PELICAN RESOURCES LIMITED
(ABN 12 063 388 821)
2014 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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66
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 2014.
The Company continued to focus its attention on the Romblon Nickel Project in the Philippines.
In 2013, the Court denied the motion for reconsideration in the Resolution dated 14 June 2013 where the
Regional Trial Court in Romblon had ruled in favour of the Applicant (SNPDC) and declared the Provincial
Executive Order unconstitutional. The Motion for Reconsideration of that ruling was filed by the Governor of
Romblon.
Currently the project continues to be on care and maintenance with the decision now resting with the
Department of Environment and Natural Resources (DENR) and the Mines and Geosciences Bureau (MGB).
The Company continued to monitor the activities on the island and SNPDC’s legal counsel are looking at all
legal avenues to resolve the Cease and Desist Order. The representations made to the Office of the President
in the previous reporting period have been returned to the DENR from the Office of the President as the
decision remained within the jurisdiction of the DENR.
Investor interest in nickel in the Philippines is expected to increase substantially during the next period due to
the Indonesian ban on shipping nickel laterite ore.
The San Marcos Gold Project in the United States continues to be of interest to the Company and independent
reports have been obtained with a view to accelerating activities on the project area.
On the Cockatoo Island Project, the Company continues to receive royalties from the project from Pluton
Resources Limited. Pluton has continued to ship ore during the reporting period however issues have arisen
with respect to the payment of royalties which are due and owing to the Company.
The Company has released information to the market in relation to the Pluton arrangements. In order to assist
in finalising the payment arrangements, the Company took an underwriting position in the Pluton capital
raising.
The Company has been advised that Pluton is confident of fulfilling its minimum subscription levels
notwithstanding the current decline in iron ore prices and that the Company will continue to receive royalties
when due together with the payment of all outstanding royalties.
As with previous years, I wish to express my gratitude to our staff in Perth and Philippines who have worked
in pursuit of the Company’s objectives during the year under review.
Dated this 26th day of September, 2014
__________________
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 in the
Philippines. 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 idle Ferro-Nickel (FeNi) Plants located within barging
distance of the Romblon Project are currently being prepared to commence production in 2014.
Additionally, the Company is undertaking an internal study to evaluate a Direct Reduction Process (DRP)
for laterite nickel ore. The technology to process high iron ore into Sponge Iron (SFE) and high nickel
ore into Sponge Nickel (SNI) is being developed in China. The initial Scoping Study will include a
review of Direct Reduction Iron (DRI) facilities currently operating in China and India which may be
followed by pilot plant test work if the process has potential to enhance the Romblon Nickel Project.
Discussions are ongoing with the Owners of other nickel projects in the Philippines regarding their
interest in a joint venture to process nickel ore in the Philippines utilising DRP.
Currently the project site is under care and maintenance due to a Cease and Desist Order (CDO) issued by
the Department of Environment and Natural Resources (DENR). Samples of the nickel ore from the
project cannot be obtained until the CDO is lifted.
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.
3
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
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 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 CDO 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 CDO.
The Governor of Romblon Province signed an Executive Order in 2012 making the province a non-
mining zone. SNPDC’s filed a Petition in the Regional Trial Court in Romblon to contest the Executive
Order. 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 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 Regional Trial Court in Romblon issued a Resolution on 14 June
2013 denying the Motion for Reconsideration. Counsel for SNPDC provided the Mines & Geosciences
Bureau (MGB) with a copy of the Resolution on the Motion for Reconsideration.
Given the Court’s ruling, SNPDC has made representations to the Office of the President of the
Philippines (OP) where its own appeal in respect of the Cease a 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. The OP responded to the request stating that it was too early to
make a representation to the OP and the decision was still in the jurisdiction of the DENR. Counsel for
SNPDC is following up on the representation to the DENR.
The Philippine elections were held successfully on the 13 May 2013. The incumbent Mayor of San
Fernando Municipality lost the re-election. The newly elected officials were formally sworn into office
on 30 June 2013. Elections for Barangay officials within San Fernando Municipality were held during
the reporting period. There have been some 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 along with progress in discussions with the DENR and MGB regarding lifting of the
CDO.
4
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
In due course, 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. The EO requires local government ordinances to be
consistent with the Philippine Constitution and the Mining Act.
The Secretary of the DENR announced in December 2013, that the Mining Industry Coordinating
Council (MICC) had submitted a draft bill for a new mining tax to the Presidential Liaison Office. The
proposed new tax will assist in resolving the current debate in the Philippines with respect to the
contribution of the mining industry to the local community. The new tax is not expected to be applied to
independent nickel processing plants. The draft bill had not been submitted to Congress as of 30 June
2014.
The nickel price and FOB price of laterite nickel DSO increased significantly between January and June
2014. Indonesia imposed a ban on DSO inclusive of laterite nickel ore effective 12 January 2014.
Indonesia supplied approximately 50% of laterite nickel DSO shipped to China during CY2013. The
price increase during the 2nd half of FY2014 was 35% and 200% for nickel metal and 1.8% Ni DSO
respectively. The prices declined slightly towards the end of June 2014 due to a general slowdown in
the Chinese economy and some resistance to the price increase.
Investor interest in nickel laterite ore and projects located in the Philippines is expected to increase
substantially during FY2015 if the Indonesian ban of nickel laterite DSO is maintained. It will take 2-3
years for new nickel laterite ore processing plants to be constructed and commissioned in Indonesia.
Additionally, the production ramp-up following plant commissioning is often over a 2-3 year period.
Nickel and nickel laterite DSO prices are expected to continue to increase in FY2015 assuming positive
growth in the Chinese economy.
PROJECT GENERATION IN THE PHILIPPINES
Pelican Staff in the Philippines have been active in a review of new mining projects while the Romblon
Nickel Project has been on care and maintenance. The focus is on permitted and advanced nickel laterite,
iron ore and iron sand projects. Efforts have been focused in Provinces that have a history of
encouraging mining exploration and operations. A number of opportunities have been identified in
northern Luzon and Leyte Province in eastern Visayas. A short list of projects with the highest potential
will be evaluated through meetings with the relevant parties and site visit.
5
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
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 informed the Company in FY14 that efforts towards application for a MPSA have ceased. Rugby
decided 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. Rugby’s EP application was near the end of the
approval process as of 30 June 2014.
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.
6
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
UNITED STATES OF AMERICA
SAN MARCOS GOLD PROJECT, ARIZONA USA
Interest: Option to earn up to 100%
Operator: Pelican wholly owned USA subsidiary (incorporated July 2013)
Pelican Resources Limited 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 US subsidiary, on the San Marcos Gold Project located in La Paz County, Arizona,
USA.
On 18 February 2013, Pelican announced to the ASX it had exercised the Option to Enter into a Farm-in and
Joint Venture Agreement with AusAmerican on terms announced to the ASX on 14 January 2013.
Following the above transactions Pelican incorporated a wholly-owned USA subsidiary, Dore 5 Resources
Inc. Officers and Directors of Dore 5 were appointed together with banking and statutory facilities to enable
the Company to move forward.
Dore 5 appointed a professional geologist located in Tucson Arizona as a Director of the subsidiary, who has
also accepted responsibility for the management of exploration. A professional tenement company was also
contracted to manage those claims hosting the San Marcos Project area.
The San Marcos project is located approximately 145kms west of Phoenix, Arizona, and is accessed by paved
and well maintained roads. Electric power lines, high pressure natural gas pipelines, major highways and an
active railway pass over or close to the property. Favourable climatic conditions allow year-round exploration
work. Arizona is recognised as a mining-friendly jurisdiction.
The San Marcos property comprises 125 contiguous mining claims and is owned in its entirety by
AusAmerican Mining. It lies on the northwest flank of the Harquahala Mountain range within the Detachment
Fault structural terrane of the Basin and Range physiographic province. The gold mineralised complex lies in
and close to a gently sloping detachment surface that separates ancient quartz-feldspar gneiss from overlying
granitic and sedimentary rock units.
The property has been prospected and mapped in preliminary fashion and further explored by 30 percussion
drill holes and 5 cored drill holes. Analytical data is incomplete. The favourable horizon and mineralisation
are open to down-dip and lateral extension beneath semi-lithified coarse fluvial gravels that obscure the
prospective bedrock.
Following the appointment of a geologist, priorities were focused on geological data collection to enable
further geological modelling based on detachment style mineralisation which is somewhat unique in the
project area. Ongoing field work including rock chip sampling, mapping along a parallel anomaly identified
by AusAmerican consultant geologist, together with commencement of splitting and logging approximately
1000 metres of drill core which were part of the last campaign by AusAmerican.
This work was undertaken early in 2014 with selected core put aside for future metallurgical test work.
Budgets were re-aligned to meet the farm –in expenditure requirements.
7
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
Pelican gave notice to AusAmerican on 29 April 2014 that the required amount had been expended on the San
Marcos Project. Under the terms of the Farm-in Agreement, Pelican has earned 30% in the San Marcos
Project.
During May and June 2014, Dore 5 was focused on prospect generation activity. Numerous prospective
properties were reviewed mostly through land research and data analysis. The properties reviewed were
Johnson Camp, Gold Bar, Soccoro Mine area, Harquahala Mine area and El Tigre.
The Gold Bar property is an historic mine on patented land near Wickenburg, AZ. Various reports indicate
historic production totalling 24,000 tonnes grading 0.88 opt gold. There are numerous mineral occurrences on
the property with good molybdenum assays and a copper vein reported to grade better than 5%. The most
promising aspect of this property is the fact that well mineralised breccia pipes are inclined. Previous
exploration and development has focused on mineralisation directly below surface outcrops. The dipping
breccia pipes and recent work on the structure and extensional tectonics of the area leads the Company to
believe significant potential for a large mineralised system exists on untested areas of this property. The
Company’s geologist has recommended pursuing a deal on this property and a decision of how to proceed is
pending.
The Socorro Mine district is adjacent to the San Marcos project. Non-public data exists on the area. This data
(soil sampling, mapping) was reviewed and indicates the potential for Au mineralisation along a compressive
structural corridor. Open ground is available in this area.
Research and a brief data review was conducted on the Harquahala and El Tiger Mine located in W. Arizona.
These properties represent the opportunity for a small 100-200K+ oz. operation. Further due diligence is
needed before any recommendation is made.
WESTERN AUSTRALIA
KIMBERLEYS
COCKATOO ISLAND PROJECT (M04/235)
Interest: 100%
Operator: Pluton Resources Ltd (from 01 October 2012 to 30 June 2014)
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 1 October 2012. Pluton Resources will be the operator and maintain management control. Their
initial open-cut mine plan forecast monthly shipments commenced November 2012.
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 was also required to pay to Pelican a minimum royalty of $50,000 per month for a total period of 14
months.
8
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS (continued)
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 if mining operations on Cockatoo Island are suspended due to force
majeure events.
Pluton, as operator of the Cockatoo Island Project, reported that shipments of iron ore in the period from 01
July 2013 to 30 June 2014 were 913,328 dry tonnes. Royalty payments are on the basis of $1.00 per dry
tonnes of iron ore shipped.
RELINQUISHMENTS
Nil.
NEW ACQUISITIONS
Nil.
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.
9
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 2014.
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 loss for the year after income tax was ($1,812,363) (2013: profit of $284,146).
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 2014.
10
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the year, the following options expired and new shares were issued:
Date
Details
30/09/2013 Unlisted options expired
23/12/2013 Unlisted options expired
09/06/2014 Conversion of listed options
11/06/2014 Conversion of listed options
12/06/2014 Conversion of listed options
23/06/2014 Conversion of listed options
26/06/0214 Conversion of listed options
27/06/2014 Conversion of listed options
30/06/2014 Conversion of listed options
No. of
Shares
--
--
13,067
683
304
35,548
1,125
12,500
8,025
Issue Price
--
--
$0.04
$0.04
$0.04
$0.04
$0.04
$0.04
$0.04
No. of
Options
1,000,000
11,875,000
--
--
--
--
--
--
--
Exercise
Price
$0.15
$0.10
--
--
--
--
--
--
--
Exercisable
By
30/09/2013
23/12/2013
--
--
--
--
--
--
--
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 over 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)
11
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
PARTICULARS OF DIRECTORS (continued)
DIRECTORS’ REPORT (continued)
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.
COMPANY SECRETARY
John Joseph Palermo, B.Bus, FCA, ACIS
Mr Palermo is a Chartered Accountant with 18 years experience in Public Practice. His areas of expertise are
in corporate advisory, strategic business management and business structuring. Currently a director of
Palermo Chartered Accountants, he has experience in public company accounting and administration. Mr
Palermo is a former 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.
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
11,811,292
--
21,754,400
--
--
--
--
500,000
12
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
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.
Remuneration policy (continued)
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.
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.
13
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Remuneration policy (continued)
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)
--
--
2014
2013
132,500
126,250
Hills, J – Director (non-executive)
25,000
37,000
--
--
Bue, M – Director (executive)
--
--
150,000
150,000
2014
2013
2014
2013
Total Remuneration:
2014
2013
307,500
313,250
--
--
--
--
--
--
--
--
--
--
14,822
20,438
578
--
13,875
13,500
29,275
33,938
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
147,322
146,688
25,578
37,000
163,875
163,500
336,775
347,188
Other related party transactions of key management personnel are disclosed in Note 18.
Remuneration Options
There were no options issued as part of director remuneration for the years ended 30 June 2014 and 30 June 2013.
During the year ended 30 June 2014, no remuneration options were forfeited, expired or exercised by the directors.
14
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Shareholdings by Directors
2014
J Palermo
J H Hills
M Bue
Total
2013
J Palermo
J H Hills
M Bue
Total
Balance
01/07/13
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
25,895,126
11,811,292
--
37,706,418
--
--
--
--
--
--
--
--
Net Other
Change
(No. of Shares)
Balance
30/06/14
(No. of Shares)
(5,072,198)
20,822,928
--
--
11,811,292
--
(5,072,198)
32,634,220
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
Listed Options Holdings by Directors
2014
Balance
01/07/13
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/14
(No. Options)
Total Vested
30/06/14
(No. Options)
Total
Exercisable
(No. Options)
J Palermo
21,754,400
J H Hills
M Bue
Total
--
--
21,754,400
--
--
--
--
--
--
--
--
(i)
Total listed options of 21,754,400 expired on 1 July 2014.
--
--
--
--
--
--
--
--
21,754,400
(i)
--
--
21,754,400
--
--
--
--
--
--
--
--
2013
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
15
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Unlisted Options Holdings by Directors
2014
J Palermo
J H Hills
M Bue
Total
2013
J Palermo
J H Hills
M Bue
Total
Balance
01/07/13
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Exercised
Net
Change
Other
(No. Options)
Balance
30/06/14
(No. Options)
Total Vested
30/06/14
(No. Options)
Total
Exercisable
(No. Options)
--
--
--
--
--
--
--
--
--
--
--
--
Balance
01/07/12
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Exercised
1,000,000
1,000,000
--
2,000,000
--
--
--
--
--
--
--
--
--
--
--
--
Net
Change
Other
(No. Options)
(1,000,000)
(1,000,000)
--
(2,000,000)
--
--
--
--
--
--
--
--
--
--
--
--
Balance
30/06/13
(No. Options)
Total Vested
30/06/13
(No. Options)
Total
Exercisable
(No. Options)
--
--
--
--
--
--
--
--
--
--
--
--
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 14b).
[END OF REMUNERATION REPORT (Audited)]
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 2014 by each director:
John Palermo
John Henry Hills
Mike Bue
Number
Eligible to
Attend
19
19
19
Number
Attended
19
19
18
16
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIVIDENDS
DIRECTORS’ REPORT (continued)
No dividend is recommended nor has one been declared or paid since the formation of the Company.
SHARE OPTIONS
At the date of this report, there existed the following outstanding options to acquire ordinary shares:
Listed Options
59,725,571 options exercisable at $0.02 on or before 30 June 2017
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.
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 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 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 and does not present disclosure of the premium.
17
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (continued)
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 62.
NON-AUDIT SERVICES
Stantons International has not provided any non-audit services to the entity as shown at Note 19.
Signed in accordance with a resolution of the board of directors
Dated at Perth this 26th day of September, 2014
__________________
JOHN PALERMO
Director
18
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
Revenue
Gain on deconsolidation of subsidiary
Net foreign exchange gains
Gain/(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
Doubtful debt provision
Exploration expenditure impairment
Exploration expenditure written off
Insurance
Legal expenses
Public relations and marketing
Rent and outgoings
Share register maintenance
Travel and accommodation
Other expenses
(Loss)/profit before income tax
Income tax
(Loss)/profit for the year
Other comprehensive income
Currency translation differences
Change in fair value of securities
Income tax on other comprehensive income
Other comprehensive (loss)/income for the year
Total comprehensive (loss)/income for the year
(Loss)/gain attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive (loss)/gain 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)
3(c)
2014
$
1,101,426
--
391
692
(149,872)
(27,986)
--
(32,775)
(186,750)
(10,133)
(81,905)
(198,016)
(157,654)
(1,582,052)
(258,721)
(22,498)
(17,641)
(22,050)
(23,049)
(19,740)
(10,333)
(113,697)
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)
(1,812,363)
284,146
4
--
--
(1,812,363)
284,146
14(c)
(20,473)
--
--
161,187
65,018
--
(20,743)
226,205
(1,832,836)
510,351
(1,425,543)
(386,820)
(1,812,363)
(1,445,447)
(387,389)
(1,832,836)
646,185
(362,039)
284,146
912,751
(402,400)
510,351
Basic and diluted (loss)/earnings per share (cents per share)
22
(0.59)
0.26
The above statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes
19
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
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
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
2014
$
2013
$
5
6
7
8
9
10
762,231
673,170
166,419
1,265,184
508,087
159,995
1,601,820
1,933,266
27,715
51,418
2,100,000
620
35,776
3,600,929
2,179,133
3,637,325
3,780,953
5,570,591
11
12
225,132
3,773
163,282
13,339
228,905
176,621
12
991,240
1,003,176
991,240
1,003,176
1,220,145
1,179,797
2,560,808
4,390,794
13(a)
14(a)
15
13,286,471
1,597,616
13,283,621
1,617,520
(11,508,079) (10,082,536)
3,376,008
(815,200)
4,818,605
(427,811)
16
2,560,808
4,390,794
The above statement of financial position
should be read in conjunction with the accompanying notes
20
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Issued
Capital
Options
Reserve
Consolidated
$
$
Foreign
Currency
Translation
Reserve
$
Asset
Revaluation
Reserve
Accumulated
Losses
Non-
Controlling
Interest
Total
Equity
$
$
$
$
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/(loss) 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
--
--
--
--
--
--
--
--
--
--
--
--
--
Balance at 30/06/2013
13,283,621
1,528,725
88,795
Balance at 01/07/2013
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/(loss) 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
13,283,621
1,528,725
88,795
--
--
--
--
--
2,850
--
--
2,850
--
--
--
--
--
--
--
--
--
--
(19,904)
--
(19,904)
(19,904)
--
--
--
--
Balance at 30/06/2014
13,286,471
1,528,725
68,891
--
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
(10,082,536)
(427,811)
4,390,794
(1,425,543)
(386,820)
(1,812,363)
--
--
--
(569)
(20,473)
--
--
(569)
(20,473)
(1,425,543)
(387,389)
(1,832,836)
--
--
--
--
--
--
--
--
2,850
--
--
2,850
(11,508,079)
(815,200)
2,560,808
The above statement of changes in equity
should be read in conjunction with the accompanying notes.
21
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Royalties received
Settlement proceeds
Interest paid
Other
Consolidated
Note
2014
$
2013
$
(720,714)
27,297
551,703
--
--
3,125
(980,290)
84,802
358,901
525,000
(2,632)
500
Net Cash Used in Operating Activities
17(b)
(138,589)
(13,719)
Cash Flows from Investing Activities
Payments for exploration expenditure
Loans to other entities
Payments for plant and equipment
Proceeds from sale of plant and equipment
Proceeds from sale of investments
Other
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Proceeds from issue of shares and options
Repayment of borrowings
Net Cash Provided by/(Used in) Financing Activities
(368,083)
--
(36,761)
1,616
40,792
--
(364,986)
(29,830)
(181)
--
--
8,514
(362,436)
(386,483)
2,850
--
--
(100,000)
2,850
(100,000)
Net decrease in cash and cash equivalents held
(498,175)
(500,202)
Cash and cash equivalents at the beginning of the financial year
1,265,184
1,635,694
Effect of exchange rate changes on cash holdings
(4,778)
129,692
Cash and cash equivalents at the end of the financial year
17(a)
762,231
1,265,184
The above statement of cash flows
should be read in conjunction with the accompanying notes
22
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
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 2014 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 29.
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 26 September 2014.
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.
Going Concern
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.
Payment of the royalty may also be deferred in the event if mining operations on Cockatoo Island are
suspended due to force majeure events.
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).
23
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c)
New and Revised Accounting Standards and Interpretations adopted by the Group
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current year.
The adoption of all the new and revised Standards and Interpretations has resulted in changes to the Group’s
accounting policies in order to comply with these amendments. However, the changes in accounting policies
have no effect on the amounts reported for the current or prior years. In addition to the amendments to the
accounting policies of the Consolidated Entity, the amendments to AASB 12: Disclosure of Interest in other
entities requires additional disclosures in relation to the subsidiaries with non-controlling interest.
(d)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent Pelican
Resources Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls
an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in
Note 21.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting
policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non
controlling interests". The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation at
either fair value or at the non-controlling interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each
component of other comprehensive income. Non-controlling interests are shown separately within the equity
section of the statement of financial position and statement of comprehensive income.
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,
24
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Principles of Consolidation (continued)
Business Combinations (continued)
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.
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.
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.
25
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Plant and Equipment (continued)
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
2.5 – 100%
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.
(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.
26
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(g)
Exploration and Development Expenditure (continued)
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.
27
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
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
Investments in controlled entities are carried at cost less, where applicable, any impairment losses.
Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture where
unanimous decisions about relevant activities are required.
Separate joint venture entities providing joint venturers with an interest to net assets are classified as a "joint
venture" and accounted for using the equity method.
28
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j) Financial Instruments (continued)
Interests in Joint Arrangements (continued)
Joint venture operations represent arrangements whereby joint operators maintain direct interests in each asset
and exposure to each liability of the arrangement. The Group's interests in the assets, liabilities, revenue and
expenses of joint operations are included in the respective line items of the consolidated financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties'
interests. When the Group makes purchases from a joint operation, it does not recognise its share of the gains
and losses from the joint arrangement until it resells those goods/assets to a third party.
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.
(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)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the
measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used
to determine fair value. Adjustments to market values may be made having regard to the characteristics of the
specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are
determined using one or more valuation techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data.
29
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Fair Value of Assets and Liabilities (continued)
To the extent possible, market information is extracted from either the principal market for the asset or liability
(ie the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such
a market, the most advantageous market available to the entity at the end of the reporting period (ie the market
that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability,
after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's ability to
use the asset in its highest and best use or to sell it to another market participant that would use the asset in its
highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer of
such financial instruments, by reference to observable market information where such instruments are held as
assets. Where this information is not available, other valuation techniques are adopted and, where significant,
are detailed in the respective note to the financial statements.
Valuation Techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more
valuation techniques to measure the fair value of the asset or liability. The Group selects a valuation technique
that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The
availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or
liability being measured. The valuation techniques selected by the Group are consistent with one or more of
the following valuation approaches:
- Market approach: valuation techniques that use prices and other relevant information generated by
-
market transactions for identical or similar assets or liabilities;
Income approach: valuation techniques that convert estimated future cash flows or income and
expenses into a single discounted present value; and
- Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current
service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when
pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the
Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of
unobservable inputs. Inputs that are developed using market data (such as publicly available information on
actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the
asset or liability are considered observable, whereas inputs for which market data is not available and therefore
are developed using the best information available about such assumptions are considered unobservable.
30
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Fair Value of Assets and Liabilities (continued)
Fair Value Hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input
that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable
market data. If all significant inputs required to measure fair value are observable, the asset or liability is
included in Level 2. If one or more significant inputs are not based on observable market data, the asset or
liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following
circumstances:
(i)
(ii)
if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3)
or vice versa; or
if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or
vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value
hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in
circumstances occurred.
31
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m)
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.
(n)
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.
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.
32
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
Foreign Currency Transactions and Balances (continued)
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
21) is the Philippine PESO.
(o)
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.
(p)
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).
(q)
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.
(r)
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.
33
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(s)
(Loss)/Earnings per share
(i) 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.
(ii) 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.
(t)
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.
(u)
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.
The Consolidated Entity’s assessment of the new and amended pronouncements that are relevant to the
Consolidated Entity but applicable in future reporting periods is set out below:
34
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u)
New Accounting Standards and Interpretations for Application in Future Periods (continued)
AASB 9
Financial
Instruments
AASB
2012-3
AASB
2013-3
AASB
2013-6
Amendments to
Australian
Accounting
Standards –
Offsetting
Financial Assets
and Financial
Liabilities
Amendments to
AASB 136 –
Recoverable
Amount
Disclosures for
Non- Financial
Assets
Amendments to
AASB 136 arising
from Reduced
Disclosure
Requirements
Replaces the requirements of AASB 139 for the classification and
measurement of financial assets. This is the result of the first part
of Phase 1 of the IASB’s project to replace IAS 39.
AASB 2012-3 principally amends AASB 7 Financial Instruments:
Disclosures to require disclosure of the effect or potential effect of
netting arrangements. This includes rights of set-off associated
with the entity’s recognised financial assets and liabilities, on the
entity’s financial position, when the offsetting criteria of ASB 132
are not all met.
1 January
2017
1 January
2014
Address inconsistencies in current practice when applying the
offsetting criteria in AASB 132 Financial Instruments:
Presentation.
Clarifies the meaning of 'currently has a legally enforceable right
of set-off' and 'simultaneous realisation and settlement'.
1 January
2014
Amends AASB 136 Impairment of Assets to establish reduced
disclosure requirements for Tier 2 entities arising from AASB
2013-3 Amendments to AASB 136 – Recoverable Amount
Disclosures for Non-Financial Assets.
1 January
2014
35
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(v) 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 6 – Trade and Other Receivables
Note 10 – Mineral Exploration and Evaluation Expenditure
Note 25 – Risk Management Objectives and Policies
Note 28 – Share Based Payments
36
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 2: REVENUE
Revenue
Settlement with Pluton Resources Ltd
Profit/(loss) 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 20)
Gain/(loss) on disposal of investments
(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
Diminution in value of investments
Directors’ and CEO benefits expenses
Doubtful debt provision
Exploration expenditure impairment
Exploration expenditure written off
Insurance
Legal expenses
Public relations and marketing
Rent and outgoings
Share register maintenance
Travel and accommodation
Other expenses
37
Consolidated
2014
$
--
674
1,058,123
39,504
3,125
2013
$
525,000
(2,157)
703,760
76,949
500
1,101,426
1,304,052
10,133
8,765
--
2,632
391
--
692
20,125
100
(65,271)
1,083
(45,046)
149,872
27,986
32,775
186,750
81,905
198,016
157,654
1,582,052
258,721
22,498
17,641
22,050
23,049
19,740
10,333
113,697
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
2,904,739
963,463
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
2014
$
2013
$
(1,812,363)
284,146
(543,709)
85,244
(63,562)
95
(117)
24,572
450,279
(41,047)
1,477,530
(101,102)
373
(6,038)
(18,761)
(150,899)
(41,119)
--
(1,304,041)
232,302
--
--
47,135
216,386
2,422,500
88,182
191,814
3,726,541
2,686,021
4,006,537
(629,999)
(198,188)
(828,187)
(1,080,278)
(134,626)
(1,214,904)
112,231
650,000
65,184
1,200,000
762,231
1,265,184
NOTE 4: INCOME TAX
The prima facie tax on (loss)/profit before income tax
is reconciled to the income tax as follows:
(Loss)/profit before income tax
Income tax calculated at 30%
Add back:
Income accrued
Non deductible expenses
Unrealised foreign exchange (gains)
Provisions
Capitalised exploration written off/(recouped)
Capital raising costs
Foreign losses expired
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
38
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Accrued royalties
Doubtful debt provision
Goods and services tax
Advances/loans – other parties
As of 30 June 2014, trade and other receivables contained a balance of $565,307
which was past due. As at 30 June 2014, the directors have booked a provision
for doubtful debts of $157,654 however the directors believe that the full amount
will be received. The Consolidated Entity does not hold any collateral in relation
to these receivables. Since 30 June 2014, the Company has agreed to convert
$250,000 of the accrued royalties into 25,000,000 Pluton shares at 1 cent per share.
NOTE 7: OTHER
Current
Deposits held
Accrued revenue
Prepayments
NOTE 8: OTHER FINANCIAL ASSETS
Non Current
Listed investments at fair value:
Shares in other entities(i)
(i) As at 30 June 2014, the Company held 2,725,000 shares in Pluton
Resources Limited. At the date of signing this report, the value of
those shares held was $27,250.
Consolidated
2014
$
792,010
(157,654)
27,211
11,603
2013
$
434,690
--
28,246
45,151
673,170
508,087
131,000
26,269
9,150
131,000
14,062
14,933
166,419
159,995
27,715
620
39
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
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
2014
$
2013
$
111,227
(59,809)
77,476
(41,700)
51,418
35,776
35,776
36,761
(942)
(10,133)
(10,044)
54,453
181
(2,157)
(8,765)
(7,936)
51,418
35,776
40
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 10: MINERAL EXPLORATION AND
EVALUATION EXPENDITURE
Balance at beginning of year
Exploration and mining expenditure incurred during the year
Foreign exchange movement
Expenditure impairment
Expenditure written off
Balance at end of year
Exploration expenditure carried forward in respect
of areas of interest in the exploration and evaluation phase
Consolidated
2014
$
2013
$
3,600,929
368,083
(28,239)
(1,582,052)
(258,721)
3,097,931
364,986
230,583
--
(92,571)
2,100,000
3,600,929
2,100,000
3,600,929
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.
As at 30 June 2014, the Company impaired the value of its exploration projects by $1,582,052.
Consolidated
2014
$
129,122
95,046
964
2013
$
123,301
39,587
394
225,132
163,282
3,773
13,339
991,240
1,003,176
NOTE 11: TRADE AND OTHER PAYABLES
Trade creditors and accrued expenses
Goods and services tax
Withholding tax
NOTE 12: NON-INTEREST BEARING LIABILITIES
Current
Loans – other parties
Non current
Loans – other parties
41
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
2014
$
2013
$
NOTE 13: ISSUED CAPITAL
(a) Issued Capital
241,274,320 Ordinary shares fully paid (2013: 241,203,068)
13,286,471
13,283,621
(b) Movements in ordinary share capital of the Company during the last two years were as follows:
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
Date
Details
No. of Shares
Issue Price
$
01/07/2013
09/06/2014
11/06/2014
12/06/2014
23/06/2014
26/06/2014
27/06/2014
30/06/2014
Opening balance
Conversion of listed options
Conversion of listed options
Conversion of listed options
Conversion of listed options
Conversion of listed options
Conversion of listed options
Conversion of listed options
241,203,068
13,067
683
304
35,548
1,125
12,500
8,025
$0.04
$0.04
$0.04
$0.04
$0.04
$0.04
$0.04
13,283,621
523
27
12
1,422
45
500
321
Less: transaction costs arising on share issues
30/06/2014
Closing balance
241,274,320
13,286,471
(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 2014 and no dividends are expected to be paid in 2015.
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.
42
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 14: RESERVES
(a) Composition
Share based payments reserve
Foreign currency translation reserve
Consolidated
2014
$
2013
$
1,528,725
68,891
1,528,725
88,795
1,597,616
1,617,520
(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
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
Date
Details
Performance
Rights
No. of
Listed
Options
No. of
Unlisted
Options
Fair Value
of Options
Issued
Exercise
Price
Expiry
Date
01/07/2013 Opening balance
30/09/2013 Unlisted options expired
23/12/2013 Unlisted options expired
09/06/2014 Conversion of listed options
11/06/2014 Conversion of listed options
12/06/2014 Conversion of listed options
23/06/2014 Conversion of listed options
26/06/2014 Conversion of listed options
27/06/2014 Conversion of listed options
30/06/2014 Conversion of listed options
30/06/2014 Closing balance
500,000
--
--
--
--
--
--
--
--
--
500,000
88,175,767
--
--
(13,067)
(683)
(304)
(35,548)
(1,125)
(12,500)
(8,025)
88,104,515(i)
12,875,000
(1,000,000)
(11,875,000)
--
--
--
--
--
--
--
$1,528,725
--
--
--
--
--
--
--
--
--
--
$1,528,725
$0.15 30/09/2013
$0.10 23/12/2013
$0.04 30/06/2014
$0.04 30/06/2014
$0.04 30/06/2014
$0.04 30/06/2014
$0.04 30/06/2014
$0.04 30/06/2014
$0.04 30/06/2014
(i) On 2 July 2014, 8,040 listed options were converted with the balance of 88,096,475 expiring
on 1 July 2014.
43
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 14: RESERVES (continued)
(c) Movements in asset revaluation reserve:
Opening balance at 1 July 2013
Marked to market of shares and options
Closing balance at 30 June 2014
NOTE 15: ACCUMULATED LOSSES
Balance at beginning of the year
(Loss)/profit attributable to members of Pelican Resources Limited
Balance at end of the year
NOTE 16: NON-CONTROLLING INTEREST
Reconciliation of minority equity interest in controlled entities:
Opening balance
Share of current year’s (loss) after income tax
Share of current year’s translation reserve
Consolidated
2014
$
2013
$
--
--
--
(65,018)
65,018
--
(10,082,536)
(1,425,543)
(10,728,721)
646,185
(11,508,079)
(10,082,536)
(427,811)
(386,820)
(569)
(25,411)
(362,039)
(40,361)
(815,200)
(427,811)
44
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 17: 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
2014
$
2013
$
Cash and cash equivalents (Note 5)
762,231
1,265,184
b) Reconciliation of net cash and cash equivalents used in operating activities
to (loss)/profit for the year:
(Loss)/profit for the year
Profit on deconsolidation of subsidiary
Debt conversions
Exploration and evaluation expenditure written off / impaired
Depreciation
Diminution in value of investments
Net (gain)/loss on disposal of plant and equipment
Foreign exchange (gains)/losses
Net (gain)/loss on disposal of investments
Doubtful debt provision
Movements in assets and liabilities:
Receivables
Net GST receivable
Prepayments
Payables
(1,812,363)
284,146
--
--
1,840,773
10,133
81,905
(674)
(391)
(692)
157,654
(483,602)
56,494
5,783
6,391
(100)
4,500
92,571
8,765
2,480
2,157
(112,696)
65,171
--
(337,006)
24,238
18,615
(66,560)
Net cash used in operating activities
(138,589)
(13,719)
c) Non-cash investing and financing activities
2014
There were no non-cash investing and financing activities during the year ended 30 June 2014.
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.
45
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 18: 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)
--
--
2014
2013
132,500
126,250
Hills, J – Director (non-executive)
25,000
37,000
2014
2013
--
--
Bue, M – Director (executive)
2014
2013
150,000
150,000
Total Remuneration:
2014
2013
307,500
313,250
--
--
--
--
--
--
--
--
--
--
--
--
14,822
20,438
578
--
13,875
13,500
29,275
33,938
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
(b) Compensation of Key Management Personnel
Compensation by category:
Short-term
Post employment
46
--
--
--
--
--
--
--
--
--
--
--
--
--
--
147,322
146,688
25,578
37,000
163,875
163,500
336,775
347,188
Consolidated
2014
$
2013
$
307,500
29,275
313,250
33,938
336,775
347,188
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 18: 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 and/or accrued payment for the provision
of geological consulting and general consultancy, management services and disbursements 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)
Management and disbursements (John Palermo)
Amounts payable or receivable to directors and their director related party
entities at balance date arising from these transactions were as follows:
Consolidated
2014
$
22,573
100
2013
$
33,550
178
Payables
18,822
21,142
NOTE 19: REMUNERATION OF AUDITORS
Audit services – Stantons International
– Overseas auditors
27,038
4,978
32,016
30,124
3,685
33,809
NOTE 20: 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
Gain
Gain on deconsolidation of Ibis
($15,937)
$16,037
$100
47
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 21: INTEREST IN SUBSIDIARIES
(a)
Information about Principal Subsidiaries
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.
Dore 5 Resources Inc.
AUS
AUS
AUS
PHP
PHP
PHP
PHP
USA
2014
$
2013
$
1
1
950,000
950,000
1,000
1,000
--
--
--
--
94
--
--
--
--
--
951,095
951,001
The Group’s effective ownership interest in its subsidiaries has not changed since the prior year apart from the
acquisition of the new subsidiary, Dore 5 Resources Inc.
48
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 21: INTEREST IN SUBSIDIARIES (continued)
(b)
Summarised Financial Information of Subsidiaries with Material Non-Controlling Interests
Set out below is the summarised financial information for each subsidiary that has non-controlling interests that
are material to the Group.
Summarised Financial Position
Current Assets
Non Current Assets
Current Liabilities
Non Current Liabilities
Net Assets
Carrying amount of non-controlling interest
Summarised Financial Performance
Revenue
Loss before income tax
Income tax
Post-tax loss from continuing operations
Post-tax loss from discontinued operations
Other Comprehensive Income
Total Comprehensive Loss
The information above is the amount before intercompany eliminations.
Loss attributable to non-controlling interests
Distributions paid to non-controlling interest
Summarised Cash Flow Information
Net cash flows (used in) operation activities
Net cash flows from financing activities
49
Sibuyan Nickel Properties
Development Corporation
As at
30 June 2014
$
As at
30 June 2013
$
4,012
1,279,014
(280)
(4,479,960)
6,449
2,829,393
(3,564)
(4,479,936)
(3,197,214)
(1,647,658)
(815,200)
(427,811)
Sibuyan Nickel Properties
Development Corporation
Year Ended
30 June 2014
$
Year Ended
30 June 2013
$
6
(1,547,281)
--
(1,547,281)
--
--
(1,547,281)
5
(821,546)
--
(821,546)
--
--
(821,546)
(1,547,281)
--
(821,546)
--
Sibuyan Nickel Properties
Development Corporation
Year Ended
30 June 2014
$
Year Ended
30 June 2013
$
(22,757)
19,696
(57,262)
30,214
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 22: LOSS PER SHARE
The following reflects the income and data used in the calculations of basic and diluted (loss)/profit per share:
(Loss)/profit before income tax – Group
Adjustments:
Loss attributable to non-controlling interest
Consolidated
2014
$
2013
$
(1,812,363)
284,146
(386,820)
(362,039)
(Loss)/profit used in calculating basic and diluted (loss)/profit per share
(1,425,543)
646,185
Weighted average number of ordinary shares used in calculating:
Basic loss per share
Diluted loss per share
2014
Number of
Shares
2013
Number of
Shares
241,204,862
241,204,862
240,871,561
240,871,561
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 23: COMMITMENTS FOR EXPENDITURE
In order to maintain current rights of tenure to mining tenements, the Consolidated Entity will be required to
outlay in 2014/15 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
2014
$
2013
$
220,000
98,175
220,000
98,175
660,000
294,525
1,100,000
490,875
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 farm-in agreements without
allowing for dilution.
50
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 24: 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,
Philippines and the USA.
Australia
Philippines
USA
Eliminations
Consolidated
2014
$
2013
$
2014
$
2013
$
2014
$
2013
$
2014
$
2013
$
2014
$
2013
$
Geographical Segments
Revenue
Sales to customers outside the
Consolidated Entity
Other revenues from customers
outside the Consolidated Entity
1,058,123 1,228,760
43,190
75,239
--
113
113
--
53
53
--
--
--
Total segment revenue
1,101,313 1,303,999
(374,270)
818,932
(1,874,821)
(1,379,076)
(87,054)
--
--
--
--
--
--
--
--
--
--
1,058,123
1,228,760
43,303
75,292
1,101,426
1,304,052
523,782
844,290
(1,812,363)
284,146
7,660,586 7,630,328
1,811,426
3,425,603
101,327
--
(5,792,386)
(5,485,340)
3,780,953
5,570,591
8,951,376 8,549,698
6,219,582
5,936,797
188,287
--
(14,139,100)
(13,306,698) 1,220,145
1,179,797
51
Results
Segment result
Assets
Segment assets
Liabilities
Segment liabilities
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 25: 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 13 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.
52
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 25: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Non Interest
Bearing
$
Weighted
Average Effective
Interest Rate %
Floating
Interest Rate
$
Fixed
Interest Rate
$
Total
$
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
112,231
--
11,603
27,211
634,356
26,269
27,715
839,385
65,184
--
45,151
28,246
434,690
14,062
620
587,953
129,122
964
995,013
95,046
1,220,145
123,301
394
1,016,515
39,587
1,179,797
3.85
3.22
--
--
--
--
--
--
--
--
--
4.34
4.00
--
--
--
--
--
--
--
--
--
650,000
131,000
--
--
--
--
--
781,000
1,200,000
131,000
--
--
--
--
--
1,331,000
--
--
--
--
--
--
--
--
--
--
(380,760)
(591,844)
781,000
1,331,000
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
762,231
131,000
11,603
27,211
634,356
26,269
27,715
1,620,385
1,265,184
131,000
45,151
28,246
434,690
14,062
620
1,918,953
129,122
964
995,013
95,046
1,220,145
123,301
394
1,016,515
39,587
1,179,797
400,240
739,156
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
Total Financial Liabilities
Net Financial
(Liabilities)/Assets
Interest Rate Sensitivity
At 30 June 2014, if interest rates had changed by 10% during the entire year with all other variables held constant,
profit/(loss) for the year and equity would have been $3,950 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 2014 from around 3.54% to 3.89% (10% decrease: 3.19%) representing a 35 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.
As at 30 June 2014, the Consolidated Entity had a balance of $565,307 owing from Pluton Resources Limited.
The entire amount was past due however the directors believe it is not impaired.
53
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 25: 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
Loans other parties
- less than 12 months
- greater than 12 months
Foreign Exchange Risk
Consolidated
2014
$
2013
$
130,086
95,046
123,695
39,587
3,773
991,240
1,220,145
13,339
1,003,176
1,179,797
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:
2014
Change in equity with a 10% change in
exchange rates
2013
Change in equity with a 10% change
in exchange rates
Increase 10%
$
(146)
2,108
Decrease 10%
$
179
(2,576)
Increase 10%
$
(312,586)
461,896
Decrease 10%
$
382,049
(564,540)
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.
54
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 25: 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 2014, if share/option values had changed by 25% based on the 30 June 2014 fair values with all other
variables held constant, the Consolidated Entity’s profit/(loss) for the year and equity would have been $6,929
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.
Equity Price Risk
The Group is exposed to equity price risk which arises from available-for-sale-equity securities. No sensitivity
analysis has been completed as the directors believe any impact would be immaterial.
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
2014
$
2013
$
400,240
739,156
9,150
51,418
2,100,000
2,560,808
14,933
35,776
3,600,929
4,390,794
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
55
2014
$
27,715
--
--
27,715
2013
$
620
--
--
620
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 26: EVENTS SUBSEQUENT TO REPORTING PERIOD
Subsequent to the end of the financial year ended 30 June 2014, the following events had occurred:
On 2 July 2014, 8,040 ordinary fully paid shares were issued at $0.04 being conversion of options.
On 10 July 2014, the Company announced that it had entered into a Subscription and Set-Off Agreement
with Pluton Resources Limited to subscribe, via conversion of a portion of the debt owed by Pluton to
Pelican, for a shortfall in the Rights Issue up to an amount of $250,000 at the issue price of 1 cent per
share.
On 26 August 2014, the Company announced it will undertake an offer of up to 88,096,475 options with
an issue price of $0.0001, exercisable at $0.02 and will expire on or before 30 June 2017. On the 15
September 2014, the offer closed with 59,475,571 applications taken up leaving a shortfall of 28,620,904.
On 25 September 2014, 250,000 listed options were issued via a private placement to investors at $0.0001
each exercisable at $0.02 per option expiring 30 June 2017.
NOTE 27: CONTINGENT LIABILITIES
Pelican Resources Limited has no known material contingent liabilities at the end of the financial year.
NOTE 28: SHARE BASED PAYMENTS
There were no share based payments in the current year.
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.
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
2014
$0.10
--
$0.04
$0.125
--
--
$0.04
$0.04
Number of
Options
2014
101,050,767
--
(71,252)
(12,875,000)
--
--
88,104,515
88,104,515
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
The options outstanding at 30 June 2014 have an exercise price of $0.04 and a weighted average remaining
contractual life of Nil years (2013: 0.6 years).
56
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 29: PARENT ENTITY DISCLOSURES
2014
$
2013
$
751,368
647,083
140,193
1,217,494
450,224
133,379
1,538,644
1,801,097
33,689
978,810
650
1,023,082
1,012,499
1,023,732
2,551,143
2,824,829
188,567
134,413
188,567
134,413
188,567
134,413
2,362,576
2,690,416
13,286,471
1,528,725
(12,452,620)
13,283,621
1,528,725
(12,121,930)
2,362,576
2,690,416
2014
$
2013
$
(330,690)
--
97,608
65,018
(330,690)
162,626
(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
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
(b) Financial Performance
(Loss)/profit for the year
Other comprehensive income
Total Comprehensive (Loss)/Income
57
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 29: 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
2014
$
114,000
26,160
33
2013
$
114,000
13,916
5,463
140,193
133,379
951,095
8,603,114
(8,603,114)
27,715
951,001
8,165,469
(8,094,008)
620
978,810
1,023,082
(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.
58
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
The directors of the Company declare that the financial statements and notes set out on 19 to 58 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 2014 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 26th day of September, 2014
JOHN PALERMO
Director
59
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
PELICAN RESOURCES LIMITED
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Report on the Financial Report
We have audited the accompanying financial report of Pelican Resources Limited, which comprises
the consolidated statement of financial position as at 30 June 2014, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information and the directors’ declaration of
the consolidated entity comprising the company and the entities it controlled at the year’s end or
from time to time during the financial year.
Directors’ responsibility for the Financial Report
The directors of the Company are responsible for the preparation and fair presentation of the
financial report in accordance with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of
the financial report that is free from material misstatement, whether due to fraud or error; selecting
and applying appropriate accounting policies; and making accounting estimates that are reasonable
in the circumstances. In note 1(b), the directors also state, in accordance with Australian Accounting
Standard AASB 101 Presentation of Financial Statements, that the financial report, comprising the
financial statements and notes, complies with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. These Auditing Standards require that
we comply with relevant ethical requirements relating to audit engagements and plan and perform
the audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Liability limited by a scheme approved
under Professional Standards Legislation
-60-
Auditor’s opinion
In our opinion:
(a)
the financial report of Pelican Resources Limited is in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2014 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including
Accounting Interpretations) and the Corporations Regulations 2001.
the Australian
(b)
the financial report also complies with International Financial Reporting Standards as
disclosed in note 1(b).
Emphasis of Matter Regarding Going Concern and Carrying Values of Current and Non-
Current Assets
Without qualification to the opinion expressed above, attention is drawn to the following matters:
As referred to in Note 2 (a) to the financial statements, the financial statements have been prepared
on the going concern basis. At 30 June 2014, the entity had working capital of $1,372,915, cash and
cash equivalents of $762,231 and had incurred a loss for the year amounting to $1,812,363. The
entity has capitalised Mineral exploration and evaluation expenditure of $2,100,000. The ability of
the entity to continue as a going concern is subject to the continued receipt of sufficient royalty
funding or successful recapitalisation of the Company. The carrying value of the Mineral exploration
and evaluation expenditure is dependent upon commercial exploitation of these assets and/or sale
of these assets to generate sufficient funds at least equivalent to their carrying values. In the event
that Pelican Resources Limited is not successful in commercial exploitation and/or sale of these
assets, does not continue to receive sufficient royalty funding or is not successful in recapitalising
the entity and in raising further funds, the Company may not be able to meet its liabilities as they fall
due and the realisable value of the Company’s current and non–current assets may be significantly
less than book values.
Report on the Remuneration Report
We have audited the remuneration report included in pages 13 to 16 of the directors’ report for the
year ended 30 June 2014. The directors of the Company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards
Auditor’s opinion
In our opinion the remuneration report of Pelican Resources Limited for the year ended 30 June
2014 complies with section 300 A of the Corporations Act 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
26 September 2014
- 61-
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
26 September 2014
Board of Directors
Pelican Resources Limited
Level 1, 284 Oxford Street
Leederville, WA 6007
Dear Directors
RE: PELICAN RESOURCES LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide
the following declaration of independence to the directors of Pelican Resources Limited.
As the Audit Director for the audit of the financial statements of Pelican Resources
Limited for the year ended 30 June 2014, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved
under Professional Standards Legislation
- 62-
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION
QUOTED SECURITIES
(a)
ORDINARY FULLY PAID SHARES
(i)
DISTRIBUTION OF SHAREHOLDERS AS AT 25 SEPTEMBER 2014:
SPREAD
OF HOLDINGS
NO. OF
HOLDERS
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
330
632
190
323
174
NO. OF
SHARES
157,456
1,419,380
1,293,156
10,976,999
227,435,369
1,649
241,282,360
PERCENTAGE OF
ISSUED CAPITAL %
0.06
0.59
0.54
4.55
94.26
100.00
The number of shareholdings held in less than marketable parcels is 1,455.
(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
1.
Finebase Holdings Pty Ltd
2. Mainview Holdings Pty Ltd
Gallant (WA) Pty Ltd
3.
Veltox Pty Ltd
4.
Leuzzi J & S
5.
DF Lynton-Brown Pty Ltd
6.
Nefco Nominees Pty Ltd
7.
8.
Topaze Enterprises Pty Ltd
9. Monslit Pty Ltd
10. RFID Systems Pty Ltd
11.
12.
13.
14.
15.
16.
17. Dong Dong
18. Green DB
19.
20.
Finebase Holdings Pty Ltd
JP Morgan Nominees Aust Ltd
Surfboard Pty Ltd
Energy-Saving Technology
Energy-Saving Technology
Tel WA Pty Ltd
Zero Nominees Pty Ltd
Surfboard Pty Ltd
NO. OF
ORDINARY
SHARES
HELD
PERCENTAGE
OF ISSUED
SHARES %
18,009,666
13,165,029
12,094,137
11,883,837
10,000,000
8,028,459
7,672,445
6,322,699
6,000,000
5,100,000
5,072,198
5,052,828
4,544,380
4,468,001
4,000,000
3,350,000
3,077,199
3,000,000
2,926,667
2,722,287
7.46
5.46
5.01
4.93
4.14
3.33
3.18
2.62
2.49
2.11
2.10
2.09
1.88
1.85
1.66
1.39
1.28
1.24
1.21
1.13
136,489,832
56.56
63
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.
24,697,048
13,165,029
%
10.23
5.46
(b)
OPTIONS
As at 25 September 2014, there existed the following quoted options:
59,725,571 OPTIONS EXERCISABLE AT $0.02 EACH ON OR BEFORE 30 JUNE 2017
(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+
2
6
4
24
34
70
534
19,848
28,184
754,273
58,922,732
59,725,571
0.00
0.03
0.05
1.26
98.66
100.00
64
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION (continued)
QUOTED SECURITIES (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
1.
Mainview Holdings PL
2.
Mulloway PL
3.
Mulloway PL
4.
Goffacan PL
5.
Topaze Entps PL
6.
Stonehurst WA PL
7.
Sharp Raymond
8.
J P Morgan Nom Aust Ltd
9.
Surfboard PL
10.
11. Darlot Inv PL
12. Hewitt Gabriel
13. Monslit PL
Surfboard PL
14.
15. Virtus Cap PL
16.
17.
18. Mulloway PL
19.
20. Monslit PL
Jones Chad
Jones Brett
Burford Matthew
NO. OF
OPTIONS
HELD
PERCENTAGE
OF QUOTED
OPTIONS
%
21,754,400
8,357,666
6,337,412
4,000,000
2,328,609
2,257,584
1,425,000
1,250,000
1,221,457
1,136,095
816,667
750,000
683,334
680,572
545,000
516,667
500,000
405,668
403,334
366,667
55,736,132
36.42
13.99
10.61
6.70
3.90
3.78
2.39
2.09
2.05
1.90
1.37
1.26
1.14
1.14
0.91
0.87
0.84
0.68
0.68
0.61
93.33
(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.
UNQUOTED SECURITIES
(a)
PERFORMANCE RIGHTS
As at 25 September 2014, there existed the following performance rights:
Name
Mike Bue
Rights
%
500,000
100.00
65
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:
66
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;
67
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
68
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 4 employees, of which 4 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.
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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
71
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 25 in the Notes to the Financial Statements in the Annual Report.
74