year ended 31 December 2012 an amount of $1,464,577 has been written off (2011:
$1,275,080)
41
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
3
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
Key Estimates
Share based payments
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an internal valuation
using a Black-Scholes option pricing model. Refer Note 22 for details of estimates and assumptions used
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.
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)
2012
$
2011
$
714,939
6,992,170
7,707,109
1,691,975
6,319,162
8,011,137
103,698
103,698
57,402
57,402
17,050,141
-
315,854
(9,762,584)
7,603,411
15,925,556
4,623
436,263
(8,412,707)
7,953,735
(1,623,399)
(1,623,399)
(1,756,614)
(1,756,614)
Guarantees
Geopacific Resources NL has not entered into any guarantees, in the current or previous financial year, in
relation to the debts of its subsidiaries.
Contingent liabilities
At 31 December 2012, Geopacific Resources NL had no contingent liabilities. (2011: Nil)
Contractual commitments
At 31 December 2012, Geopacific Resources NL had not entered into any contractual commitments for the
acquisition of property, plant and equipment. (2011: Nil)
42
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
5 REVENUE
Interest income – other persons
Management Fees Raki Raki Joint Venture
Other income
6
LOSS BEFORE INCOME TAX
Consolidated
2012
$
47,716
-
1,278
48,994
2011
$
89,559
2,691
1,283
93,533
Loss before income tax includes the following specific expenses:
Rental expenses
Contributions to defined superannuation funds
69,478
46,081
15,344
-
7
REMUNERATION OF AUDITORS
Assurance services
Audit services
A.
Audit or review of the financial report
William Buck Audit (WA) Pty Ltd:
- Current year
KS Black & Co Australian firm:
- Prior year
34,225
-
-
34,450
Total remuneration for audit services
34,225
34,450
43
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
8
INCOME TAX
(a) Reconciliation of income tax expense/(benefit) to
prima facie tax payable
Loss from continuing operations before income tax
expense/(benefit)
Consolidated
2012
$
2011
$
(2,672,619)
(1,723,229)
Tax at the Australian rate of 30% (2011 – 30%)
(801,786)
(516,990)
Tax effect of:
Non-deductible share based payment
Exploration costs
Capital raising costs
Other non-deductible expenses
Deferred tax assets not brought to account
Income tax expense
(b) Deferred tax – Consolidated Statement of Financial
Position
Deferred Tax Liabilities
Capitalised Exploration and Evaluation expenditure
Less: Deferred Tax Assets
Accrued expenses
Interest bearing liabilities
Deductible equity raising costs
Tax losses available to offset against future taxable
income
Net Deferred tax assets not recognised
44,547
46,122
(25,948)
29,378
707,687
-
-
(54,233)
(30,086)
(147,027)
748,336
-
(2,094,070)
(2,094,070)
(2,140,193)
(2,140,193)
27,638
3,934
50,220
19,262
-
76,168
2,224,923
2,306,715
212,645
2,625,684
2,721,114
580,921
The deferred tax assets of tax losses 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)
9 CASH AND CASH EQUIVALENTS
Current
Cash at bank
696,841
1,687,834
44
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
10
TRADE AND OTHER RECEIVABLES
Current
Security deposits
Sundry debtors
GST receivable
11
EXPLORATION EXPENDITURE
Non-Current
Consolidated
2012
$
2011
$
82,487
8,989
8,106
99,582
19,444
41,141
134,169
194,754
Capitalised exploration expenditure carried forward
6,980,234
7,133,975
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
$1,464,577 (2011: 1,275,080) on the relinquishment of the Nuku tenement SPL 1377, CX 735 and
Nadovu tenement CX667.
7,133,975
1,310,836
-
-
(1,464,577)
6,980,234
7,547,611
900,051
(11,817)
(26,790)
(1,275,080)
7,133,975
12 PLANT AND EQUIPMENT
Non-Current
Plant, vehicles and equipment
At Cost
Less: Accumulated depreciation
Total plant and equipment
Movement
288,657
(90,863)
197,794
201,297
(47,080)
154,217
Plant &
Equipment
Computer
software
Motor
Vehicle
Lease
Vehicle
Carrying value – beginning of
year
Additions
Disposals
Depreciation (included in
profit and loss)
Carrying value – end of year
$
$
$
$
119,019
32,359
(1,273)
(26,863)
23,242
6,101
35,894
-
(9,405)
32,590
26,232
-
(11,597)
(6,177)
8,458
-
33,683
-
(5,491)
28,192
Furniture
and
Fittings
$
2,865
2,998
-
(551)
5,312
Total
$
154,217
104,934
(12,870)
(48,487)
197,794
At 31 December 2012, a motor vehicle with a carrying amount of $28,192 (2011: Nil) is secured under
a finance lease arrangement.
45
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
13 TRADE AND OTHER PAYABLES
Current
Sundry creditors and accruals
14 FINANCIAL LIABILITIES
CURRENT
Lease liabilities
NON-CURRENT
Lease liabilities
Consolidated
2012
$
2011
$
253,385
65,741
6,990
19,323
-
-
Lease liabilities are secured by underlying leased assets with a carrying amount of $28,192 as at year end.
15 ISSUED CAPITAL
Issued Capital
17,050,141
15,925,556
Reconciliation of movements during the
period:
Balance as at 1 January
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 pursuant to a placement at
22 cents
Less share issue costs
No. of
Shares
37,854,463
2012
$
15,925,556
No. of
Shares
36,033,957
2011
$
15,215,954
-
-
-
-
1,275,672
382,702
544,834
326,900
5,461,364
-
1,201,500
(76,915)
-
-
-
Balance as at 31 December
43,315,827
17,050,141
37,854,463
15,925,556
46
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
16 RESERVES
(a) Reserves
Foreign currency translation reserve
Forfeited share reserve
Share-based payments reserve
(b) Movements
Share-based payments reserve
Balance 1 January
Option expense
Options expired
Balance 31 December
Foreign currency translation reserve
Balance 1 January
Exchange gains (losses) during year
Balance 31 December
Forfeited share reserve
Balance 1 January
Transfer to accumulated losses
Balance 31 December
Total reserves
(c) Nature and purpose of reserves
Consolidated
2012
$
(362,188)
-
315,854
2011
$
(351,445)
4,623
436,263
(46,334)
89,441
436,263
148,491
(268,900)
429,217
7,046
-
315,854
436,263
(351,445)
(10,743)
(362,188)
(316,366)
(35,079)
(351,445)
4,623
(4,623)
4,623
-
-
4,623
(46,334)
89,441
Share-based payments reserve
The share-based payments reserve records the value of unexercised options issued to employees
and Directors which have been taken to expenses, the value of options issued on acquisition of
Millennium Mining (Fiji) Ltd, the value of unexercised 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 controlled entities accounts during the year.
17
CONTINGENT LIABILITIES
The Group does not have any contingent liabilities at the end of the reporting period.
47
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
18
COMMITMENTS
(a)
Tenement Commitments
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 for 2013 is required.
Tenement
SPL1216
SPL 1231/1373
SPL 1436
Tenement Renewed
Expenditure $F
Comments
to
02 May 2013
300,000
01 June, 2013
200,000
01 June, 2013
50,000
50% to be met by JV partner
Imperial Mining (Fiji) Ltd
50% to be met by JV partner
Imperial Mining (Fiji) Ltd
(b) Option acquisition commitments
The company has entered into an agreement with a landowner to acquire the following
tenement:
SP1368 Vuda for AUD353,669 plus interest, to be paid by payments of AUD40,000 per quarter.
The remaining commitment as at year end is as follows:
Payable not later than one year
Payable later than one year, but not later than two
years
(c)
Finance lease commitments
Payable – minimum lease payments:
Payable not later than one year
Payable later than one year, but not later than five years
Minimum lease payments
Less future finance charge
Present value of minimum lease payments
Consolidated
2012
$
35,122
-
35,122
$
8,607
20,744
29,351
(3,038)
26,313
2011
$
151,756
71,893
223,649
$
-
-
-
-
-
The Group’s lease vehicle under a finance lease agreement for a period of 36 months ending May 2015.
48
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
19 PARTICULARS RELATING TO CONTROLLE ENTITIES
Class of Share
Holding Company
2012
2011
Beta Limited
Geopacific Limited
Millennium Mining (Fiji) Limited
Ordinary
Ordinary
Ordinary
%
100
100
100
%
100
100
100
Geopacific Limited, Beta Limited and Millennium Mining (Fiji) Limited are companies incorporated
and carrying on business in Fiji.
20 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:
S T Biggs
C B Bass
R J Fountain
I N A Simpson
R H Probert (alternate for I N A Simpson)
(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
Total KMP compensation
Consolidated
2012
$
211,327
9,840
136,919
2011
$
302,367
-
7,046
358,086
309,413
Further details on the remuneration 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.
49
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
20
KEY MANAGEMENT PERSONNEL DISCLOSURES (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.
2012
Name
Balance at
the start of
the year(1)
Granted during
the year as
compensation
Other
changes
during the
year1
Exercised
during the
year
Lapsed
during the
year
Balance at
the end of
the year
Vested
and
exercisable
at the end
of the year
Directors of Geopacific Resources NL
C B Bass
S T Biggs
R J Fountain
R H Probert
I N A Simpson
Other Key
management
Personnel
S Whitehead
-
-
-
-
500,000
2,000,000
-
-
-
-
2,476,059
2,798,709
33,000
323,773
377,460
500,000
-
-
-
-
-
-
-
-
- 4,476,059
- 2,798,709
33,000
-
323,773
-
877,460
-
-
-
-
-
500,000
-
500,000
83,333
1 Bonus issue of options
No options are vested and unexercisable at the end of the year.
2011
Name
Balance at
the start of
the year(1)
Granted during
the year as
compensation
Other
changes
during the
year
Exercised
during the
year
Lapsed
during the
year
Balance
at the
end of
the year
Vested and
exercisable
at the end
of the year
Directors of Geopacific Resources NL
C B Bass
S T Biggs
R J Fountain
R H Probert
I N A Simpson
Other Key
management
Personnel
S Whitehead
833,334
2,000,000
4,000
5,800
562,845
-
-
-
-
-
-
500,000
-
-
-
-
-
-
-
(833,334)
-
-
(300,000) (1,700,000)
-
(4,000)
(5,800)
-
(2,845) 500,000
-
-
(60,000)
-
-
-
-
500,000
-
- 500,000
-
50
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
20 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(d) Equity instrument disclosures relating to key management personnel (continued)
(iii)
Share holdings
2012
Name
I N A Simpson
R J Fountain
R H Probert
C B Bass
S T Biggs
Other Key management
Personnel
S Whitehead
2 Shares placement
Balance at the
start of the year
754,919
66,000
647,545
2,815,753
5,597,417
-
Received during
the year on the
exercise of
options
Other changes
during the year2
Balance at the
end of the year
754,919
66,000
647,545
4,152,117
5,632,417
-
-
-
1,336,364
35,000
-
-
-
-
-
-
-
-
2011
Name
I N A Simpson
R J Fountain
R H Probert
C B Bass
S T Biggs
Other Key management
Personnel
S Whitehead
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
2,815,753
5,597,417
-
-
-
-
51
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
21 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
Exsolution Pty Ltd, a Company in which Dr Russell Fountain is a director and
shareholder, is utilized to provide services in relation to Geopacific Resources NL:
Director’s fee
Consultant fee and claims
Dr Ian Pringle provided office services in relation to Geopacific Resources NL:
Office Rental
2012
$
2011
$
40,218
13,144
24,000
30,000
-
-
-
9,018
22 SHARE-BASED PAYMENTS
(a) Employee Option Plan
Geopacific Resources NL Employee Option Plan was approved by shareholders at the annual general
meeting held on 31 May 2012. All employees are eligible to participate in the plan.
Plan options are granted under the plan for no consideration.
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 plan options is based on the weighted average price at which the Company’s
shares are traded on the Australian Securities Exchange during the five trading days immediately
before the options are granted.
Set out below are summaries of options granted under the plan:
Exercise
price
Number of
options
Expiry date
Grant date
Value per option at
grant date
Date vesting
83,333
6 September 2012 30 November
$0.35
$0.0422
1 July 2013
83,333
6 September 2012 30 November
$0.35
$0.0422
1 July 2014
2015
2015
83,333
6 September 2012 30 November
$0.35
$0.0422
1 July 2015
2015
No plan options were exercised or forfeited during the periods.
The weighted average remaining contractual life of share options outstanding at the end of the period
was 3.2 years (2011 – Nil).
52
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
22
SHARE-BASED PAYMENTS (CONTINUED)
The assessed fair value at grant date of plan options granted to the individuals is allocated equally over
the period from grant date to vesting date. 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 weighted average fair value of the plan options granted during the year was 4.22 cents (2011:
Nil). The price was calculated by using the Black-Scholes option pricing model applying the following
inputs:
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Weighted average risk free interest rate
Consolidated
2012
2011
35.00
3.2
14.00
75.72%
2.49%
-
-
-
-
-
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.
(b)
Unlisted options issued
During the financial year the Company granted non-plan options over unissued shares as follows for
share-based payments in lieu of cash consideration for services provided to the Company:
Number of Options Granted
2,000,000
250,000
Exercise Price
Expiry Date
30 cents
30 cents
5 April 2015
30 September 2014
During the year, no options over unissued shares were exercised (2011: Nil). During the year, no
options were cancelled or lapsed unexpired (2011: Nil).
The weighted average fair value of the options granted during the year was 13.35 cents (2011: Nil).
The price was calculated by using the Black-Scholes option pricing model applying the following
inputs:
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Weighted average risk free interest rate
Consolidated
2012
2011
30.00
2.75
20.00
124.04%
3.56%
-
-
-
-
-
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.
53
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
22
SHARE-BASED PAYMENTS (CONTINUED)
Issue
Date
Expiry
Date
Exercise
Price
Number
on issue
1 January 2012
Granted
during
year
Lapsed
during
year
Exercised
during
year
08.05.2006 08.05.2012
18.09.2009 01.08.2013
08.05.2006 08.05.2013
30.09.2011 30.09.2014
05.04.2012 30.09.2014
05.04.2012 05.04.2015
07.09.2012 30.11.2015
06.06.2009
06.06.2009
(a)
(b)
$1.25
$0.50
$1.50
$0.30
$0.30
$0.30
$0.35
$2.50
$5.00
100,000
610,000
100,000
500,000
-
-
-
800,000
200,000
2,310,000
-
-
-
-
250,000
2,000,000
250,000
-
-
2,500,000
(100,000)
-
-
-
-
-
-
-
-
(100,000)
Number
on issue
31 December
2012
-
-
-
-
-
-
-
-
-
-
-
610,000
100,000
500,000
250,000
2,000,000
250,000
800,000
200,000
4,710,000
(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.
23 LOSS PER SHARE
(a) Basic and diluted loss per share
Consolidated
2012
Cents
2011
Cents
Loss attributable to the ordinary equity holders of the Company
(6. 34)
(4.78)
(b) Reconciliation of loss used in calculating loss per share
Basic and diluted loss per share
2012
$
2011
$
Loss attributable to the ordinary equity holders of the Company used in
calculating basic and diluted loss per share
(2,672,619)
(1,723,299)
(c) Weighted average number of shares used as the denominator
2012
Number
2011
Number
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted loss per share.
42,140,111
36,079,978
The options on issue as stated in note 22 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.
54
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
24 EVENTS OCCURRING AFTER THE YEAR END
Other than the following, there has not arisen in the interval between the end of the financial year
and the date of this report any item, transaction or event of a material and unusual nature likely, in
the opinion of the Directors of the Company to affect substantially the operations of the Group, the
results of those operations or the state of affairs of the Group in subsequent financial years.
• On 3 January 2013, the Company announced that it had entered into an agreement with
unlisted public company World Wide Mining Projects Limited (“WWM”) to undertake an off-
market, target board-recommended 1:1 scrip takeover bid for 100% of WWM’s issued capital
by issuing of up to 53,700,000 GPR shares. A successful takeover will result in GPR having
option to take an 85% interest in the Kou Sa Copper Project.
On 7 February 2013 a Bidder Statement was lodged with ASIC and ASX, and a Supplementary
Bidder Statement lodged on 26 February 2013.
On 11 March 2013 the Company announced that the takeover offer had been extended to 2
April 2013.
On 18 March 2013 the Company advised WWM that it had received acceptances from WWM
shareholders amounting to 92.5% of total WWM shares on issue.
• On 10 January 2013 the company announced the issue of 700,000 ordinary shares to
consultants in lieu of cash consideration for their services.
• 21,657,951 listed options exercisable at 35 cents each expired on 19 January 2013 in
accordance with their terms.
• On 20 February 2013, the Company announced a placement of 4,250,000 ordinary fully paid
shares at 10 cents each, raising $425,000 before costs.
Other matters
No other matters or circumstances have arisen since 31 December 2012 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.
25 OPERATING SEGMENTS
The Group has identified its operating segments based on the internal reports that are
reviewed by the Board in assessing performance and determining the appropriate allocation
of the Group’s resources. The Group also has had regard to the qualitative thresholds for the
determination of operating segments.
For management purposes the Group is organised into one operating segment, which
involves mineral exploration and development in Fiji. The Group’s principal activities are
interrelated and the Group has no revenue from operations.
All significant operating decisions are based upon analysis of the Company as one segment.
The financial results of this segment are equivalent to the financial statements of the
Company as a whole.
The accounting policies applied for internal reporting purposes are consistent with those
applied in preparation of the financial statements.
55
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
25 OPERATING SEGMENTS (CONTINUED)
Revenue by geographical region
The Group has not generated revenue from operations, other than other revenue as below.
Australia
Fiji
Total Other Revenue
2012
$
47,716
1,278
48,994
2011
$
89,316
4,216
93,533
Assets by geographical region
The location of segment assets is disclosed below by geographical location of the assets.
Australia
Fiji
Total Assets
26
FINANCIAL INSTRUMENTS DISCLOSURES
2012
$
817,412
7,157,039
7,974,451
2011
$
909,166
8,260,914
9,170,080
Credit risk
The Directors do not consider that the Group’s financial assets are subject to anything more than a
negligible level of credit risk, and as such no disclosures are made. Refer to Note 2(a).
Impairment losses
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the
reporting date. No impairment expense or reversal of impairment charge has occurred during the
reporting period.
56
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
26
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements. Refer to Note 2(b):
Carrying
amount
Contractual
cash flows
6 months
or less
6-12
months
1-2
years
2-
5years
More
than 5
years
$
$
$
$
$
$
$
Consolidated
2012
Financial assets – cash
flows realisable
Cash and cash equivalents
Trade
other
and
receivables
Total anticipated inflows
Financial liabilities due
for payment
Trade and other payables
Other financial liabilities
Total expected outflows
inflow/(outflow) on
Net
financial instruments
696,841
696,841
696,841
99,582
796,423
99,582
796,423
99,582
796,423
-
-
-
-
-
-
253,385
26,313
279,698
253,385
26,313
279,698
253,385
-
253,385
-
6,990
6,990
-
19,323
19,323
-
-
-
-
-
-
-
-
516,725
516,725
543,038
(6,990)
(19,323)
-
-
57
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
26
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
2011
Carrying amount
Contractual cash
flows
6 months
or less
6-12
months
1-2
years
2-
5years
More
than 5
years
$
$
$
$
$
$
$
Financial assets – cash
flows realisable
and
Cash
equivalents
Trade
receivables
Total anticipated inflows
other
cash
and
1,687,834
1,687,834
1,687,834
194,754
194,754
194,754
1,882,588
1,882,588
1,882,588
Trade and other payables
Total expected outflows
65,741
65,741
65,741
65,741
65,741
65,741
inflow on financial
Net
instruments
1,816,847
1,816,847
1,816,847
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The weighted average interest rate for the interest bearing liabilities is 6.99% (2011:Nil).
Currency risk
The Group is exposed to foreign currency on expenditures that are dominated in a currency other
than Australian Dollars. The currency giving rise to this risk is primarily Fiji Dollars. Refer note 2 (c).
Interest rate risk
At the reporting date the interest profile of the Group’s interest-bearing financial instruments were:
Consolidated
2012
$
2011
$
26,313
26,313
-
-
696,841
1,687,834
696,841
1,687,834
Fixed rate instruments:
Financial liabilities
Variable rate instruments:
Financial assets
Fair value sensitivity analysis for fixed rate investments
58
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
26
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
The Group does not account for any fixed rate financial assets and liabilities at fair value through
profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value
hedge accounting model. Therefore a change in interest rates at the reporting date would not affect
profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased)
equity and profit or loss by the amounts shown below. This analysis assumes that all other variables
remain constant.
Profit and Loss
100bp
increase
100bp
decrease
Equity
100bp
increase
100bp
decrease
$
$
$
$
2012
Variable rate instruments
6,968
(6,968)
6,968
(6,968)
2011
Variable rate instruments
16,878
(16,878)
16,878
(16,878)
Fair values
Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities as described in the consolidated statement of
financial position represent their estimated net fair value.
59
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
27 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
(b) Non Cash Financing
Exchange rate fluctuations in exploration expenditure
Share based payments
(c) Reconciliation of Cash Flows from Operating Activities
Profit (loss) for the year
Non-cash items:
Depreciation
Options expense
Exploration expenditure written off
Changes in Assets and Liabilities:
Decrease in receivables
Increase in payables
Net Cash used in Operating Activities
Consolidated
2012
$
2011
$
696,841
1,687,834
-
148,491
(11,817)
7,046
(2,672,619)
(1,723,299)
48,487
148,491
1,464,577
27,176
7,046
1,275,080
161,372
214,157
163,706
20,128
(635,535)
(230,163)
60