PELICAN RESOURCES LIMITED
(ABN 12 063 388 821)
2013 ANNUAL REPORT
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE DIRECTORY
BOARD OF DIRECTORS:
John Palermo (Chairman)
John Henry Hills
Mike Bue
COMPANY SECRETARY:
John Joseph Palermo
Level 1
284 Oxford Street
LEEDERVILLE, WESTERN AUSTRALIA 6007
PRINCIPAL OFFICE:
Level 1
284 Oxford Street
LEEDERVILLE, WESTERN AUSTRALIA 6007
Telephone: +61 8 9242 1166
Facsimile: +61 8 9443 9960
REGISTERED OFFICE:
Level 1
284 Oxford Street
LEEDERVILLE, WESTERN AUSTRALIA 6007
Telephone: +61 8 9242 1166
Facsimile: +61 8 9443 9960
SHARE REGISTRY:
Security Transfer Registrars Pty Ltd
770 Canning Highway
APPLECROSS, WESTERN AUSTRALIA 6153
Telephone: +61 8 9315 2333
+61 8 9315 2233
Facsimile:
AUDITOR:
Stantons International
Level 2
1 Walker Avenue
WEST PERTH, WESTERN AUSTRALIA 6005
Telephone: +61 8 9481 3188
+61 8 9321 1204
Facsimile:
CONTENTS
PAGE
Corporate Directory
Chairman’s Report
Review of Operations
Directors’ Report
Statement of Profit or Loss and Other
Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Auditor’s Independence Declaration
ASX Additional Information
Corporate Governance Statement
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64
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CHAIRMAN’S REPORT
On behalf of the Board, I have pleasure in presenting the Annual Report of the Company for the year ended 30
June 2013.
The year under review saw the Company continue its focus on the Romblon Nickel Project in the Philippines.
The Company received notification from SNPDC that the Petition for Declaratory Relief to declare the
Provincial Executive Order as contrary to the Philippine Constitution has been determined in favour of
SNPDC.
The Regional Trial Court in Romblon has ruled in favour of the Applicant (SNPDC) and declared the
Provincial Executive Order as unconstitutional. A motion for reconsideration was filed by the Governor of
Romblon against the Order. The Court denied the Motion for Reconsideration in a Resolution dated 14 June
2013.
Pelican and Australian American Mining Corporation Limited (AusAmerican) entered into an option
agreement pursuant for a farm‐in and joint venture, through a USA subsidiary, on the San Marcos Gold
Project in La Paz Country, Arizona, USA.
Pelican completed the incorporation of a wholly owned USA subsidiary (Dore 5 Resources Inc.) in July 2013.
The services of an Arizona-based consulting geologist has been established together with the appointment of
Directors and offices of Dore 5 Resources.
On Cockatoo Island, the Company continued to receive royalties from the project from Pluton Resources
Limited, with shipping continuing during the reporting period.
The Company announced to the market in September 2012, that it had entered into an agreement with Cliffs
Asia Pacific Iron Ore Pty Ltd (Cliffs) and Pluton Resources Limited (Pluton) on the rights on Cockatoo Island.
Cockatoo Island project was purchased from Cliffs Asia Pacific Iron Ore Pty Ltd by Pluton Resources Limited
and its unincorporated joint venture partner Wise Energy. Pluton Resources is the operator and maintains
management control.
Again this year, I wish to express my gratitude to our staff in Perth and the Philippines who have worked
tirelessly in pursuit of the Group’s objectives during the year under review.
Dated this 24th day of September, 2013
__________________
JOHN PALERMO
Chairman
2
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REPUBLIC OF THE PHILIPPINES
REVIEW OF OPERATIONS
ROMBLON PROJECT, SIBUYAN ISLAND, ROMBLON PROVINCE (MPSA No. 3042009-IVB)
Interest:
MPSA 3042009-IVB
The Romblon direct shipping lateritic nickel project remains the main focus for the Company. The Project is
located on the southwest coast of Sibuyan Island in Romblon Province which is situated roughly in the centre
of the Philippines. The project is being evaluated as a source of direct shipping lateritic nickel ore (DSO).
There is potential for processing nickel laterite ore in the Philippines if this option can add value to the project.
Several Ferro-Nickel (FeNi) Plants located within barging distance of the Romblon Project are currently idle.
All options can be fully evaluated after an exploration program has been completed to define a Measured and
Indicated JORC compliant Mineral Resource.
The granted Mineral Production Sharing Agreement (MPSA), on Sibuyan Island in the Romblon Province in
the Philippines, covers a lateritic nickel deposit where work was carried out by two Japanese nickel companies
in 1972.
The project is still in the process of being evaluated and also transferred from Altai Resources Philippines Inc
(Altai), the original applicant of the MPSA, to Sibuyan Nickel Properties Development Corporation (SNPDC).
SNPDC is owned by Pelican Resources Limited in conjunction with its Joint Venture partner All-Acacia
Resources Inc.
Drill crews were mobilized and about to commence drill testing the resource when the Mines and Geosciences
Bureau (MGB) of the Department of Environment and Natural Resources (DENR) issued a Cease and Desist
Order (CDO) in September 2011 against Altai Philippines Mining Corporation (Altai) to immediately
terminate exploration and mining activities within the area covered by the MPSA. Sibuyan Nickel Properties
Development Corporation, as attorney-in-fact of Altai, filed its comment on the CDO. SNPDC’s lawyers filed
a supplemental response to the comment and wrote to the Secretary of the DENR requesting the lifting of the
CDO.
The MGB inspection team visited the site on Sibuyan Island to document and verify the veracity or
truthfulness, if any, to the issues and complaints. The MGB report did not note any environmental or
permitting violations due to work completed by the Joint Venture. It was noted by the MGB that the Joint
Venture should obtain a “Social Licence” or majority support from the Local Government Officials,
Organisations and Community. To date, both the MGB and DENR have yet to issue a response to the demand
for the immediate lifting of the Cease and Desist Order against Altai.
These matters, which have been initiated by Local Government Officials, are being attended to by SNPDC’s
Legal Counsel in the Philippines who are looking at all the legal avenues to resolve the Cease and Desist
Order. A Petition for Declaration Relief was filed in April and an Application for Temporary Restraining
Order was filed in June 2012 at the Regional Trial Court in Romblon Province.
The application of the Temporary Restraining Order (TRO) against the Provincial Executive Order and
Resolutions are now submitted for resolution as all parties have filed their respective Memoranda of response.
In addition, the Company’s legal counsel will move to resolve the Sibuyan TRO application in an effort to lift
the Cease and Desist Order issued by the MGB.
3
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
Representatives of the DENR and MGB met with SNPDC representatives and SNPDC’s Legal Counsel in
Manila on 18 December 2012. The DENR representatives stated that the Sibuyan MPSA Contract Area is not
included in the list of No-Go-Zones or restricted areas to be defined as declared in Executive Order 79 (EO
79). The DENR cannot release the list because what they submitted was a recommendation which is subject
to the approval of the MGB Director and DENR Secretary. Only Mt. Guting-guting and the buffer zones
outside of the MPSA were included in the recommended No-Go-Zones.
SNPDC’s Legal Counsel further advised that the Sibuyan MPSA was granted on 23 December 2009 and EO
79 became effective on 26 July 2012. Hence, the provision in EO 79 which declared additional areas closed
to mining applications cannot invalidate Sibuyan’s MPSA and the Company’s right to conduct mining
activities within the MPSA Contract Area cannot be impaired pursuant to the non-impairment of contracts
clause of the Constitution.
The Company received notification from SNPDC, in the Quarter ending 31 March 2013, that the Petition for
Declaratory Relief to declare the Provincial Executive Order as contrary to the Philippine Constitution has
been determined in favour of SNPDC.
The Regional Trial Court in Romblon has ruled in favour of the Applicant (SNPDC) and declared the
Provincial Executive Order as unconstitutional. The Order will not become final and executory until the lapse
of 15 days from receipt by all parties of the decision of the Court.
A motion for reconsideration was filed by the Governor of Romblon against the Order. The Court denied the
Motion for Reconsideration in a Resolution dated 14 June 2013. The respondents have the option to Appeal
the Court ruling.
Given the Court’s ruling in favour of the Applicant, SNPDC is making representations to the Office of the
President of the Philippines (OP) where its own appeal in respect of the Cease and Desist Order is still pending
and advising the OP of the recent Court Resolution declaring the Executive Order unconstitutional and asking
that any pending Appeal be immediately resolved. Counsel for SNPDC will also provide the Mines &
Geosciences Bureau with a copy of the Resolution and keep the MGB appraised of this significant
development.
The Philippine elections were held successfully on the 13 May 2013. The incumbent Mayor of San Fernando
Municipality lost the re-election by a small margin. The newly elected officials were formally sworn into
office on 30 June 2013. It is anticipated that there will be some tensions resulting from the elections and
potential legal challenges against the election results. Little activity at the project site will be undertaken
until there is acceptance of the newly elected officials and stability in the Municipality.
SNPDC will request meetings with the elected officials and appraise them on the status of the CDO and
proposed exploration program when the local situation is considered as stable. The DENR and MGB have
been clear in the requirement for SNPDC to obtain the support of Local Government Units including elected
officials, organisations and community prior to commencing an exploration program. SNPDC is in full
agreement with this requirement.
The President of the Philippines signed an Executive Order (EO) No. 79 s. 2012 (Mining) amending the
country’s Mining Code in July 2012 and became effective on 26 July 2012. The EO is titled:
“Institutionalising and implementing reforms in the Philippine mining sector providing policies and guidelines
to ensure environmental protection and responsible mining in the utilisation of mineral resources”.
This new EO awaits implementation rules and regulations to be drafted and in the meantime, granting of new
mining licenses remains unresolved. Mining contracts, agreements and concessions approved before the
effective date of the order continue to be valid and the order will respect prior permits even in areas where
mining will be prohibited under the current order.
4
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
The EO requires local government ordinances to be consistent with the Philippine Constitution and the Mining
Act.
MABUHAY PROJECT, SURIGAO DEL NORTE PROVINCE, MINDANAO ISLAND
(MPSA APPLICATION No. 000029-X)
Operator:
Wallaby Corporation a subsidiary of Rugby Mining Limited
The old Mabuhay gold mine, on Surigao del Norte Province, Mindanao Island, Philippines, has the potential to
host an underlying copper-gold porphyry system.
In 2011, the Company’s Philippine associate, Sunpacific Resources Inc. (Sunpacific), entered into an
agreement with Rugby Mining Limited (Rugby) a Canadian-listed company, to assign all its rights, title and
interest under the Memorandum of Agreement (MOA) between All-Acacia Resources Inc. and Sunpacific.
The assignment grants to Rugby the right to enter into an option to explore the project area at Mabuhay over a
period of seven years.
In consideration for the assignment, Rugby will pay to the Company $500,000 over a period of four years as
Rugby progresses through the exploration phase. The first payment is due 12 months from the end of the Due
Diligence period provided the MPSA is granted. In addition, Rugby will pay to the Company $5 million on
commencement of commercial production. Commercial production is defined as being 45 days after mineral
products have been shipped from the property. The Company is monitoring progress on the exploration of the
project area and particularly on the granting of permits.
Rugby recently informed the Company that efforts towards application for a MPSA have ceased. Rugby now
intends to apply for an Exploration Permit (EP) to allow exploration drilling to commence at an earlier date.
The DENR lifted the moratorium on applications for Exploration Permits (EPs) and Financial or Technical
Assistance Agreements (FTAAs) effective 18 March 2013. The moratorium was imposed in January 2011
after the DENR ordered the MGB to review all pending and inactive mining projects in the country. The
suspension covered applications for EPs, FTAAs and MPSAs.
An MPSA is a Mineral Agreement in which the government shares in the production of the contractor.
Applications for MPSAs are still not allowed as Executive Order No. 79 stipulates that "no new Mineral
Agreements shall be entered into until legislation rationalising existing revenue sharing schemes and
mechanisms shall have taken effect". An FTAA is a mining right granted for large-scale operation,
development and utilisation of minerals. It allows 100-percent foreign ownership of a venture, with 50-50
revenue-sharing with the government.
EPs may now be issued because the MGB has completed the mapping of no-go zones; areas where mining
activities are prohibited or restricted because they are dedicated solely to agriculture and tourism activities or
are protected areas. EO 79 required the no-go zones to be mapped before EPs could be issued. Rugby hopes
to proceed to exploration through an EP and consider application for a MPSA or an FTAA at a later date
depending on the success of the exploration.
The assignment of the rights under the MOA, which was first entered into in 2003, enables the Company to
focus its resources on the Romblon Nickel Project in the Philippines.
Pelican’s original concept at Mabuhay was to test the high-grade vein-type gold system. During the course of
the exploration, it became apparent that the high-grade gold-copper veins mined by underground stopes cap a
deeper lower grade porphyry copper-gold system. It is this system that will be the focus of the proposed future
exploration program.
5
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
UNITED STATES OF AMERICA
SAN MARCOS GOLD PROJECT, ARIZONA USA
Interest:
Operator:
Option to earn up to 100%
Pelican wholly owned USA subsidiary (incorporated July 2013)
Pelican and Australian American Mining Corporation Limited (AusAmerican) entered into an option
agreement pursuant to which Pelican was granted an option to enter into a farm‐in and joint venture
agreement, through a USA subsidiary, on the San Marcos Gold Project in La Paz Country, Arizona, USA.
Pelican has exercised the option by providing notice and a payment of AUD$25,000 to AusAmerican. The
parties are now entering into a formal farm-in and joint venture agreement. A wholly owned USA subsidiary
company was incorporated in July 2013. The key terms of the agreement were announced to the ASX on 14
January 2013.
A site visit and due diligence was conducted during January 2013. The Company contracted experienced
consultants to generate a computer model of the data and issue a JORC compliant Mineral Resource report.
This work, which is still in progress, is being undertaken to assist in formulating an ongoing gold exploration
program.
The San Marcos mine and surrounding lands consist of 126 contiguous lode mining claims over 4 square miles
(10.5 square kilometres).
The historic San Marcos mine was operated first in the 1890’s as an underground mine, which included a
shallow underlay shaft of some 500 feet (150 metres) length with drifts at four levels, and a vertical shaft 160
feet (49 metres) deep. The ore was said to average 2 ounces gold per ton and 0.3 ounce per ton silver. The
mine operated intermittently until 1934. Since then, the mine has attracted industry interest at times of high
gold prices. The only drilling undertaken was by Westmont during the 1980’s.
AusAmerican had undertaken an evaluation of the potential of this strongly mineralised area. Work consisted
of evaluation of numerous mineralised prospects, extensive sampling of outcropping mineralised zones, a total
magnetic survey, and preliminary geologic mapping.
Geologic mapping has confirmed the structural control of mineralisation by both low-angle and high-angle
faults. The structural setting is similar to that of the Copperstone mine, which lies some 48 miles (77.5
kilometres) to the WNW, where the regional detachment fault and associated high angle faults host nearly one
million ounces of gold. The San Marcos Decline attempted to follow a similar low-angle fault. The prospect
pits and the San Marcos open cut expose both a low angle fault and associated high-angle structures.
Surface sampling by AusAmerican has so far included collection of 86 samples over about 80% of the
property. Analytical data received for nearly all these samples, and include fire assay for gold and a multi-
element scan for numerous other metals including silver. These samples include grab, composite, continuous
chip, or short channel samples depending upon the nature of each occurrence. They were analysed by ALS-
Chemex, an ISO certified laboratory, in Reno, Nevada.
Pelican completed the incorporation of its wholly owned USA subsidiary Dore 5 Resources Inc. in July 2013.
The services of an Arizona-based consulting geologist has been established together with the appointment of
Directors and offices of Dore 5 Resources.
Statutory requirements have been completed to enable the Company (Dore 5 Resources Inc.) to now move
forward with the review of the computer resource model in conjunction with geological core logging of
diamond drill holes which were drilled by AusAmerican.
6
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
Dore 5 has also contracted the services of a professional tenement company based in Tucson Arizona to
manage the San Marcos group of claims.
WESTERN AUSTRALIA
KIMBERLEYS
COCKATOO ISLAND PROJECT (M04/235)
Interest:
Operator:
100%
HWE Cockatoo Pty Ltd (from 01 July to 30 September 2012)
Pluton Resources Ltd (from 01 October 2012 to 30 June 2013)
The Company announced to the market in September 2012, that it had entered into an agreement with Cliffs
Asia Pacific Iron Ore Pty Ltd (Cliffs) and Pluton Resources Limited (Pluton) on the rights on Cockatoo Island.
Cockatoo Island project was purchased from Cliffs Asia Pacific Iron Ore Pty Ltd by Pluton Resources Limited
and its unincorporated joint venture partner Wise Energy during September with the asset handover date
effective on the 1st October 2012. Pluton Resources will be the operator and maintain management control.
Their initial open-cut mine plan forecasts monthly shipments to commence in November 2012.
As part of the transaction, Pelican and Pluton have entered into various assignment deeds pursuant to which,
among other things, Pluton has agreed to pay to Pelican $500,000. The payment to Pelican is in consideration
of the Company waiving any rights claimed in respect of certain ore previously mined from Cockatoo Island,
the ownership of which was in dispute. Pluton also paid Pelican a signing fee of $25,000 on completion of the
Sale Agreement.
Following Pluton’s acquisition of the Cockatoo Island Project, Pelican renegotiated royalty arrangements for
direct shipping iron ore derived from open cut mining on the Island are based on $1 per tonne or 1% – 1.5% of
the FOB sales price of ore shipped (depending on the prevailing FOB sales price) whichever is the greater.
Pluton will also be required to pay to Pelican a minimum royalty of $50,000 per month for a total period of 14
months, guaranteeing Pelican a minimum total royalty of $700,000 over the 14 month period from 01 October
2012.
Pluton will only be relieved of its obligation to pay the minimum royalty if mining operations on Cockatoo
Island permanently cease following complete exploitation of the ore resources on the island. Payment of the
royalty may also be deferred in the event mining operations on Cockatoo Island are suspended due to force
majeure events.
Cliffs Asia Pacific Iron Ore Pty Ltd, as representative for the Cockatoo Island Project, notified the Company
that their final shipment of iron ore shipped from Cockatoo Island was 348,582 tonnes. Royalty payments
were at the rate of 50 cents per dry metric tonne of iron ore shipped.
Pluton, as operator of the Cockatoo Island Project, reported that shipments of iron ore in the period from 01
October 2012 to 30 June 2013 were 340,808 dry tonnes. Royalty payments were on the basis of $1.00 per dry
tonnes of iron ore shipped.
RELINQUISHMENTS
Donald Well (E45/2534) October 2012
7
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
NEW ACQUISITIONS
Option on the San Marcos gold project in Arizona, USA.
Competent Person’s Statement
The information in this Report that relates to Mineral Resources is based on, and accurately reflects, the
information compiled by Dr John Hills a consultant to Pelican Resources Limited. Dr Hills is a member of the
Australasian Institute of Mining and Metallurgy, respectively. Dr Hills has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activities which they
are undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Hills consents to the inclusion in
this report of the matters based on the information in the form and context in which it appears.
8
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Your directors submit their report on the Consolidated Entity consisting of Pelican Resources Limited and its
controlled entities for the financial year ended 30 June 2013.
DIRECTORS
The following persons were directors of Pelican Resources Limited during the whole of the financial year and
up to the date of this report:
John Palermo
John Henry Hills
Mike Bue
PRINCIPAL ACTIVITIES
The principal activity of the Consolidated Entity during the year was mineral exploration.
OPERATING RESULTS
The consolidated profit for the year after income tax was $284,146 (2012: loss of $2,646,345).
The auditors have issued an emphasis of matter opinion on the capitalised expenditure on the exploration
assets.
The Company has internally generated cashflow via a royalty stream from the Cockatoo Island operations.
The continuity of development and exploration activities will, at some stage in the future, require access to
new funding.
The development and exploration activities to be carried out in the future and the Company’s planned
discretionary expenditure may vary significantly due to a variety of factors. The Company has the ability to
substantially reduce or defer actual exploration expenditure if required to better match the funds available to
the Company at any point in time.
The directors are of the view that the current carrying value of the Romblon project is reasonable given the
carrying value of projects of a similar nature.
The directors have prepared the financial statements on a going concern basis which contemplates the
continuity of normal business activities.
DIVIDENDS PAID OR RECOMMENDED
No dividends were paid or recommended for the year ended 30 June 2013.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the year, the following options expired and new shares were issued:
Date
Details
31/12/2012 Unlisted options expired
27/02/2013 Compensation for services in relation
to the San Marcos Gold Project
(issued for a fair value of $4,500)
No. of
Shares
--
500,000
Issue Price
--
--
No. of
Options
2,500,000
--
Exercise
Price
$0.15
--
Exercisable
By
31/12/2012
--
9
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
REVIEW OF ECONOMIC OPERATIONS
The Company and its controlled entities continued their exploration activities. Further details are noted in the
review of operations section of the annual report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company and its controlled entities intend to continue their exploration activities.
ENVIRONMENTAL REGULATION
The Consolidated Entity has assessed whether there are any particular or significant environmental regulations
which apply. It has determined that the risk of non-compliance is low, and has not identified any compliance
breaches during the year.
PARTICULARS OF DIRECTORS
John Palermo, B.Bus, FCA, FCPA, JP
Mr Palermo is a Chartered Accountant with 30 years experience in public practice. He was the principal in a
private practice from 1978 until 2006. His main areas of expertise are corporate services and company
administration with his main focus in mining and exploration, and biotechnology. Mr Palermo has extensive
management, corporate and directorial experience and is also Chairman and Company Secretary of other
public companies, both listed and unlisted. During the past three years, Mr Palermo has also served as a
director of the following other listed companies:
Pharmanet Group Ltd *
Consolidated Global Investments Ltd *
Gladiator Resources Ltd (resigned 30/11/2012)
(* denotes current directorship)
John Henry Hills, B.Sc. Hons, M.Sc, Ph.D, MAusIMM
Dr Hills is a qualified geologist with over 50 years experience in the industry, 12 years of which were spent
with BP as Minerals Exploration Manager. His experience in the mineral industry spans diamond exploration
in Botswana, mine geology and mineragraphic research with RST in Zambia, mineral exploration and research
in the Alligator Rivers Uranium Province in the Northern Territory and the initiation of an Australia-wide
minerals exploration program in 1974 for BP Group. During the past three years, Dr Hills has not served as a
director of any other listed companies.
Mike Bue, B.Sc. Eng. (Mining), M.Eng (Mineral Economics), P.Eng (PEO)
Mr Bue is an experienced Mining Engineer with over 35 years experience in the mining industry. Mr Bue has
a Bachelor of Science with a major in Mining Engineering. Mr Bue held a senior role with Queensland Nickel
Ltd (a subsidiary of BHP Billiton) for eight years and was responsible for the purchase and supply of nickel
laterite ore from mines in New Caledonia, Indonesia and the Philippines. During that period, Mr Bue also
managed exploration programs and mine development and logistics operations for nickel laterite from mine
ports and rail transport to the Yabulu Nickel Refinery. During the past three years, Mr Bue has not served as a
director of any other listed companies.
10
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
COMPANY SECRETARY
John Joseph Palermo, B.Bus, FCA, ACIS
Mr Palermo is a Chartered Accountant with 17 years experience in Public Practice. His areas of expertise are
in corporate transaction execution, strategic business management and business structuring. Currently a
director of Palermo Chartered Accountants, he has experience in public company accounting and
administration. Mr Palermo serves as Chairman of the Regional Council of the Institute of Chartered
Accountants and the National Public Practice Advisory Committee. Mr Palermo is also a member of the
Executive of the National Trust of Western Australia.
REMUNERATION REPORT (Audited)
This report outlines the remuneration arrangements in place for directors and executives of the Company.
Remuneration policy
The remuneration policy of Pelican Resources Limited has been designed to align director and executive
objectives with shareholder and business objectives by providing a fixed remuneration component and
offering specific long-term incentives based on key performance areas affecting the Consolidated Entity’s
ability to attract and retain the best executives and directors to run and manage the Consolidated Entity.
The Board’s policy for determining the nature and amount of remuneration for board members and senior
executives of the Consolidated Entity is as follows:
The remuneration policy setting out the terms and conditions for the executive directors and other senior
executives was developed by the Board.
Executive remuneration and other terms of employment are reviewed annually by the Board having regard to
performance against goals set at the start of the year, relevant comparative information and independent expert
advice.
As well as a base salary, remuneration packages include superannuation, retirement and termination
entitlements, performance-related bonuses and fringe benefits.
Remuneration packages are set at levels that are intended to attract and retain executives capable of managing
the Company’s diverse operations.
Remuneration and other terms of employment for the executive director and certain other senior executives
have been formalised in service agreements as follows:
Mike Bue - $150,000 p.a. plus superannuation, termination by either party within 3 months and no fixed term.
Remuneration of non-executive directors is determined by the Board within the maximum amount approved
by the shareholders from time to time and which currently stands at $250,000 per annum.
11
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Remuneration policy (continued)
The Board undertakes an annual review of its performance against goals set at the start of the year. The Board
may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to
attract the highest calibre of executives and reward them for performance that results in long-term growth in
shareholder wealth.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
Performance-based remuneration
The Company currently has no performance-based remuneration component built into director and executive
remuneration packages.
Key management personnel compensation
Details of the nature and amount of emolument paid for each director and executive of Pelican Resources Limited
are set out below:
Primary Benefits
Cash
Bonus Monetary
Non-
Salary
& Fees
Post Employment
Super-
annuation
Retirement
Benefits
Share Based
Payments
Shares/Options
Other
Benefits
TOTAL
$
%
Consisting
of Options
Directors
Palermo, J – Chairman (non-executive)
--
--
2013
2012
126,250
130,771
Hills, J – Director (non-executive)
37,000
120,300
--
--
Bue, M – Director (executive)
--
--
150,000
34,000
2013
2012
2013
2012
--
5,306
--
5,306
--
5,305
20,438
16,350
--
16,350
13,500
1,350
Green, D – Director (non-executive) (resigned: 29/11/2011)
2013
2012
--
36,000
--
--
Bell, S – CEO (resigned: 11/01/2012)
2013
2012
--
41,424
Total Remuneration:
2013
2012
313,250
362,495
--
--
--
--
--
--
--
--
--
--
--
3,728
--
15,917
33,938
37,778
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
146,688
152,427
37,000
141,956
163,500
40,655
--
36,000
--
45,152
347,188
416,190
Other related party transactions of key management personnel are disclosed in Note 19.
Remuneration Options
There were no options issued as part of director remuneration for the years ended 30 June 2013 and 30 June 2012.
During the year ended 30 June 2013, no remuneration options were forfeited or exercised by the directors, however
2,500,000 unlisted options did expire on 31 December 2012.
12
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
DIRECTORS’ INTERESTS IN SHARES, OPTIONS AND PERFORMANCE RIGHTS OF THE COMPANY
At the date of this report, the directors’ interests in shares, options and performance rights of Pelican Resources Limited
were:
Number of Ordinary Number of Options
Shares
over Ordinary Shares
Number of
Performance Rights
John Palermo
John Henry Hills
Mike Bue
20,822,928
11,883,839
--
21,754,400
--
--
--
--
500,000
DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the Company’s directors, including directors’ resolutions,
held during the year ended 30 June 2013 by each director:
John Palermo
John Henry Hills
Mike Bue
DIVIDENDS
Number
Eligible to
Attend
27
27
27
Number
Attended
27
27
27
No dividend is recommended nor has one been declared or paid since the formation of the Company.
SHARE OPTIONS
As at 30 June 2013, there existed the following outstanding options to acquire ordinary shares:
Listed Options
88,175,767 options exercisable at $0.04 on or before 30 June 2014.
Unlisted Options
1,000,000 options exercisable at $0.15 on or before 30 September 2013; and
11,875,000 options exercisable at $0.10 on or before 23 December 2013.
No person entitled to exercise options had or has any right, by virtue of the option, to participate in any share
issue of any other body corporate.
13
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behavior and accountability, the directors of
Pelican Resources Limited support and have substantially adhered to the best practice recommendations set by
the ASX Corporate Governance Council. The Company’s corporate governance statement is contained in the
annual report.
INDEMNIFICATION AND INSURANCE OF DIRECTORS
The Company has, during or since the financial year, in respect of any person who is or has been an officer or
auditor of the Company or a related body corporate:
indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer,
including costs and expenses in successfully defending legal proceedings; or
paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer
for the costs or expenses to defend legal proceedings.
Insurance of Officers
Since the end of the previous financial year, the Company has paid insurance premiums of $14,930 in respect
of directors and officers liability and corporate reimbursement, for directors and officers of the Company. The
insurance premiums relate to:
any loss for which the directors and officers may not be legally indemnified by the Company arising out of
any claim, by reason of any wrongful act committed by them in their capacity as a director or officer, first
made against them jointly or severally during the period of insurance; and
indemnifying the Company against any payment which it has made and was legally permitted to make
arising out of any claim, by reason of any wrongful act, committed by any director or officer in their
capacity as a director or officer, first made against the director or officer during the period of insurance.
The insurance policy outlined above does not allocate the premium paid to each individual officer of the
Company.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act
2001 is set out on page 59.
NON-AUDIT SERVICES
Stantons International has not provided any non-audit services to the entity as shown at Note 20.
Dated at Perth this 24th day of September, 2013
Signed in accordance with a resolution of the board of directors
__________________
JOHN PALERMO
Director
14
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
Revenue
Gain on deconsolidation of subsidiary
Net foreign exchange gains
Loss on disposal of investment
Administration expense
Auditor’s remuneration
Borrowing costs
Company secretarial expenses
Consulting fees
Depreciation
Diminution in value of investments
Directors’ and CEO benefits expenses
Exploration expenditure written off
Impairment of assets
Insurance
Legal expenses
Public relations and marketing
Rent and outgoings
Share register maintenance
Travel and accommodation
Other expenses
Profit/(loss) before income tax
Income tax
Profit/(loss) for the year
Other comprehensive income
Currency translation differences
Change in fair value of securities
Income tax on other comprehensive income
Other comprehensive income/(loss) for the year
Total comprehensive income/(loss) for the year
Gain/(loss) attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive gain/(loss) attributable to:
Members of the parent entity
Non-controlling interest
Note
2
3(b)
3(b)
3(b)
3(c)
3(c)
3(a)
3(c)
3(c)
3(a)
3(c)
3(c)
3(c)
3(c)
3(c)
3(c)
3(c)
3(c)
3(c)
3(c)
3(c)
4
15(c)
Consolidated
2013
$
1,304,052
100
20,125
(65,271)
(137,841)
(33,809)
(2,632)
(32,700)
(220,000)
(8,765)
(2,480)
(198,319)
(92,571)
--
(23,357)
(34,067)
(42,030)
(1,230)
(27,265)
(17,024)
(100,770)
2012
$
961,455
48,370
251,467
--
(137,368)
(38,431)
(43,336)
(32,700)
(228,579)
(13,526)
(1,860)
(94,202)
(356,651)
(2,677,984)
(24,120)
(12,222)
(24,250)
(36,390)
(39,545)
(8,611)
(137,952)
284,146
(2,646,345)
--
--
284,146
(2,646,345)
161,187
65,018
--
(42,218)
(40,716)
--
226,205
(82,934)
510,351
(2,729,279)
646,185
(362,039)
284,146
(2,569,584)
(76,761)
(2,646,345)
912,751
(402,400)
510,351
(2,652,027)
(77,252)
(2,729,279)
Basic and diluted earnings/(loss) per share (cents per share)
23
0.12
(1.33)
The above statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes
15
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2013
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Non Current Assets
Other financial assets
Plant and equipment
Mineral exploration and evaluation expenditure
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest bearing liabilities
Non interest bearing liabilities
Total Current Liabilities
Non Current Liabilities
Non interest bearing liabilities
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total parent entity interest
Non-controlling interest
Total Equity
Consolidated
Note
2013
$
2012
$
5
6
7
8
9
10
11
12
13
1,265,184
508,087
159,995
1,635,694
162,682
194,977
1,933,266
1,993,353
620
35,776
3,600,929
3,253
54,453
3,097,931
3,637,325
3,155,637
5,570,591
5,148,990
163,282
--
13,339
219,225
100,000
3,642
176,621
322,867
13
1,003,176
950,180
1,003,176
950,180
1,179,797
1,273,047
4,390,794
3,875,943
14(a)
15(a)
16
13,283,621
1,617,520
13,279,121
1,350,954
(10,082,536) (10,728,721)
4,818,605
(427,811)
3,901,354
(25,411)
17
4,390,794
3,875,943
The above statement of financial position
should be read in conjunction with the accompanying notes
16
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2013
Issued
Capital
Options
Reserve
Consolidated
$
$
Foreign
Currency
Translation
Reserve
$
Asset
Revaluation
Reserve
Accumulated
Losses
Non-
Controlling
Interest
Total
Equity
$
$
$
$
Balance at 01/07/2011
Total comprehensive income
for the year
(Loss)/profit for the year
Other comprehensive income
Foreign currency translation
differences
Net changes in fair value of
securities
Total other comprehensive
income for the year
Total comprehensive income
for the year
Transactions with owners
recorded directly into equity
Contributions by and
distributions to owners
Shares issued during the year
Options issued during the year
Transaction costs
Total contributions by /
distributions to owners
12,320,896
1,385,725
(71,026)
(24,302)
(8,159,137)
51,841
5,503,997
--
--
--
--
--
--
--
--
--
--
--
(41,727)
--
--
--
(40,716)
(41,727)
(40,716)
(2,569,584)
(76,761)
(2,646,345)
--
--
--
(491)
(42,218)
--
(40,716)
(491)
(82,934)
(41,727)
(40,716)
(2,569,584)
(77,252)
(2,729,279)
1,203,515
--
(245,290)
--
143,000
958,225
143,000
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
1,203,515
143,000
(245,290)
1,101,225
Balance at 30/06/2012
13,279,121
1,528,725
(112,753)
(65,018)
(10,728,721)
(25,411)
3,875,943
13,279,121
1,528,725
(112,753)
(65,018)
(10,728,721)
(25,411)
3,875,943
Balance at 01/07/2012
Total comprehensive income
for the year
Profit/(loss) for the year
Other comprehensive income
Foreign currency translation
differences
Net changes in fair value of
securities
Total other comprehensive
income for the year
Total comprehensive income
for the year
Transactions with owners
recorded directly into equity
Contributions by and
distributions to owners
Shares issued during the year
Options issued during the year
Transaction costs
Total contributions by /
distributions to owners
--
--
--
--
--
4,500
--
--
4,500
--
--
--
--
--
--
--
--
--
--
201,548
--
--
--
65,018
201,548
65,018
646,185
(362,039)
284,146
--
--
--
(40,361)
161,187
--
65,018
(40,361)
226,205
201,548
65,018
646,185
(402,400)
510,351
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
4,500
--
--
4,500
(10,082,536)
(427,811)
4,390,794
Balance at 30/06/2013
13,283,621
1,528,725
88,795
The above statement of changes in equity
should be read in conjunction with the accompanying notes.
17
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2013
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Royalties received
Settlement proceeds
Interest paid
Other
Consolidated
Note
2013
$
2012
$
(980,290)
(2,632)
358,901
525,000
84,802
500
(721,413)
114,889
955,079
--
(47,836)
--
Net Cash (Used in)/Provided by Operating Activities
18(b)
(13,719)
300,719
Cash Flows from Investing Activities
Payments for exploration expenditure
Loans (to)/from other entities
Payments for plant and equipment
Other
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Proceeds from issue of shares and options
Costs associated with share and option issues
Repayment of borrowings
Net Cash (Used in)/Provided by Financing Activities
(364,986)
(29,830)
(181)
8,514
(409,125)
18,358
(46,582)
(8,514)
(386,483)
(445,863)
--
--
(100,000)
1,203,515
(120,290)
(350,000)
(100,000)
733,225
Net (decrease)/increase in cash and cash equivalents held
(500,202)
588,081
Cash and cash equivalents at the beginning of the financial year
1,635,694
1,133,489
Effect of exchange rate changes on cash holdings
129,692
(85,876)
Cash and cash equivalents at the end of the financial year
18(a)
1,265,184
1,635,694
The above statement of cash flows
should be read in conjunction with the accompanying notes
18
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Pelican Resources Limited is a company domiciled in Australia. The consolidated financial statements of the
Company as at and for the year ended 30 June 2013 comprise the Company and its subsidiaries (referred to as
the Group or Consolidated Entity).
Separate financial statements for Pelican Resources Limited as an individual entity are no longer presented as
a consequence of changes to the Corporations Act 2001, however required financial information for Pelican
Resources Limited as an individual entity is included in Note 30.
The significant policies, which have been adopted in the preparation of this financial report, are:
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Act 2001.
The financial report was authorised for issue by the Board on 24 September 2013.
The financial report has been prepared on an accruals basis and is based on historical costs except for certain
assets which are carried at fair value. Cost is based on the fair values of the consideration given in exchange
for assets.
The financial report has been prepared on the going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and the settlement of liabilities in the normal course of
business.
The directors confirm that there are reasonable grounds to believe that the Consolidated Entity will be able to pay
its debts as and when they become due and payable and is a going concern because of the following factors:
The ability to issue additional shares under the Corporations Act 2001; and/or
The Consolidated Entity receives royalties of $1.00 per metric tonnes of ore shipped on a monthly basis.
If the Consolidated Entity is unable to continue as a going concern then it may be required to realise its assets
and extinguish its liabilities, other than in the normal course of business and at amounts different from those
stated in the financial statements.
(b)
Statement of Compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial
statements and notes comply with International Financial Reporting Standards (IFRS).
19
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c)
New and Amended Accounting Standards adopted by the Group
None of the new standards and amendments to standards that are mandatory for the first time for the financial
year beginning 1 July 2012 affected any of the amounts recognised in the current period or any prior period
and are not likely to affect future periods. However, amendments made to AASB 101 Presentation of
Financial Statements effective 1 July 2012 now require the statement of comprehensive income to show the
items of comprehensive income grouped into those that are not permitted to be reclassified to profit or loss in a
future period and those that may have to be reclassified if certain conditions are met.
(d)
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Pelican Resources Limited at the end of the reporting period. A controlled entity is any entity over which
Pelican Resources Limited has the power to govern the financial and operating policies so as to obtain benefits
from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through
subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence
and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those
entities are included only for the period of the year that they were controlled. A list of controlled entities is
contained in Note 22 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in
the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with those adopted by the parent entity.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent,
are shown separately within the equity section of the consolidated statement of financial position and
statement of profit or loss and other comprehensive income. The non-controlling interests in the net assets
comprise their interests at the date of the original business combination and their share of changes in equity
since that date.
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 (ie. 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 entity 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 acquirer.
20
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Principles of Consolidation (continued)
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 in the separate
financial statements. 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.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of profit or loss and
other comprehensive income. Where changes in the value of such equity holdings had previously been
recognised in other comprehensive income, such amounts are recycled to profit or loss.
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 of 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 profit or loss and other 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 statement of profit or
loss and other comprehensive income.
(e)
Income Tax
The charge for current income tax is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using the rates that have been enacted or are substantively enacted by the
statement of financial position date.
Deferred tax is accounted for using the statement of financial position liability method in respect of temporary
differences arising between the tax base of assets and liabilities and their carrying amounts in the financial
statements. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the statement of profit or loss and other comprehensive income
except where it relates to items that may be credited directly to equity, in which case the deferred tax is
adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future profit will be available
against which deductible temporary differences can be utilised.
21
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
Income Tax (continued)
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the Consolidated
Entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
(f)
Plant and Equipment
Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment is measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the assets employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
Depreciation
The depreciable amount of all fixed assets is depreciated on either a diminishing value method or prime cost
method commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Plant and equipment
Motor vehicles
2.5 – 100%
22.5%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of
financial position date and where adjusted, shall be accounted for as a change in accounting estimate. Where
depreciation rates or method are changed, the net written down value of the asset is depreciated from the date
of the change in accordance with the new depreciation rate or method.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the statement of profit or loss and other comprehensive income.
22
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(g)
Exploration and Development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which
the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves.
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.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of
the mining permits. Such costs have been determined using estimates of future costs, current legal
requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
(h) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but
not the legal ownership, that are transferred to entities in the Consolidated Entity are classified as finance
leases. All other leases are classified as operating leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair
value of the leased property of the present value of the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest
expense for the period.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred.
23
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i)
Share Based Payments
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 vesting and performance criteria, the impact of
dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and risk free interest rate for the term of the option.
The fair value of the options granted excluded the impact of any non-market vesting condition (for example,
profitability and sale growth targets). Non-market vesting conditions are included in assumption about the
number of options that are expected to become exercisable. The employee benefit expense recognised each
period takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to these options is
transferred to share capital.
The market value of shares issued to employees for no cash consideration under the employee share scheme is
recognised as an employee benefits expense with a corresponding increase in equity when the employees
become entitled to the shares.
(j) Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition, these instruments are
measured as set out below.
Controlled Entities and Jointly Controlled Entities
Investments in controlled entities are carried at cost less, where applicable, any impairment losses.
Impairment
At each reporting date, the directors assess whether there is objective evidence that a financial instrument has
been impaired. In the case of available-for-sale financial instruments, a prolonged decline in value of the
instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in
the statement of profit or loss and other comprehensive income.
24
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
Impairment of Assets
At each reporting date, the directors review the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount
is expensed to the statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the directors estimate the
recoverable amount of the cash-generating unit to which the asset belongs.
(l)
Investments in Associates
Investments in associate companies are recognised in the financial statements by applying the equity method
of accounting where significant influence is exercised over an investee. Significant influence exists where the
investor has the power to participate in the financial and operating policy decisions of the investees but does
not have control or joint control over those policies. The equity method of accounting recognises the
Consolidated Entity’s share of post acquisition reserves of its associates.
(m)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Consolidated Entity’s entities is measured using the currency of the
primary economic environment in which that entity operates. The consolidated financial statements are
presented in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair
values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or
loss and other comprehensive income, except where deferred in equity as a qualifying cash flow or net
investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in
the statement of profit or loss and other comprehensive income.
25
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m)
Foreign Currency Transactions and Balances (continued)
Controlled entities
The financial results and position of foreign operations whose functional currency is different from the
Consolidated Entity’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.
Retained profits 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 Consolidated
Entity’s foreign currency translation reserve in the statement of financial position. These differences are
recognised in the statement of profit or loss and other comprehensive income in the period in which the
operation is disposed. The functional currency of the subsidiaries incorporated in the Philippines (refer Note
22) is the Philippine PESO.
(n)
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, net of outstanding bank overdrafts.
(o)
Revenue
Revenue from the sale of goods is recognised upon the delivery of goods to customers.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
Royalty revenue is recognised on an accruals basis based on tonnages shipped.
All revenue is stated net of the amount of goods and service tax (GST).
(p)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily
take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
26
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
(r)
(i)
(ii)
(Loss)/Earnings per share
Basic (Loss)/Earnings per share
Basic (loss)/earnings per share is determined by dividing the operating (loss)/profit after income tax
attributable to members of Pelican Resources Limited by the weighted average number of ordinary
shares outstanding during the financial year.
Diluted (Loss)/Earnings per Share
Diluted (loss)/earnings per share adjusts the amounts used in the determination of basic
(loss)/earnings per share by taking into account unpaid amounts on ordinary shares and any reduction
in earnings per share that will probably arise from the exercise of options outstanding during the
financial year.
(s)
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of
the share proceeds received.
(t)
New Accounting Standards and Interpretations for Application in Future Periods
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.
At the date of the authorisation of the financial statements, the Accounting Standards and Interpretations listed
below were in issue but not yet effective.
27
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t)
New Accounting Standards and Interpretations for Application in Future Periods (continued)
Standard/Interpretation
AASB 9 ‘Financial Instruments’, AASB 2010-7 ‘Amendments to
Australian Accounting Standards arising from AASB 9 (December 2010)’,
and AASB 2012-6 ‘Amendments to Australian Accounting Standards-
Mandatory Effective date of AASB 9 and Transition Disclosures’
Effective for
annual reporting
periods beginning
on or after
Expected to be
initially applied
in the financial
year ending
1 January 2015
30 June 2016
AASB 10 ‘Consolidated Financial Statements’
AASB 11 ‘Joint Arrangements’
1 January 2013
30 June 2014
1 January 2013
30 June 2014
AASB 12 ‘Disclosure of Interests in Other Entities’
1 January 2013
30 June 2014
AASB 13 ‘Fair Value Measurement’ and AASB 2011-8 ‘Amendments to
Australian Accounting Standards arising from AASB 13’
1 January 2013
30 June 2014
AASB 119 ‘Employee Benefits’ (2011) and AASB 2011-10 ‘Amendments
to Australian Accounting Standards arising from AASB 19 (2011)’
1 January 2013
30 June 2014
AASB 127 ‘Separate Financial Statements (2011), AASB 2011-7
‘Amendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangements standards’
AASB 128 ‘Investments in Associates and Joint Ventures’ (2011), AASB
2011-7 ‘Amendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangements standards’
1 January 2013
30 June 2014
1 January 2013
30 June 2014
AASB 2011-4 ‘Amendments to Australian Accounting Standards to
Remove Individual Key Management Personnel Disclosure Requirements’
1 July 2013
30 June 2014
AASB 2011-7 ‘Amendments to Australian Accounting Standards arising
from the Consolidation and Joint Arrangements standards’
1 January 2013
30 June 2014
AASB 2012-2 ‘Amendments to Australian Accounting Standards-
Disclosures-Offsetting Financial Assets and Liabilities’ (Amendments to
AASB 7)
AASB 2012-3 ‘Amendments to Australian Accounting Standards-
Disclosures-Offsetting Financial Assets and Liabilities’ (Amendments to
AASB 132)
1 January 2013
30 June 2014
1 January 2014
30 June 2015
AASB 2012-5 ‘Amendments to Australian Accounting Standards arising
from Annual Improvements cycle’
1 January 2013
30 June 2014
AASB 2012-6 ‘Amendments to Australian Accounting Standards-
Mandatory Effective date of AASB 9 and Transition Disclosures’
Interpretation 20 ‘Stripping Costs in the Production Phase of a Surface
Mine’ and AASB 2011-12 ‘Amendments to Australian Accounting
Standards arising from Interpretation 20’.
1 January 2013
30 June 2014
1 January 2013
30 June 2014
28
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t)
New Accounting Standards and Interpretations for Application in Future Periods (continued)
The Group has decided not to early adopt any of the new and amended pronouncements. Of the above new
and amended Standards and Interpretations, the Group's assessment of those 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 and AASB 2012-6: 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.
The Group has not yet been able to reasonably estimate the impact of these pronouncements on its
financial statements.
−
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. The Group has not yet been able to reasonably estimate the impact of this Standard on its
financial statements.
29
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t)
New Accounting Standards and Interpretations for Application in Future Periods (continued)
AASB 11 replaces AASB 131: Interests in Joint Ventures (July 2004, as amended). AASB 11 requires
joint arrangements to be classified as either "joint operations" (whereby the parties that have joint control
of the arrangement have rights to the assets and obligations for the liabilities) or 'joint ventures" (where
the parties that have joint control of the arrangement have rights to the net assets of the arrangement).
Joint ventures are required to adopt the equity method of accounting (proportionate consolidation is no
longer allowed).
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 only
affect disclosures and is not expected to significantly impact the Group.
To facilitate the application of AASB’s 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.
−
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 measurements.
AASB 13 requires:
−
−
inputs to all fair value measurements to be categorised in accordance with a fair value hierarchy; and
enhanced disclosures regarding all assets and liabilities (including, but not limited to, financial
assets and financial liabilities) measured at fair value.
These Standards are not expected to significantly impact the Group.
−
AASB 2011-4: Amendments to Australian Accounting Standards to remove the individual key
management Personnel Disclosure Requirements (applicable for annual reporting periods commencing
on or after 1 January 2013).
This standard makes amendments to AASB 124: Related Party Disclosures to remove the individual key
management personnel disclosure requirements (including para’s Aus 29.1 to Aus 29.9.3). These
amendments serve a number of purposes, including furthering the trans-Tasman conversion, removing
differences from IFRS’s, 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.
-
AASB 119 (September 2011) includes changes to the accounting for termination benefits.
The Group has not yet been able to reasonably estimate the impact of these changes to AASB 119.
30
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t)
New Accounting Standards and Interpretations for Application in Future Periods (continued)
-
AASB 2012-2 ‘Amendments to Australian Accounting Standards-Disclosures-Offsetting Financial Assets
and Liabilities’ (Amendments to AASB 7); AASB 2012-3 ‘Amendments to Australian Accounting
Standards-Disclosures-Offsetting Financial Assets and Liabilities’ (Amendments to AASB 132); AASB
2012-5 ‘Amendments to Australian Accounting Standards arising from Annual Improvements cycle’;
AASB 2012-6 ‘Amendments to Australian Accounting Standards-Mandatory Effective date of AASB 9 and
Transition Disclosures’; and Interpretation 20 ‘Stripping Costs in the Production Phase of a Surface
Mine’ and AASB 2011-12 ‘Amendments to Australian Accounting Standards arising from Interpretation
20’.
These standards are not expected to impact the Group.
(u) Critical Accounting Estimates and Judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. The directors evaluate estimates and judgments incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable expectation of
future events and are based on current trends and economic data, obtained both externally and within the
Consolidated Entity. Actual results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements
are described in the following notes:
Note 4 – Income Tax
Note 10 – Mineral Exploration and Evaluation Expenditure
Note 26 – Risk Management Objectives and Policies
Note 29 – Share Based Payments
31
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 2: REVENUE
Revenue
Settlement with Pluton Resources Ltd
(Loss)/profit on sale of plant and equipment (Note 9)
Royalties
Interest earned
Other income
Total revenue
NOTE 3: EXPENSES AND (GAINS)/LOSSES
(a) Expenses
Depreciation of non-current assets
Plant and equipment
Borrowing cost expense
Interest expense on convertible notes and loans
(b) (Gains)/losses
Net foreign exchange (gains)
Gain on disposal of subsidiary (Note 21)
Loss on disposal of investment
(c) Significant Items
(Loss)/profit before income tax includes the following expenses whose disclosure is
relevant in explaining the financial performance of the entity:
Administration expenses
Auditor’s remuneration
Company secretarial expenses
Consulting fees
Decrease in value of loans and investments
Directors’ and CEO benefits expenses
Exploration expenditure written off
Impairment of assets
Insurance
Legal expenses
Public relations and marketing
Rent and outgoings
Share register maintenance
Travel and accommodation
Other expenses
32
Consolidated
2013
$
525,000
(2,157)
703,760
76,949
500
2012
$
--
(47)
888,568
72,934
--
1,304,052
961,455
8,765
13,526
2,632
43,336
(20,125)
(100)
65,271
(251,467)
(48,370)
--
45,046
(299,837)
137,841
33,809
32,700
220,000
2,480
198,319
92,571
--
23,357
34,067
42,030
1,230
27,265
17,024
100,770
137,368
38,431
32,700
228,579
1,860
94,202
356,651
2,677,984
24,120
12,222
24,250
36,390
39,545
8,611
137,952
963,463
3,850,865
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Consolidated
2013
$
2012
$
284,146
(2,646,345)
85,244
(793,904)
(101,102)
373
(6,038)
(18,761)
(150,899)
(41,119)
32,540
286
(75,440)
12,773
684,147
(41,779)
232,302
181,377
--
--
88,182
191,814
3,726,541
129,301
210,575
3,494,239
4,006,537
3,834,115
(1,080,278)
(134,626)
(1,214,904)
(929,379)
(33,524)
(962,903)
65,184
1,200,000
135,694
1,500,000
1,265,184
1,635,694
NOTE 4: INCOME TAX
The prima facie tax on profit/(loss) before income tax
is reconciled to the income tax as follows:
Profit/(loss) before income tax
Income tax calculated at 30%
Add back:
Income accrued
Non deductible expenses
Unrealised foreign exchange (gains)/losses
Provisions
Capitalised exploration (recouped)/written off
Capital raising costs
Future income tax benefits not brought to account
Income tax expense
Deferred tax assets:
Capital raising costs
Provisions
Carried forward tax losses (including foreign tax losses)
Deferred tax liabilities:
Capitalised exploration costs
Accrued income
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
Term deposits
33
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Accrued royalties
Goods and services tax
Advances/loans – other parties
As of 30 June 2013, trade and other receivables do not contain impaired assets
and are not past due. It is expected that these amounts will be received when
due. The Consolidated Entity does not hold any collateral in relation to these
receivables.
NOTE 7: OTHER
Current
Deposits held
Accrued revenue
Prepayments
Other
NOTE 8: OTHER FINANCIAL ASSETS
Non Current
Listed investments at fair value:
Shares in other entities
Unlisted investments at fair value:
Options in other entities
Consolidated
2013
$
434,690
28,246
45,151
2012
$
89,831
41,867
30,984
508,087
162,682
131,000
14,062
14,933
--
131,000
21,915
33,548
8,514
159,995
194,977
620
3,100
--
620
153
3,253
34
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 9: PLANT AND EQUIPMENT
Plant and equipment at cost
Less: accumulated depreciation
Total plant and equipment
Reconciliation of the carrying amount for plant and
equipment and motor vehicles is set out below:
Plant and equipment
Carrying amount at beginning of year
Additions
Net book value of plant and equipment disposed
Depreciation expense
Foreign exchange impact
Carrying amount at end of year
Consolidated
2013
$
2012
$
77,476
(41,700)
83,008
(28,555)
35,776
54,453
54,453
181
(2,157)
(8,765)
(7,936)
26,267
46,582
(47)
(13,526)
(4,823)
35,776
54,453
35
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 10: MINERAL EXPLORATION AND
EVALUATION EXPENDITURE
Balance at beginning of year
Exploration and mining expenditure incurred during the year
Foreign exchange movement
Expenditure written off
Impairment of exploration assets
Balance at end of year
Exploration expenditure carried forward in respect
of areas of interest in the exploration and evaluation phase
Consolidated
2013
$
2012
$
3,097,931
364,986
230,583
(92,571)
--
5,378,421
409,125
345,020
(356,651)
(2,677,984)
3,600,929
3,097,931
3,600,929
3,097,931
The value of the exploration tenements carried forward is dependent upon:
(a)
(b)
(c)
The continuance of the Consolidated Entity’s rights to tenure of the area of interest;
The results of future exploration; and
The recoupment of costs through successful development and exploitation of the areas of interest or alternatively
by their sale.
NOTE 11: TRADE AND OTHER PAYABLES
Trade creditors and accrued expenses
Goods and services tax
Withholding tax
NOTE 12: INTEREST BEARING LIABILITIES
Current
Short-term loans(i)
(i) The loans had an interest rate at 12% p.a. and no fixed repayment date.
NOTE 13: NON-INTEREST BEARING LIABILITIES
Current
Loans – other parties
Non current
Loans – other parties
36
Consolidated
2013
$
123,301
39,587
394
2012
$
190,017
28,970
238
163,282
219,225
--
100,000
13,339
3,642
1,003,176
950,180
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Consolidated
2013
$
2012
$
NOTE 14: ISSUED CAPITAL
(a) Issued Capital
241,203,068 Ordinary shares fully paid (2012: 240,703,068)
13,283,621
13,279,121
(b) Movements in ordinary share capital of the Company during the last two years were as follows:
Date
Details
No. of Shares
Issue Price
$
01/07/2011
08/03/2012
Opening balance
Non-renounceable rights issue
180,527,301
60,175,767
$0.02
Less: transaction costs arising on share issues
30/06/2012
Closing balance
240,703,068
12,320,896
1,203,515
(245,290)
13,279,121
Date
Details
01/07/2012
27/02/2013
Opening balance
Compensation for services in relation to the
San Marcos Gold Project
Less: transaction costs arising on share issues
No. of Shares
Issue Price
$
240,703,068
13,279,121
500,000
$0.009
4,500
--
30/06/2013
Closing balance
241,203,068
13,283,621
(c) Capital Risk Management
When managing capital, management’s objective is to ensure the Company continues as a going concern
as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management
also aims to maintain a capital structure that ensures the lowest cost of capital available to the Company.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The Company does not have a defined share buy-back plan.
No dividends were paid in 2013 and no dividends are expected to be paid in 2014.
There is no current intention to incur further debt funding on behalf of the Company as on-going
expenditure will be funded via cash reserves or equity.
The Company is not subject to any externally imposed capital requirements.
37
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 15: RESERVES
(a) Composition
Share based payments reserve
Foreign currency translation reserve
Asset revaluation reserve
Consolidated
2013
$
2012
$
1,528,725
88,795
--
1,528,725
(112,753)
(65,018)
1,617,520
1,350,954
(b) Movements in share based payments reserve during the last two years were as follows:
Date
Details
Performance
Rights
No. of
Listed
Options
No. of
Unlisted
Options
01/07/2011 Opening balance
31/12/2011 Unlisted options expired
31/12/2011 Unlisted options expired
31/12/2011 Unlisted options expired
08/03/2012 Non-renounceable rights
500,000
--
--
--
issue(i)
08/03/2012 Non-renounceable rights
issue(ii)
27/04/2012 Pursuant to general
meeting of shareholders
on 20/04/2012(ii)
02/05/2012 Pursuant to Company
agreement(iii)
31/05/2012 Unlisted options expired
--
--
--
--
--
Fair Value
of Options
Issued
$1,385,725
--
--
--
Exercise
Price
Expiry
Date
$0.10
$0.25
$0.35
31/12/2011
31/12/2011
31/12/2011
--
$0.04
30/06/2014
$50,000
$0.04
30/06/2014
$75,000
$0.04
30/06/2014
--
--
--
--
23,875,000
(2,500,000)
(2,500,000)
(2,500,000)
60,175,767
12,500,000
12,500,000
--
--
--
3,000,000
--
--
(1,000,000)
$18,000
--
$0.04
$0.10
30/06/2014
31/05/2012
30/06/2012 Closing balance
500,000
88,175,767
15,375,000
$1,528,725
(i) free attaching listed options exercisable at $0.04 on or before 30 June 2014.
(ii) listed options exercisable at $0.04 on or before 30 June 2014 being consideration for sub-underwriting fees
totalling $50,000 and $75,000 which were determined by reference to the market value on the Australian
Securities Exchange (ASX) at the grant date.
(iii) listed options exercisable at $0.04 on or before 30 June 2014 being consideration for consultant’s fees
totalling $18,000 which was determined by reference to the market value on the ASX at the grant date.
38
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 15: RESERVES (continued)
(b) Movements in share based payments reserve during the last two years were as follows (continued):
Date
Details
Performance
Rights
No. of
Listed
Options
No. of
Unlisted
Options
Fair Value
of Options
Issued
Exercise
Price
Expiry
Date
01/07/2012 Opening balance
31/12/2012 Unlisted options expired
500,000
--
88,175,767
--
15,375,000
(2,500,000)
$1,528,725
--
$0.15
31/12/2012
30/06/2013 Closing balance
500,000
88,175,767
12,875,000
$1,528,725
Consolidated
2013
$
2012
$
(65,018)
65,018
(24,302)
(40,716)
--
(65,018)
(10,728,721)
646,185
(8,159,137)
(2,569,584)
(10,082,536)
(10,728,721)
(25,411)
(362,039)
(40,361)
51,841
(76,761)
(491)
(427,811)
(25,411)
(c) Movements in asset revaluation reserve:
Opening balance at 1 July 2012
Marked to market of shares and options
Closing balance at 30 June 2013
NOTE 16: ACCUMULATED LOSSES
Balance at beginning of the year
Profit/(loss) attributable to members of Pelican Resources Limited
Balance at end of the year
NOTE 17: NON-CONTROLLING INTEREST
Reconciliation of minority equity interest in controlled entities:
Opening balance
Share of current year’s (loss)/profit after income tax
Share of current year’s translation reserve
39
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 18: NOTES TO THE STATEMENT OF CASH FLOWS
a) Cash and cash equivalents at the end of the financial year as shown in the
Statement of Cash Flows is reconciled to items in the Statement of Financial
Position as follows:
Consolidated
2013
$
2012
$
Cash and cash equivalents (Note 5)
1,265,184
1,635,694
b) Reconciliation of net cash and cash equivalents used in operating activities
to profit/(loss) for the year:
Profit/(loss) for the year
Profit on deconsolidation of subsidiary
Debt conversions
Exploration and evaluation expenditure written off
Depreciation
Decrease in value of loans and investments
Impairment of exploration assets
Net loss on disposal of plant and equipment
Foreign exchange (gains)/losses
Net loss on disposal of investment
Movements in assets and liabilities:
Receivables
Net GST receivable
Prepayments
Payables
284,146
(2,646,345)
(100)
4,500
92,571
8,765
2,480
--
2,157
(112,696)
65,171
(337,006)
24,238
18,615
(66,560)
--
18,000
356,651
13,526
1,860
2,677,984
47
(251,467)
--
108,466
(3,626)
(29,776)
55,399
Net cash (used in)/provided by operating activities
(13,719)
300,719
c) Non-cash investing and financing activities
2013
The Company issued 500,000 ordinary fully paid shares with a fair value of $4,500 in compensation for services
in relation to the San Marcos Gold Project.
2012
The Company granted 25,000,000 listed options with a fair value of $125,000 in satisfaction for share placement
fees and 3,000,000 listed options with a fair value of $18,000 in satisfaction of consultant’s fees.
40
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 19: KEY MANAGEMENT PERSONNEL
This note is to be read in conjunction with the Remuneration Report which is included in the Directors’ Report.
(a)
Directors and Specified Executives
Names and positions held by key management personnel in office at any time during the financial year and up to
the date of this report are:
Directors
John Palermo
John Henry Hills
Mike Bue
Chairman (non-executive)
(non-executive)
(executive)
There are no other specified executives in position of control or exercising management authority.
Details of the nature and amount of emolument paid for each director and executive of Pelican Resources
Limited are set out below:
Primary Benefits
Cash
Bonus Monetary
Non-
Salary
& Fees
Post Employment
Super-
annuation
Retirement
Benefits
Share Based
Payments
Shares/Options
Other
Benefits
TOTAL
$
%
Consisting
of Options
Directors
Palermo, J – Chairman (non-executive)
--
--
2013
2012
126,250
130,771
Hills, J – Director (non-executive)
37,000
120,300
2013
2012
--
--
Bue, M – Director (executive)
2013
2012
150,000
34,000
--
--
--
5,306
20,438
16,350
--
5,306
--
5,305
--
16,350
13,500
1,350
Green, D – Director (non-executive) (resigned: 29/11/2011)
2013
2012
--
36,000
Bell, S – CEO (resigned: 11/01/2012)
--
--
2013
2012
--
41,424
Total Remuneration:
2013
2012
313,250
362,495
--
--
--
--
--
--
--
--
--
--
--
3,728
--
15,917
33,938
37,778
(b) Compensation of Key Management Personnel
Compensation by category:
Short-term
Post employment
41
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
146,688
152,427
37,000
141,956
163,500
40,655
--
36,000
--
45,152
347,188
416,190
Consolidated
2013
$
2012
$
313,250
33,938
378,412
37,778
347,188
416,190
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 19: KEY MANAGEMENT PERSONNEL (continued)
(c) Transactions with Key Management Personnel
Either individually or through companies under their control, or through companies under the control of a
director related entity, John Palermo, John Hills and Mike Bue received payment for the provision of geological
consulting and general consultancy, management services, disbursements and sub-underwriting fees under
normal commercial terms and conditions during this financial year.
Aggregate amount of each type of transaction with directors and their director related entities were as follows:
Geological expenses (Mike Bue)
Geological expenses (John Hills)
Management and disbursements (John Palermo)
Sub-underwriting fees (John Palermo) (Note 29)
Consolidated
2013
$
33,550
--
178
--
2012
$
3,812
514
463
75,000
Amounts payable or receivable to directors and their director related party entities at balance date arising from
these transactions were as follows:
Payables
(d)
Shareholdings by Directors
Consolidated
2013
$
2012
$
21,142
31,467
2013
J Palermo
J H Hills
M Bue
Total
2012
J Palermo
J H Hills
M Bue
Total
Balance
01/07/12
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/13
(No. of Shares)
20,514,870
13,297,830
--
33,812,700
--
--
--
--
--
--
--
--
5,380,256
25,895,126
(1,486,538)
11,811,292
--
--
3,893,718
37,706,418
Balance
01/07/11
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/12
(No. of Shares)
8,260,470
14,297,830
--
22,558,300
--
--
--
--
42
--
--
--
--
12,254,400
20,514,870
(1,000,000)
13,297,830
--
--
11,254,400
33,812,700
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 19: KEY MANAGEMENT PERSONNEL (continued)
(e)
Listed Options and Rights Holdings by Directors
2013
J Palermo
J H Hills
M Bue
Total
2012
J Palermo
J H Hills
M Bue
Total
Balance
01/07/12
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/13
(No. Options)
Total Vested
30/06/13
(No. Options)
Total
Exercisable
(No. Options)
21,754,400
--
--
21,754,400
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
21,754,400
21,754,400
21,754,400
--
--
--
--
--
--
21,754,400
21,754,400
21,754,400
Balance
01/07/11
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/12
(No. Options)
Total Vested
30/06/12
(No. Options)
Total
Exercisable
(No. Options)
--
--
--
--
--
24,754,400
--
--
--
--
--
24,754,400
--
--
--
--
(3,000,000)
21,754,400
21,754,400
21,754,400
--
--
--
--
--
--
--
--
(3,000,000)
21,754,400
21,754,400
21,754,400
(f)
Unlisted Options and Rights Holdings by Directors
2013
J Palermo
J H Hills
M Bue
Total
2012
J Palermo
J H Hills
M Bue
Total
Balance
01/07/12
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Exercised
1,000,000
1,000,000
--
2,000,000
--
--
--
--
--
--
--
--
Balance
01/07/11
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Exercised
Net
Change
Other
(No. Options)
(1,000,000)
(1,000,000)
--
(2,000,000)
Net
Change
Other
(No. Options)
Balance
30/06/13
(No. Options)
Total Vested
30/06/13
(No. Options)
Total
Exercisable
(No. Options)
--
--
--
--
--
--
--
--
--
--
--
--
Balance
30/06/12
(No. Options)
Total Vested
30/06/12
(No. Options)
Total
Exercisable
(No. Options)
(3,000,000)
1,000,000
1,000,000
1,000,000
(3,000,000)
1,000,000
1,000,000
1,000,000
--
--
--
--
(6,000,000)
2,000,000
2,000,000
2,000,000
4,000,000
4,000,000
--
8,000,000
--
--
--
--
--
--
--
--
43
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 19: KEY MANAGEMENT PERSONNEL (continued)
(g)
Remuneration Options
There were no options issued as part of director remuneration for the years ended 30 June 2013 and
30 June 2012.
(h)
Performance Rights
On 24 December 2010, 500,000 Performance Rights were issued to Mike Bue. The rights will
convert to shares upon completion of the first shipment of ore from Sibuyan Island under the
Company’s Romblon Nickel Project (Note 15b).
NOTE 20: REMUNERATION OF AUDITORS
Amount paid or due and payable to the auditors for:
Audit services – Stantons International
– Overseas auditors
Consolidated
2013
$
2012
$
30,124
3,685
32,109
6,322
33,809
38,431
NOTE 21: DECONSOLIDATION OF SUBSIDIARIES
2013
On 18 February 2013, Ibis Minerals Pty Ltd (a subsidiary of Pelican Resources Limited) was deregistered.
The subsidiary had an intercompany loan payable to its parent, Pelican Resources Limited, of $15,937 as
at 18 February 2013. This loan which was fully provided for in the books of Pelican Resources is now
written off.
Loss on write off of loan
($15,937)
Gain
Gain on deconsolidation of Ibis
$16,037
$100
2012
On 31 December 2011, the Group decided to divest itself of its interest in Sunlight Resources
(Philippines) Inc.
The subsidiary had an intercompany loan payable to its parent, Sunshine Gold Pty Ltd (a subsidiary of
Pelican Resources Ltd), of $144,708 as at 31 December 2011. This loan which was fully provided for in
prior periods in the books of Sunshine Gold is now written off and forgiven in the books of Sunlight
Resources.
Loan Forgiven (Sunlight)
$144,708
Net assets deconsolidated
($96,338)
Gain on deconsolidation of Sunlight
$48,370
44
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 22: CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of Pelican Resources Limited and the
subsidiaries listed in the following table:
Country
of
Incorporation
Book Value of Shares
held by
Parent Entity
Sunrise Exploration Pty Ltd
Sunshine Gold Pty Ltd
Pelican Pacific Pty Ltd
Sunpacific Resources Philippines, Inc.
Sunrom Philippines Holdings Corp’n.
Sibuyan Nickel Properties Dev. Corp’n.
Bato Mining Resources, Inc.
AUS
AUS
AUS
PHP
PHP
PHP
PHP
2013
$
2012
$
1
1
950,000
950,000
1,000
1,000
--
--
--
--
--
--
--
--
951,001
951,001
The Group’s effective ownership interest in its subsidiaries has not changed since the prior year, apart from Ibis
Minerals Pty Ltd being deregistered on 18 February 2013 (refer Note 21).
NOTE 23: LOSS PER SHARE
The following reflects the income and data used in the calculations of basic and diluted loss per share:
Profit/(loss) before income tax – Group
Adjustments:
Loss attributable to non-controlling interest
Consolidated
2013
$
2012
$
646,185
(2,569,584)
(362,039)
(76,761)
Profit/(loss) used in calculating basic and diluted loss per share
284,146
(2,646,345)
45
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 23: LOSS PER SHARE (continued)
Weighted average number of ordinary shares used in calculating:
Basic loss per share
Diluted loss per share
2013
Number of
Shares
2012
Number of
Shares
240,871,561
240,871,561
199,270,573
199,270,573
Diluted loss per share is the same as basic loss per share as no options are in the money and the Consolidated
Entity incurred a loss for the year.
NOTE 24: COMMITMENTS FOR EXPENDITURE
In order to maintain current rights of tenure to mining tenements, the Consolidated Entity will be required to
outlay in 2013/14 amounts noted below in respect of minimum tenement expenditure requirements and lease
rentals. The obligations are not provided for in the accounts and are payable as follows:
Not later than one year
Later than one year but not
later than 2 years
Later than 2 years but not
later than 5 years
Consolidated
2013
$
2012
$
98,175
70,000
98,175
70,000
294,525
210,000
490,875
350,000
The Company has a number of avenues available to continue the funding of its current exploration program and,
as and when decisions are made, the Company will disclose this information to shareholders.
The commitments referred to above represent the Group’s share of obligations under joint venture agreements
without allowing for dilution.
46
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 25: SEGMENT INFORMATION
Business Segments
The directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are reviewed by the chief operating decision maker
(the Board) in allocating resources and have concluded that at this time there are no separate identifiable business segments.
The operations and assets of Pelican Resources Limited and its controlled entities are employed in exploration activities relating to minerals in Australia and the
Philippines.
Australia
Philippines
Eliminations
Consolidated
2013
$
2012
$
2013
$
2012
$
2013
$
2012
$
2013
$
2012
$
Geographical Segments
Revenue
Sales to customers outside the
Consolidated Entity
Other revenues from customers
outside the Consolidated Entity
1,228,760
888,568
75,239
72,805
--
53
53
--
82
82
--
--
--
--
--
--
1,228,760
888,568
75,292
72,887
1,304,052
961,455
Total segment revenue
1,303,999
961,373
Results
Segment result
Assets
Segment assets
Liabilities
Segment liabilities
818,932
(768,256)
(1,379,076)
58,270
844,290
(1,936,359)
284,146
(2,646,345)
7,630,328
7,544,022
3,425,603
4,936,793
(5,485,340)
(7,331,825)
5,570,591
5,148,990
8,549,698
8,280,911
5,936,797
4,734,771
(13,306,698)
(11,742,635)
1,179,797
1,273,047
47
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 26: RISK MANAGEMENT OBJECTIVES AND POLICIES
The Consolidated Entity’s principal financial instruments comprise cash and short-term deposits, short-term loans
and investments in listed entities.
The main purpose of these financial instruments is to finance the Consolidated Entity’s operations. The
Consolidated Entity has various other financial assets and liabilities such as other receivables and trade payables,
which arise directly from its operations. It is, and has been throughout the entire period under review, the
Consolidated Entity’s policy that trading in financial instruments may be undertaken.
The main risks arising from the Consolidated Entity’s financial instruments is cash flow interest rate risk, foreign
exchange risk and market price risk. Other minor risks are either summarised below or disclosed at Note 14 in the
case of capital risk management. The Board reviews and agrees policies for managing each of these risks.
Cash Flow Interest Rate Risk
The Consolidated Entity’s exposure to the risks of changes in market interest rates relates primarily to the
Consolidated Entity’s short-term deposits with a floating interest rate. These financial assets with variable rates
expose the Consolidated Entity to cash flow interest rate risk. All other financial assets and liabilities in the form
of receivables and payables are non-interest bearing. The Consolidated Entity does not engage in any hedging or
derivative transactions to manage interest rate risk.
The following tables set out the carrying amount by maturity of the Consolidated Entity’s exposure to interest rate
risk and the effective weighted average interest rate for each class of these financial instruments.
The Consolidated Entity has not entered into any hedging activities to cover interest rate risk. In regard to its
interest rate risk, the Consolidated Entity does not have a formal policy in place to mitigate such risks.
48
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 26: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Non Interest
Bearing
$
Weighted
Average Effective
Interest Rate %
Floating
Interest Rate
$
Fixed
Interest Rate
$
Total
$
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
65,184
--
45,151
28,246
434,690
14,062
620
587,953
135,694
--
30,984
41,867
89,831
21,915
3,253
323,544
4.34
4.00
--
--
--
--
--
5.62
5.26
--
--
--
--
--
1,200,000
131,000
--
--
--
--
--
1,331,000
1,500,000
131,000
--
--
--
--
--
1,631,000
123,301
394
1,016,515
39,587
--
1,179,797
190,017
238
953,822
28,970
--
1,173,047
--
--
--
--
--
--
--
--
--
12.00
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
1,265,184
131,000
45,151
28,246
434,690
14,062
620
1,918,953
1,635,694
131,000
30,984
41,867
89,831
21,915
3,253
1,954,544
--
--
--
--
100,000
100,000
123,301
394
1,016,515
39,587
--
1,179,797
190,017
238
953,822
28,970
100,000
1,273,047
(591,844)
(849,503)
1,331,000
1,631,000
--
(100,000)
739,156
681,497
Financial Assets
- Cash and cash
equivalents
- Deposits held
- Receivable other parties
- GST
- Accrued royalties
- Accrued revenue
- Investments at fair value
Total Financial Assets
Financial Liabilities
- Trade creditors and
accrued expenses
- Withholding tax payable
- Loan – other parties
- GST
- Short-term loans
Total Financial Liabilities
Net Financial
(Liabilities)/Assets
Interest Rate Sensitivity
At 30 June 2013, if interest rates had changed by 10% during the entire year with all other variables held constant,
profit for the year and equity would have been $7,694 lower/higher, mainly as a result of lower/higher interest
income from cash and cash equivalents.
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short term
and long term Australian dollar interest rates. A 10% increase sensitivity would move short term interest rates at
30 June 2013 from around 4.17% to 4.59% (10% decrease: 3.75%) representing a 42 basis points shift. This
would represent two to three increases which is reasonably possible in the current environment with the bias
coming from the Reserve Bank of Australia and confirmed by market expectations that interest rates in Australia
are more likely to move up than down in the coming period.
Based on the sensitivity analysis, only interest revenue from variable rate deposits and cash balances are impacted
resulting in a decrease or increase in overall income.
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, to
recognised financial assets is the carrying amount net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements.
The Consolidated Entity does not have any material credit risk exposure to any single receivable or group of
receivables under financial instruments entered into.
49
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 26: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Liquidity Risk
The Company manages liquidity risk by maintaining sufficient cash reserves and marketable securities and
through the continuous monitoring of budgeted and actual cash flows.
Contracted maturities of liabilities at 30 June
Payables
- less than 30 days
- less than 12 months
Short-term loans
- less than 12 months
Loans other parties
- less than 12 months
- greater than 12 months
Foreign Exchange Risk
Consolidated
2013
$
2012
$
123,695
39,587
190,255
28,970
--
100,000
13,339
1,003,176
1,179,797
3,642
950,180
1,273,047
The Consolidated Entity is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the PESO and USD.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the Company’s and subsidiaries functional currency. The risk is
measured using sensitivity analysis.
Foreign Currency Risk Sensitivity Analysis
At 30 June, the effect on consolidated profit and equity as a result of changes in the value of the Australian Dollar
to the foreign currencies, with all other variables remaining constant is as follows:
2013
Change in equity with a 10% change in
exchange rates
2012
Change in equity with a 10% change
in exchange rates
Increase 10%
$
(312,586)
461,896
Decrease 10%
$
382,049
(564,540)
Increase 10%
$
(242,493)
339,638
Decrease 10%
$
296,381
(415,113)
Financial assets
Financial liabilities
The Company is not exposed to foreign exchange risk as all financial assets and liabilities of the Company are in
Australian dollars.
50
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 26: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Market Price Risk
The Consolidated Entity is exposed to market price risk arising from investments in other companies carried at
fair value.
At 30 June 2013, if share/option values had changed by 25% based on the 30 June 2013 fair values with all other
variables held constant, the Consolidated Entity’s profit for the year and equity would have been $155
lower/higher.
A sensitivity of 25% has been selected as this is considered reasonable given the recent movements in prices of
the companies the Consolidated Entity holds investments in.
Reconciliation of Net Financial Assets to Net Assets
Net financial assets/(liabilities)
Other financial assets
Prepayments and other
Plant and equipment
Mineral exploration and evaluation expenditure
Net assets
Net Fair Values
Consolidated
2013
$
2012
$
739,156
681,497
14,933
35,776
3,600,929
4,390,794
42,062
54,453
3,097,931
3,875,943
For assets and other liabilities the net fair value approximates their carrying value. The Consolidated Entity has no
financial liabilities but does have financial assets that are readily traded on organised markets at balance date and
has no financial assets where the carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
statement of financial position and in the notes to and forming part of the financial statements.
Fair Value Hierarchy
The table below analyses financial instruments carried at fair value by valuation method. The different levels
have been defined as follows:
Level 1: quoted prices in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly as prices or indirectly (ie. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
Available for sale financial assets - Level 1
Available for sale financial assets - Level 2
Available for sale financial assets - Level 3
2013
$
620
--
--
620
2012
$
3,100
153
--
3,253
51
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 27: EVENTS SUBSEQUENT TO REPORTING PERIOD
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 significantly the operations of the Company, the results of those operations, or the state of affairs of the
Company, in future financial years.
NOTE 28: CONTINGENT LIABILITIES
Pelican Resources Limited has no known material contingent liabilities at the end of the financial year.
NOTE 29: SHARE BASED PAYMENTS
2013
On 27 February 2013, the Company issued 500,000 ordinary fully paid shares with a fair value of $4,500 in
compensation for services in relation to the San Marcos Gold Project.
2012
On 8 March 2012, the following options were granted in consideration for sub-underwriting fees:
- 12,500,000 listed options exercisable at $0.04 on or before 30 June 2014.
Fair value of options granted
The fair value totalling $50,000 (12,500,000 options x $0.004) was determined by reference to the market value
on the Australian Stock Exchange (ASX) at the grant date.
On 20 April 2012, the following options were granted in consideration for sub-underwriting fees:
- 12,500,000 listed options exercisable at $0.04 on or before 30 June 2014.
Fair value of options granted
The fair value totalling $75,000 (12,500,000 options x $0.006) was determined by reference to the market value
on the ASX at the grant date.
On 2 May 2012, the following options were granted in consideration for consultant’s fees:
- 3,000,000 listed options exercisable at $0.04 on or before 30 June 2014.
Fair value of options granted
The fair value totalling $18,000 (3,000,000 options x $0.006) was determined by reference to the market value on
the ASX at the grant date.
During the year, no options were issued to directors of the Consolidated Entity as part of their remuneration.
The shared based payments expense for the 2012 year was $143,000.
52
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 29: SHARE BASED PAYMENTS (continued)
The number and weighted average exercise prices of share options are as follows:
Outstanding at 1 July
Forfeited during the year
Exercised during the year
Expired during the year
Granted during the year
Issued during the year
Outstanding at 30 June
Exercisable at 30 June
Weighted
average exercise
price
2013
$0.11
--
--
$0.15
--
--
$0.10
$0.10
Number of
Options
2013
103,550,767
--
--
(2,500,000)
--
--
101,050,767
101,050,767
Weighted
average exercise
price
2012
$0.1714
--
--
$0.20
$0.04
$0.04
$0.11
$0.11
Number of
Options
2012
23,875,000
--
--
(8,500,000)
28,000,000
60,175,767
103,550,767
103,550,767
The options outstanding at 30 June 2013 have an exercise price in the range of $0.04 to $0.15 and a weighted
average remaining contractual life of 0.6 years (2012: 1.3 years).
53
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 30: PARENT ENTITY DISCLOSURES
(a) Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets (i)
Total Current Assets
Non Current Assets
Plant and equipment
Other financial assets (ii)
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest bearing liabilities
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
(b) Financial Performance
Profit/(loss) for the year
Other comprehensive income/(loss)
Total Comprehensive Income/(Loss)
54
2013
$
2012
$
1,217,494
450,224
133,379
1,554,319
121,501
158,280
1,801,097
1,834,100
650
1,023,082
3,396
954,354
1,023,732
957,750
2,824,829
2,791,850
134,413
--
168,560
100,000
134,413
268,560
134,413
268,560
2,690,416
2,523,290
13,283,621
1,528,725
(12,121,930)
13,279,121
1,463,707
(12,219,538)
2,690,416
2,523,290
2013
$
2012
$
97,608
65,018
(381,633)
(40,716)
162,626
(422,349)
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 30: PARENT ENTITY DISCLOSURES (continued)
(i) Other current assets
Deposits held
Accrued revenue
Prepayments
(ii) Other financial assets
Investments in controlled entities
Loans to controlled entities
Provision for non recovery
Investments in other entities
2013
$
114,000
13,916
5,463
2012
$
114,000
21,725
22,555
133,379
158,280
951,001
8,165,469
(8,094,008)
620
951,101
7,676,380
(7,676,380)
3,253
1,023,082
954,354
(c) Guarantees
Pelican Resources Limited has not entered into any guarantees in relation to the debts of its subsidiaries.
(d) Other Commitments and Contingencies
Pelican Resources Limited has no commitments to acquire property, plant and equipment and has no contingent
liabilities.
55
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
The directors of the Company declare that the financial statements and notes set out on 15 to 55 and remuneration
disclosures set out in the Remuneration Report are in accordance with the Corporations Act 2001, including:
1.
(a)
complying with Accounting Standards;
(b)
are in accordance with International Financial Reporting Standards; and
(c)
giving a true and fair view of the financial position as at 30 June 2013 and the performance for the
financial year ended on that date of the Consolidated Entity.
2.
The director acting in place of the Chief Financial Officer has declared that:
(a)
the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
(b)
the financial statements and notes for the financial year comply with the Accounting Standards; and
(c)
the financial statements and notes for the financial year give a true and fair view.
3.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the board of directors.
Dated this 24th day of September, 2013
JOHN PALERMO
Director
56
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION
QUOTED SECURITIES
(a)
ORDINARY FULLY PAID SHARES
(i)
DISTRIBUTION OF SHAREHOLDERS AS AT 10 SEPTEMBER 2013:
SPREAD
OF HOLDINGS
NO. OF
HOLDERS
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
329
639
200
323
185
NO. OF
SHARES
158,569
1,443,246
1,381,925
11,198,532
227,020,796
1,676
241,203,068
PERCENTAGE OF
ISSUED CAPITAL %
0.07
0.60
0.57
4.64
94.12
100.00
The number of shareholdings held in less than marketable parcels is 1,290.
(ii)
TOP 20 HOLDERS OF ORDINARY FULLY PAID SHARES:
The names of the twenty largest shareholders of ordinary fully paid shares are listed below:
NAME
Finebase HldgsPL
Nefco Nom PL
Surfboard PL
Topaze Entps PL
1.
2. Mainview Hldgs PL
Veltox PL
3.
DF Lynton-Brown PL
4.
5.
Leuzzi Joe & Sally
6. Monarch Corp PL
7.
8.
9.
10. Monslit PL
11.
12. RFID System PL
13.
14.
15.
16.
17. Green Douglas Burkett
18. Darlot Inv PL
19. Coastpark PL
20. Winkara PL
Finebase Hldgs PL
JP Morgan Nom Aust Ltd
Energy-Saving Technology
Energy-Saving Technology
Sharbanee Paul Gabriel
NO. OF
ORDINARY
SHARES
HELD
PERCENTAGE
OF ISSUED
SHARES %
16,812,670
13,165,029
11,883,837
8,028,459
8,000,000
7,750,000
7,672,445
7,266,667
6,322,699
6,000,000
5,341,544
5,100,000
5,072,198
5,029,568
4,468,001
4,000,000
3,000,000
2,700,000
2,581,847
2,500,000
6.97
5.46
4.93
3.33
3.32
3.21
3.18
3.01
2.62
2.49
2.21
2.11
2.10
2.09
1.85
1.66
1.24
1.12
1.07
1.04
132,694,964
55.01
60
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION (continued)
QUOTED SECURITIES (continued)
(a)
ORDINARY FULLY PAID SHARES (continued)
(iii)
VOTING RIGHTS
Article 15 of the Constitution specify that on a show of hands every member present in person,
by attorney or by proxy shall have:
(a)
(b)
for every fully paid share held by him one vote
for every share which is not fully paid a fraction of the vote equal to the amount paid up
on the share over the nominal value of the shares.
(iv)
SUBSTANTIAL SHAREHOLDERS
Name
Finebase Holdings Pty Ltd
Mainview Holdings Pty Ltd
Ordinary Shares
No.
21,884,868
13,165,029
%
9.07
5.46
(b)
OPTIONS
As at 10 September 2013, there existed the following quoted options:
88,175,767 OPTIONS EXERCISABLE AT $0.04 EACH ON OR BEFORE 30 JUNE 2014
(i)
DISTRIBUTION OF OPTIONHOLDERS:
SPREAD
OF HOLDINGS
NO. OF
HOLDERS
NO. OF
OPTIONS
PERCENTAGE OF
QUOTED OPTIONS %
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
24
41
14
56
66
201
13,286
112,058
104,548
1,999,681
85,946,194
88,175,767
0.01
0.13
0.12
2.27
97.47
100.00
61
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION (continued)
(b)
OPTIONS (continued)
(ii)
TOP 20 HOLDERS OF QUOTED OPTIONS:-
The names of the twenty largest optionholders are listed below:
NAME
Finebase Hldgs PL
Celtic Cap Pte Ltd
Mainview Hldgs PL
Mulloway PL
Mulloway PL
Lawrence Crowe Cons PL
Goffacan PL
Topaze Entps PL
Sharbanee Paul Gabriel
1.
2.
3.
4.
5.
6.
7.
8.
9.
10. Albatross Pass PL
11. Wicklow Cap PL
Surfboard Pl
12.
13. Dejul Trading PL
14.
15.
16.
17. De Vita Grace
18. McLean Maria
19. Green Douglas Burkett
20. Darlot Inv PL
Stonehurst WA PL
JP Morgan Nom Aust Ltd
Sharp Raymond
NO. OF
OPTIONS
HELD
PERCENTAGE
OF QUOTED
OPTIONS
%
21,754,400
8,750,000
8,357,666
6,337,412
4,000,000
2,500,000
2,328,609
2,257,584
1,916,667
1,916,667
1,916,666
1,816,667
1,500,000
1,400,000
1,254,832
1,250,000
1,000,000
1,000,000
1,000,000
816,667
73,073,837
24.67
9.92
9.48
7.19
4.54
2.84
2.64
2.56
2.17
2.17
2.17
2.06
1.70
1.59
1.42
1.42
1.13
1.13
1.13
0.93
82.86
(iii)
VOTING RIGHTS
Holders of options are not entitled to vote at a General Meeting of Members in person, by proxy or
upon a poll, in respect of their option shareholding.
62
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION (continued)
UNQUOTED SECURITIES
(a)
OPTIONS
As at 10 September 2013, there existed the following unquoted options:
(i) 1,000,000 OPTIONS EXERCISABLE AT $0.15 EACH ON OR BEFORE 30 SEPTEMBER
2013
Name
Azure Capital Investments Pty Ltd
Options
%
1,000,000
100.00
(ii) 11,875,000 OPTIONS EXERCISABLE AT $0.10 EACH ON OR BEFORE 23 DECEMBER
2013
Name
LJM Capital Corporation Pty Ltd
Domenal Enterprises Pty Ltd
Monarch Corporation Pty Ltd
Topaze Enterprises Pty Ltd
(b)
PERFORMANCE RIGHTS
As at 10 September 2013, there existed the following performance rights:
Name
Mike Bue
Options
625,000
1,250,000
4,250,000
5,750,000
%
5.26
10.53
35.79
48.42
11,875,000
100.00
Rights
%
500,000
100.00
63
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT
Pelican Resources Limited (“the Company”) is committed to implementing and maintaining the highest standards
of corporate governance. The primary responsibility of the Board of the Company (“the Board”) is to represent
and advance the Company’s shareholders’ (“the Shareholders”) interests and to protect the interests of all
stakeholders. To fulfill this role, the Board is responsible for the overall corporate governance of the Company
including its strategic direction, establishing goals for its employees and monitoring achievement of these goals.
The Company adopts the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations released in 2007 (“the Recommendations”) to determine an appropriate system of control and
accountability to best fit its business and operations commensurate with these guidelines.
The Company’s compliance with the Revised Corporate Governance Principles and Recommendations is
summarised in the table below:
ASX P & R1
Recommendation 1.1
Recommendation 1.2
Recommendation 1.3
Recommendation 2.1
Recommendation 2.2
Recommendation 2.3
Recommendation 2.4
Recommendation 2.5
Recommendation 2.6
Recommendation 3.1
Recommendation 3.2
Recommendation 3.3
Recommendation 3.4
Recommendation 3.5
Recommendation 4.1
If not, why not2
ASX P & R1
Recommendation 4.2
Recommendation 4.3
Recommendation 4.4
Recommendation 5.1
Recommendation 5.2
Recommendation 6.1
Recommendation 6.2
Recommendation 7.1
Recommendation 7.2
Recommendation 7.3
Recommendation 7.4
Recommendation 8.1
Recommendation 8.2
Recommendation 8.3
If not, why not2
¹ Indicates where the Company has followed the Principles & Recommendations and summarised those practices below.
² Indicates where the Company has provided an “if not, why not” disclosure below.
In acknowledging the Key Messages of the first review of the corporate governance reporting under the Revised
Corporate Governance Principles and Recommendations by ASX Markets Supervision (“ASXMS”), the
Company has provided additional disclosure for each of the 29 recommendations. Where the Company has
departed from a recommendation, the Company has provided substantive reasons and refers to material containing
additional disclosure, as relevant.
The “if not, why not” disclosure of the Company is summarised in the table below:
64
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
Recommendation
2.1
2.4
3.5
4.1, 4.2, 4.3, 4.4
6.1, 6.2
7.2
8.1, 8.3
Explanation of Departure from Recommendation
The majority of the Board is not independent. However, the Directors
consider that the Board as a whole is nevertheless capable of exercising
independent judgment in effectively discharging its role in managing and
overseeing Company performance.
Owing to the size and composition of the Board, it is not appropriate to
establish an independent nomination committee, or to establish a formal
nomination policy.
Given the Company’s small size and stage of development as an exploration
company, it is not appropriate to establish a formal gender diversity policy.
Owing to the size and composition of the Board, it is not appropriate to
establish an independent audit committee, or to establish a formal audit policy.
Owing to the size and composition of the Board, it is not appropriate to
to promote effective communication with
establish a formal policy
Shareholders and encourage their participation at meetings.
As the Company has not appointed senior management, the Board assumes
responsibility for the design and implementation of risk management and
internal control systems.
Owing to the size and composition of the Board, it is not appropriate to
establish an independent remuneration committee. Details of the Company’s
remuneration policy are set out in the Remuneration Report in the Directors’
Report.
It is noted that as the Company’s activities develop in size, nature and scope, the Company’s corporate
governance policies and processes will continue to be reviewed and improved as resources permit.
1.
BOARD OF DIRECTORS
1.1. Role of Board
The Board is responsible for setting the strategic direction and establishing and overseeing the policies and
financial position of the Company, and monitoring the business and affairs on behalf of its Shareholders, by
whom the directors of the Company (“the Directors”) are elected and to whom they are accountable.
Further, the Board takes specific responsibility for:
Protecting and enhancing Shareholder value;
Approving all significant business transactions including acquisitions, divestments and capital
Formulating, reviewing and approving the objectives and strategic direction of the Company;
expenditure;
Monitoring the financial performance of the Company by reviewing and approving budgets and
monitoring results;
65
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
1.
BOARD OF DIRECTORS (continued)
1.1. Role of Board (continued)
Ensuring that adequate internal control systems and procedures (including financial, risk management,
occupational health and safety, environmental management systems and procedures) exist and that
compliance with these systems and procedures is maintained;
Identifying significant business risks and ensuring that such risks are adequately managed;
Appointing Directors to the Board;
Monitoring and reviewing the performance and remuneration of Directors;
Monitoring and evaluating the Company Secretary’s performance;
Establishing and maintaining appropriate ethical standards; and
Evaluating and, where appropriate, adopting with or without modification, the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations.
The Board is responsible for establishing a culture and framework that supports corporate governance,
including creating the strategic direction for the Company, establishing goals for employees and the
Company Secretary and monitoring the achievement of these goals.
The Company has a formal Board Charter, which is available from the Company on request. In broad
terms, the Board is accountable to the Shareholders and must ensure that the Company is properly managed
to protect and enhance shareholders’ wealth and other interests. The Board Charter sets out the role and
responsibilities of the Board within the governance structure of the Company and its related bodies
corporate (as defined in the Corporations Act).
As at the date of this Annual Report, the Company has not employed any senior executives; therefore,
disclosure under Recommendations 1.2 and 1.3 is not required.
1.2. Terms of Office of Directors
The constitution of the Company (“the Constitution”) specifies that one third of the Directors, excluding
the Managing Director, shall rotate on an annual basis. It is noted that, as at the date of this Annual Report,
the Company has not appointed a Managing Director.
1.3. Composition of the Board and Independence
The Directors in office at the date of this Annual Report are:
Name
Position
Mr John Palermo
Non-executive Director
Dr John Henry Hills
Non-executive Director
Mr Mike Bue
Executive Director
Independent
No
No
Yes
Expertise
Refer to Directors’
Report
Refer to Directors’
Report
Refer to Directors’
Report
66
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
1.
BOARD OF DIRECTORS (continued)
1.3. Composition of the Board and Independence (continued)
The majority of Directors are not independent, departing from Recommendation 2.1. Mr Mike Bue is
considered to be independent, as he is not engaged with the Company on any basis other than serving as an
executive Director. John Palermo is not considered to be independent, owing to his relationship with the
Company. Further, Dr John Hills is not considered to be independent, owing to the nature of his substantial
shareholding and position as a non-executive with the Company.
Owing to the size and structure of the Company, the roles of the Chairperson and CEO equivalent are now
occupied by the same Director.
The role of Company Secretary is performed by Mr John Joseph Palermo, who is also independent.
The Company has not established a formal policy for the nomination and appointment of Directors.
However, the composition of the Board is determined using the following principles:
The Board comprises three (3) Directors; however, this number may be increased where it is felt that
additional expertise is required in specific areas, or when an outstanding candidate is identified; and
The Board should comprise Directors with a broad range of expertise.
The Board reviews its composition on an annual basis to ensure that the Board has the appropriate mix of
expertise and experience. When a vacancy exists, for whatever reason, or where it is considered that the
Board would benefit from the services of a new Director with particular skills, the Board selects a panel of
candidates with the appropriate expertise and experience. Potential candidates are identified by the Board
with advice from an external consultant, if necessary. The Board then appoints the most suitable candidate
who must stand for election at a general meeting of Shareholders.
The Company does not currently have a formal gender diversity policy in place. However, its recruitment
is fundamentally driven by identifying the best candidate for all positions regardless of gender. Based on
the current scale of activities of the Company, there is no set objective to achieve a certain percentage of
female employees in the workforce.
The Board does not currently believe that the adoption of a formal gender diversity policy would
significantly improve the functions currently performed by the Board.
Given the Company’s small size and stage of development as an exploration company, the Board considers
it impractical at this time to set measurable diversity objectives and adopt a formal gender diversity policy.
The Company currently has 3 employees, of which 3 are male and none are female. There are no women
in senior executive positions or on the Board. However, while the Board considers this to be appropriate at
this stage of the Company’s development, the Company will review this requirement annually as the
circumstances of the Company change.
The Company does not have a formal gender diversity policy at this stage of development, and
consequently, did not provide the information indicated in the Guide to reporting on Principle 3.
67
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
1.
BOARD OF DIRECTORS (continued)
1.4. Monitoring of Board Performance
In accordance with Recommendation 2.5, the Directors’ performance is reviewed by the Chairperson on an
ongoing basis. In the event that any Director’s performance is considered to be unsatisfactory, that
Director will be asked to retire from the Board. The Chairperson’s performance is reviewed by the
remaining two Board members.
The Company has established firm guidelines to identify the measurable and qualitative indicators of the
Directors’ performance during the course of the year (“the Guidelines”). Those Guidelines include
minimum requirements for attendance at all Board and Shareholder meetings, whereby the non-attendance
of a Director at more than three consecutive meetings without reasonable excuse will result in that
Director’s position being reviewed.
1.5.
Independent Professional Advice
Each Director has the right, in connection with his/her duties and responsibilities as a Director, to seek
independent professional advice at the Company’s expense. However, prior approval of the Chairperson is
required, which will not be unreasonably withheld.
1.6. CEO and CFO Attestations
As at the date of this Annual Report, the Company has not appointed a CEO or a chief financial officer
(“the CFO”). Due to the size and scale of the Company’s operations, those roles are currently performed
by the Board, specifically Mr John Palermo who is primarily responsible for financial matters in relation to
the Company.
In lieu of the CEO and CFO’s attestations, Mr John Palermo certifies to the Board that:
The Company’s financial statements are complete and present a true and fair view, in all material
aspects, of the financial condition and operational results of the Company and are in accordance with
relevant accounting standards (“the Executive Director’s Statement”); and
The Executive Director’s Statement is founded on a sound system of risk management and internal
compliance and control which implements the policies adopted by the Board and that the Company’s
risk management and internal compliance and control is operating effectively and efficiently in all
material aspects.
2.
BOARD COMMITTEES
2.1. Nomination Committee
Owing to its size and composition, the Company has not established a separate nomination committee in
accordance with Recommendation 2.4.
The Board considers that the selection and appointment of Directors should be the responsibility of the full
Board and that no benefits or efficiencies are to be gained by delegating this function to a separate
committee. In any event, the Board consists of only three members, which is the minimum composition
recommended for a nomination committee pursuant to Recommendation 2.4.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
2.
BOARD COMMITTEES (continued)
2.1. Nomination Committee (continued)
The Board does not have a separate charter for its nomination and succession planning functions; however,
the responsibilities of the Board ordinarily include the nomination functions described in section 1.3 of this
Corporate Governance Statement.
2.2. Audit Committee
Owing to its size and composition, the Company has not established a separate audit committee in
accordance with Recommendation 4.1.
The Board considers that the selection and appointment of Directors should be the responsibility of the full
Board and that no benefits or efficiencies are to be gained by delegating this function to a separate
committee
In any event, the Board consists of only three members, which is the minimum number recommended for
an audit committee pursuant to Recommendation 4.2.
The Directors are all financially literate. Mr John Palermo, Director, and Mr John Joseph Palermo,
Company Secretary, hold financial qualifications and are chartered accountants. The Directors have,
together, accumulated sufficient technical expertise in other directorships to provide valuable insight and
technical knowledge, allowing the Board to verify and safeguard the integrity of the Company’s financial
statements.
Preserving the spirit of Principle 4, the external auditor has full access to the Board throughout the year.
The Board does not have a separate charter for its audit functions; however, the responsibilities of the
Board (as set out in section 1.1of this Corporate Governance Statement) ordinarily include:
Reviewing internal controls and recommending enhancements;
Monitoring compliance with Corporations Act 2001, Securities Exchange Listing Rules, matters
outstanding with auditors, Australian Taxation Office, Australian Securities and Investment
Commission and financial institutions;
Improving the quality of the accounting function;
Reviewing external audit reports to ensure that, where major deficiencies or breakdowns in controls or
procedures have been identified, appropriate and prompt remedial action is taken by the Company;
and
Liaising with the external auditors and ensuring that the annual audit and half-year review are
conducted in an effective manner.
The Board reviews the performance of the external auditors on an annual basis and nomination of auditors
is as the discretion of the Board.
2.3. Remuneration Committee
Owing to its size and composition, the Company has not established a separate remuneration committee in
accordance with Recommendation 8.1.
The Board considers that the responsibility for the selection and appointment of Directors can be
adequately discharged by the Board and that no benefits or efficiencies are to be gained by delegating this
69
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
2.
BOARD COMMITTEES (continued)
2.3. Remuneration Committee (continued)
function to a separate committee. In any event, the Board consists of only three members, which is the
minimum composition recommended for an audit committee pursuant to Recommendation 8.1.
The Board does not have a separate charter for its remuneration functions; however, the Board is vested
with the responsibility to review remuneration packages and policies (including remuneration, incentives,
termination policies, and superannuation arrangements) applicable to each of the Directors and the
Company Secretary. Remuneration levels are competitively set to attract the most qualified and
experienced Directors for the benefit of the Company and Shareholders. The Board obtains independent
advice on the appropriateness of remuneration packages.
In making decisions with respect to appropriate remuneration and incentive policies for executive Directors
and the Company Secretary, the Board’s objectives are to:
Motivate executive Directors and the Company Secretary to pursue the long term growth and
success of the Company within an appropriate control framework;
Demonstrate a clear correlation between key performance and remuneration; and
Align the interests of key leadership with the long-term interests of the Company’s Shareholders.
Shareholder approval is also required to determine the maximum aggregate remuneration for non-executive
Directors. The maximum aggregate remuneration approved for non-executive Directors is currently set at
$250,000 per annum. Non-executive Directors are not provided with retirement benefits other than
statutory superannuation entitlements and are not entitled to participate in equity-based remuneration
schemes of the Company.
Full disclosure of the Company’s remuneration philosophy and framework, and the remuneration received
by Directors in the current period, is set out in the remuneration report, which is contained within the
Directors’ Report (“the Remuneration Report”). This Remuneration Report clearly distinguishes the
remuneration provided for non-executive Directors and executive Directors.
3.
ETHICAL STANDARDS
The Company has established a formal Code of Conduct (“the Code”) as per Recommendation 3.1, which
is available from the Company on request.
The Code outlines the Company’s expectations of Directors, the Company Secretary and employees and its
related bodies corporate in relation to their behaviour and the way business is conducted in the workplace
on a range of issues. Directors, the Company Secretary and employees are committed to acting with the
utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the
Company. Directors, the Company Secretary and employees must conduct themselves in a manner
consistent with the expectations of its stakeholders, commensurate with prevailing community and
corporate standards, and must take responsibility for upholding the Company’s legal obligations. In
addition, the Board subscribes to the Statement of Ethical Standards as published by the Australian Institute
of Company Directors.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
4.
DIRECTORS’ DEALINGS IN COMPANY SHARES
The Company has implemented a formal trading policy as required by Recommendation 3.2 entitled
Guidelines for Dealing in Securities. This policy applies to Directors, the Company Secretary, employees
and contractors of the Company, and is available from the Company on request.
In addition, Directors must notify the Australian Securities Exchange of any acquisition or disposal of
shares by lodgment of a Notice of Director’s Interests. Board policy is to prohibit Directors, the Company
Secretary and employees from dealing in shares of the Company whilst in possession of price sensitive
information.
5.
CONTINUOUS DISCLOSURE AND SHAREHOLDER COMMUNICATION
The Company has implemented a formal Continuous Disclosure and Information Policy as suggested in
Recommendation 5.1, which is available from the Company on request. This policy was introduced to
ensure the Company achieves compliance with its continuous disclosure obligations under the Corporations
Act and ASX Listing Rules.
The Board aims to ensure that the Shareholders, on behalf of whom they act, are informed of all
information necessary to assess the performance of the Directors. Information is communicated to
Shareholders through:
The Annual Report which is distributed to all Shareholders;
Half-yearly reports, quarterly reports and all ASX announcements which are posted on the
Company’s website;
The Annual General Meeting and other meetings so called to obtain Shareholder approval for Board
action as appropriate; and
Compliance with the continuous disclosure requirements of the ASX Listing Rules.
The Company’s auditor is required to be present, and be available to Shareholders, at the Annual General
Meeting.
6.
RESPECT THE RIGHTS OF SHAREHOLDERS
The Company has a formal privacy policy (“the Privacy Policy”), which is available from the Company on
request. The Company is committed to respecting the privacy of Shareholders’ personal information. The
Privacy Policy sets out the Company’s personal information management practices and covers the
application of privacy laws, personal information collection, the use and disclosure of personal information,
accessing and updating Shareholders’ information and the security of that information.
The Board has not adopted any additional codes of conduct or communications policies to promote
effective communication with Shareholders and encourage their participation at general meetings in
accordance with Recommendation 6.1. This is because the Board considers, in the context of the size and
nature of the Company, that a communications policy would not improve the effective exercise of the
Shareholders’ rights at general meetings.
Nevertheless, the Company informally adopts several of the suggestions in Recommendation 6, including
communicating to Shareholders electronically, and uploading its formal codes and policies to the
Company’s website.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (continued)
7.
RECOGNISE AND MANAGE RISK
Due to the size and scale of the Company and the Board, a separate committee has not been established to
oversee risk management. However, the Board has established a formal risk management policy to
recognise and manage risk, as recommended by Recommendation 7.1. This risk management policy is
available from the Company on request.
Risk management is a priority for the Board who remains vigilant in creating a culture, processes and
structures directed to optimising the Company’s opportunities whilst minimising and managing potential
material business risks.
Risk oversight, management and internal control are dealt with on a continuous basis by the Board, with
differing degrees of involvement from various Directors and the Company Secretary, depending upon the
nature and materiality of the matter.
The Board continuously reviews material business risks to identify whether the system for identifying and
reporting risks is being managed effectively. Determined areas of risk which are regularly considered
include:
Performance and funding of research and development activities;
Budget control and asset protection;
Compliance with government laws and regulations;
Status of intellectual property;
Safety and the environment;
Continuous disclosure obligations; and
Sovereign risk.
As the Company has not appointed a CFO (or equivalent), an assurance under s295A of the Corporations
Act has been made by Mr John Palermo, who performs the function of the CFO for this purpose.
The Annual Report sets out the categories of financial risk applicable to the Company, which are contained
in Note 26 in the Notes to the Financial Statements in the Annual Report.
72