PELICAN RESOURCES LIMITED
A.B.N. 12 063 388 821
ANNUAL FINANCIAL REPORT
30 JUNE 2016
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE DIRECTORY
BOARD OF DIRECTORS
Antonio Torresan (Executive Director)
Colin Chenu (Non-Executive Director)
Alec Pismiris (Non-Executive Director)
COMPANY SECRETARY
Alec Pismiris
CONTENTS
Directors’ Report
PAGE
1
Statement of Profit or Loss and Other
Comprehensive Income 17
Statement of Financial Position 18
Statement of Changes in Equity 19
20
21
55
56
58
59
62
REGISTERED OFFICE AND PRINCIPAL
BUSINESS OFFICE
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
Level 9
190 St Georges Terrace
Perth, Western Australia, 6000
Postal Address:
P.O. Box Z5108, St Georges Terrace
Perth, Western Australia, 6831
Telephone: (+61 8) 6141 6304
(+61 8) 9226 1370
Facsimile:
SHARE REGISTRY
Automic Registry Services
Level 1
7 Ventnor Avenue
West Perth, Western Australia, 6005
Investor Enquiries: (+61 8) 9324 2099
AUDITOR
Stantons International
Level 2
1 Walker Avenue
West Perth, Western Australia, 6005
Telephone: (+61 8) 9481 3188
(+61 8) 9321 1204
Facsimile:
STOCK EXCHANGE LISTING
ASX Limited (Australian Securities Exchange)
ASX Codes: PEL, PELOA
0
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
The directors present their report together with the financial statements of the Consolidated Entity consisting
of Pelican Resources Limited (“Pelican” or “the Company”) and its controlled entities for the financial year
ended 30 June 2016 (“Balance Date”) and the auditor’s report thereon.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this
report are as follows. Directors were in office for the entire period unless otherwise stated.
Colin Chenu
Antonio Torresan
Alec Pismiris
PARTICULARS OF DIRECTORS
Colin Edward Chenu, B. Juris, LLB
Non-Executive Director
Appointed 29 June 2015
Mr Chenu is a graduate of the University of Western Australia, with a Bachelor of Laws, and is admitted to
practice in the Supreme Court of Western Australia and the High Court of Australia. He has practiced law in
Western Australia for 29 years, as both a barrister and solicitor, in a wide range of commercial, litigious and
non litigious work. Mr Chenu has gained extensive experience in the law of corporations, trade practices,
contracts, equity and trusts and tort. He is a director and principal at Bennett + Co.
Other current directorships: None
Former directorships (last 3 years): Mount Magnet South Limited
Antonio Alessio Torresan
Executive Director
Appointed 24 March 2015
Mr Torresan is a businessman with significant experience in capital markets. Mr Torresan has been actively
involved in arranging capital raisings for ASX listed companies as well as unlisted public companies, providing
investor relation services and assisting boards with development of strategic plans. Mr Torresan has held
numerous executive positions where his responsibilities have included strategy, operational management and
business development.
Other current directorships: None
Former directorships (last 3 years): None
1
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
PARTICULARS OF DIRECTORS (CONTINUED)
Alec Pismiris, B.Comm, MAICD, IGIA
Non-Executive Director
Appointed 24 March 2015
Mr Pismiris is currently a Director – Corporate Finance with Somers and Partners Pty Ltd, a company which
provides corporate finance services. Since 1990, Mr Pismiris has served as a director and company secretary
for various ASX listed companies as well as a number of unlisted public and private companies. Mr Pismiris
completed a Bachelor of Commerce degree at the University of Western Australia, is a member of the
Australian Institute of Company Directors and an associate of The Governance Institute of Australia. Mr
Pismiris has over 30 years’ experience in the securities, finance and mining industries and has participated
numerous times in the processes by which boards have assessed the acquisition and financing of a diverse
range of assets and has participated in and become familiar with the range of evaluation criteria used and the
due diligence processes commonly adopted in the commercial assessment of corporate opportunities.
Other current directorships: Agrimin Limited, Aguia Resources Limited, HotCopper Holdings Limited and
Mount Magnet South Limited
Former directorships (last 3 years): Cardinal Resources Limited and Papillon Resources Limited
COMPANY SECRETARY
Alec Pismiris, B.Comm, MAICD, IGIA
Appointed 29 June 2015
Mr Pismiris has over 30 years’ experience in the securities, finance and mining industries and has held a
number of company secretary positions secretary for various ASX listed companies as well as a number of
unlisted public and private companies over the years.
2
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
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 2016 by each director:
Antonio Torresan
Colin Chenu
Alec Pismiris
PRINCIPAL ACTIVITIES
Number
Eligible to Attend
3
3
3
Number
Attended
3
3
3
The principal activities of the Consolidated Entity during the course of the financial year were the evaluation
of its existing exploration projects and the continued search for new opportunities in the resources sector which
could demonstrate capacity to add long term shareholder value.
OPERATING AND FINANCIAL REVIEW
The Company made a loss after tax of $430,562 for the year ended 30 June 2016 (2015: $1,431,510).
REPUBLIC OF THE PHILIPPINES
SALE OF SIBUYAN NICKEL PROPERTIES DEVELOPMENT CORPORATION
On 25 June 2015, the Company announced that it had concluded negotiations for the sale of Sibuyan Nickel
Properties Development Corporation (“SNPDC”), the beneficial owner of the Romblon Project located on
Sibuyan Island in the Romblon Province in the Philippines and entered into a Memorandum of Understanding
(“MOU”) with Dynamo Atlantic Limited, a BVI registered company (“Dynamo”).
Under the terms of the MOU, Dynamo agreed to purchase SNPDC for a purchase price of $A4.70 million
(“Consideration”) payable in cash as follows:
-
an initial payment of $A470,000 as a non-refundable deposit which was received by the Company on
signing of the MOU;
a second payment of $A940,000 was received by the Company on Dynamo completing technical,
legal and financial due diligence investigations; and
on completion of sale and transfer of 100% ownership of SNPDC, a final payment of $A3,290,000.
-
-
Dynamo further agreed to grant a 2.5% royalty on net income generated by SNPDC from any operations
undertaken on Sibuyan Island.
The Company required the support of its venture partner, Acacia Resources Inc. (“AAR”) for sale of SNPDC.
During the period Pelican made a number of proposals in an attempt to secure AAR’s support for sale of
SNPDC, which were largely unsuccessful. Subsequent to year end, Pelican announced that it had secured
AAR’s support for the sale which allowed the parties to proceed towards completion.
The sale of Pelican’s interest in SNPDC constitutes a disposal of main undertaking pursuant to the Listing Rule
11.2, therefore the Company will seek shareholder approval for the disposal at the Company’s Annual General
Meeting to be held in November 2016. Shareholder approval for the sale of Pelican’s interest in SNPDC will satisfy
the final condition under the MOU.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Dynamo subsequently responded indicating that it did not wish to proceed with the purchase of SNPDC, and
requested a full refund the purchase price paid to date under the MOU. The Company has advised Dynamo
that is considers that the Agreement remains on foot and requires Dynamo to complete the Agreement by
payment of the balance of the purchase price at settlement of the sale.
The sale of Pelican’s interest in SNPDC constitutes a disposal of main undertaking pursuant to the Listing
Rule 11.2, therefore the Company will be required to seek shareholder approval for the disposal. On execution
of a formal sale agreement for the transfer Pelican’s interest in SNPDC, Pelican will commence preparing
notice of meeting materials seeking shareholder approval for the disposal.
ROMBLON PROJECT, SIBUYAN ISLAND, ROMBLON PROVINCE
(MPSA No. 3042009-IVB)
Interest:
MPSA 3042009-IVB
The Romblon Project, on Sibuyan Island in the Romblon Province in the Philippines, is being evaluated as
a source of direct shipping lateritic nickel ore (DSO). The nickel resource explored by two Japanese nickel
companies in 1972 is covered by a Mineral Production Sharing Agreement (MPSA). 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 SNPDC.
Further exploration is required to fully evaluate the laterite nickel resource but the project is currently on
care and maintenance due to a Cease and Desist Order (CDO) issued in September 2011 by the Mines and
Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR). Counsel
for SNPDC is pursuing all legal avenues with respect to the appeal to the MGB and DENR to lift the CDO.
4
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
The MGB and DENR are currently focused on reviewing a map issued during the June quarter by the Mineral
Industry Coordinating Council (MICC) that specifies Go and No-Go Zones for mining throughout the
Philippines. The map is a draft proposal that does not take into consideration approved Exploration Permits,
MPSA’s and existing mining operations. Approvals for new mining projects are expected to be deferred
until the Go and No-Go Zones are finalised along with implementation rules and regulations. Counsel for
SNPDC has advised that approved MPSA’s should be included in Go Zones.
Additional issues such as revised mining tax regulations, Minahang Bayan Zones (Small Scale Mining) and
domestic processing of DSO are currently being reviewed by various Government departments. New mining
exploration projects are expected to be delayed until all issues are resolved by the current Administration.
Projects with an approved MPSA or Foreign Technical Assistance Agreement (FTAA) can proceed with
approvals to develop mining and plant operations. A new laterite nickel project in the Province of Agusan
del Norte was commissioned in 2014 and existing mining operations have been allowed to apply for
expansions of their MPSA’s and Environmental Compliance Certificates (ECC’s).
The Company held discussions with several local companies currently involved in nickel laterite mining in
an effort to identify a potential joint venture partner for the Romblon Project,. The Company believed that
involvement of an active local mining company in the project could potentially assist in the permitting
process and Local Government Unit (LGU) support for the project. An interested party which had previously
conducted a site visit to the Romblon Project, submitted a revised draft joint venture term sheet during the
quarter. Another party which had previously submitted a draft proposal for a 90-day due diligence period
with exclusive rights to negotiate an agreement, also submitted a revised draft proposal during the quarter.
These proposals were reviewed and compared to the Dynamo proposal to acquire SNPDC, and the directors
concluded the Dynamo proposal was superior.
Interest in laterite nickel resources in the Philippines has increased since Indonesia banned the export of DSO
on 12 January 2014. The FOB price of laterite nickel DSO rose to a 6 year high during the first half of 2014.
Prices declined during the June quarter as demand for nickel products in China decreased and some DSO is
being replaced by other nickel products such as FeNi, nickel concentrates and nickel metal. It is expected
that DSO prices will decrease or be relatively flat in the next two quarters as exports from the Philippines
will increase due to improved weather and sea conditions in the mining areas of Mindanao and Dinagat
Islands.
An internal study into nickel laterite processing through the use of direct reduction technology is ongoing
along with discussions with local companies with processing experience. A new bill has been submitted to
the Senate that proposes a ban on DSO similar to the Indonesian legislation. It is expected that there will be
an implementation period of about 5 years if the bill is approved.
During 2014, the MICC approved a Minahang Bayan Zone in Eastern Leyte and Samar for Black (Iron) Sand
Mining but the product must be processed domestically. It is anticipated that all new Minahang Bayan Zones
will be subject to the same regulations. The MGB and DENR are preparing implementation rules and
regulations for Minahang Bayan. Currently on gold, silver and chromite are allowed to be mined in Minahang
Bayan Zones but the Government intends to include iron sand in the revised regulations.
As previously reported all project development field work continued on hold to minimise expenses in the
Philippines.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (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.
During the period under review, Pelican reached agreement for the sale of its’ interest in the Mabuhay Project
to Rugby.
UNITED STATES OF AMERICA
SAN MARCOS GOLD PROJECT, ARIZONA USA
During the reporting period and in accordance with the terms of the farm-in and joint venture agreement
(“JV Agreement”) on the San Marcos Gold Project, Pelican on behalf of its wholly owned subsidiary Dore
5 Resources confirmed its withdrawal from the JV Agreement with AusROC Metals Limited.
Pelican as a consequence of its withdrawal from the JV Agreement, relinquished all rights in connection
with the San Marcos Gold Project.
During the reporting period Pelican dissolved Dore 5 Resources Inc.
WESTERN AUSTRALIA
KIMBERLEYS
COCKATOO ISLAND PROJECT (M04/235)
Interest:
Operator:
100%
Pluton Resources Limited
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
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 (Receivers and Managers appointed)
(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 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.
On 5 October 2015 Sam Marsden and Derrick Vickers of PricewaterhouseCoopers (“PWC”) were appointed
as Voluntary Administrators of Pluton Resources Limited (“Pluton”) following the resignation of Vincent
Smith and Samuel Freeman of EY.
Bryan Hughes and Daniel Bredenkamp of Pitcher Partners continued to act as Receivers and Managers of
Pluton. Throughout the quarter the assets and undertakings of Pluton remained subject to the Receivers’
appointment and all operations of Pluton were under the control of the Receivers.
A second meeting of creditors of Pluton was held on 9 December 2015 at which creditors voted in favour of
the proposal for the Deed of Company Arrangement (DOCA) proposal from World System Capital
Investment Limited (BVI) (“WSCI”), a related entity of General Nice Recursos Comercial Offshore De
Macau Limitada.
On 6 January 2016 PWC announced that Pluton and WSCI executed the DOCA on 4 January 2016. On
execution of the DOCA, Sam Marsden and Derrick Vickers retired as Joint and Several Voluntary
Administrators of Pluton and were appointed Joint and Several Deed Administrators.
WSCI notified the Deed Administrators that it was unable to comply with the terms of the DOCA by 31
March 2016 (the original end date specified in the DOCA) and requested a meeting of creditors be convened
on 8 April 2016 to consider a variation to the terms of the DOCA. The meeting of creditors was further
postponed to 9 May 2016 to allow WSCI sufficient time to confirm funding arrangements to meet its
obligations under the DOCA. At the meeting of creditors, the Deed Administrators confirmed that $3.5
million had been received from WSCI which was subsequently applied to priority creditors and to the
KordaMentha receivership creditors.
The Company received $252,994 representing full settlement of outstanding royalty payments incurred
during the period that KordaMentha was acting as Receiver and Manager of Pluton. On receipt of the
payment from KordaMentha, Pelican withdrew the Writ of Summons with Endorsement of Claim that was
lodged with the Supreme Court of Western Australia.
The total of all outstanding royalty payments is $910,153.
7
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
RELINQUISHMENTS
The Company withdrew from the farm-in and joint venture agreement on the San Marcos Gold Project and the
Mabuhay Project.
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.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the year, the Company undertook the following capital transactions:
- On 12 August 2015 the Company issued 50,000,000 unlisted options exercisable at $0.01 expiring
30 June 2019 under the terms of an underwriting agreement entered into and disclosed in the prior
financial year.
- On 16 September 2015 the Company announced a share sale facility for holders of less than a
marketable parcel of the Company’s shares. A Less Than Marketable Parcel of Pelican shares will
be any registered shareholding of 62,500 shares or less on 16 September 2015. The Facility closed
on 28 October 2015 with a total of 7,883,233 shares purchased for a consideration of $63,065.68.
Shareholders that did not elect to retain their shares were paid their sale proceeds by direct credit or
cheque.
- At a general meeting held on 12 November 2015 approval was obtained for the issue of 20,000,000
options exercisable at $0.02 expiring 31 December 2019 to directors and 14,500,000 options
exercisable at $0.02 expiring 31 December 2019 to advisors vesting on the successful completion of
a transaction.
During the reporting period, the Company continued a review of its existing projects with an objective of
rationalising those projects located in offshore jurisdictions. The Company achieved its goal of rationalising
existing projects as follows:
- The relinquishment and withdrawal from the Company’s interest in the San Marcos Gold Project.
- The dissolution of Dore 5 Resources Inc.
- The sale of the Company’s interest in the Mabuhay Project to Rugby Mining Limited.
- Continued efforts to complete the conditions precedent in the Memorandum of Understanding for the
sale of 100% ownership of Sibuyan Nickel Properties Development Corporation (“SNPDC”), the
beneficial owner of the Romblon Project located on Sibuyan Island in the Romblon Province in the
Philippines for a price of $A4.70 million.
Pelican continued to search for new opportunities in the resources sector which could demonstrate capacity to
add long term shareholder value. The directors believe that existing cash reserves combined with funds
received from the sale of its interest in Sibuyan Nickel Properties Development Corporation leave the
Company well positioned to fund new opportunities in the resources sector.
8
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
DIVIDENDS
No dividends were paid or recommended for the year ended 30 June 2016.
EVENTS SUBSEQUENT TO REPORTING DATE
On 20 July 2016 an application to terminate or set aside the Pluton DOCA proposal from WSCI filed by
Ziziphus Pty Ltd and Celtic Capital Pty Ltd was heard in the Supreme Court of Western Australia. The
following day and pursuant to an Order of the Supreme Court of Western Australia on 21 July 2016 the DOCA
was terminated. At a subsequent hearing on 3 August 2016 Sam Marsden and Derrick Vickers of PWC were
appointed by the Court as Joint and Several Official Liquidators of the Company. In September 2016, the
receivers, Pitcher Partners, put Pluton’s share of the Cockatoo Island project up for sale.
On 17 August 2016, the Company announced that it has received notification from All Acacia Resources Inc
(“AARI”) that it is prepared to support the sale of SNPDC. Dynamo had previously completed due diligence
enquiries and advanced payments totaling $A1.41 million in accordance with the terms of the MOU. On
securing AARI’s support for the sale of SNPDC, the Company considers that the MOU is unconditional and
the parties can proceed towards completion.
On 7 September 2016 the Company announced that Dynamo had indicated that it did not wish to proceed with
the purchase of SNPDC, and requested a full refund the purchase price paid to date under the MOU.
The Company has advised Dynamo that it considers the Agreement, and the parties’ respective obligations
under it, remain on foot, and that it requires Dynamo to complete the Agreement by payment of the balance of
the purchase price at settlement of the sale.
SHARE OPTIONS
The Company has the following securities on issue as at the date of the Directors’ Report.
Security Description
Fully paid shares
Options exercisable at $0.02 expiring 30 June 2017
Options exercisable at $0.01 expiring 30 June 2019
Options exercisable at $0.02 expiring 31 December 2019
Number of
Securities
361,923,540
59,725,571
50,000,000
35,000,000
Unissued shares
As at the date of this report, there were 144,725,571 unissued ordinary shares under options (30 June 2015:
109,725,571).
Option holders do not have any right, by virtue of the options, to participate in any share issue of the Company
or any related body corporate.
Shares issued as a result of the exercise of options
During the financial year there were no ordinary shares issued as a result of the exercise of options (2015:
8,040).
9
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
As at the date of this report there has been no ordinary shares issued since the Balance Date on the exercise
of options.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group will continue to focus on maximising value from the current portfolio of mining projects and will
continue its search for further opportunities. Given that the nature of the Group’s activities is exploration
focused, no further information can be provided as to likely developments as such developments will depend
on exploration success at the Group’s various project interests, and the nature of any new acquisitions going
forward.
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.
DIRECTORS’ INTERESTS IN SHARES AND OPTIONS OF THE COMPANY
At the date of this report, the directors’ interests in shares and options of Pelican Resources Limited were:
Number of Ordinary Number of Options
Shares
over Ordinary Shares
Antonio Torresan
Colin Chenu
Alec Pismiris
59,193,981
Nil
12,000,000
38,143,563
2,000,000
13,500,000
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.
10
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
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 allow disclosure of the premium.
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 58.
NON-AUDIT SERVICES
Stantons International has not provided any non-audit services to the entity as shown at Note 17.
11
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.
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:
The Company has entered into an executive service agreement with executive director, Mr Antonio Torresan.
The terms of the service agreement are set out as follows:
- Commencement date: 24 March 2015
- Term: one year with a one year extension at the sole discretion of the Board
- Fixed remuneration: $120,000 per annum
- Termination for cause: no notice period
- Termination without cause: three month notice period
The Company has entered into an agreement with non-executive director, Mr Alec Pismiris. The terms of the
agreement are set out as follows:
- Commencement date: 24 March 2015
- Term: no fixed
- Fixed remuneration: $36,000 per annum
- Termination for cause: no notice period
- Termination without cause: no notice period
12
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Remuneration policy (continued)
The Company has entered into an agreement with non-executive director, Mr Colin Chenu. The terms of the
agreement are set out as follows:
- Commencement date: 29 June 2015
- Term: no fixed
- Fixed remuneration: $36,000 per annum
- Termination for cause: no notice period
- Termination without cause: no notice period
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.
Performance-based remuneration
The Company currently has no performance-based remuneration component built into director and executive
remuneration packages.
13
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
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
$
Directors
A Torresan - Executive Director 1
2016
2015
120,000
32,500
-
-
C Chenu - Non-Executive Director 2
2016
2015
36,000
-
-
-
A Pismiris - Non-Executive Director 1
72,0007
9,750
2016
2015
-
-
M Bue - Executive Director 3
2015
150,000
J Palermo - Non-Executive Director 4
98,750
2015
-
-
J Hills - Non-Executive Director 5
2015
25,000
Total Remuneration:
228,000
316,000
2016
2015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,250
1,781
2,375
-
18,406
-
-
-
-
-
-
-
-
-
-
-
Notes:
(1) Appointed 24 March 2015
(2) Appointed 29 June 2015
(3) Resigned 25 March 2015
(4) Deceased 15 March 2015
85,531
-
16,292
-
61,093
-
-
-
-
-
-
-
-
-
-
-
205,531
32,500
52,292
-
133,093
9,750
164,250
37,500(6)
138,031
-
27,375
162,916
-
-
37,500
390,916
371,906
(5) Resigned 29 June 2015
(6) Termination benefit
(7) Includes $36,000 paid as fees for company
secretarial services
Other related party transactions of key management personnel are disclosed in Note 16.
Remuneration Options
During the year ended 30 June 2016, 20,000,000 options were issued as part of director remuneration (30 June
2015: Nil). Details relating to remuneration options are as follows:
Fair value at measurement date (cents)
Dividend yield (%)
Expected volatility (%)
Risk free rate (%)
Expected life of option
Share price (cents)
Exercise price (cents)
Model used
0.8
Nil
100
2.25
4
1.3
2
Black-scholes
During the year ended 30 June 2016, 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
2016
Balance
01/07/15
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/16
(No. of Shares)
A Torresan
C Chenu
A Pismiris
Total
2015
A Torresan 1
C Chenu 2
A Pismiris 1
M Bue 3
J Palermo 4
J Hills 5
Total
59,193,981
-
12,000,000
71,193,981
-
-
-
-
-
-
-
-
-
-
-
-
59,193,981
-
12,000,000
71,193,981
Balance
01/07/14
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/15
(No. of Shares)
-
-
-
-
20,822,928
11,811,292
32,634,220
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,193,981
-
12,000,000
-
(20,822,928)
(11,811,292)
38,559,761
59,193,981
-
12,000,000
-
-
-
71,193,981
Notes:
(1) Appointed 24 March 2015
(2) Appointed 29 June 2015
Options Holdings by Directors
(3) Resigned 25 March 2015
(4) Deceased 15 March 2015
(5) Resigned 29 June 2015
2016
A Torresan
C Chenu
A Pismiris
Total
2015
A Torresan 1
C Chenu 2
A Pismiris 1
M Bue 3
J Palermo 4
J Hills 5
Total
Balance
01/07/15
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/16
(No. Options)
9,407,667
-
-
9,407,667
10,500,000
2,000,000
7,500,000
20,000,000
18,235,896
-
6,000,000
24,235,896
-
-
-
-
-
-
-
-
38,143,563
2,000,000
13,500,000
53,643,563
Balance
01/07/14
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/15
(No. Options)
-
-
-
-
21,754,400
-
21,754,400
-
-
-
-
-
-
-
-
-
-
-
21,754,400
-
21,754,400
-
-
-
-
-
-
-
9,407,667
-
-
-
(43,508,800) 6
-
(34,101,133)
9,407,667
-
-
-
-
-
9,407,667
Notes:
(1) Appointed 24 March 2015
(2) Appointed 29 June 2015
End of remuneration report (audited).
(3) Resigned 25 March 2015
(4) Deceased 15 March 2015
(5) Resigned 29 June 2015
15
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
Signed in accordance with a resolution of the board of directors.
Dated at Perth this 27th day of September, 2016
Alec Pismiris
Director
16
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Revenue
Other income
Corporate
Salaries and wages
Exploration expenditure written-off
Diminution in value of investments
Doubtful debts provision movement (net)
Share-based payments
Other expenses
Loss before income tax
Income tax
Loss for the year
Other comprehensive income/(loss)
Item that may be classified to profit or loss:
Currency translation differences
Other comprehensive income/(loss) for the year
Total comprehensive loss for the year
Loss attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive loss attributable to:
Members of the parent entity
Non-controlling interest
Note
2(a)
2(b)
3(c)
3(b)
25
Consolidated
2016
$
2015
$
112,636
22,929
970,115
17,934
(475,470)
(41,297)
(2,352)
-
177,079
(190,675)
(33,412)
(613,067)
(301,138)
(200,591)
(327,715)
(945,493)
-
(31,555)
(430,562)
(1,431,510)
4
-
-
(430,562)
(1,431,510)
(50,638)
115,907
(50,638)
115,907
(481,200)
(1,315,603)
(424,158)
(6,404)
(430,562)
(1,424,841)
(6,669)
(1,431,510)
(472,181)
(9,019)
(481,200)
(1,323,277)
7,674
(1,315,603)
Basic and diluted loss per share (cents per share)
19
(0.12)
(0.58)
The above statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
17
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Current Assets
Cash and cash equivalents
Restricted cash
Security deposits
Trade and other receivables
Other current assets
Assets held for sale
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
Deferred revenue
Liabilities associated with assets held for sale
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total parent entity interest
Non-controlling interest
Total Equity
Consolidated
Note
2016
$
2015
$
5
27
6
7
27
8
9
10
11
12
27
910,584
940,000
131,000
20,717
-
2,351,024
1,107,805
-
131,000
41,005
9,267
2,371,772
4,353,325
3,660,849
-
-
-
-
-
28,600
-
28,600
4,353,325
3,689,449
228,995
1,410,000
1,236,253
192,029
470,000
1,255,335
2,875,248
1,917,364
2,875,248
1,917,364
1,478,077
1,772,085
13
14
13,630,120
2,021,580
13,634,103
1,878,428
(13,357,078) (12,932,920)
2,294,622
(816,545)
2,579,611
(807,526)
1,478,077
1,772,085
The above statement of financial position
should be read in conjunction with the accompanying notes.
18
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Issued
Capital
Options
Reserve
Consolidated
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Non-
Controlling
Interest
Total
Equity
$
$
$
Balance at 01/07/2014
Total comprehensive income
for the year
Loss for the year
Other comprehensive income
Foreign currency translation
differences
Total comprehensive income / (loss)
for the year
Transactions with owners
recorded directly into equity
Share-based payments
Shares issued during the year
Options issued during the year
Transaction costs
13,286,471
1,528,725
68,891
(11,508,079)
(815,200)
2,560,808
-
-
-
-
-
-
-
(1,424,841)
(6,669)
(1,431,510)
101,564
-
14,343
115,907
101,564
(1,424,841)
7,674
(1,315,603)
-
603,528
-
(255,896)
195,700
-
5,973
(22,425)
-
-
-
-
-
-
-
-
-
-
-
-
195,700
603,528
5,973
(278,321)
Balance at 30/06/2015
13,634,103
1,707,973
170,455
(12,932,920)
(807,526)
1,772,085
Balance at 01/07/2015
Total comprehensive income
for the year
Loss for the year
Other comprehensive income
Foreign currency translation
differences
Total comprehensive income / (loss)
for the year
Transactions with owners
recorded directly into equity
Share-based payments
Shares issued during the year
Options issued during the year
Transaction costs
13,634,103
1,707,973
170,455
(12,932,920)
(807,526)
1,772,085
-
-
-
-
-
-
-
(424,158)
(6,404)
(430,562)
(48,023)
-
(2,615)
(50,638)
(48,023)
(424,158)
(9,019)
(481,200)
-
-
-
(3,983)
190,675
-
500
-
-
-
-
-
-
-
-
-
-
-
-
-
190,675
-
500
(3,983)
Balance at 30/06/2016
13,630,120
1,899,148
122,432
(13,357,078)
(816,545)
1,478,077
The above statement of changes in equity
should be read in conjunction with the accompanying notes.
19
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Royalties received
Consolidated
Note
2016
$
2015
$
(510,242)
12,929
289,716
(896,465)
44,106
358,978
Net Cash Used in Operating Activities
15(b)
(207,597)
(493,381)
Cash Flows from Investing Activities
Payments for exploration expenditure
Payments for plant and equipment
Proceeds from sale of plant and equipment
Proceeds from sale of project
Proceeds from deposit for sale of project
Reclassification of deposit for sale of project to restricted cash
Net Cash Provided by Investing Activities
Cash Flows from Financing Activities
Proceeds from issue of shares and options
Payments for capital raising costs
Net Cash Provided by / (Used in) Financing Activities
(2,352)
-
6,711
10,000
940,000
(940,000)
(156,039)
(1,886)
-
-
470,000
-
14,359
312,075
-
(3,983)
609,501
(82,621)
(3,983)
526,880
Net increase / (decrease) in cash and cash equivalents held
(197,221)
345,574
Cash and cash equivalents at the beginning of the financial year
1,107,805
762,231
Cash and cash equivalents at the end of the financial year
15(a)
910,584
1,107,805
The above statement of cash flows
should be read in conjunction with the accompanying notes
20
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 2016 comprise the Company and its subsidiaries (referred to as
the Group or Consolidated Entity).
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 27 September 2016.
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;
• The ability to sell a project; and/or
• The Consolidated Entity receives royalties of $1.00 per metric tonnes of ore shipped. Payment of the
royalty may be deferred if mining operations on Cockatoo Island are suspended due to force majeure
events. The operator of Cockatoo Island is currently under the control of administrators who have been
remitting royalty payments as shipments occur.
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).
21
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 not resulted in any material changes
to the Group’s accounting policies in order to comply with these amendments. The changes in accounting
policies have no effect on the amounts reported for the current or prior years.
(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 19.
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 profit or loss and other 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,
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.
22
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Principles of Consolidation (continued)
Business Combinations (continued)
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.
23
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
24
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
25
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
26
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
27
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
28
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
29
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 earnings are translated at the exchange rates prevailing at the date of the transaction.
30
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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
19) 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.
31
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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
A number of new standards, amendments to standards and interpretations issued by the AASB which are not
yet mandatorily applicable to the Consolidated Entity have not been applied in preparing these consolidated
financial statements. Those which may be relevant to the Consolidated Entity are set out below. The
Consolidated Entity does not plan to adopt these standards early.
(cid:1) AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period
commencing 1 January 2018)
The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and
includes revised requirements for the classification and measurement of financial instruments, revised
recognition and derecognition requirements for financial instruments and simplified requirements for
hedge accounting.
Key changes made to this standard that may affect the Group on initial application include certain
simplifications to the classification of financial assets, simplifications to the accounting of embedded
derivatives, and the irrevocable election to recognise gains and losses on investments in equity instruments
that are not held for trading in other comprehensive income.
The directors anticipate that the adoption of AASB 9 will not have a material impact on the Group’s
financial instruments.
32
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u)
New Accounting Standards and Interpretations for Application in Future Periods (continued)
(cid:1) AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing
on or after 1 January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue with
a single, principles-based model. Except for a limited number of exceptions, including leases, the new
revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges
between entities in the same line of business to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to
be entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the
following five-step process:
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
-
-
- determine the transaction price;
-
-
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group's
financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
(cid:1) AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).
AASB 16 removes the classification of leases as either operating leases or finance leases for the lessee
effectively treating all leases as finance leases. Short term leases (less than 12 months) and leases of a low
value are exempt from the lease accounting requirements. Lessor accounting remains similar to current
practice.
Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group's
financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
(cid:1) AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests
in Joint Operations [AASB 1 & AASB 11]
AASB 2014-3 amends AASB 11 Joint Arrangements to provide guidance on the accounting for
acquisitions of interests in joint operations in which the activity constitutes a business. The amendments
require:
(a) the acquirer of an interest in a joint operation in which the activity constitutes a business, as defined in
AASB 3 Business Combinations, to apply all of the principles on business combinations accounting in
AASB 3 and other Australian Accounting Standards except for those principles that conflict with the
guidance in AASB 11
(b) the acquirer to disclose the information required by AASB 3 and other Australian Accounting
Standards for business combinations
This Standard also makes an editorial correction to AASB 11.
33
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(cid:1) AASB 2014-9: Amendments to Australian Accounting Standards – Equity Method in Separate Financial
Statements (AASB 2014-9 applies to annual reporting periods beginning on or after 1 January 2016. Early
adoption permitted).
AASB 2014-9 amends AASB 127 Separate Financial Statements, and consequentially amends AASB 1
First-time Adoption of Australian Accounting Standards and AASB 128 Investments in Associates and
Joint Ventures, to allow entities to use the equity method of accounting for investments in subsidiaries,
joint ventures and associates in their separate financial statements. AASB 2014-9 also makes editorial
corrections to AASB 127.
(cid:1) Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact
on the entity in the current or future reporting periods and on foreseeable future transactions.
(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 23 – Risk Management Objectives and Policies
Note 26 – Share Based Payments
34
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 2: REVENUE
(a) Revenue
Royalties
(b) Other income
Interest earned
Profit on sale of exploration project
Total
NOTE 3: EXPENSES AND GAINS/(LOSSES)
(a) Expenses
Depreciation
Impairment of plant and equipment
(b) Doubtful debt provision movement
Provision for doubtful debt
Reversal of provision for doubtful debt
(c) Significant Items
Loss before income tax includes the following expenses whose disclosure is relevant in
explaining the financial performance of the consolidated entity:
Included in corporate expenses
Accounting and administration fees
Consulting
Consolidated
2016
$
2015
$
112,636
970,115
12,929
10,000
22,929
17,934
-
17,934
3,909
8,635
12,544
14,139
-
14,139
(75,915)
252,994
(945,493)
-
177,079
(945,493)
127,253
189,400
171,640
194,750
35
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 4: INCOME TAX
The prima facie tax on loss before income tax
is reconciled to the income tax as follows:
Loss before income tax
Income tax calculated at 30%
Add back:
(Income accrued)/doubtful debt expense
Non deductible expenses
Unrealised foreign exchange (gains)
Provisions
Capitalised exploration written off
Capital raising costs
Share based payment
Foreign losses movement
Future income tax (charge)/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
36
Consolidated
2016
$
2015
$
(430,562)
(1,431,510)
(129,169)
(429,453)
29
-
-
-
706
(17,321)
(57,203)
485,190
198,158
15
(1,909)
97,715
60,178
(37,375)
-
(29,897)
(282,232)
142,568
-
-
15,828
314,100
2,285,426
24,632
314,100
2,565,067
2,615,354
2,903,799
(616,633)
-
(616,633)
(616,633)
(29)
(616,662)
910,584
1,107,805
910,584
1,107,805
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Accrued royalties
Doubtful debt provision (i)
Goods and services tax
Advances/loans – other parties
Consolidated
2016
$
2015
$
923,838
(923,838)
20,717
-
1,103,147
(1,103,147)
25,260
15,745
20,717
41,005
(i) On 8 September 2015, Pluton announced that it has appointed voluntary administrators and receivers and
managers in order to execute a recapitalization and restructure proposal. As a result, the Company has raised a
provision for doubtful debts against the full amount owing by Pluton which is past the due date.
NOTE 7: OTHER CURRENT ASSETS
Accrued revenue
Prepayments
NOTE 8: OTHER FINANCIAL ASSETS
Non Current
Listed investments at fair value:
Shares in other entities(i)
-
-
-
-
98
9,169
9,267
-
(i) As at 30 June 2016, the Company held 32,725,000 shares and 2,084,167 options exercisable at $0.055 on or
before 31 March 2017 in Pluton Resources Limited. At the date of signing this report, the value of those
securities held has been provided for in full as the shares in Pluton Resources Limited were in suspension on
the Australian Securities Exchange.
37
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 is set out below:
Plant and equipment
Carrying amount at beginning of year
Additions
Net book value of plant and equipment disposed
Depreciation expense
Impairment expense
Foreign exchange impact
Carrying amount at end of year
Consolidated
2016
$
2015
$
-
-
-
124,340
(95,740)
28,600
28,600
-
(9,154)
(3,909)
(8,635)
(6,902)
51,418
1,886
-
(14,139)
-
(10,565)
-
28,600
38
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 10: MINERAL EXPLORATION AND
EVALUATION EXPENDITURE
Balance at beginning of year
Exploration and mining expenditure incurred during the year
Foreign exchange movement
Expenditure written off
Transfer to assets held for sale (note 27)
Balance at end of year
Exploration expenditure carried forward in respect
of areas of interest in the exploration and evaluation phase
Consolidated
2016
$
2015
$
-
-
-
-
-
-
-
2,100,000
156,039
312,272
(200,591)
(2,367,720)
-
-
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.
The carrying value of the exploration expenditure as at 30 June 2016 is disclosed at note 27 and relates to the Romblon
Project which is subject to a cease and desist order. The Company has entered into a Memorandum of Understanding for
the sale of the Romblon project for $4.7 million which exceeds the carrying value at 30 June 2016. (refer to the Directors’
Report - Review of Operations for further details).
NOTE 11: TRADE AND OTHER PAYABLES
Trade payables and accrued expenses
Goods and services tax
Withholding tax
Advances/loans – other parties
NOTE 12: DEFERRED REVENUE
Deposit on sale of subsidiary
Consolidated
2016
$
73,196
154,520
-
1,279
2015
$
44,223
145,862
665
1,279
228,995
192,029
Consolidated
2016
$
2015
$
1,410,000
470,000
On 25 June 2015, the Company entered into a Memorandum of Understanding with Dynamo Atlantic Limited, a BVI
registered company to sell 100% ownership of Sibuyan Nickel Properties Development Corporation and received an initial
payment of $470,000 and a subsequent payment of $940,000 on completion of due diligence representing 30% of the
purchase price agreed of $4.70 million. A portion of the purchase price is owed to the Company’s joint venture partner All-
Acacia Resources Limited. As the sale has not completed, the Company has deferred this revenue and will recognize the
full proceeds upon completion of the sale.
39
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 13: ISSUED CAPITAL
(a) Issued Capital
361,923,540 Ordinary shares fully paid (2015: 361,923,540)
13,630,120
13,634,103
(b) Movements in ordinary share capital of the Company:
Consolidated
2016
$
2015
$
Date
Details
No. of Shares
Issue Price
$
01/07/2014
02/07/2014
15/06/2015
22/06/2015
Opening balance
Conversion of listed options
Entitlements offer allotment
Entitlements offer allotment
241,274,320
8,040
57,314,330
63,326,850
-
$0.04
$0.005
$0.005
Less: transaction costs arising on share issues
30/06/2015
Closing balance
361,923,540
13,286,471
322
286,572
316,634
(255,896)
13,634,103
Date
Details
No. of Shares
Issue Price
$
01/07/2015
Opening balance
361,923,540
Less: transaction costs arising on share issues
30/06/2016
Closing balance
361,923,540
13,634,103
(3,983)
13,630,120
(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 2015 and no dividends will be paid in 2016.
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.
40
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 14: RESERVES
(a) Composition
Share based payments reserve
Foreign currency translation reserve
Consolidated
2016
$
2015
$
1,899,148
122,432
1,707,973
170,455
2,021,580
1,878,428
(b) Movements in options and performance rights on issue during the last two years were as follows:
Date
Details
Performance
Rights
No. of
Listed
Options
No. of
Unlisted
Options
Fair Value
of Options and
Performance Rights
Issued
Exercise
Price
Expiry
Date
01/07/2014 Opening balance
02/07/2014 Conversion of listed options
03/07/2014 Listed options expired
19/09/2014 Pursuant to prospectus dated
26 August 2014
25/09/2014 Private placement to investors
25/03/2015 Lapse of performance rights
12/05/2015 Underwriter options (to be issued)(ii)
500,000(i)
-
-
-
-
(500,000)
-
88,104,515
(8,040)
(88,096,475)
59,475,571
250,000
-
-
50,000,000
Less: transaction costs arising
on issues
$1,528,725
-
-
$5,948
$25
-
$195,700
($22,425)
30/06/2015 Closing balance
-
59,725,571
50,000,000
$1,707,973
$0.04 30/06/2014
$0.04 30/06/2014
$0.02 30/06/2017
$0.02 30/06/2017
$0.01 30/06/2019
(i)
(ii)
Performance Rights will convert to shares upon completion of the first shipment of ore from Sibuyan Island under the Company’s Romblon
Nickel Project.
Underwriter options relating to the Entitlements Offer undertaken in June 2015 were issued on 12 August 2015 following shareholder
approval. As services were rendered prior to 30 June 2015, the value of the services have been recognized in the year ended 30 June 2015.
Date
Details
No. of
Listed
Options
No. of
Unlisted
Options
Fair Value
of Options and
Performance Rights
Issued
Exercise
Price
Expiry
Date
01/07/2015 Opening balance
12/08/2015 Underwriter options (prior year)(i)
59,725,571
-
50,000,000
$1,707,973
$500
18/11/2015 Director and consultant options
18/11/2015 Advisor options(ii)
-
-
20,500,000
14,500,000
$165,821
$24,854
Refer above
Refer
above
$0.02 31/12/2019
$0.02 31/12/2019
30/06/2016 Closing balance
59,725,571
85,000,000
$1,899,148
(i)
(ii)
Underwriter options were accounted for in the prior year. The amount of $500 recognised relates to the subscription price for the issue of
the options.
The fair value of the advisor options is $62,790 however the value recognised in reserves is lower due to the impact of vesting conditions.
41
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 15: 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
2016
$
2015
$
Cash and cash equivalents (Note 5)
910,584
1,107,805
b) Reconciliation of net cash and cash equivalents used in operating activities
to loss for the year:
Loss for the year
Exploration and evaluation expenditure written off / impaired
Depreciation
Diminution in value of investments
Impairment of plant and equipment
Share based payment expense
Doubtful debt provision
Movements in assets and liabilities:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in other assets
Increase/(Decrease) in trade and other payables
Net cash used in operating activities
(430,562)
(1,431,510)
2,352
3,909
-
8,635
190,675
(177,079)
200,591
14,139
327,715
-
-
945,493
202,780
9,267
(17,574)
(541,580)
26,152
(34,382)
(207,597)
(493,381)
c) Non-cash investing and financing activities
2016
Other than share-based payment transactions disclosed in note 25, there were no non-cash investing and financing
activities during the year ended 30 June 2016.
2015
During the year, the Company received 30,000,000 shares in Pluton Resources Limited in consideration for royalties
owed to the value of $300,000.
42
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 16: KEY MANAGEMENT PERSONNEL
This note is to be read in conjunction with the Remuneration Report which is included in the Directors’ Report.
(a) Compensation of Key Management Personnel
Consolidated
Compensation by category:
Short-term
Post employment
Termination benefit
Share based payment
2016
$
228,000
-
-
162,916
2015
$
316,000
18,406
37,500
-
390,916
371,906
(b) 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 Hills, Alec Pismiris, Antonio Torresan, Mike Bue and John Palermo received and/or accrued
payment for the provision of geological consulting and general consultancy, management services, underwriting
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:
Sub-underwriting fee (Mainview Holdings Pty Ltd – A Torresan)
Sub-underwriting fee (ACP Investments Pty Ltd – A Pismiris)
Consulting fee (Capital Investment Partners) (i)
Consolidated
2016
$
71,375
23,484
258,490
2015
$
-
-
36,795
(i) On 12 August 2015, 25,547,324 options were issued to Capital Investment Partners as part of the underwriting
fee for a total value of $195,700. The fair value of these options were booked as an expense in 2015 as it related to
services provided in that year. On 18 November 2015, 14,500,000 options were issued to Capital Investment
Partners vesting upon the completion of a corporate transaction for a total value of $62,790.
Amounts payable or receivable to directors and their director related party entities at balance date arising from these
transactions was $nil (2015: $nil).
NOTE 17: REMUNERATION OF AUDITORS
Audit services – Stantons International
– Overseas auditors
43
Consolidated
2016
$
29,076
3,815
32,891
2015
$
30,538
7,077
37,615
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 18: 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
Equity Interest
2016
%
2015
%
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
*Entity was dissolved during the financial year.
100
100
100
100
100
75
-
-
100
100
100
100
100
75
100
100
44
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 18: 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
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) operating activities
Net cash flows from financing activities
45
Sibuyan Nickel Properties
Development Corporation
As at
30 June 2016
$
As at
30 June 2015
$
7,513
1,567,079
(706)
(4,776,481)
4,052
1,591,287
(702)
(4,761,155)
(3,202,595)
(3,166,518)
(816,545)
(807,526)
Sibuyan Nickel Properties
Development Corporation
Year Ended
30 June 2016
$
Year Ended
30 June 2015
$
13
(25,617)
-
(25,617)
-
(25,617)
3
(26,677)
-
(26,677)
-
(26,677)
(6,404)
-
(6,669)
-
Sibuyan Nickel Properties
Development Corporation
Year Ended
30 June 2016
$
Year Ended
30 June 2015
$
(23,400)
-
(25,885)
-
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 19: LOSS PER SHARE
The following reflects the income and data used in the calculations of basic and diluted (loss)/profit per share:
Loss before income tax – Group
Adjustments:
Loss attributable to non-controlling interest
Consolidated
2016
$
2015
$
(430,562)
(1,431,510)
6,404
6,669
Loss used in calculating basic and diluted loss per share
(424,158)
(1,424,841)
2016
Number of
Shares
2015
Number of
Shares
Weighted average number of ordinary shares used in calculating:
Basic and diluted loss per share
361,923,540
245,356,231
NOTE 20: COMMITMENTS FOR EXPENDITURE
In order to maintain current rights of tenure to mining tenements, the Consolidated Entity will be required to outlay
in 2016/17 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
2016
$
-
-
-
-
2015
$
3,000
-
-
3,000
Minimum tenement expenditure and lease rentals relating to the Cockatoo Island project remain the responsibility
of Pluton Resources Limited.
46
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 21: 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
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
Geographical Segments
Revenue
Sales to customers outside the
Consolidated Entity
Other revenues from customers
outside the Consolidated Entity
Total segment revenue
125,552
988,020 10,013
112,636
970,115
-
12,916
17,905 10,013
-
29
29
-
-
-
-
-
-
-
-
-
-
-
-
112,636
970,115
22,929
17,934
135,565
988,049
Results
Segment result
Assets
Segment assets
Liabilities
Segment liabilities
(443,807)
(888,500)
(107,844)
(340,948)
-
(124,510)
121,089
(77,552)
(430,562)
(1,431,510)
2,935,106
2,201,962 2,369,220
2,510,539
-
937
(951,001)
(1,023,989)
4,353,325
3,689,449
3,087,507
2,097,747 8,549,065
8,525,497
-
212,408
(8,761,324)
(8,918,288)
2,875,248
1,917,364
47
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 22: 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, credit
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 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.
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. There
were no fixed interest rate financial assets or liabilities held by the Consolidated Entity (2015: nil).
Non Interest
Bearing
$
Weighted
Average Effective
Interest Rate %
Floating
Interest Rate
$
Total
$
2016
2015
2016
2015
2016
2015
2016
2015
910,584
-
-
-
-
-
20,717
931,301
73,902
154,520
1,235,547
-
1,463,969
1,107,805
-
15,745
-
98
-
25,260
1,148,908
44,223
145,862
1,255,912
665
1,446,662
2.10
-
-
-
-
-
-
-
-
-
-
3.30
-
-
-
-
-
-
-
-
-
-
-
1,071,000
-
-
-
-
-
1,071,000
-
-
-
-
-
-
131,000
-
-
-
-
-
131,000
910,584
1,071,000
-
-
-
-
20,717
2,002,301
1,107,805
131,000
15,745
-
98
-
25,260
1,279,908
-
-
-
-
-
73,902
154,520
1,235,547
-
1,463,969
44,223
145,862
1,255,912
665
1,446,662
Financial Assets
- Cash and cash equivalents
- Deposits held
- Receivable other parties
- Accrued royalties (net)
- Accrued revenue
- Investments at fair value
- GST receivable
Total Financial Assets
Financial Liabilities
- Trade creditors
- GST payable
- Loan – other parties
- Withholding tax payable
Total Financial Liabilities
Net Financial Assets / (Liabilities)
(532,668)
(297,754)
1,071,000
131,000
538,332
(166,754)
48
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 22: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest Rate Sensitivity
At 30 June 2016, 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 $2,142 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 2016 from around 2.1% to 2.3% (10% decrease: 1.9%) representing a 30 basis points shift. This would
represent one increase 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 2016, the Consolidated Entity had a balance of $923,838 (2015: $1,103,147) owing from Pluton
Resources Limited. A provision for doubtful debts has been raised for the full amount (2015: $1,103,147).
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
Consolidated
2016
$
2015
$
73,902
154,520
44,223
145,862
8,069
1,228,757
1,465,248
8,174
1,247,738
1,445,997
The amount of $1,228,757 are liabilities associated with assets held for sale which have been disclosed under current
liabilities as the disposal of Sibuyan Nickel Properties Development Corporation is expected within 12 months (note
27).
49
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 22: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Foreign Exchange Risk
The Consolidated Entity is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the PESO and USD. No sensitivity analysis has been completed as the directors believe any impact
would be immaterial.
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 currencies. The risk is
measured using sensitivity analysis.
Market Price Risk
The Group is exposed to equity price risk which arises from available-for-sale-equity securities.
The Consolidated Entity is exposed to market price risk arising from investments in other companies carried at fair
value. No sensitivity analysis has been completed as the directors believe any impact would be immaterial. The
Company has provided in full for the investment in Pluton Resources Limited.
Net Fair Values
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(i)
Available for sale financial assets - Level 2
Available for sale financial assets - Level 3
(i) Refer Note 8(i).
2016
$
2015
$
-
-
-
-
-
-
-
-
50
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 23: EVENTS SUBSEQUENT TO REPORTING PERIOD
Subsequent to the end of the financial year ended 30 June 2016, the following events had occurred:
On 20 July 2016 an application to terminate or set aside the Pluton DOCA proposal from WSCI was filed by
Ziziphus Pty Ltd and Celtic Capital Pty Ltd was heard in the Supreme Court of Western. The following day
and pursuant to an Order of the Supreme Court of Western Australia on 21 July 2016 the DOCA was
terminated. At a subsequent hearing on 3 August 2016 Sam Marsden and Derrick Vickers of PWC were
appointed by the Court as Joint and Several Official Liquidators of the Company. In September 2016, the
receivers, Pitcher Partners, put Pluton’s share of the Cockatoo Island project up for sale.
On 17 August 2016, the Company announced that it has received notification from All Acacia Resources Inc
that it is prepared to support the sale of SNPDC. Dynamo had previously completed due diligence enquiries
and advanced payments totaling $A1.41 million in accordance with the terms of the MOU. On securing
AARI’s support for the sale of SNPDC, the Company considers that the MOU is unconditional and the parties
can proceed towards completion.
On 7 September 2016, the Company announced that Dynamo had indicated that it did not wish to proceed with
the purchase of SNPDC, and requested a full refund of the purchase price paid to date under the MOU.
The Company has advised Dynamo that it considers the Agreement, and the parties’ respective obligations
under it, remain on foot, and that it requires Dynamo to complete the Agreement by payment of the balance of
the purchase price at settlement of the sale.
NOTE 24: CONTINGENT LIABILITIES
On 7 September 2016, the Company announced that Dynamo had indicated that it did not wish to proceed with
the purchase of SNPDC, and requested a full refund of the purchase price paid to date under the MOU.
The Company has advised Dynamo that it considers the Agreement, and the parties’ respective obligations
under it, remain on foot, and that it requires Dynamo to complete the Agreement by payment of the balance of
the purchase price at settlement of the sale.
Other than as disclosed above, Pelican Resources Limited has no known material contingent liabilities at the end of
the financial year.
51
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 25: SHARE BASED PAYMENTS
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
2016
$0.02
-
-
-
-
$0.01
$0.02
$0.02
Number of
Options
2016
59,725,571
-
-
-
-
85,000,000
144,725,571
130,225,571
Weighted
average exercise
price
2015
$0.04
-
$0.04
$0.04
-
$0.02
$0.02
$0.02
Number of
Options
2015
88,104,515
-
(8,040)
(88,096,475)
-
59,725,571
59,725,571
59,725,571
The options outstanding at 30 June 2016 have an exercise price of $0.02 and a weighted average remaining
contractual life of 2.5 years (2015: 2 years).
The following table lists the inputs to the models used for the valuation of the options issued during the year:
Director
options
Consultant
options
Advisor
options
Number of options
Fair value at measurement date (cents)
Dividend yield (%)
Expected volatility (%)
Risk free rate (%)
Expected life of option
Share price (cents)
Exercise price (cents)
Model used
20,000,000
0.8
Nil
100
2.25
4
1.3
2
500,000
0.6
Nil
100
2.25
4
1.0
2
Black-scholes Black-scholes Black-scholes
14,500,000
0.4
Nil
100
2.25
4
0.8
2
52
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 26: PARENT ENTITY DISCLOSURES
(a) Financial Position
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
(b) Financial Performance
Loss for the year
Other comprehensive income
Total Comprehensive Loss
(c) Guarantees
2016
$
1,966,352
2,917,353
1,167,716
1,167,716
2015
$
1,213,372
2,184,011
178,202
178,202
13,630,120
1,899,148
(13,779,630)
13,634,103
1,707,973
(13,336,267)
1,749,638
2,005,809
2016
$
2015
$
(443,363)
-
(883,647)
-
(443,363)
(883,647)
The parent entity has not entered into any guarantees, in relation to the debts of subsidiaries.
(d) Contingent liabilities
Other than disclosed in note 24, the parent entity has no known material contingent liabilities at the end of the
financial year.
(e) Commitments for expenditure
The parent entity has not entered into any commitments for expenditure as at the end of the financial year.
53
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 27: ASSETS AND LIABILITIES HELD FOR SALE
In June 2015, the Company entered into a Memorandum of Understanding (“MOU”) with Dynamo Atlantic Limited
to sell 100% ownership of Sibuyan Nickel Properties Development Corporation (“SNPDC”) for a purchase price of
$4.7 million (refer Directors’ Report for further detail).
Assets and liabilities held for sale
The major classes of assets and liabilities comprising the operations classified as held for sale at balance date are as
follows:
Cash
Trade and other receivables
Mineral exploration and evaluation expenditure (note 10)
Assets held for sale
Trade payables
Other payables
Liabilities associated with assets held for sale
2016
$
3,243
4,270
2,343,511
2,351,024
706
1,235,547
1,236,253
2015
$
870
3,182
2,367,720
2,371,772
702
1,254,633
1,255,335
The Company has received $1.41 million as deposits for the sale of SNPDC and $0.94 million has been classified
as restricted cash as the formal sale agreement has not yet been executed.
54
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors:
a.
the accompanying financial statements, notes and additional disclosures are in accordance with the
Corporations Act 2001 including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2016 and of its
performance for the year then ended; and
ii.
complying with Accounting Standards and Corporations Regulations 2001; and
b.
c.
subject to the matters set out in note 1 “Going Concern”, there are reasonable grounds to believe
that the Company will be able to pay its debts as and when they become due and payable.
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2016.
This declaration is signed in accordance with a resolution of the Board of Directors.
Alec Pismiris
Director
Dated this 27th day of September, 2016
55
-56-
-57-
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION
QUOTED SECURITIES
(a)
ORDINARY FULLY PAID SHARES
(i)
DISTRIBUTION OF SHAREHOLDERS AS AT 26 SEPTEMBER 2016:
SPREAD
OF HOLDINGS
NO. OF
HOLDERS
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
28
34
23
92
176
353
NO. OF
SHARES
9,956
82,341
162,633
4,647,049
357,021,561
361,923,540
PERCENTAGE OF
ISSUED CAPITAL %
0.00
0.02
0.04
1.28
98.65
100.00
The number of shareholdings held in less than marketable parcels is 1370.
(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
NO. OF
ORDINARY
SHARES
HELD
PERCENTAGE
OF ISSUED
SHARES %
Mainview Holdings Pty Ltd
1.
Mr Kenneth Gatchalian
2.
Mr Joe Leuzzi & Mrs Sally Leuzzi
3.
DF Lynton-Brown Pty Ltd
4.
Monslit Pty Ltd
5.
Gallant (WA) Pty Ltd
6.
Finebase Holdings Pty Ltd
7.
Alitime Nominees Pty Ltd
8.
Veltox Pty Ltd
9.
10.
Topaze Enterprises Pty Ltd
11. GAB Superannuation Fund Pty Ltd
12. Mr Jose Mari Moraza & Mr Antonio Moraza
Topaze Enterprises Pty Ltd
13.
14.
Finebase Holdings Pty Ltd
15. ACP Investments Pty Ltd
16. ACP Investments Pty Ltd
17. Darlot Investments Pty Ltd
18.
19.
20. Mr Paul Gabriel Sharbanee
Citicorp Nominees Pty Ltd
Cityscan Pty Ltd
42,843,981
25,699,591
16,350,000
13,932,885
13,350,000
12,094,137
11,990,000
10,930,205
10,593,650
9,484,049
7,873,785
7,272,445
6,229,134
6,019,666
6,000,000
6,000,000
5,849,676
5,282,634
5,177,757
5,007,434
227,981,029
11.84
7.10
4.52
3.85
3.69
3.34
3.31
3.02
2.93
2.62
2.18
2.01
1.72
1.66
1.66
1.66
1.62
1.46
1.43
1.38
62.99
59
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
Mainview Holdings Pty Ltd
Mr Kenneth Gatchalian
Ordinary Shares
No.
42,843,981
25,699,591
68,513,572
%
11.84
7.10
18.94
(b)
OPTIONS
As at 26 September 2016, 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 %
534
19,848
28,184
884,064
58,792,941
59,725,571
0.00
0.03
0.05
1.48
98.44
100.00
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
2
6
4
26
32
70
60
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
NO. OF
OPTIONS
HELD
PERCENTAGE
OF QUOTED
OPTIONS
%
Finebase Holdings Pty Ltd
1.
2. Mainview Holdings Pty Ltd
3. Mr Martin Music
4. Mulloway Pty Ltd
Darlot Investments Pty Ltd
5.
Topaze Enterprises Pty Ltd
6.
Goffacan Pty Ltd
7.
First Investment Partners Pty Ltd
8.
Stonehurst (WA) Pty Ltd
9.
10. Citicorp Nominees Pty Ltd
11. Monslit Pty Ltd
12. Mr Chad Jonathon Jones
13. Mr Brett David Jones
14. Mr Ryan Bennett
15. Virtus Capital Pty Ltd
16. Mulloway Pty Ltd
17. Mr Daniel James Pietzner
18. Monslit Pty Ltd
19.
Jetblack Nominees Pty Ltd
Finebase Holdings Pty Ltd
20.
21,754,400
8,357,666
6,500,000
4,000,000
3,000,000
2,257,584
1,837,415
1,500,000
1,425,000
1,166,666
683,334
516,667
500,000
500,000
445,000
405,668
390,274
366,667
350,000
333,839
56,290,180
36.42
13.99
10.88
6.70
5.02
3.78
3.08
2.51
2.39
1.95
1.14
0.87
0.84
0.84
0.75
0.68
0.65
0.61
0.59
0.56
94.25
(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)
UNLISTED OPTIONS ON ISSUE
- 50,000,000 unlisted options exercisable at $0.01 each on or before 30 June 2019.
- 35,000,000 unlisted options exercisable at $0.02 each on or before 31 December 2019.
(b)
PERFORMANCE RIGHTS
The Company has no performance rights on issue.
61
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance practices adopted by the Board of Pelican Resources Limited
(“Pelican” or the “Company”), which comply with the ASX Corporate Governance Council recommendations
unless otherwise stated.
The Board and management of Pelican recognise their duties and obligations to shareholders and other stakeholders
to implement and maintain a proper system of corporate governance. The Company believes that good corporate
governance adds value to stakeholders and enhances investor confidence.
The ASX Listing Rules require listed companies to prepare a statement disclosing the extent to which they have
complied with the recommendations of the ASX Corporate Governance Council (“Recommendations”) in the
reporting period. The Recommendations are guidelines designed to improve the efficiency, quality and integrity of
the Company. They are not prescriptive, sit that if a company considers a recommendation to be inappropriate
having regard to its own circumstances, it has the flexibility not to follow it. Where a company has not followed
all the Recommendations, it must identify which Recommendations have not been followed and give reasons for
not following them.
This Corporate Governance Statement (“Statement”) sets out a description of the Company’s main corporate
practices and provides details of the Company’s compliance with the Recommendations, or where appropriate,
indicates a departure from the Recommendations with an explanation.
This Statement is current as at 25 September 2015 and has been approved by the Board of Directors of Pelican.
Principle 1 – Lay solid foundations for management and oversight
Recommendation
1.1
A listed entity should disclose:
Requirement
Comply
Yes/No
(a) The respective roles and responsibilities of its board and management: and
(b) Those matters expressly reserved to the board and those delegated to
Yes
management.
1.2
A listed entity should:
(a) Undertake appropriate checks before appointing a person, or putting forward
to security holders a candidate for election, as a director: and
(b) Provide security holders with all material information in its possession
relevant to a decision on where or not to elect or re-elect a director.
1.3
1.4
A listed entity should have a written agreement with each director and senior
executive setting out the terms of their appointment.
The company secretary of a listed entity should be accountable directly to the board,
through the chair, on all matters to do with the proper functioning of the board.
Yes
Yes
Yes
62
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation
1.5
A listed entity should:
Requirement
(a) Have a diversity policy which includes requirements for the board or a
relevant committee of the board to set measurable objectives for achieving
gender diversity and to assess annually both the objectives and the entity’s
progress in achieving them:
(b) Disclose the policy or a summary of it: and
(c) Disclose as at the end of each reporting period the measurable objectives
for achieving gender diversity set by the board or a relevant committee of
the board in accordance with the entity’s diversity policy and its progress
towards achieving them and either:
1) The respective proportions of men and women on the board, in
senior executive positions and across the whole organisation
(including how the entity has defined “senior executive” for these
purposes): or
If the entity is a “relevant employer” under the Workplace Gender
Equality Act, the entity’s most recent “Gender Equality
Indicators”, as defined in and published under the Act.
2)
Comply
Yes/No
Yes
1.6
A listed entity should:
(a) Have and disclose a process for periodically evaluating the performance of
the board, its committees and individual directors: and
(b) Disclose, in relation to each reporting period, whether a performance
Yes
evaluation was undertaken in the reporting period in accordance with that
process.
1.7
A listed entity should:
(a) Have and disclose a process for periodically evaluating the performance of
its senior executives; and
(b) Disclose, in relation to each reporting period, whether a performance
Yes
evaluation was undertaken in the reporting period in accordance with that
process.
Commentary
The Corporate Governance Policies set out the functions and responsibilities of the Board of Pelican, and are
available on the Pelican website.
The Company seeks to have a board comprising directors with an appropriate variety of skill, experience and
expertise who are competent in dealing with current and emerging issues of the business and who can effectively
review and challenge the performance of management and exercise independent judgement. The Board has
procedures for the selection and appointment of new directors and the re-election of incumbent directors, which are
set out in the Corporate Governance Policies which are available on the Pelican website.
Non-executive directors have written agreement with the Company setting out the terms of their appointment as
directors, the two executive directors have employment contracts.
The Board meets on a regular basis. The agenda for these meetings is prepared by the Company Secretary who is
also the Managing Director, in conjunction with the Chairman. Relevant information is circulated to directors in
advance of the Board meetings. The Company Secretary is accountable directly to the Board on matters to do with
the proper functioning of the Board.
The Board has adopted a policy on achieving gender, age and ethnic diversity in the Company’s board and
employees.
63
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
The respective proportions of men and women on the Board, in senior executive positions and across the whole
organisation is as follows:
Gender
Total
Female
Male
%Female
Senior Management
-
1
-
0
4
0
Board
-
3
-
The evaluation of the performance of the Board and individual directors is undertaken annually and in accordance
with the terms of their employment contract. Performance reviews were undertaken in the reporting period.
Principle 2 – Structure the Board to add value
Recommendation
2.1
The board of a listed entity should:
(a) Have a nomination committee which:
Requirement
1) Has at least three members, a majority of whom are independent
directors; and
Is chaired by an independent director,
2)
and disclose
3) The charter of the committee:
4) The members of the committee; and
5) As at the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; OR
(b) If it does not have a nomination committee, disclose that fact and the
processes it employs to address board succession issues and to ensure that the
board has the appropriate balance of skills, knowledge, experience,
independence and diversity to enable it to discharge its duties and
responsibilities effectively.
A listed entity should have and disclose a board skills matric setting out the mix of
skills and diversity that the board currently has or is looking to achieve in its
membership.
A listed entity should disclose:
(a) The names of the directors considered by the board to be independent
directors;
(b) If a director has an interest, position, association or relationship of the type
describe in Box 2.3 but the board is of the opinion that it does not
compromise the independence of the director, the nature of the interest,
position, association or relationship in question and an explanation of why
the board is of that opinion; and
(c) The length of service of each director.
A majority of the board of a listed entity should be independent directors.
The Chair of the board of a listed entity should be independent director and, in
particular, should not be the same person as the CEO/Managing Director of the entity.
A listed entity should have a program for inducting new directors and provide
appropriate professional development opportunities for directors to develop and
maintain the skills and knowledge needed to perform their role as directors
effectively.
64
2.2
2.3
2.4
2.5
2.6
Comply
Yes/No
Yes
Yes
Yes
No
Yes
Yes
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Commentary
The Board believes the Company is not of sufficient size to justify having a Nomination Committee. If any
vacancies arise on the Board, the Board and all directors are involved in the search and recruitment of a replacement.
The Board strives to ensure that it is comprised of directors with a blend of skills, experience and attributes
appropriate to the Company and its business. The principal criterion for the appointment of new directors is their
ability to add value to the Company and its business. In light of this, it has not been deemed necessary to create a
formal document setting out the mix of skills and diversity that the Board currently has or is looking to achieve in
its membership.
The Board consists of Executive Director Mr Antonio Torresan (appointed 24 March 2015), Independent non-
executive director Mr Colin Chenu (appointed 29 June 2015), Non-executive director Mr Alec Pismiris (appointed
24 March 2015), Executive Director Mr Mike Bue (resigned on 25 March 2015), Non-executive chairman Mr John
Palermo (deceased 15 March 2015) and Independent non-executive director Mr John Hills (resigned 29 June 2015).
The details of their skills, experience and expertise have been included in the 2015 Directors Report. The number
of Board meetings and attendance of the directors are set out in the 2015 Directors Report.
Although the majority of the Board is not independent, the directors considers the current Board composition to be
suitable in the present circumstances, with an appropriate range of qualifications and expertise, and directors who
can understand and competently deal with current and emerging business issues as well as effectively review and
challenge the performance of management. Furthermore, each individual member of the Board is satisfied that all
directors bring an independent judgement to bear on board decisions.
New directors are provided with copies of all relevant documents and policies governing the Company’s business,
operations and management at the time of joining the Board. The Company is able to provide appropriate
professional development opportunities for directors to assist in their roles. Directors are also encouraged to
personally undertake appropriate training and refresher courses conducted by the Australian Institute of Company
Directors.
Principle 3 – Act ethically and responsibly
Recommendation
3.1
A listed entity should:
Requirement
(a) Have a code of conduct for its directors, senior executives and employees;
and
(b) Disclose that code or a summary of it.
Comply
Yes/No
Yes
Commentary
As part of the Board’s commitment to maintaining a proper system of corporate governance, the Company has
adopted a Code of Conduct to guide directors and officers in carrying out their duties and responsibilities. The Code
embraces the values of honesty, integrity, enterprise, excellence, accountability, justice, independence and equality
of stakeholder opportunity. The Code of Conduct is available on the Pelican website.
65
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Principle 4 – Safeguard integrity in corporate reporting
Recommendation
4.1
The board of a listed entity should:
(a) Have an audit committee which:
Requirement
Comply
Yes/No
1) Has at least three members, all of whom are non-executive
2)
directors and a majority of whom are independent directors; and
Is chaired by an independent director, who is not the chair of the
board, and disclose;
3) The charter of the committee;
4) The relevant qualifications and experience of the members of the
5)
committee; and
In relation to each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have an audit committee, disclose that fact and the processes it
employs that independently verify and safeguard the integrity of its
corporate reporting, including the processes for the appointment and
removal of the external auditor and the rotation of the audit engagement
partner.
The board of a listed entity should, before it approves the entity’s financial
statements for a financial period, receive form its CEO and CFO a declaration that,
in their opinion, the financial records of the entity have been properly maintained
and that the financial statements comply with the appropriate accounting standards
and give a true an fair view of the financial position and performance of the entity
and that the opinion has been formed on the basis of a sound system of risk
management and internal control which is operating effectively.
A listed entity should that has an AGM should ensure that its external auditor
attends its AGM and is available to answer questions from security holders relevant
to the audit.
Yes
Yes
Yes
4.2
4.3
Commentary
The board believes that due to the size and composition of the board and the size of the Company it is not appropriate
to have an Audit Committee. The Board as a whole is responsible for the integrity of the Company’s financial
reporting, reviews and oversees the planning process for external audits, the conduct of the external audit process
and the independence of all parties to the process as well as reviewing the performance of external auditors, the
processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.
Prior to the approval of the Company’s annual financial statements, the board obtains a declaration from its
Company Secretary and CFO that , in their opinion, the financial records of the Company have been properly
maintained and that the financial statements comply with appropriate accounting standards and give a true and fair
view of the financial position and performance of the Company, and that the opinion has been formed on the basis
of a sound system of risk management and internal control which is operating effectively.
The Company’s external auditor attends every Annual General Meeting as required by the Corporations Act, and
member are allowed a reasonable opportunity at the meeting to ask the auditor questions relevant to the audit, their
report and independence, and the accounting policies adopted by the company.
66
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Principle 5 – Make timely and balanced disclosure
Recommendation
5.1
A listed entity should:
Requirement
(a) Have a written policy for complying with its continuous disclosure
obligations under the Listing Rules; and
(b) Disclose that code or a summary of it.
Comply
Yes/No
Yes
Commentary
The Company’s Disclosure Policy is available on the Pelican website. The Disclosure Policy sets out the key
obligations of directors and employees in relation to continuous disclosure as well as the Company’s obligation
under the ASX Listing Rules and the Corporations Act. The Policy also provides procedures for internal notification
and external disclosure, as well as procedures for promoting understanding of compliance with disclosure
requirements.
Principle 6 – Respect the rights of security holders
Recommendation
6.1
A listed entity should provide information about itself and its governance to
investors via a website.
Requirement
A listed entity should design and implement an investor relations program to
facilitate effective two-way communication with investors.
A listed entity should disclose the policies and processes it has in place to facilitate
and encourage participation at meeting so security holders.
A listed entity should give security holders to option to receive communicating from
and send communications to, the entity and its security registry electronically.
6.2
6.3
6.3
Commentary
Comply
Yes/No
Yes
Yes
Yes
Yes
The Board is committed to open and accessible communications with holders of the Company’s shares. In
accordance with continuous disclosure obligations under the ASX Listing Rules, all disclosure are made in a time
manner and posted on the Company’s website.
Shareholders are forwarded the Company’s Annual Report, if requested and documents relating to each General
Meeting, being the Notice of Meeting, any Explanatory Memorandum and a Proxy Form, and shareholders are
invited to attend these meetings. Shareholders may elect to receive communications electronically. The Company’s
external auditors are also required to be present at annual shareholder meetings to answer any queries shareholders
may have with regard to the audit and preparation and content of the Audit Report.
67
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Principle 7 – Recognise and manage risk
Recommendation
7.1
The board of a listed entity should:
(a) Have a committee or committees to oversee risk, each of which;
Requirement
Comply
Yes/No
1) Has at least three members, a majority of whom are independent
directors; and
Is chaired by and independent director and disclose;
2)
3) The charter of the committee
4) The ;members of the committee; and
5) As at the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
If it does not have a risk committee or committees that satisfy (a) above, disclose
that fact and the processes it employs for overseeing the entity’s risk management
framework.
The board or a committee of the board should;
(a) Review the entity’s risk management framework at least annually to satisfy
itself that it continues to be sound; and
(b) Disclose, in relation to each reporting period, whether such review has
taken place.
7.2
7.3
A listed entity should disclose:
(a) If it has an internal audit function, how the function is structured and what
role it performs; or
(b) If it does not have an internal audit function, that fact and the processes it
employs for evaluating and continually improving the effectiveness of its
risk management and internal control processes.
A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and, if it does, how it manages or
intends to manage those risks.
7.4
Commentary
Yes
Yes
Yes
Yes
The board as a whole is ultimately responsible for establishing and reviewing the Company’s policies on risk
profile, oversight and management and satisfying itself that management has developed and implemented a sound
system of risk management and internal control in accordance with the Company’s Corporate Governance
Policies.
The board believes that due to the size and composition of the board, and the size of the Company it is not
appropriate to have a Risk Committee.
The Company’s risk management program is implemented under the direction of the Chief Executive Officer to
ensure matters affecting goals, objectives and performance of the Company and the safety of its stakeholders are
identified and assessed by an operational risk management framework in accordance with industry accepted
standards.
The Company’s risk management framework is reviewed annually. A review was undertaken in the reporting
period.
The board believes that the Company is not of a size to justify having an internal audit function for efficiency
purposes. The Company evaluates its risk management and internal control processes in consultation with its
external auditor with a view to continually improving its effectiveness.
68
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
The board does not believe the Company has any material exposure to economic, environmental and social
sustainability risks at the present time.
Principle 8 – Remunerate fairly and responsibly
Recommendation
8.1
The board of a listed entity should:
(a) Have a remuneration committee which’
Requirement
1) Has at least three members, a majority of whom are independent
directors; and
Is chaired by an independent director, and disclose
2)
3) The charter of the committee;
4) The members of the committee; and
5) As at the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have a remuneration committee, disclose that fact and the
processes it employs for setting the level and composition of remuneration
for directors and senior executives and ensuring that such remuneration is
appropriate and not excessive.
Comply
Yes/No
Yes
8.2
A listed entity should separately disclose its policies and practices regarding the
remuneration of non-executive directors and the remuneration of executive directors
and other senior executives.
Yes
Commentary
The Board believes it is not of a size to justify having a Remuneration Committee. The Company’s remuneration
policy is structured for the purpose of motivating executive directors and senior management to pursue the long-
term growth and success of the Company. The Board sets the level and structure of remuneration to executive
directors and senior executives for the purpose of balancing the Company’s competing interest of attracting and
retaining executive directors and senior management and not paying excessive remuneration.
69