Managed by ICM Limited
ANNUAL REPORT 2013
ZETA RESOURCES LIMITED
ESTABLISHED AUGUST 2012
LISTED ON THE ASX 12 JUNE 2013
GROSS ASSETS OF US$48.9
MILLION AS AT 30 JUNE 2013
CONTENTS
2
3
7
8
10
10
11
22
26
28
29
33
61
64
CHAIRMAN’S STATEMENT
INVESTMENT MANAGER’S REPORT
FIVE LARGEST HOLDINGS
REVIEW OF THE FIVE LARGEST HOLDINGS
INVESTMENT TEAM
INVESTMENT APPROACH
CORPORATE GOVERNANCE STATEMENT
DIRECTORS’ REPORT
INDEPENDENT AUDIT REPORT
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
ADDITIONAL ASX INFORMATION
COMPANY INFORMATION
FINANCIAL CALENDAR
Annual General Meeting 13 November 2013
Half year December 2013 announcement February 2014
IMAGE ACKNOWLEDGEMENTS
Raymond McKay - Kan Tan IV cover and pg 8
Petroleum Geo-Services Media Gallery - Atlantic Explorer cover and pg 9
Ramform Vanguard cover
Zeta’s investment aim is to maximise total returns for shareholders by identifying and investing in resource assets
and companies where the underlying value is not reflected in the market price. The company invests in a range of
resources entities, including those focused on oil and gas, gold and base metals exploration and production.
Zeta Resources Limited - 2013 Annual Report 1
CHAIRMAN’S STATEMENT
INVESTMENT MANAGER’S REPORT
Zeta’s investment manager, ICM Limited (“ICM”), has
a strong track record of value investing globally. ICM
has dedicated a specialist resources team to manage
Zeta, and the investment manager has worked
quickly under the oversight of the Zeta board of
directors to invest the company’s capital while the
resources sector is depressed. More information on
the approach taken, and investments made to date,
is covered in the investment manager’s report that
follows.
While Zeta has not been listed for very long, the
board of Zeta is pleased with progress made to date.
The one disappointment has been that Zeta shares
have traded on the ASX at a substantial discount to
the company’s stated net assets. However, given the
aforementioned depressed state of the resources
sector, this is perhaps unsurprising. Nevertheless we
believe that Zeta’s shares provide good value.
I look forward to reporting to you again next year, by
which time I trust that others will have discovered
the value that Zeta provides.
Peter Sullivan
Chairman
It is with pleasure that I write to you as Chairman
of Zeta Resources Limited (“Zeta”) in the company’s
inaugural annual report.
Zeta listed on the Australian Stock Exchange (“ASX”)
in June 2013 following a scheme of arrangement
to merge a portfolio of investments in resources
companies owned by Utilico Investments Limited
(“Utilico”) listed on the London Stock Exchange with
ASX-listed junior gold explorer Kumarina Resources
Limited (“Kumarina”).
The resources sector globally has experienced sharp
declines in certain asset prices, particularly in the
minerals sectors. Some observers attribute this to a
slowdown in demand, particularly from China; others
to an increase in supply driven by technological
improvements. Profitability for many mines has been
impacted by rising production costs such as wages,
with no relief in the form of lower energy costs.
Significant developments in extracting shale oil
and gas have occurred recently. Impacts on prices
– especially in the case of shale gas – are most
significant on the local markets where production is
increased; the impact on international prices is often
muted by the lack of the necessary infrastructure
such as LNG terminals which are costly to build and
take time to be constructed.
With sharp declines in share prices for many minerals
companies, especially gold companies, this has
affected the share prices of companies in other
resources sectors such as oil & gas, even though the
underlying commodity prices haven’t decreased; this
is due to the opportunity cost of capital. Some funds
have been forced sellers due to redemptions, which
has provided an opportunity for Zeta to take a long-
term view and purchase investments in prospective
companies at marked-down prices.
Zeta’s investment aim is to maximise total returns for
shareholders by identifying and investing in assets
and companies where the underlying value is not
reflected in the market price.
While Zeta has only been listed on the ASX since
June 2013, much work had already been completed in
preparation prior to the listing date. As a result Zeta
quickly invested its capital into the market taking
advantage of attractive long-term valuations. As at
30 June 2013, Zeta’s investments mainly comprised
shares in gold and oil & gas companies.
BACKGROUND
During 2012, certain commodities began a marked
downturn in pricing; this downturn has continued
into 2013, and has only recovered slightly since June.
Concerns around a slowdown in demand from China
have been partially to blame; the well-signalled but yet
to occur slowdown in asset purchases by the US Federal
Reserve also strengthened the US dollar at the expense
of the US dollar price of gold and other commodities.
The impact of the decline in certain commodity
prices has been exaggerated in an even greater decline
in the share prices of exploration and production
companies owing to operational leverage. In the case
of relatively high cost gold producers, mines have
in some instances had to be closed as they were
uneconomic. Across the board, capital expenditure
plans are either being cancelled or scaled back.
More generally, investors in open-ended resources
funds have withdrawn their investments. This has fed
a vicious circle, where mutual funds and unit trusts
have been forced to sell already depressed stocks in
order to fund redemption; investors have responded
by redeeming even more. In many instances the
shares being purchased by Zeta are being sold by
open-ended funds that are, in effect, forced sellers.
The above factors have seen the prices of listed
shares in resources companies fall sharply across the
board as falls in one sub-sector impacted on others
due to the increased opportunity cost of capital.
GOLD
One of the largest falls in commodity prices has been
the US dollar price of gold, which peaked at $1,800
in October 2012, but fell precipitously thereafter,
reaching a low of $1,200 in June.
Source: London Afternoon (PM) Gold Price Fix
Prior to this sharp decline, the price of gold had sustained
a long rally. Some market observers had highlighted the
risks of a global financial crisis – as in fact did occur in
2008, and thus investors turned their attention to gold
which prior to then had been out of favour as a financial
investment. As monetary authorities responded to the
financial crisis with large liquidity injections, the price
of gold rose ever higher – for a time being seen as a
safer store of value than the US dollar. The reversal,
or rather the signalling of the reversal of monetary
liquidity operations by the Federal Reserve, has reversed
sentiment around gold in favour of the US dollar.
OIL & GAS
Meanwhile certain other commodities, notably oil,
either held up well, or actually increased in price. Various
political events, notably those in Egypt and Syria, have
been cited as reasons for the firmness in the price of oil.
Source: US Energy Information Administration
A notable development in energy commodities markets
has been the significant increase in development in
North America of both shale oil and shale gas. The
biggest impact has been on the price of natural gas in
the United States; it will take some time for this to fully
impact on the price of natural gas in other countries,
but in the short term it has removed any idea that the
United States will be a major importer of natural gas.
2 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 3
INVESTMENT MANAGER’S REPORT continued
In the context of the sharp decline in asset prices
generally across the resources sector, we have taken a
long term view and selectively targeted investments
that are strong value plays in resources companies.
In many – but not all – cases these companies have
limited downside risk, either because the companies
have substantial cash reserves, or are relatively low
cost producers, or both. A minority of the investments
undertaken are toward the higher risk, higher potential
reward end of the spectrum, but nevertheless still
represent good value on a risk-adjusted basis.
As part of the scheme of arrangement Zeta acquired
the assets of Kumarina, which is now a 100%-owned
subsidiary of Zeta. Given the high opportunity cost
of capital, we have elected to pursue a modest
capital expenditure programme on drilling, and the
results to date have been pleasing. Another unlisted
investment that we are excited about is Seacrest LP
(“Seacrest”). Both of these investments, along with
the largest listed investments, are discussed below.
CAPITAL STRUCTURE
It is worth noting that Zeta is a closed-end investment
company, in contrast to open-ended mutual funds
and unit trusts. As resources shares have fallen in price,
relative value has increased. This is little comfort to open-
ended investment funds that have been forced sellers,
exacerbating the already steep falls in resources share
prices. For Zeta, however, it provides the opportunity to
invest at good valuations for the long term.
At the time Zeta was listed, no significant new equity
was raised. Given our strong view that the resources
sector offers long term value, the board of Zeta
agreed to a modest debt facility, provided by Zeta’s
majority shareholder Utilico. The facility was initially
for A$5.0 million, of which the full A$5.0 million
(US$4.58 million) was drawn as of 30 June 2013.
As at 30 June 2013, Zeta had gross assets of US$48.9
million. Of this figure, $24.8 million was invested in the
oil & gas sector; $21.7 million was invested in the gold
sector; and the remaining $2.4 million was invested in
other commodity-based resources investments.
FINANCIAL RESULTS
The consolidated net loss after tax for the year
was US$9,338,686. The majority of the consolidated
net loss is comprised of a write-down of listed
Sectoral Split of Investments
As at 30 June 2013
Geographical Split of Investments
As at 30 June 2013
investments (marked to market) and the impairment
of goodwill as at 30 June to account for financial
assets being recognised at fair value.
LARGEST INVESTMENTS
The following review of Zeta’s largest investments
at year end is divided into two sections – oil & gas,
and gold.
Oil & Gas
NZOG
New Zealand Oil & Gas Limited (“NZOG”) is New
Zealand’s largest listed oil & gas exploration and
production (“E&P”) firm. As New Zealand is relatively
isolated geographically, it is also relatively unexplored.
The downside of its isolation, from an exploration
and development perspective, is that it is difficult to
attract the attention of oil rig operators. There can
be periods of years between drilling programmes, and
the various explorers and developers in New Zealand
generally join together to form a “rig club”.
While NZOG has not conducted any drilling in New
Zealand for some years, the next year will be active.
In the meantime NZOG has substantial cash reserves
(NZ$158.0m as at 30 June 2013), due partly to healthy
production from its offshore Taranaki, New Zealand,
oil interests (Kupe 15%, Tui 12.5%), and partly to the
exercise of warrants some years ago at a significantly
higher price than the current share price.
In the year to 30 June 2013 NZOG’s revenues were
ahead of forecasts, albeit down on the previous year
which is normal for oil production in the absence
of new exploration. In June 2013 the company
announced promising results from its joint venture
(22.5%) drilling in Kisaran, Indonesia; further work
is needed to prove up whether the results can be
developed commercially. In Tunisia, the company
decided not to pursue further work on the Cosmos
prospect, a decision we supported as the potential
capital expenditure costs were substantial.
The coming year will be an active one for drilling.
Even accounting for that, NZOG still has more than
adequate cash reserves, and it is our hope that excess
cash will be returned to shareholders, preferably in
the form of a buy-back.
Seacrest
Seacrest LP, founded in 2010, is a Bermuda-based
seismic specialist oil exploration firm. Seacrest has
a large team of petroleum geologists, and access to
one of the world’s largest seismic databases. Whereas
individual oil explorers may have access to seismic data
over the permit areas they own, Seacrest often has
access to detailed, modern seismic data over the entire
regional basin. As such, it can add value by developing a
better understanding of oil migration patterns.
Seacrest’s objective is to build a portfolio of high
impact, de-risked and “drill ready” prospects. The
company has established a handful of regionally-
focused subsidiaries. Each of these subsidiaries has
acquired a collection of exploration permits, which
are in general being funded by free carries from farm-
ins to operating drill companies.
Gold
Resolute
Our largest investment in gold mining is in Resolute
Mining Limited (“Resolute”). Resolute’s share price
has declined in the wake of the sharp drop in the
gold price. Resolute’s shares also suffered from
negative perceptions surrounding Mali, where the
company has its largest mining operations at Syama,
in the south of the country.
Nevertheless, as a mid-cost producer of gold,
Resolute’s operations have continued according to
plan. Production during the financial year ended
June 2013 was over 435,000 ounces, comfortably
exceeding forecasts, and cash costs of A$811 per
ounce were lower than forecast. The average gold
price realised was A$1,562 per ounce, down from
A$1,627 the previous year. Forecast production for the
year to 30 June 2014 is 345,000 ounces at an average
cost of A$890 per ounce, with reduced production
in line with expectations due to the closure of the
Golden Pride operation in Tanzania having reached
the end of its mine life.
While the company has scaled back its future capital
expenditure plans somewhat, it has continued to produce
excess cash flows, and has taken advantage of the bear
market in gold company shares (and subsequent lack of
investment capital) to make investments in other gold
companies and projects. We believe Resolute’s year-end
share price of A$0.59 fundamentally undervalues the
company’s long term prospects.
Centamin
Centamin plc (“Centamin”) is an Arabian-Nubian
Shield focused gold exploration, development and
mining company. Centamin’s principal asset, the
Sukari Gold Mine in the eastern desert of Egypt,
began production in 2009 and is the first large-scale
modern gold mine in Egypt. The company also has
four exploration projects in northern Ethiopia.
As Sukari is a surface mine, its costs are low by
international standards, especially in comparison
to expensive underground mines. Centamin’s gross
margins, therefore, are good, even in the wake of the
recent sharp drop in gold prices. The shares are cheap
by normal investing metrics such as price-to-earnings
ratio, and enterprise value to cash flows. However, of
all the investments made by Zeta to date, Centamin
has the highest political risk, having its principal
operations located in Egypt.
The outlook for Egypt’s stability
is uncertain.
Centamin may be sheltered somewhat in that the
Egyptian government is a co-investor in the Sukari
mine; it is therefore in the government’s interest for
the mine to succeed. In addition there has been a
challenge to the company’s mining title and the
4 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 5
INVESTMENT MANAGER’S REPORT continued
FIVE LARGEST HOLDINGS
As at
30 June 2013
Company (Country of principal activity)
Fair Value
USD 000
% of Total
Investments
New Zealand Oil & Gas Limited
(New Zealand)
20,385
Resolute Mining Limited
(Mali, Australia)
Centamin Plc
Kumarina Resources Limited– unlisted
Seacrest LP – unlisted
Other investments
Total Portfolio
(Egypt)
(Australia)
(Global)
4,968
4,785
4,296
3,250
2,842
50.3%
12.3%
11.8%
10.6%
8.0%
7.0%
40,526
100.0%
1
2
3
4
5
The value of the five largest holdings represents 93.0% of the group’s total investments. The country shown is the
location of the major part of the company’s business. The total number of companies included in the portfolio is
10. The Kumarina fair value is stated at the value of the gold tenements at year end.
Kumarina Tenement Schedule
Project Area Tenement ID
Ownership
Comments
Ilgarari
E52/2274
100%
Murrin Murrin
M39/1068
M39/397
M39/398
M39/399
M39/400
M39/0371
100%
100%
100%
100%
100%
0%
M39/0372
0%
P39/5230
P39/5231
P39/5232
P39/5233
P39/5234
P39/5235
P39/5236
P39/5237
P39/5238
100%
100%
100%
100%
100%
100%
100%
100%
100%
Gold and Base
Metals Rights
Gold and Base
Metals Rights
hearing is slowly moving through the court. The
company fully expects to rebuff this challenge.
In the context of a portfolio of investments, Zeta has
chosen to hold a portion of the company’s assets
in Centamin, noting that it has the highest political
risk, but also the highest potential returns should the
situation stabilise.
Kumarina
Kumarina is a 100%-owned subsidiary of Zeta. The
company is focused on two prospective projects
in Western Australia. Following the scheme of
arrangement by which Kumarina became part of Zeta,
we have elected to pursue a modest programme of
capital expenditure given the high opportunity cost
of capital in the sector. Nevertheless, results of this
programme have been encouraging.
Kumarina announced a maiden resource at the Ilgarari
copper project in November 2012 of copper oxide
resources of 1.1 million tonnes at 1.89% Cu for 20,940
tonnes of contained copper. Whilst the company’s
primary focus has been on exploration directed at
the discovery of primary sulphide mineralisation, the
oxide copper resource at Ilgarari has potential to be
developed as a heap leach operation. Further drilling
directed at expanding the near surface resource
combined with large scale column tests to generate
more certain leach kinetics are being considered as a
future option for the oxide resource. In the meantime
a review of the company’s tenement holdings in
the region was completed in June that resulted in
relinquishing a number of licenses.
At the Murrin Murrin copper-gold project, Kumarina
completed 67 RC drill holes for a total of 4,668
metres in the year to 30 June 2013. Other work
programs included low level aeromagnetic survey,
metallurgical test work, preliminary pit optimisation
studies and site rehabilitation. The results from the
drilling programs indicate that potential exists to
delineate an economic mineable resource at the
Malcolm Challenger project. Further drilling will be
required to complete a mine study, but work on mine
planning has been deferred for the time being due to
the unfavourable market conditions.
6 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 7
REVIEW OF THE FIVE LARGEST HOLDINGS
NEW ZEALAND OIL & GAS LIMITED (NEW ZEALAND)
www.nzog.com
Market Cap: US$264.2 million
New Zealand Oil & Gas Limited is an independent New Zealand
oil & gas exploration and production company, with exposure
to two relatively low cost production assets in New Zealand:
the Kupe gas and oil field (15% partner) and Tui area oil fields
(12.5% partner). In addition, NZOG has an exploration portfolio in
New Zealand, Indonesia and Tunisia. NZOG is listed on both the
New Zealand and Australian stock exchanges. While the price
of oil has increased recently, NZOG’s share price has increased
just 3% during the 12 months to June 2013. During this period
the company paid a dividend of 6 cents, which represents a net
yield of 7%. Full year results to 30 June 2013, while behind the
previous year, were above forecasts with revenues at NZ$98.0
million due largely to an increased oil price during the year. Cash
flow from operating activities was NZ$54.3 million. At year end
NZOG had NZ$158 million (US$122 million) of net cash. The next
year is likely to be active, with drilling expected to continue in
Indonesia, and an active drilling programme in offshore Taranaki,
New Zealand, for the first time in some years.
RESOLUTE MINING LIMITED (AUSTRALIA)
www.resolute-ltd.com.au
Market Cap: US$349.3 million
Resolute Mining Limited is an unhedged gold producer, with long
life mines at Syama in Mali and Ravenswood in Australia. In the
year to June 2013 Resolute’s various operations yielded 436,000
ounces of gold, an increase of +9.4% year-on-year, at an average
cash cost of A$811 per ounce. During the year the price of gold
dropped significantly, falling from a peak of almost US$1,800
in October to a low of US$1,200 in June. Resolute’s share price
suffered accordingly, falling 56% in the 12 months to June 2013.
While civil unrest in the north of Mali and an intervention by
France there also influenced perceptions regarding Resolute, the
company’s Syama operations in the south of the country continue
to be unaffected. In the wake of falling gold prices, the company
has scaled back its capital expenditure plans, and instead used
cash flows to make select investments in other gold companies. As
a mid-cost producer, it is expected that the company’s production
will continue unhindered.
CENTAMIN PLC (UNITED KINGDOM)
www.centamin.com
Market Cap: US$527.7 million
Centamin Plc is a low-cost gold producer based in Egypt. The
company’s share price has suffered in the wake of the fall in the
gold price, concerns around political events in Egypt, and the
fact that the company is subject to two court cases brought
by the Egyptian government. The first court case pertains to
the company’s right to fuel subsidies; the other is regarding the
company’s license to operate. It is expected that even if the
company loses its operating license it will be able to renegotiate
a new one with the Egyptian government. Operationally, the
company has continued to perform well, with cash costs for
calendar 2013 projected to be US$700 per ounce and production
of c. 320,000 ounces. The Sukari mine has a long life, with
approximately 10m ounces of gold in reserves. The company also
has substantial cash reserves on its balance sheet, and no debt. A
substantial plant expansion is being funded from cost recoveries,
and is expected to be commissioned during the second half of
calendar 2013. The company is targeting annual production of
500,000 ounces by 2015.
KUMARINA RESOURCES LIMITED (AUSTRALIA)
www.kumarina.com
Market Cap: N/A - Unlisted
Kumarina was incorporated in Western Australia on 24 March
2010 and was subsequently admitted to the official list of ASX on
13 December 2011. Following its successful initial public offering,
which raised A$10.3 million, the company has completed
a number of exploration programs aimed at upgrading the
exploration assets. These programs included drilling, geophysical
surveys, compiling of electronic data bases, resource estimations
and geological mapping. The exploration completed to date has
been successful in extending mineralisation at both the Ilgarari
Project and the Murrin Murrin Project, both of which are located
in Western Australia. Further exploration work will depend in
part on market conditions as to timing.
SEACREST LP (BERMUDA)
www.seacrest.com
Market Cap: N/A - Unlisted
Seacrest is an unlisted Bermuda-based private seismic specialist
oil explorer. With a large team of petroleum geologists, the
company is creating value by offering a better understanding
of regional seismic patterns in oil and gas exploration basins
globally. Seacrest’s commercial approach is to join with operating
exploration firms, and acquiring interests in joint ventures through
farm-ins. Seacrest has established a number of subsidiaries with
regional focuses.
8 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 9
INVESTMENT TEAM
CORPORATE GOVERNANCE STATEMENT
DUGALD MORRISON
INVESTMENT APPROACH
1.
Introduction
4. Board Independence
returns
for
is to maximise total
Zeta’s aim
shareholders by identifying and investing in assets
and companies where the underlying value is not
reflected in the market price. The company invests in
a range of resources entities, including those focused
on oil and gas, gold and base metals exploration and
production.
Zeta intends to have a mid to long term investment
horizon and does not expect to be trading its
positions on a frequent basis. Zeta will also work
with its investee companies to seek to maximise
their value and may make follow-on investments
into these companies or increase investment through
market purchases as appropriate.
Zeta may acquire majority or minority positions
in its target investments. Although Zeta’s initial
portfolio will consist of minority positions, Zeta will
also consider opportunities which will maximise its
ability to contribute as a proactive investor, with a
view to actively extracting value for both its own
investors and investors in the underlying investee
companies. This proactive approach may include
taking significant or full ownership positions in
companies, bringing about management change
and encouraging strategies to maximise shareholder
value and return.
Dugald Morrison, based in Wellington, New Zealand,
is the General Manager for ICM New Zealand. He
has extensive investment analysis experience, having
worked in stockbroking, investment banking and
investment management firms in New Zealand, the
United Kingdom, and the United States since 1987.
Mr Morrison is a director of RESIMAC Financial
Services Limited and Brightwater Group Limited, and
a member of the New Zealand Institute of Directors.
DUNCAN SAVILLE
Mr Saville is a chartered accountant and is a director
of ICM Limited. He is a non-executive director of
Infratil Limited. He was formerly a non-executive
director of Utilico Investment Trust plc and is an
experienced director having previously been a non-
executive director in both the water and airport
sectors.
ALASDAIR YOUNIE
Alasdair Younie is a director of ICM Limited. Based
in Bermuda he is a qualified chartered accountant
with significant experience in corporate finance
and corporate investment. Mr Younie qualified as a
chartered accountant with PricewaterhouseCoopers
and subsequently worked for six years within
the corporate finance department of Arbuthnot
Securities Limited in London. Mr Younie is a director
of AK Jensen Group Limited and Vix Holdings Limited
and is a member of the Institute of Chartered
Accountants in England and Wales.
JONATHAN GROOCOCK
Jonathan Groocock, has been involved in the running
of ICM Limited funds since February 2011. Prior to
joining the investment team Mr Groocock was an
equity research analyst at Investec and is a CFA
charterholder.
The board of directors of Zeta Resources
Limited has adopted the following Corporate
Governance Principles promulgated by the ASX
Corporate Governance Council (“Council”) and is
responsible for the adherence to these Principles.
These Principles and Practices will be reviewed
regularly and upgraded or changed to reflect
changes in law and what is regarded as best
practice. A description of the company’s main
Corporate Governance Principles and Practices is
set out below.
2. Role of the Board
The board has adopted the following Statement
of Matters for which the board will be responsible:
(a) review and determine the company’s strategic
direction and operational policies;
(b) review and approve business plans, budgets
and forecasts and set goals for management;
(c) appoint and remunerate senior staff (if any);
(d) review performance of senior staff (if any);
(e) review performance of the Investment
Manager (as defined below);
(f) review financial performance against Key
Performance Indicators on a monthly basis;
(g) approve capital, development and other large
expenditures;
(h) review risk management and compliance;
(i) oversee the company’s control and
accountability systems;
(j) report to shareholders; and
(k) ensure compliance with environmental, taxation,
Corporations Act, the Bermudan Companies Act
1981 and other applicable laws and regulations.
3. Investment Manager
Zeta has entered into an Investment Management
ICM Limited, pursuant to
Agreement with
which ICM Limited acts as investment manager
(“Investment Manager”). The Investment Manager
recommends policies, strategic direction and
business plans for the board’s approval and is
responsible for managing the company’s day-to-
day business.
(a) The board consists of three directors, but up
to 10 directors can serve on the board. There
are no executive directors. All of the directors
are non-executive. The current directors are:
Peter Sullivan, Non-Executive Chairman,
57 years, Appointed June 2013
Xi Xi, Non-Executive Director,
37 years, Appointed June 2013
Marthinus Botha, Non-Executive Director,
54 years, Appointed June 2013
(b) Ms Xi and Mr Botha are considered
independent directors on the board, according
to the guidelines of the Council.
(c) As a result, the company complies with the
Council’s recommendation, Item 2.1, that the
majority of the company’s directors should be
independent directors. In addition, the board
has adopted a series of safeguards to ensure
that independent judgement is applied when
considering the business of the board:
(i) Directors are entitled to seek independent
professional advice at the company’s
expense. Prior written approval of the
is not
Chairman
unreasonably withheld.
is required but this
(ii) Directors having a conflict of interest
with an
item for discussion by the
board must absent themselves from a
board meeting where such item is being
discussed before commencement of
discussion on such topic.
(iii) The independent directors confer on a
"needs" basis with the Chairman with such
discussion if warranted and considered
necessary by the independent directors.
(iv) The board
considers non-executive
directors to be independent even if they
have minor dealings with the company,
provided they are not a substantial
shareholder. Transactions with a value
in excess of 5% of the company’s annual
operating costs are considered material.
A director will not be considered
in
independent
transactions with the company that are in
excess of this materiality threshold.
if he/she
involved
is
10 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 11
CORPORATE GOVERNANCE STATEMENT continued
5. Tenure of the Board
(a) The directors are expected to review their
membership of the board from time to time
taking into account the length of service on
the board, age, qualification and experience.
In accordance with the company’s Bye-laws
and in light of the needs of the company
and direction of the company together with
such other criteria considered desirable for
composition of a balanced board and the
overall interests of the company.
(b) A director is expected to resign if the remaining
directors recommend that a director should not
continue in office, but is not obliged to do so.
6. Chairman
(a) Peter Sullivan has been appointed as Chairman
of the company. Mr Sullivan brings a wealth
of business experience, connections and drive
to the board. As Mr Sullivan is a substantial
shareholder he is not considered to be
independent.
(b) The Chairman’s role includes:
(i) providing effective leadership on
formulating the board’s strategy;
(ii) representing the views of the board to
the public;
(iii) ensuring that the board meets at regular
intervals throughout the year and that
minutes of meeting accurately record
decisions taken and where appropriate
the views of individual directors;
(iv) guiding the agenda, information flow and
conduct of all board meetings;
(v) reviewing the performance of the board
of directors; and
(vi) monitoring the performance of the
management of the company.
7. Nomination Committee
(a) Due to the small size of the company and the
number of board members, the board does
not have a formal nomination committee
structure. Any new directors will be selected
according to the needs of the company at
that particular time, the composition and the
balance of experience on the board as well as
the strategic direction of the company.
(b) Should the need arise to consider a new board
member, some or all of the directors would
form the committee to consider the selection
process and appointment of a new director.
(c) At each annual general meeting the following
directors retire:
(i) one third of directors (excluding the
Managing Director, if any);
(ii) directors appointed by the board to fill
casual vacancies or otherwise; and
(iii) directors who have held office for more
than three years since the last general
meeting at which they were elected.
8. Ethical and Responsible Decision-Making
(a) In making decisions, the directors of the
company, its officers and employees, take into
account the needs of all stakeholders:
(i)
the company;
(ii) shareholders;
(iii) employees;
(iv) the community;
(v) creditors;
(vi) contractors; and
(vii) governments which are relevant to the
company’s business and operations.
(b) The directors, officers and employees of the
company are expected to:
(i) comply with the laws and regulations both
by the letter and in spirit;
(ii) act honestly and with integrity;
(iii) avoid conflicts of interest by not placing
themselves in situations which result in
divided loyalties;
(iv) use the company’s assets responsibly and
in the interests of the company, not take
advantage of property, information or
position for personal gain or to compete
with the company;
(v) keep non-public information confidential
except where disclosure is authorised or
legally mandated; and
(vi) be
responsible and accountable
for
their actions and report any unethical
behaviour.
9. Trading in Company Securities
(a) The company encourages directors and
employees to adopt a long-term attitude to
their investment in the company’s securities.
In accordance with Corporate Governance
formulated
principals the company has
a Securities Trading Policy. All directors
and employees (including their immediate
family or any entity for which they control
investment decisions), must ensure that any
trading in securities issued by the company is
undertaken within the framework set out in
the Securities Trading Policy.
(b) The Securities Trading Policy does not
prevent directors or employees (including
their immediate family or any entity for
which they control investment decisions)
from participating in any share plan or share
offers established or made by the company.
However, directors or employees
are
prevented from trading in the securities once
acquired if the individual is in possession of
information not generally
price sensitive
available to all security holders.
(c) In
recent
Listing Rule
keeping with
amendments, additional
restrictions are
placed on trading by directors and other
personnel as determined by the Chairman and
Company Secretary from time to time (“Key
Management Personnel”).
(d) Key Management Personnel must not deal in
company securities at any time if in possession
of any inside information relating to those
securities.
(e) In addition to the overriding prohibition
against dealing in the company’s securities
when a person is in possession of inside
information, Key Management Personnel
and their associated parties are at all times
prohibited from dealing in the company’s
securities during prescribed ‘closed’ periods
(“Closed
company has
nominated Closed Periods to be during the
week prior to the release of the company’s
Quarterly
exceptional
Reports
circumstances apply.
Periods”). The
unless
(f) The Securities Trading Policy also includes a
clause prohibiting directors and executives
(if any) from entering into transactions in
associated products which operate to limit
the economic risk of security holdings in the
company over unvested entitlements.
(g) In accordance with Listing Rules, a director
must notify the ASX within 5 business days
after any change in the director’s relevant
interest in securities of the company or a
related body corporate of the company.
(h) A director must notify the Company Secretary
in writing of the requisite information within
2 business days in order for the Company
Secretary to make the necessary notifications
to ASIC and ASX as required by the ASX
Listing Rules.
10. Integrity of Financial Reporting
Zeta’s Chairman and Investment Manager will
report in writing to the board:
(a) That the company’s financial reports are
complete and present a true and fair view, in
all material respects, of the financial condition
and operational results of the company and
group; and
(b) That the above statement is founded on a
sound system of internal control and risk
management which implements the policies
adopted by the board and that the company’s
risk management and internal controls are
operating efficiently in all material respects.
11. Audit Committee
(a) The company does not have a formal
in the opinion of
audit committee as,
the directors, the scope and size of the
company’s operations do not warrant it. As
such the company is not in compliance with
the Council’s Recommendation 4.2, that the
board should establish an audit committee.
(b) The board will regularly review the scope of
external audits, the level of audit fees and
the performance of auditors. In addition the
board will assess the ongoing independence
of the external auditor and will, if necessary,
use other consultants to avoid any potential
independence issues.
12 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 13
CORPORATE GOVERNANCE STATEMENT continued
12. Timely and Balanced Disclosure to the
Australian Securities Exchange
(a) The company has procedures in place to
identify matters that are likely to have a material
effect on the price of the company’s securities
and to ensure those matters are notified to the
Australian Securities Exchange in accordance
with its listing rule disclosure requirements.
(b) The distribution of information to the market
and media will be handled by the Chairman
or the Company Secretary. The Company
Secretary has been nominated as the person
responsible for communications with the
Australian Securities Exchange. This role
includes responsibility for compliance with
the continuous disclosure requirements of the
Australian Securities Exchange Listing Rules
and overseeing and coordinating information
the Australian Securities
disclosures
Exchange, analysts, brokers, shareholders the
media and the public.
to
(c) All disclosures to the Australian Securities
Exchange will be posted on the company’s
website soon after clearance has been received
from the Australian Securities Exchange.
(d) The Chairman and Company Secretary will
monitor information in the marketplace to
ensure that a false market does not emerge in
the company’s securities.
13. Communication with Shareholders
(a) It is the company’s communication policy to
communicate with shareholders and other
stakeholders in an open, regular and timely
manner so that the market has sufficient
information to make informed investment
decisions on the operations and results of
the company.
(b) The information will be communicated to the
shareholders through:
(i) continuous disclosure announcements
made to the Australian Securities Exchange;
(ii) distribution of the annual report to
shareholders together with a notice of
meeting;
(iii) posting of half-yearly
Australian
and
all
Exchange
announcements on the company’s website;
Securities
results
(iv) posting of all major drilling results;
(v) posting of all media announcements on
the company’s website; and
(vi) the calling of annual general meetings,
and other meetings of shareholders, as
required, and to obtain approval for board
action as considered appropriate.
On the company’s website, information about
the company’s projects will be shown.
(c) At annual general meetings and other general
meetings of shareholders, shareholders will
be encouraged to ask questions of the board
of directors relating to the operation of
the company.
14. Risk Management
Due to its size of operation and size of the board,
there is no formal board committee to identify,
assess and monitor and manage risk. Responsibility
for day-to-day control and risk management lies
with the
Investment Manager and Company
Secretary (financial risk) with reporting responsibility
to the board. The board will monitor risks including
but not limited to compliance with development
and environmental approvals, tendering, contracting
and development, pricing of products, quality,
safety, strategic issues, financial risk, joint venture,
accounting and insurance. Any changes in the risk
profile for the company will be communicated
to its stakeholders via an announcement to the
Australian Securities Exchange.
15. Performance
(a) The board has adopted a self-evaluation
process to measure its own performance.
The Chairman evaluates the performance of
each director and the board evaluates the
performance of the Chairman. If the company
has any executives or senior staff, the
board will be responsible for evaluating the
performance of those executives and senior
staff. All performance evaluations will be
measured against budget, goals and objectives
set.
(b) All directors of the board have access to the
Company Secretary who is appointed by the
board. The Company Secretary reports to the
Chairman, in particular to matters relating to
corporate governance.
(c) All board members have access to professional
independent advice at
the company’s
expense provided they first have obtained
the Chairman’s approval which will not be
unreasonably withheld.
business activities and should the need arise,
will consider employing executives or senior
staff capable of managing the company’s
operations.
(c) General
16. Remuneration
(a) Directors
the
(i) The non-executive directors including the
Chairman are eligible to receive a fixed
directors’ fee. The maximum aggregate
amount of fees which could be paid to
non-executive directors, as authorised by
the company’s Bye-laws is $200,000pa.
company’s
The objective of
remuneration policies, processes and
practices are
retain
appropriately qualified and experienced
directors who will add value by adopting
competitive remuneration and reward
programmes which are fair and responsible
and aligned with shareholder objectives.
Remuneration is also determined having
regard to how directors are remunerated
for other similar companies, the time
spent on the company’s matters and the
performance of the company.
to attract and
(ii) The company does not have a Managing
for managing
Director. Responsibility
the company’s day-to-day business
is
undertaken by the Investment Manager,
under the terms of the
Investment
Management Agreement. The board
will continue to monitor the company’s
if circumstances
circumstances and,
change and the board considers
it
appropriate, the board may appoint a
Managing Director.
(iii) The board has no retirement or termination
benefits.
(b) Senior Executives
The Investment Manager is responsible for
managing the company’s day-to-day business.
Due to the size of its operations, the company
does not have any senior executive employees.
The board will monitor the company’s
(i) The company does not have a separate
remuneration committee. The board
considers that the company
is not
currently of a size, nor are its affairs of such
complexity to justify the formation of a
remuneration committee. The board as a
whole is responsible for the remuneration
arrangements for directors and executives
(if any) of the company and considers it
more appropriate to set aside time at
board meetings each year to specifically
address matters that would ordinarily fall
to a remuneration committee.
(ii) The company does not operate an
employee share option plan and there
are no options outstanding issued to
directors.
17. Interests of Stakeholders
(a) It is the company’s objective to create wealth
for its shareholders and provide a safe and
challenging environment for employees (if
any) and for the company to be a valuable
member of the community as a whole.
(b) The company’s ethical and
responsible
behaviour is set out under the heading “Ethical
and Responsible Decision-making”.
(c) The company’s core values are summarised as
follows:
(i) provide value to its shareholders through
growth in its market capitalisation;
(ii) act with integrity and fairness;
(iii) create a safe and challenging workplace;
(iv) be participative and recognise the needs
of the community;
(v) protect the environment;
(vi) be commercially competitive; and
(vii) strive for high quality performance and
development.
14 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 15
CORPORATE GOVERNANCE STATEMENT continued
18. Diversity Policy
(a) Due to the scope and size of the company’s
operations, the board does not have a
formal diversity policy in line with the ASX’s
Corporate Governance guidelines.
(b) The company believes that the promotion
of diversity on its board and within the
organisation generally is good practice.
(c) The board acknowledges the benefits of
and will seek to achieve diversity during the
process of employment at all levels without
detracting from the principal criteria for
selection and promotion of people to work
within the company based on merit.
(d) The board believes that there is no detriment
to the company in not adopting a formal
diversity policy or in not setting gender
is
diversity objectives as the company
committed
to providing all employees
with fair and equal access to employment
opportunities and nurturing diversity within
the company. This is evident as one of the
three board members is a woman (Ms Xi Xi
(non-executive director)).
(e) The board will regularly review the size of
its operations and will, if necessary, adopt a
formal diversity policy and gender diversity
objective as appropriate.
ASX Principles and Recommendations
Status
1
Lay solid foundations for management and oversight
Companies should establish and disclose the respective roles and responsibilities of board and management
1.1
1.2
Companies should establish the functions
reserved to the board and those delegated to
senior executives and disclose those functions
Compliant. The role of the board, delegations of authority,
and powers of the board have been set out in a ‘Statement
of Matters’ included in the Corporate Governance Statement
and disclosed on the company website.
Companies should disclose
the process
for evaluating the performance of senior
executives
Non-compliant. The board does not currently have a formal
policy for the evaluation of the performance of its senior
executives because it does not have any employees. As the
company progresses, and hires/wishes to hire executives, the
board intends to establish formal, quantitative and qualitative
performance evaluation procedures.
1.3
Companies should provide the information
indicated in the Guide to reporting on Principle 1
Compliant. Disclosed
Statement.
in the Corporate Governance
2
Structure the Board to add value
Companies should have a board of an effective composition, size and commitment to adequately discharge its
responsibilities and duties
2.1
A majority of the board should be independent
directors
Compliant. The board currently comprises 3 directors
2 of whom are considered independent.
2.2 The chair should be an independent director
Non-compliant. The company does not have an independent
chairman. Mr Peter Sullivan is a substantial shareholder and is
therefore not considered to be independent in accordance
with the ASX Principles and Recommendations.
Due to the company’s size, its operations, the size of the
board, and that Mr Peter Sullivan’s interests in the company
align with shareholders; the board does not consider it
necessary to have an independent chair. Furthermore,
the board considers Mr Peter Sullivan brings significant
value to his role as chair due to his vast experience in the
resources sector.
2.3
The roles of chair and chief executive officer
should not be exercised by the same individual
Compliant. The company does not have a chief executive
officer but delegates executive responsibility to a
management company ICM Limited.
2.4 The board should establish a nomination
committee
Non-compliant. The board has considered the need for
a nomination committee, and believes that the company
is not of a size to justify the establishment of a separate
committee. It is therefore more appropriate for such
responsibilities to be met by the full board rather than a
separate committee.
16 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 17
CORPORATE GOVERNANCE STATEMENT continued
ASX Principles and Recommendations
Status
2.5 Companies should disclose the process for
evaluating the performance of the board, its
committee and individual directors
2.6 Companies should provide the information
indicated in the Guide to reporting on
Principle 2
Compliant. The board has adopted a self-evaluation process
to measure its own performance. The Chairman evaluates
the performance of each director and the board evaluates
the performance of the Chairman. If the company has any
executives or senior staff, the board will be responsible for
evaluating the performance of those executives and senior
staff. All performance evaluations will be measured against
budget, goals and objectives set.
Compliant. Disclosed
in the Corporate Governance
Statement and Director’s sections on the company website.
The current board, appointed on 7 June 2013, has not yet
undertaken any performance evaluation as required in the
Corporate Governance Statement.
3
Promote ethical and responsible decision-making
Companies should actively promote ethical and responsible decision-making
3.1
Companies should establish a code of conduct
and disclose the code or a summary of the
code as to:
•
the practices necessary to maintain
confidence in the company’s integrity
the practices necessary to take into account
their legal obligations and the reasonable
expectations of their stakeholders
the responsibility and accountability of
individuals for reporting and investigating
reports of unethical practices
•
•
3.2 Companies
a policy
should establish
concerning diversity and disclose the policy
or a summary of that policy. The policy
should include requirements for the board to
establish measureable objectives for achieving
gender diversity and for the board to assess
annually both the objectives and progress in
achieving them.
Compliant. The company’s Corporate Governance
Statement addresses these practices and issues, and is
included on the company’s website.
Non-compliant. Due to the scope and size of the
company’s operations, and in particular the engagement
of the Investment Manager, the board does not have a
formal diversity policy in line with the ASX’s Corporate
Governance guidelines.
The company believes that the promotion of diversity on its
board and within the organisation generally is good practice.
The board acknowledges the benefits of and will seek to
achieve diversity during the process of employment at all
levels without detracting from the principal criteria for
selection and promotion of people to work within the
company based on merit.
The board believes that there is no detriment to the company
in not adopting a formal diversity policy or in not setting gender
diversity objectives as the company is committed to providing
all employees with fair and equal access to employment
opportunities and nurturing diversity within the company. This
is evident as one of the three board members is a woman (Ms
Xi Xi (non-executive director)).
The board will regularly review the size of its operations and
will, if necessary, adopt a formal diversity policy and gender
diversity objective as appropriate.
the measureable objectives
3.3 Companies should disclose in each annual
for
report
achieving gender diversity set by the board
in accordance with the diversity policy and
progress in achieving them.
3.4 Companies should disclose in each annual
report the proportion of women employees
in the whole organisation, women in senior
executive positions and women on the board.
Non-compliant. Refer 3.2
Non-compliant. Refer 3.2
3.5 Companies should provide the information
in the Guide to reporting on
indicated
Principle 3.
Non-compliant. Refer 3.2
4
Safeguard integrity in financial reporting
Companies should have a structure to independently verify and safeguard the integrity of their financial
reporting
4.1
The board should establish an audit committee Non-compliant. The company does not have a formal
audit committee as, in the opinion of the directors, the
scope and size of the company’s operations do not warrant
it. As such, the company is not in strict compliance with
the Council’s Recommendation 4.2, that the board should
establish an audit committee.
The board will regularly review the scope of external audits,
the level of audit fees and the performance of auditors. In
addition, the board will assess the ongoing independence
of the external auditor and will, if necessary, use other
consultants to avoid any potential independence issues.
4.2 The audit committee should be structured so
Non-compliant. Refer 4.1
that it:
•
•
•
•
consists only of non-executive directors
consists of a majority of independent
directors
is chaired by an independent chair, who is
not a chair of the board
has at least three members
4.3
The audit committee should have a formal
charter
Non-compliant. Refer 4.1
4.4 Companies should provide the information
in the Guide to reporting on
indicated
Principle 4
Non-compliant. Refer 4.1
18 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 19
CORPORATE GOVERNANCE STATEMENT continued
ASX Principles and Recommendations
Status
5 Make timely and balanced disclosure
Companies should promote timely and balanced disclosure of all material matters concerning the company
5.1
Companies should establish written policies
designed to ensure compliance with ASX
Listing Rules disclosure requirements and to
ensure accountability at a senior executive
level for that compliance and disclose those
policies or a summary of those policies
5.2 Companies should provide the information
in the Guide to reporting on
indicated
Principle 5
Compliant. The company’s policies and procedures
for compliance with the ASX Listing Rule disclosure
requirements are included in the company’s Corporate
Governance Statement on the company website.
Compliant. Disclosed
Statement on the company website.
in the Corporate Governance
6
Respect the rights of shareholders
Companies should respect the rights of shareholders and facilitate the effective exercise of those rights
6.1
Companies should design a communications
policy for promoting effective communication
with shareholders and encouraging their
participation at general meetings and disclose
their policy or a summary of that policy
6.2 Companies should provide the information
in the Guide to reporting on
indicated
Principle 6
Compliant. The company has a policy of communicating
in an open, regular and timely manner with shareholders.
Compliant. Disclosed
Statement on the company’s website.
in the Corporate Governance
7
Recognise and manage risk
Companies should establish a sound system of risk oversight and management and internal control
7.1
Companies should establish policies for the
oversight and management of material business
risks and disclose a summary of those policies
7.2
The board should require management to
design and implement the risk management
and internal control system to manage the
company’s material business risks and report
to it on whether those risks are being managed
effectively. The board should disclose that
management has reported to it as to the
effectiveness of the company’s management
of its material business risks
20 Zeta Resources Limited - 2013 Annual Report
Non-compliant. Due to its size of operation and size of
the board, there is no formal board committee to identify,
assess and monitor and manage risk. Responsibility for
day-to-day control and risk management lies with the
Investment Manager and Company Secretary (financial
risk) with reporting responsibility to the board. The board
will monitor risks including but not limited to compliance
with development and environmental approvals, tendering,
contracting and development, pricing of products,
quality, safety, strategic issues, financial risk, joint venture,
accounting and insurance. Any changes in the risk profile for
the company will be communicated to its stakeholders via
an announcement to the Australian Securities Exchange.
Non-compliant. The new board has not yet received a
report from Management setting out material business
risks as the company has had no recent corporate or
operational activity. The new board will monitor this as
it moves forward with re-evaluation of the business and
remaining assets post Scheme Implementation.
7.3
The board should disclose whether it has
received assurance from the chief executive
officer (or equivalent) and the chief financial
officer (or equivalent) that the declaration
provided in accordance with section 295A of
the Corporations Act is founded on a sound
system of risk management and internal control
and that the system is operating effectively in
all material respects in relation to financial
reporting risks
7.4 Companies should provide the information
in the Guide to reporting on
indicated
Principle 7
Compliant. The Chairman and Investment Manager have
provided these assurances as part of the annual financial
statement review.
Non-compliant. Refer 7.1
8
Remunerate fairly and responsibly
Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that
its relationship to performance is clear
8.1
The board should establish a remuneration
committee
8.2 The
remuneration committee should be
structured so that it:
•
consists of a majority of independent
directors
•
•
is chaired by an independent director
has at least three members
Non-compliant. The board has considered the need for a
remuneration committee, and believes that the company
is not of a size to justify the establishment of a separate
committee. It is therefore more appropriate for such
responsibilities to be met by the full board rather than a
separate committee.
Non-compliant. The board does not have a separate
remuneration committee and as such does not comply
with Recommendation 8.2.
8.3 Companies
clearly
should
distinguish
the structure of non-executive directors’
remuneration from that of executive directors
and senior executives.
Non-compliant. The company does not have executive
directors and senior executives. The company’s day-to-day
business is undertaken by the Investment Manager, under
the terms of the Investment Management Agreement.
8.3 Companies should provide the information
in the Guide to reporting on
indicated
Principle 8.
Non-compliant. Refer 8.1
Zeta Resources Limited - 2013 Annual Report 21
DIRECTORS’ REPORT
Your directors present their report of Zeta Resources
Limited and the group, including its subsidiary, Kumarina
Resources Limited for the period ended 30 June 2013.
DIRECTORS
The names of directors in office at any time during or
since the end of the year are:
Peter Ross Sullivan
Marthinus (Martin) Botha
Xi Xi
Charles Jillings
Alasdair Younie
(appointed 7 June 2013)
(appointed 7 June 2013)
(appointed 7 June 2013)
(resigned 7 June 2013)
(resigned 7 June 2013)
Directors have been in office since the start of the period
to the date of this report unless otherwise stated.
PRINCIPAL ACTIVITIES
The principal activities of the company and the
group are investing in listed and unlisted resource
focussed investments.
No significant change in the nature of these activities
occurred during the year.
OPERATING AND FINANCIAL REVIEW
Operating Results
The net loss after income tax attributable to the
company for the period to 30 June 2013 amounted to
$9,705,965. The net loss after income tax attributable
to the group for the period 30 June 2013 amounted
to $9,703,842.
Overview of Operating Activity
The company listed on the ASX on 12 June 2013
following a scheme of arrangement to merge a
portfolio of investments in resources companies
held by its parent company Utilico with ASX-listed
junior gold explorer Kumarina Resources Limited.
The combined value of the investments acquired
under these two transactions was $45,628,679.
Subsequent to the listing the company proceeded
to build its portfolio of resource investments by
investing a further $10,583,403. A decline in the fair
value of the portfolio resulted in an unrealised loss
recognised in profit or loss at the period end of
$9,706,953 (group $6,523,839).
The activities of the company’s subsidiary related to
further exploration and evaluation of the existing
Australian mining tenements (the Murrin Murrin
and Ilgarari Projects) and a total of A$854,477 was
invested during the 12 months to 30 June 2013 in
further drilling and analysis work.
Financial Position
At the end of the period the company had $2,383,913
in cash and cash equivalents, and the group had
$2,603,538 in cash and cash equivalents. Investments
by the company and the group at fair value totalled
$36,229,896, and the investment in Kumarina by the
company was valued at $10,275,233.
The company and the group has a loan owing to
Utilico of $4,577,000 and the company has a loan
owing to its subsidiary of $5,468,485 at the period
end. Amounts outstanding to brokers (for settlement
of trades) totalled $2,877,359 at 30 June 2013.
During the period 50,614,556 ordinary shares and
10,122,903 options with a A$1.00 exercise price were
issued. No options were exercised during the year.
Dividends
No dividends have been paid or declared since the
start of the period. No recommendation is made as
to dividends.
After Balance Date Events
Utilico increased an existing loan facility from A$5
million to A$10 million to facilitate further investments
by the company and group, other than this there were
no matters or circumstances which have arisen since
the end of the period which significantly affected
or may significantly affect the group or company’s
operations, the results of those operations or the
group or company’s state of affairs in future periods.
Likely Developments
The company intends to continue to seek to maximise
total returns for shareholders by identifying and
investing in assets and companies where the underlying
value is not reflected in the market price. The Chairman’s
Statement and Investment Manager’s Report give a
general indication of the company’s business strategies
and likely developments in operations and expected
results of those operations in future financial years.
INFORMATION ON DIRECTORS AND
COMPANY SECRETARY
Peter Ross Sullivan BE, MBA
(Non-Executive Chairman)
Appointed 7 June 2013
Mr Sullivan is an engineer and has been involved
in the management and strategic development of
resource companies and projects for more than
20 years. His work experience includes periods in
project engineering, corporate finance, investment
banking, corporate and operational management
and public company directorships. Mr Sullivan has
considerable experience in the management and
strategic development of resource companies.
companies focused on international exploration and
development of mining projects to restructuring
and overseeing a portfolio of private and public
companies. Ms Xi holds dual Bachelor of Science
degrees in Chemical Engineering and Economics from
the Colorado School of Mines and a Master of Arts in
International Relations and China Studies from Johns
Hopkins School of Advanced International Studies.
Directorships of other listed companies in the last
3 years
Ms Xi was a non-executive director of Noble Minerals
Resources (ASX: NMG).
BCB Charter Corporate Services Limited
(Company Secretary)
Directorships of other listed companies in the last
3 years
BCB Charter Corporate Services Limited was
appointed Company Secretary in August 2012.
Mr Sullivan has been a director of Resolute Mining
Limited since June 2001 and GME Resources Limited
since 1996. He was also a director of Kumarina
Resources Limited from December 2011 to 24 June
2013 when Kumarina was delisted.
Marthinus (Martin) Botha
(Non-Executive Director)
Appointed 7 June 2013
Mr Botha is an Engineering Surveyor by training
who has almost 30 years’ experience in banking,
with the last 24 years spent in leadership roles
building Standard Bank Plc’s (part of The Standard
Bank of South Africa Limited group of companies)
international operations. Mr Botha’s specific primary
responsibilities have included establishing and leading
the development of the core global natural resources
trading and financing franchises, as well as various
geographic strategies, including those in the Russian
Commonwealth of Independent States, Turkey and
Middle East. Mr Botha is currently Non-Executive
Chairman of Sberbank CIB (UK) Limited, a securities
broker regulated by UK Financial Services Authority.
Xi Xi
(Non-Executive Director)
Appointed 7 June 2013
Ms Xi is a financial analyst with more than 10 years’
experience in the mining, energy and natural resource
industry. Her experience ranges from managing
BCB Charter Corporate Services Limited delivers
comprehensive corporate administration services for
funds, partnerships, unit trusts, exempted and local
companies, pension schemes, and other business
structures. BCB Charter Corporate Services Limited’s
clients operate in a wide range of sectors, including
insurance and reinsurance, insurance management,
aircraft holding and leasing, mutual funds, ship
owning and owning and chartering, land holding and
investment holding.
Mark Edward Pitts B.Bus FCA
(Assistant Company Secretary - Australia)
Mr Pitts was appointed as Company Secretary in June
2013.
Mr Pitts is a Chartered Accountant with over twenty
five years’ experience in statutory reporting and
business administration. He has been directly involved
with, and consulted to a number of public companies
holding senior financial management positions. He is
a partner in the corporate advisory firm Endeavour
Corporate. Endeavour offers professional services
focused on company secretarial support, corporate
advice, supervision of ASIC and ASX reporting and
compliance requirements, and commercial and
financial support.
22 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 23
DIRECTORS’ REPORT continued
PREVIOUS DIRECTORS
Charles Jillings
Resigned 7 June 2013
Alasdair Younie
Resigned 7 June 2013
REMUNERATION REPORT
The remuneration report is set out in the following
manner:
•
Policies used to determine the nature and
amount of remuneration.
• Details of remuneration
•
•
Service agreements
Share based compensation
Remuneration Policy
The board of directors is responsible for remuneration
policies and the packages applicable to the directors
of the company. The broad remuneration policy
is to ensure that packages offered properly reflect
a person’s duties and responsibilities and that
remuneration is competitive and attracts, retains,
and motivates people of the highest quality.
The directors are remunerated for the services they
render to the company and such services are carried
out under normal commercial terms and conditions.
Engagement and payment for such services are
approved by the other directors who have no interest
in the engagement of services.
At the date of this report the company had not entered
into any packages with directors or senior executives
which include performance based components.
Details of Remuneration for Directors
As the company only became operational toward the
end of the reporting period no remuneration was paid to
directors for the period ended 30 June 2013. It is expected
that directors will be remunerated from 1 July 2013.
The company had no employees as at 30 June 2013.
Share Based Compensation
There is currently no provision in the policies of
the company for the provision of share based
compensation to directors. The interest of directors
and executives in shares and options is set out
elsewhere in this report.
24 Zeta Resources Limited - 2013 Annual Report
Directors and Executives’ Interests
The relevant interests of directors and executives
either directly or through entities controlled by the
directors and executives in the share capital of the
company and related body corporates as at the date
of this report are:
Director
Net
Change
Ordinary
Shares
Opening
Balance
Ordinary
Shares
Closing
Balance
Peter R Sullivan
Martin Botha
Xi Xi
-
-
-
3,220,566 3,220,566
-
-
-
-
Mr Sullivan also holds 644,113 options with a strike
price of A$1.00 and an expiry of 7 June 2016. These
were issued to Mr Sullivan under the same one for
five bonus issue given to all shareholders.
MEETINGS OF DIRECTORS
As the reporting period is the first period of existence
of the company, and during this time the company
was in the process of being incorporated, there were
no physical board of directors meetings held.
The board has had one meeting since incorporation,
this meeting was held on 7
June 2013 via
teleconference and all directors were present at the
meeting. All resolutions passed prior to this since
the incorporation of the company on 13 August 2012
were made by unanimous written resolution.
Loans to Directors and Executives
There were no loans entered into with directors or
executives during the period under review.
Listed Options
At the date of this report the number of listed
options on issue was as follows:
10,122,903 Options exercisable at $1.00 each, expiring
7 June 2016. These were issued as a bonus issue to all
shareholders.
There were no shares issued during the year or since
the end of the year upon exercise of options.
Audit Committee
The board reviews the performance of the external
auditors on an annual basis and will meet with them
during the year to review findings and assist with
board recommendations.
The board does not have a separate audit committee
with a composition as suggested in the best practice
recommendations. The full board carries out the
function of an audit committee.
The board believes that the company is not of a
sufficient size to warrant a separate committee and
that the full board is able to meet objectives of the
best practice recommendations and discharge its
duties in this area.
Indemnifying Officers or Auditors
The company has not, during or since the period
ended, in respect of any person who is or has been
an officer or the auditor of the company or of a
related body corporate indemnified or made any
relative agreement for indemnifying against a liability
incurred as an officer or auditor, including costs and
expenses in defending legal proceedings.
Environmental Regulation
(Kumarina Resources
The company’s subsidiary’s
Limited) operations are subject to the Western
Australian Mining Act 1978 and the Environmental
Protection Act 1986.
The directors are not aware of any significant
breaches and no actions were initiated for breaches
under the Environmental Protection Act during the
period covered by this report.
Non-audit Services
No non–audit services were performed by the
auditors of the company during the period.
On-market Buy Back Scheme
The company currently has no on-market share buy-
back scheme in operation.
Investment Management Agreement
During the period the company entered into an
investment management agreement with ICM Limited
(Bermuda registered) on 10 April 2013. Management
fees are payable at a rate of 0.5% per annum, of funds
managed on calculation date, payable quarterly in
arrears and pro-rated for any period less than 3 months.
Performance fees are payable annually at year end
at a rate of 15% of equity funds (adjusted for any
dividends paid or accrued) on calculation date
less adjusted base equity funds (high-water mark)
previously used in the performance fee calculation.
The adjusted base equity funds is the base equity
fund used in the last performance fee calculation
adjusted by the average percentage income yield
on the S&P/ASX 300 Metals and Mining Index. No
performance fee was payable for the period.
Either party may terminate the agreement with
6 months’ notice.
The company also paid US$21,800 in management
fees during the reporting period.
This report is signed in accordance with a resolution
of directors.
Peter R Sullivan
Chairman
Perth, Western Australia
16 September 2013
Zeta Resources Limited - 2013 Annual Report 25
INDEPENDENT AUDIT REPORT
KPMG Inc
MSC House
1 Mediterranean Street, Foreshore, 8001
PO Box 4609,Cape Town, 8000
South Africa
Tel +27 (21) 408 7000
Fax +27 (21) 408 7100
Docex 102 Cape Town
Internet http://www.kpmg.co.za/
Independent Auditor’s report to the directors of Zeta Resources Limited
We have audited the consolidated and separate financial statements of Zeta Resources Limited,
which comprise the statements of financial position at 30 June 2013, and the statements of
comprehensive income, changes in equity and cash flows for the period then ended, and the
notes to the financial statements which include a summary of significant accounting policies and
other explanatory notes, as set out on pages 29 to 60.
Directors’ Responsibility for the Financial Statements
The company’s directors are responsible for the preparation and fair presentation of these
financial statements in accordance with International Financial Reporting Standards, and for
such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether
the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, these financial statements present fairly, in all material respects, the consolidated
and separate financial position of Zeta Resources Limited at 30 June 2013, and its consolidated
and separate financial performance and consolidated and separate cash flows for the period then
ended in accordance with International Financial Reporting Standards.
Policy Board:
Chief Executive:
RM Kgosana
KPMG Inc is a company incorporated under the South African
Companies Act and a member firm of the KPMG network of
independent member firms affiliated with KPMG International, a Swiss
cooperative.
KPMG Inc is a Registered Auditor, in public practice, in terms of the
Auditing Profession Act, 26 of 2005.
Registration number 1999/021543/21
Executive Directors:
TH Bashall*, DC Duffield, A Hari, TH Hoole, FB Leith,
JS McIntosh, AM Mokgabudi, D van Heerden
Other Directors:
LP Fourie, A Jaffer, E Magondo, CM Read, Y Suleman
(Chairman of the Board), A Thunstrom, JM Vice
The company’s principal place of business is at KPMG Crescent, 85 Empire Road,
Parktown, where a list of the directors’ names is available for inspection.
*British
Other Reports Required by the Companies Act
As part of our audit of the financial statements for the period ended 30 June 2013, we have read
the Directors’ Report and the Corporate Governance Statement for the purpose of identifying
whether there are material inconsistencies between these reports and the audited financial
statements. These reports are the responsibility of the respective preparers.
Based on reading these reports we have not identified material inconsistencies between these
reports and the audited financial statements. However, we have not audited these reports and
accordingly do not express an opinion on these reports.
KPMG Inc.
Per KT Hopkins
Chartered Accountant (SA)
Registered Auditor
Director
27 September 2013
26 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 27
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
KPMG Inc
MSC House
1 Mediterranean Street, Foreshore, 8001
PO Box 4609,Cape Town, 8000
South Africa
Tel +27 (21) 408 7000
Fax +27 (21) 408 7100
Docex 102 Cape Town
Internet http://www.kpmg.co.za/
Independent Auditor’s Declaration to the directors of Zeta Resources Limited
In relation to our audit of the financial report of Zeta Resources Limited for the financial period ended
30 June 2013, to the best of my knowledge and belief, there have been no contraventions of the
auditor independence requirements of the International Standards on Auditing or any applicable code
of professional conduct.
KPMG Inc.
Per KT Hopkins
Chartered Accountant (SA)
Registered Auditor
Director
27 September 2013
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2013
Non-current assets
Deferred exploration and evaluation expenditure
Formation expenses
Plant and equipment
Investment in subsidiary
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Non-current liabilities
Loan from subsidiary
Current liabilities
Trade and other payables
Balance due to brokers
Loan from parent
Total liabilities
NET ASSETS
Equity
Share capital
Share premium
Accumulated losses
Foreign currency translation reserve
TOTAL EQUITY
Consolidated
2013
$
Company
2013
$
Notes
4
5
6
7
8
9
10
11
12
13
13
4,295,631
2,124
61,714
-
36,229,896
-
-
-
10,275,233
36,229,896
640,313
2,603,538
-
2,383,913
43,833,216
48,889,042
-
(5,468,485)
(450,225)
(2,877,359)
(4,577,000)
(39,689)
(2,877,359)
(4,577,000)
(7,904,584)
(12,962,533)
35,928,632
35,926,509
406
406
45,632,068
45,632,068
(9,338,686)
(365,156)
(9,705,965)
-
35,928,632
35,926,509
Policy Board:
Chief Executive:
RM Kgosana
KPMG Inc is a company incorporated under the South African
Companies Act and a member firm of the KPMG network of
independent member firms affiliated with KPMG International, a Swiss
cooperative.
KPMG Inc is a Registered Auditor, in public practice, in terms of the
Auditing Profession Act, 26 of 2005.
Registration number 1999/021543/21
Executive Directors:
TH Bashall*, DC Duffield, A Hari, TH Hoole, FB Leith,
JS McIntosh, AM Mokgabudi, D van Heerden
Other Directors:
LP Fourie, A Jaffer, E Magondo, CM Read, Y Suleman
(Chairman of the Board), A Thunstrom, JM Vice
The company’s principal place of business is at KPMG Crescent, 85 Empire Road,
Parktown, where a list of the directors’ names is available for inspection.
*British
28 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 29
FINANCIAL STATEMENTS continued
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2013
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2013
Consolidated
2013
$
Company
2013
$
Notes
Revenue
Investment Income
Other Income
Expenses
Interest expense
Impairment - goodwill on acquisition of subsidiary
Management and consulting fees
Operating and administration expenses
Loss before income tax benefit
Income tax benefit
Loss for the period
Other comprehensive income
14
15
16
17
18
19
(6,523,839)
269,129
(9,706,953)
269,129
-
(3,033,469)
(35,147)
(561,799)
(21,209)
-
(26,925)
(220,007)
546,439
-
(9,338,686)
(9,705,965)
Movement in foreign currency translation reserve
(365,156)
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD
(9,703,842)
(9,705,965)
Loss per share
Basic and diluted loss per share (cents per share)
20
(0.69)
(0.69)
Share
Capital
$
Share
Premium
$
Accumulated
Loss
$
Notes
Foreign Currency
Translation
Reserve
$
Total
$
CONSOLIDATED
Balance at
incorporation
-
-
Issue of share capital
13
406
45,632,068
Net loss for the period
ended
Total other
comprehensive income
-
-
-
-
-
-
-
-
-
45,632,474
(9,338,686)
-
(9,338,686)
-
(365,156)
(365,156)
COMPANY
Balance at
incorporation
Issue of share capital
Net loss for the period
ended
-
-
406
45,632,068
-
-
-
-
-
45,632,474
-
-
(9,705,965)
-
(9,705,965)
BALANCE AT 30 JUNE 2013
406 45,632,068
(9,705,965)
-
35,926,509
(9,885,125)
(9,705,965)
BALANCE AT 30 JUNE 2013
406 45,632,068
(9,338,686)
(365,156)
35,928,632
30 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 31
FINANCIAL STATEMENTS continued
NOTES TO THE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2013
Cash flows from operating activities
Cash generated by operations
Interest received
Interest expense
Notes
21.1
Consolidated
2013
$
Company
2013
$
2,728,729
51,832
-
2,670,116
-
(21,209)
Net cash flows from operating activities
2,780,561
2,648,907
Cash flows from investing activities
Investments purchased
Exploration and evaluation expenditure
Acquisition of subsidiary, net of cash acquired
21.2
(10,583,403)
(10,583,403)
(210,577)
5,837,490
-
-
Net cash flows from investing activities
(4,956,490)
(10,583,403)
Cash flows from financing activities
Proceeds from issue of shares
Loan from parent
Loan from subsidiary
21.3
3,795
4,577,000
-
3,795
4,577,000
5,468,485
Net cash flows from financing activities
4,580,795
10,049,280
Net movement in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effect of exchange rate fluctuations on cash held
2,404,866
2,114,784
-
198,672
-
269,129
CASH AND CASH EQUIVALENTS AT END
OF THE PERIOD
9
2,603,538
2,383,913
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2013
1. General Information
Zeta Resources Limited (‘the company’) is an investment company incorporated on 13 August 2012, domiciled
in Bermuda and listed on the Australian Stock Exchange. The consolidated financial statements of the company
as at and for the period ended 30 June 2013 comprise the company and its wholly owned subsidiary, Kumarina
Resources Limited which was acquired under a scheme of arrangement on 7 June 2013.
2. Basis of Preparation
2.1 Statement of Compliance
The consolidated and separate financial statements for the period ended 30 June 2013 have been prepared in
accordance with International Financial Reporting Standards (IFRSs). The following accounting policies have,
in all material respects, been applied consistently by group entities.
The financial statements were authorised for issue by the board of directors on 16 September 2013.
2.2 Basis of Measurement
The financial statements provide information about the financial position, results of operations and changes
in financial position of the group and company. They have been prepared on the historic cost basis except for
financial instruments at fair value through profit or loss, which are measured at fair value.
2.3 Functional and Presentation Currency
The group and company's functional and presentational currency is United States Dollars.
2.4 Use of Estimates and Judgements
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expense. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions are recognised in the
period in which the estimate is revised and in any future periods affected.
The recoverability of the carrying amount of exploration and evaluation costs carried forward has been
reviewed by the directors. They have determined that they are not yet at a stage of determining whether
there is an economic resource.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment within the next financial year, as well as critical judgements in applying accounting policies that
have the most significant effect on the amounts recognised in the financial statements are included in note 23.
2.5 Adoption of New and Revised Standards
Future Amendments Not Early Adopted in the 2013 Period Ended Financial Statements
At the date of authorisation of these financial statements the following standards, amendments to standards,
and interpretations, which are relevant to the group, have been issued by the International Accounting
Standard Board, although the European Union has not yet endorsed all of these statements.
IFRS 9 Financial Instruments (effective for years commencing on or after 1 January 2015) - this standard addresses
the initial measurement and classification of financial assets as either measured at amortised cost or at fair
value. Financial assets are measured at amortised cost when the business model is to hold assets in order to
collect contractual cash flows. All other financial assets are measured at fair value with changes recognised in
profit or loss. For an investment in an equity instrument that is not held for trading, an entity may on initial
recognition elect to present all fair value changes from the investment in other comprehensive income.
32 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 33
NOTES TO THE FINANCIAL STATEMENTS continued
2. Basis of Preparation Continued
3. Significant Accounting Policies
IFRS 9 retains the classification and measurement requirements in IAS 39 for financial liabilities. The standard
however requires for financial liabilities designated under the fair value option (other than loan commitments
and financial guarantee contracts), that the amount of change in fair value attributable to changes in the credit
risk of the liability be presented in other comprehensive income (OCI). The remaining amount of the total gain
or loss is included in profit or loss. However, if this requirement creates or enlarges an accounting mismatch in
profit or loss, then the whole fair value change is presented in profit or loss.
IFRS 9 will be adopted for the first time for the year ending 30 June 2016 and will be applied retrospectively,
subject to certain transitional provisions. The impact on the financial statements has not yet been estimated.
IFRS 10 Consolidated Financial Statements (effective from 1 January 2013) - this standard introduces a new
approach to determining which investees should be consolidated and provides a single model to be applied
in the control analysis for all investees. An investor controls an investee when it is exposed or has rights to
variable returns from its involvement with that investee, it has the ability to affect those returns through its
power over that investee and there is a link between power and returns. Control is reassessed as facts and
circumstances change. IFRS 10 supersedes IAS 27 (2008) and SIC-12 Consolidation-Special Purpose Entities. In
addition, the Standards contains an exemption from consolidation for investment entities. Zeta will qualify as
an investment entity and will not be required to produce consolidated figures.
IFRS 10 will be adopted for the first time for the year ending 30 June 2014.
IFRS 12 Disclosure of Interests in Other Entities (effective from 1 January 2013) - this standard combines, in
single standard, the disclosure requirements for subsidiaries, associates and joint arrangements, as well as
unconsolidated structured entities. The required disclosures aim to provide information to enable users to
evaluate the nature of, and risks associated with, an entity's interests in other entities and the effects of those
interests on the entity's financial position, financial performance and cash flows.
The adoption of the new standard will increase the level of disclosure provided for the entity's interests in
subsidiaries, joint arrangements, associates and structured entities. This standard may impact the disclosure to
be provided by the Company, but will have to be assessed based on IFRS 10 conclusion.
IFRS 13 Fair Value Measurements (effective 1 January 2013) - this standard introduces a single source of guidance
on fair value measurement for both financial and non-financial assets and liabilities by defining fair value as an
exit price, establishing a framework for measuring fair value and setting out disclosure requirements for fair
value measurements.
IFRS 13 will be adopted for the first time for the year ending 30 June 2014. The impact on the financials
statements has not yet been estimated.
lAS 27 Separate Financial Statements (2011) supersedes IAS 27 (2008) and is effective for year ends commencing
on or after 1 January 2013. IAS 27 (2011) carries forward the existing accounting and disclosure requirements for
separate financial statements, with some minor clarifications. The impact on the group's financial statements
are not expected to be significant.
The accounting policies detailed below have been consistently applied by all group entities.
3.1 Basis of Consolidation
Business Combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is
the date on which control is transferred to the group. Control is power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. In assessing control, the group takes into
consideration potential voting rights that currently are exercisable.
The group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
•
the recognised amount of any non-controlling interests in the acquiree; plus
•
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the
•
acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
•
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships.
Such amounts generally are recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the group
incurs in connection with a business combination are expensed as incurred.
The consolidated financial statements incorporate the assets, liabilities and results of the operations of the
company and its subsidiary. The results of subsidiaries acquired or disposed of during a financial year are
included from the effective dates of acquisition or to the effective dates of disposal, as appropriate.
Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
3.2 Revenue
Dividends receivable are recognised as income on the ex-dividend date.
Gains or losses on the sale of investments are recorded on the trade date.
Investment income also comprises gains on changes in the fair value of financial assets at fair value through
profit or loss.
Interest income is accrued on a time basis by reference to the principal outstanding and at the interest rate
applicable.
3.3 Borrowing Costs
Borrowing costs are recognised as an expense when incurred except those that relate to the acquisition,
construction or production of qualifying assets where the borrowing cost is added to the cost of those assets
until such time as the assets are substantially ready for their intended use or sale.
34 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 35
NOTES TO THE FINANCIAL STATEMENTS continued
3. Significant Accounting Policies Continued
3.4 Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses
can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
3.5 Foreign Currency
Foreign Currency Transactions and Balances
Transactions in foreign currencies are translated into the respective functional currencies of group entities at
exchange rates at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies
at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between amortised cost in the functional currency at
the beginning of the period, adjusted for effective interest and payments during the period, and the amortised
cost in foreign currency translated at the exchange rate at the end of the period. The foreign currency gains or
losses are recognised in profit or loss.
Foreign currency differences arising on retranslation are recognised in other comprehensive income and treated
as a foreign currency translation reserve.
3.6 Earnings Per Share ("EPS")
Basic EPS is calculated as net result attributable to members, adjusted to exclude costs of servicing equity
(other than dividends) and preference share dividends, divided by the weighted average number of ordinary
shares, adjusted for any bonus element.
Diluted EPS is calculated as net result attributable to members, adjusted for:
• costs of servicing equity (other than dividends) and preference share dividends;
•
the after tax effect of dividends and interest associated with potential dilutive ordinary shares that have
been recognised as expenses; and
• other non discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares divided by the weighted average number of ordinary shares and
potential dilutive ordinary shares, adjusted for any bonus element.
3.7 Exploration and Evaluation Expenditure
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the group or company has obtained the
legal rights to explore an area are recognised in the statement of comprehensive income. Exploration and
evaluation assets are only recognised if the rights of the area of interest are current and either:
i)
the expenditures are expected to be recouped through successful development and exploitation of the
area of interest; or
(ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if:
•
•
sufficient data exists to determine technical feasibility and commercial viability, and
facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see impairment
accounting policy 3.10).
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units
to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of
interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first
tested for impairment and then reclassified to mining property and development assets within property, plant
and equipment.
3.8 Plant and Equipment
Equipment, principally computer equipment, furniture and fittings, and office equipment, is stated at cost less
accumulated depreciation and accumulated impairment losses.
Depreciation
Depreciation is based on the cost of an asset less its residual value. Depreciation is charged to profit or loss
on a straight-line basis over the useful lives of the items of equipment that are accounted for separately to
reduce the cost of the items of equipment over their useful lives to the expected residual value. The useful
lives, depreciation methods and residual values of items of equipment are reviewed at each reporting date
and adjusted if appropriate.
The estimated useful lives for the current period is 4 to 5 years.
36 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 37
NOTES TO THE FINANCIAL STATEMENTS continued
3. Significant Accounting Policies Continued
Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying
value may be impaired.
Impairment losses are recognised in the statement of comprehensive income.
Derecognition and Disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
3.9 Financial Instruments
Non-derivative Financial Instruments
Non-derivative financial instruments comprise investments in listed and unlisted securities, trade and other
receivables, cash and cash equivalents, trade and other payables and amounts due to/from brokers.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair
value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-
derivative financial instruments are measured as described below.
Recognition and De-recognition of Financial Instruments
Financial instruments are recognised when, and only when, the company and group becomes a party to the
contractual provisions of the particular instrument. The group (which includes the company) de-recognises
a financial asset when, the contractual rights to the cash flows arising from the financial asset have expired
or when it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in
which substantially all the risks and rewards of ownership of the financial asset are transferred.
A financial liability is derecognised when the liability is extinguished, that being, when the obligation specified
in the contract is discharged, cancelled or has expired. The difference between the carrying amount of a
financial liability assumed (or part thereof) extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Financial Assets at Fair Value Through Profit or Loss
Investment purchases and sales are accounted for on the trade date, exclusive of transaction costs. Investments
used for efficient portfolio management are classified as being at fair value through profit or loss. As the
company’s business is investing in financial assets with a view to profiting from their total return in the form
of dividends, interest or increases in fair value, its investments are designated as being at fair value through
profit or loss on initial recognition.
Gains and losses on investments are analysed within the Statement of Comprehensive Income as capital
return. Quoted investments are shown at fair value using market bid prices. The fair value of unquoted
investments is determined by the Board. In exercising its judgement over the value of these investments, the
Board uses valuation techniques which take into account, where appropriate, latest dealing prices, valuations
from reliable sources, asset values, earnings and other relevant factors.
Cash and Cash Equivalents
Cash and cash equivalents are measured at amortised cost at the reporting date. Cash and cash equivalents
comprise operating cash balances, call deposits and short-term deposits with a maturity of three months or less.
Non-derivative Financial Liabilities
The group and company have the following non-derivative financial liabilities: loans and borrowings, trade and
other payables and amounts due to/from brokers.
All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised
initially on the trade date at which the group becomes a party to the contractual provisions of the instrument.
The group and company derecognises a financial liability when its contractual obligations are discharged
or cancelled or expire. The difference between the carrying amount of a financial liability assumed (or part
thereof) extinguished or transferred to another party and consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss.
Trade and Other Payables
Trade and other payables are initially recognised at original invoice amount and are subsequently stated at
amortised cost by applying the effective interest method. Trade and other payables are not discounted where
the effects of discounting is considered immaterial. Trade and other payables are settled within 30 to 90 days
and are interest free. Any gains on derecognition are recognised in profit or loss.
3.10 Impairment of Assets
Financial Assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine
whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have had a negative effect on the estimated future cash
flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the
original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is
calculated by reference to its fair value.
Significant financial assets are tested for impairment on an individual basis. The remaining financial assets
are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are
recognised in profit or loss. Any cumulative loss in respect of an available for-sale financial asset recognised
previously in equity is transferred to profit or loss.
Non-financial Assets
The carrying amounts of the non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset's
recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds
its estimated recoverable amount. Impairment losses are recognised in profit or loss.
The recoverable amount of an asset is the greater of its value in use and its fair value less cost to sell. The fair
value less cost to sell is the amount obtainable from the sale of an asset in an arm's length transaction less the
cost of disposal. While assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects the current market assessments of the time value of money
and the risks specific to the asset.
In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date
for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
38 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 39
NOTES TO THE FINANCIAL STATEMENTS continued
3. Significant Accounting Policies Continued
3.11 Goodwill
Goodwill is any excess of the cost of an acquisition over the group's interest in the cost of the identifiable
assets and liabilities acquired.
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is allocated to the cash-
generating unit and is tested annually for impairment (see accounting policy 3.10).
3.12 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
and share options are recognised as a deduction from equity.
3.13 Provisions and Accruals
Provisions are recognised when the company has a present legal or constructive obligation as a result of
past events, for which it is probable that an outflow of economic benefits will occur, and where a reliable
estimate can be made of the amount of the obligation. The expense relating to any provision is presented in
the statement of comprehensive income net of any reimbursement. If the effect of discounting is material,
provisions are discounted. The discount rate used is a pre-tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks specific to the liability.
4. Deferred Exploration and Evaluation Expenditure
Costs carried forward in respect of exploration
and evaluation phase - at cost
Movements:
Carrying value at acquisition
Direct expenditure
Effect of movements in exchange rates
Less expenditure written off
Consolidated
2013
$
Company
2013
$
4,407,682
210,577
(155,161)
4,463,098
(167,467)
4,295,631
-
-
-
-
-
The ultimate recoupment of the above costs in relation to areas of interest in the exploration and evaluation
phase is dependent on the successful development and commercial exploitation or, alternatively, sale of the
respective areas at amounts sufficient to recover the investment.
During the period two tenements, Ilgarari North and Kumarina West, were relinquished at the end of the
period and all capitalised expenditure to date was written off to profit and loss in accordance with IFRS 6.
5. Plant and Equipment
Computer
Equipment
Office
Equipment
Site
Equipment
Total
Consolidated
Acquisitions through business combination
Depreciation
Disposals
Effect of movements in exchange rates
Net carrying amount at 30 June 2013
Cost
Accumulated depreciation
52,577
(4,756)
-
(1,851)
45,970
52,577
(6,607)
13,104
4,394
(862)
-
(461)
11,781
13,104
(1,323)
(276)
-
(155)
3,963
4,394
(431)
70,075
(5,894)
-
(2,467)
61,714
70,075
(8,361)
All group plant and equipment arise from consolidation of the subsidiary.
The company has no plant and equipment.
6. Investment in Subsidiary
Consolidated
2013
$
Company
2013
$
At fair value
Investment in Kumarina Resources Limited
-
10,275,233
7. Investments
Financial assets at fair value through profit or loss
36,229,896
36,229,896
Consolidated
2013
$
Company
2013
$
Equity securities at fair value
Ordinary shares
listed
Subscription rights - unlisted
Equity securities at cost
Ordinary shares
listed
Subscription rights - unlisted
32,979,896
3,250,000
32,979,896
3,250,000
36,229,896
36,229,896
39,605,567
3,200,000
39,605,567
3,200,000
42,805,567
42,805,567
40 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 41
NOTES TO THE FINANCIAL STATEMENTS continued
7. Investments Continued
Investments Held by the Group at the Reporting Date
Listed
Resolute Mining Limited
New Zealand Oil and Gas Limited
Pan Pacific Petroleum Limited
PMI Gold Corporation Depository Interests (Australian Listing)
PMI Gold Corporation Limited (Canadian Listing)
Falkland Oil and Gas Limited
Cue Energy Resources Limited
GME Resources Limited
Centamin Plc
Unlisted
Seacrest LLP
Number of
Shares
% of Issued
Shares Held
1.447%
8.002%
0.988%
0.472%
1.679%
0.173%
0.573%
1.487%
0.908%
9,200,000
32,588,122
5,813,977
1,299,634
4,626,500
554,112
4,000,000
745,028
10,000,000
2,500,000
NOTES TO THE
FINANCIAL
STATEMENTS
continued
9. Cash and Cash Equivalents
Cash balance comprises:
Cash at bank
Cash on hand
Consolidated
2013
$
Company
2013
$
2,603,419
2,383,913
119
-
2,603,538
2,383,913
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made
for varying periods between 3 to 6 months depending on the immediate cash requirements of the company,
and earn interest at the respective short-term deposit rates.
10. Loan from Subsidiary
Consolidated
2013
$
Company
2013
$
Loan from Kumarina Resources Limited
-
5,468,485
During the reporting period the company and group completed a total of 42 transactions in securities and
paid a total of US$14,961 in brokerage on those transactions.
The loan is denominated in Australian dollars and attracts interest at a rate of 7.5% per annum. There are no
fixed repayment terms except that no repayment is due before 30 June 2014.
8. Trade and Other Receivables
GST refundable
Office rental security deposit
Research & Development rebate
Consolidated
2013
$
Company
2013
$
78,774
15,100
546,439
640,313
-
-
-
-
11. Trade and Other Payables
Accruals
Payroll taxes
Trade creditors - exploration and evaluation
The accruals are for audit and administration fees payable.
12. Loan from Parent
Consolidated
2013
53,420
6,238
390,567
Company
2013
39,689
-
-
450,225
39,689
Consolidated
2013
Company
2013
Loan from Utilico Investments Limited
4,577,000
4,577,000
The loan is denominated in Australian dollars to the value of A$5 million, carries interest at 10% per annum
and is repayable by no later than 31 May 2014.
42 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 43
NOTES TO THE FINANCIAL STATEMENTS continued
13. Share Capital and Share Premium
Consolidated and company
Authorised
5,000,000,000 ordinary shares of par value $0.00001
Issued
Ordinary Shares
Balance as at incorporation
Number of
Shares
Share
Capital
Share
Premium
14. Investment Income
Interest income
Unrealised fair value losses
Consolidated
2013
$
Company
2013
$
51,832
-
Financial assets at fair value through profit or loss
(6,575,671)
(9,706,953)
-
-
-
-
-
-
15. Other Income
Issued at incorporation as $1 par shares
100
Shares split into 10,000,000 shares of $0.00001 each
9,999,900
Issued in consideration for purchase of investments
from Utilico Investments Limited
Issued in consideration for purchase of 100% of
Kumarina Resources Limited
Issued under initial public offering
22,835,042
228
32,221,936
17,775,514
4,000
178
-
13,406,337
3,795
50,614,556
406
45,632,068
For further details related to the share issue transactions please see note 21.3
Options
Balance as at incorporation
Issued in consideration for purchase of investments from Utilico Investments Limited
Issued in consideration for purchase of 100% Kumarina Resources Limited
Issued under initial public offering
Number of
Options
-
6,567,008
3,555,095
800
10,122,903
Under the scheme of arrangement whereby the company acquired the entire share capital of Kumarina
Resources Limited and purchased certain investments from Utilico Investments Limited one Zeta option was
issued for each five ordinary shares issued.
The options are exercisable at an exercise price of A$1.00 into one ordinary share until 7 June 2016.
(6,523,839)
(9,706,953)
Consolidated
2013
$
Company
2013
$
269,129
269,129
Consolidated
2013
$
Company
2013
$
-
3,033,469
(3,033,469)
-
-
-
-
-
Foreign exchange gains
16. Goodwill on Acquisition of Subsidiary
Opening balance
Acquisitions through business combinations
Impairment loss
Balance at 30 June 2013
Goodwill on acquisition arises from the purchase of all the issued shares of Kumarina Resources Limited.
This goodwill is considered to be the premium paid to gain control of the entire issued share capital of
Kumarina Resources Limited, thereby bringing into the group the cash and mining assets held by the subsidiary.
Recoverable amount of goodwill:
The directors deem the best estimate of the fair value of the subsidiary to be the present value of the
underlying net assets of the subsidiary.
The realizable value of each of the underlying assets and liabilities are based on the fair value which a potential
buyer would evaluate in an arm’s length transaction.
Based on this valuation the full amount of goodwill is impaired.
44 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 45
NOTES TO THE FINANCIAL STATEMENTS continued
17. Management and Consulting Fees
19.1 Income Tax Rate Reconciliation
Consolidated
2013
$
Company
2013
$
Management and consulting fees
35,147
26,925
The company entered into an investment management agreement with ICM Limited (Bermuda registered) on
10 April 2013. Management fees are payable at a rate of 0.5% per annum, of funds managed on calculation date,
payable quarterly in arrears and pro rated for any period less than 3 months.
Performance fees are payable annually at year end at a rate of 15% of equity funds (adjusted for any dividends
paid or accrued) on calculation date less adjusted base equity funds (high-water mark) previously used in
the performance fee calculation. The adjusted base equity funds is the base equity fund used in the last
performance fee calculation adjusted by the average percentage income yield on the S&P/ASX 300 Metals and
Mining Index. No performance fee was payable for the period.
Either party may terminate the agreement with 6 months notice.
18. Operating and Administration Expenses
Operating and administration expenses consist of:
Depreciation
Wages and Salaries
Audit fees
Australian Stock Exchange listing fees
Legal fees
Deferred exploration and evaluation expenditure written off
Other expenses
Consolidated
2013
$
Company
2013
$
5,894
17,934
6,045
136,050
167,568
167,467
60,841
-
-
6,045
33,479
136,050
-
44,433
561,799
220,007
19. Income Tax
The company is domiciled in Bermuda and has elected to be tax exempt in terms of local legislation. As such
no tax is payable.
Current tax benefit
Income tax benefit
Consolidated
2013
$
Company
2013
$
546,439
546,439
-
-
The prima facie income tax expense on pre-tax accounting result from operations reconciles to the income
tax provided in the financial statements as follows:
Consolidated
2013
$
Company
2013
$
Accounting loss before tax for the period ended
(9,885,125)
(9,705,965)
Consolidated benefit calculated at 30%
Tax effect of expenses attributable to the company that are
exempt in terms of local legislation
R&D tax offset
Carried forward losses for which no deferred tax
asset was recognised
Income tax benefit reported in the statement of
comprehensive income.
(2,965,538)
2,882,446
546,439
83,092
546,439
-
-
-
-
-
19.2 Unrecognised Deferred Tax Balances
Statement of
Financial Position
Statement of
Comprehensive Income
Consolidated
Company Consolidated
Company
Deferred tax liabilities
Exploration and evaluation
expenditure
Other
(1,407,788)
-
Gross deferred tax liability
(1,407,788)
Deferred tax assets
Tax loss carry forwards
Other
Gross deferred tax asset
Net deferred tax asset
Deferred tax expense
1,403,288
4,500
1,407,788
-
-
-
-
-
-
-
-
(1,407,788)
-
(1,407,788)
1,403,288
4,500
1,407,788
-
-
-
-
-
-
-
-
46 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 47
NOTES TO THE FINANCIAL STATEMENTS continued
20. Loss Per Share
21.2 Acquisition of Subsidiary
Consolidated
2013
$
Company
2013
$
Basic and diluted loss per share (cents)
(0.69)
(0.69)
Loss used in calculation of basic and diluted earrings per share
(9,703,842)
(9,705,965)
Weighted average number of ordinary shares outstanding during the
year used in calculation of basic and diluted earnings per share.
14,106,616
14,106,616
The weighted average number of ordinary shares calculation is based on the period beginning 12 August 2012
being the date of incorporation. For details of shares issued during the period refer to note 21.3.
No adjustment is made for the 10,122,903 options in issue at 30 June 2013 as they are not considered to be
dilutive.
21. Notes to the Cash Flow Statement
21.1 Cash Generated by Operations
Loss before income tax benefit
Adjustments for:
Depreciation
Fair value loss on revaluation of investments
Foreign exchange gains
Impairment - goodwill on acquisition of subsidiary
Deferred exploration and evaluation expenditure written off
Interest income
Interest expense
Consolidated
2013
$
Company
2013
$
(9,338,686)
(9,705,965)
5,894
6,575,671
(269,129)
3,033,469
167,467
(51,832)
-
9,706,953
(269,129)
-
-
-
-
21,209
Operating profit/(loss) before working capital change
122,854
(246,932)
Increase in trade and other payables
(Increase) in trade and other receivables
Increase in balance due to brokers
318,293
(589,777)
39,689
-
2,877,359
2,877,359
2,728,729
2,670,116
On 7 June 2013 the company purchased 100% of Kumarina Resources Limited. The fair value of the assets
acquired and liabilities are as follows:
Cash and cash equivalents
Exploration and evaluation expenditure
Property, plant and equipment
Trade payables
Loans receivable
Trade receivables
Fair value of net asset value
Goodwill on acquisition of subsidiary
Total purchase price paid
Less: paid per issue of shares
Total
Less cash of subsidiary
Cash generated by obtaining control
$
5,837,490
4,407,682
72,276
(136,746)
139,964
52,380
10,373,046
3,033,469
13,406,515
(13,406,515)
-
5,837,490
5,837,490
$13,406,515 of the purchase price of the subsidiary was paid for by the issue of 17,775,514 shares of the
company on 7 June 2013.
21.3 Issue of Share Capital
Shares Issued for Consideration
As part of the Kumarina scheme of arrangement an initial public offering of up to 25,000,000 ordinary
shares at A$1.00 was approved. Under this initial public offering the company issued 4,000 shares on 7 June
2013 raising the equivalent of $3,975.
Shares Issued for No Consideration
At incorporation the company issued 100 incorporation shares of $1 each. These shares were then split into
10,000,000 shares of $0.00001 par value.
On 21 May 2013 the company issued 22,835,042 ordinary shares to Utilico Investment Limited as
consideration for investments purchased from Utilico Investments Limited.
On 7 June 2013 the company issued 17,775,514 ordinary shares to acquire the entire share capital of
Kumarina Resources Limited in an equity only transaction where four Kumarina Resources Limited shares
were exchanged for one company share.
22. Auditor Remuneration
Consolidated
2013
$
Company
2013
$
Amounts received or due and receivable by the auditors for audit
of financial statements.
6,045
6,045
48 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 49
NOTES TO THE FINANCIAL STATEMENTS continued
23. Financial Risk Management
Company
The Board of Directors, together with the Investment Manager, is responsible for the group’s risk management.
The Directors’ policies and processes for managing the financial risks are set out below. These financial risks are
principally related to the market (currency movements, interest rate changes and security price movements),
liquidity and credit and counterparty risk.
The accounting policies which govern the reported statement of financial position carrying values of the
underlying financial assets and liabilities, as well as the related income and expenditure, are set out in note
3 to the Accounts. The policies are in compliance with IFRS and best practice, and include the valuation of
financial assets and liabilities at fair value through profit and loss.
Categories of Financial Instruments
The analysis of assets into their categories as defined in IAS 39 “Financial Instruments: Recognition and
Measurement” (IAS 39) is set out in the following table. For completeness, assets and liabilities of a non-
financial nature, or financial assets and liabilities that are specifically excluded from the scope of IAS 39, are
reflected in the non-financial assets and liabilities category.
The table below sets out the group and company classification of each class of financial assets and liabilities.
All assets and liabilities approximate their fair values:
Consolidated
Available
for Sale
Financial
Assets
Non-
financial
Assets and
Liabilities
Total
Carrying
Value
Loans and
Receivables
Designated
at Fair Value
Through
Profit and
Loss
-
-
-
36,229,896
-
-
-
-
-
-
640,313
2,603,538
36,229,896
3,243,851
-
-
-
-
450,225
2,877,359
4,577,000
7,904,584
Assets
Deferred exploration and
evaluation expenditure
Formation expenses
Plant and equipment
Investments
Trade and other receivables
Cash and cash equivalents
Liabilities
Trade and other payables
Balance due to brokers
Loan from parent
-
-
-
-
-
-
-
-
-
-
-
4,295,631
4,295,631
2,124
61,714
2,124
61,714
-
-
-
36,229,896
640,313
2,603,538
4,359,469
43,833,216
-
-
-
-
450,225
2,877,359
4,577,000
7,904,584
Designated
at Fair Value
Through
Profit and
Loss
Available
for Sale
Financial
Assets
Non-
financial
Assets and
Liabilities
Total
Carrying
Value
Loans and
Receivables
Assets
Investments
46,505,129
-
Cash and cash equivalents
-
2,383,913
46,505,129
2,383,913
Liabilities
Loan from subsidiary
Trade and other payables
Balance due to brokers
Loan from parent
23.1 Market Risks
-
-
-
-
-
5,468,485
39,689
2,877,359
4,577,000
12,962,533
-
-
-
-
-
-
-
-
-
-
46,505,129
2,383,913
-
48,889,042
-
-
-
-
-
5,468,485
39,689
2,877,359
4,577,000
12,962,533
The fair value of equity and other financial securities held in the group’s portfolio fluctuates with changes
in market prices. Prices are themselves affected by movements in currencies and interest rates and by
other financial issues, including the market perception of future risks. The board sets policies for managing
these risks within the group’s objective and meets regularly to review full, timely and relevant information
on investment performance and financial results. The Investment Manager assesses exposure to market
risks when making each investment decision and monitors on-going market risk within the portfolio.
The group’s other assets and liabilities may be denominated in currencies other than United States Dollars
and may also be exposed to interest rate risks. The Investment Manager and the board regularly monitor
these risks. The group does not normally hold significant cash balances. Borrowings are limited to amounts
and currencies commensurate with the portfolio’s exposure to those currencies, thereby limiting the
group’s exposure to future changes in exchange rates.
Gearing may be short- or long-term, in United States Dollars and foreign currencies, and enables the
group to take a long-term view of the countries and markets in which it is invested without having to be
concerned about short-term volatility. Income earned in foreign currencies is converted to United States
Dollars on receipt. The board regularly monitors the effects on net revenue of interest earned on deposits
and paid on gearing.
50 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 51
NOTES TO THE FINANCIAL STATEMENTS continued
23. Financial Risk Management Continued
Currency Exposure
The principal currencies to which the group was exposed were the Australian Dollar, Canadian Dollar,
Sterling and New Zealand Dollar. The exchange rates applying against the United States Dollar at 30 June
2013 and the average rates for the period were as follows:
AUD – Australian Dollar
CAD – Canadian Dollar
GBP – Sterling
NZD – New Zealand Dollar
30 June 2013
Average
0.9154
0.9507
1.5167
0.7723
1.0072
0.9794
1.5326
0.8259
The group and company monetary assets and liabilities at 30 June 2013 (shown at fair value), by currency
based on the country of primary operations, are shown below:
Consolidated
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Balance due to brokers
AUD
CAD
GBP
NZD
640,313
2,603,538
450,225
107,064
-
-
-
-
-
-
-
-
-
309,485
103,365
2,357,445
Net monetary (liabilities)/assets
3,801,140
309,485
103,365
2,357,445
Based on the financial assets and liabilities held, and exchange rates applying, at the reporting date, a
weakening or strengthening of the United States Dollar against each of these currencies by 10% would
have had the following approximate effect on annualised income after tax and on net asset value (NAV)
per share:
Strengthening of the United States Dollar
AUD
CAD
GBP
NZD
Total
Consolidated
(Increase)/decrease Total
comprehensive loss for the
period ended
Company
(Increase)/decrease Total
comprehensive loss for the
period ended
1,008,675
19,033
(496,032)
(1,786,796)
(1,255,120)
(1,019,637)
19,033
(496,032)
(1,786,796)
(3,283,432)
Weakening of the United States Dollar
Consolidated
Decrease/(increase) in total
comprehensive loss for the
period ended
(1,008,675)
(19,033)
496,032
1,786,796
1,255,120
AUD
CAD
GBP
NZD
Company
Company
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Balance due to brokers
-
2,383,913
39,689
107,064
-
-
-
-
-
-
-
-
-
309,485
103,365
2,357,445
Net monetary (liabilities)/assets
2,530,666
309,485
103,365
2,357,445
(Increase)/decrease Total
comprehensive loss for the
period ended
1,019,637
(19,033)
496,032
1,786,796
3,283,432
These analyses are broadly representative of the group’s activities during the current year as a whole,
although the level of the group’s exposure to currencies fluctuates in accordance with the investment and
risk management processes.
52 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 53
NOTES TO THE FINANCIAL STATEMENTS continued
23. Financial Risk Management Continued
Interest Rate Exposure
The exposure of the financial assets and liabilities to interest rate risks at 30 June 2013 is shown below:
Within One
Year
Greater than
One Year
Total
23.2 Liquidity Risk Exposure
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.
The group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meets its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the group’s reputation. The Investment Manager reviews liquidity
at the time of making each investment decision. The contractual maturities of the financial liabilities,
based on the earliest date on which payment can be required, were as follows:
Consolidated
Exposure to floating rates
Cash
Exposure to fixed rates
Loan from parent
Company
Exposure to floating rates
Cash
Exposure to fixed rates
Loan from subsidiary
Loan from parent
2,603,538
(4,577,000)
-
-
2,603,538
(4,577,000)
2,383,913
-
2,383,913
-
(5,468,485)
(4,577,000)
-
(5,468,485)
(4,577,000)
Exposures vary throughout the year as a consequence of changes in the make-up of the net assets of the
group arising out of the investment and risk management processes. The group tends to limit its cash
reserves and interest earned is insignificant and therefore not sensitive to interest rate changes. Borrowings
are at a fixed rate and not sensitive to interest rate risk.
Other Market Risk Exposures
The portfolio of investments, valued at US$36,229,896 at 30 June 2013 is exposed to market price changes.
The Investment Manager assesses these exposures at the time of making each investment decision. An
analysis of the portfolio by country is set out in note 25.
Price Sensitivity Risk Analysis
A 10% decline in the market price of the listed investment held by the company would result in an
unrealised loss of $3,297,990. A 10% appreciation in the market price would have the opposite effect.
Consolidated
Trade and other payables
Balance due to brokers
Loans from parent
Company
Loan from Subsidiary
Trade and other payables
Balance due to brokers
Loans from parent
More than
Three Months
but Less than
a Year
Three Months
or Less
More than a
Year
Total
450,225
2,877,359
-
-
-
4,577,000
3,327,584
4,577,000
-
-
-
-
450,225
2,877,359
4,577,000
7,904,584
-
39,689
2,877,359
-
-
-
-
4,577,000
5,468,485
5,468,485
-
-
-
39,689
2,877,359
4,577,000
2,917,048
4,577,000
5,468,485
12,962,533
23.3 Credit Risk and Counterparty Exposure
The group is exposed to potential failure by counterparties to deliver securities for which the group has
paid, or to pay for securities which the group has delivered. To mitigate against credit and counterparty
risk broker counterparties are selected based on a combination of criteria, including credit rating, balance
sheet strength and membership of a relevant regulatory body.
Cash and deposits are held with reputable banks. The group has an on-going contract with its Custodians
for the provision of custody services. The contracts are reviewed regularly. Details of securities held in
custody on behalf of the group are received and reconciled monthly.
Maximum Exposure to Credit Risk
The company has no loan asset and is therefore not exposed to credit risk. The subsidiary’s only loan asset
is an intergroup loan to its parent with an outstanding balance of $5,468,485.
None of the group’s financial assets is past due or impaired. The group’s principal banker and custodian
is Bermuda Commercial Bank (rated by Fitch as BBB-). The subsidiary holds a bank account with National
Australia Bank (rated by Fitch as AA-).
54 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 55
NOTES TO THE FINANCIAL STATEMENTS continued
23. Financial Risk Management Continued
23.4 Fair Values of Financial Assets and Liabilities
The assets and liabilities of the group are, in the opinion of the Directors, reflected in the statement of
financial position at fair value. Borrowings under loan facilities do not have a value materially different
from their capital repayment amount. Borrowings in foreign currencies are converted into United States
Dollars at exchange rates ruling at each valuation date.
Unquoted investments are valued based on professional assumptions and advice that is not wholly
supported by prices from current market transactions or by observable market data.
Valuation of Financial Instruments
The table below analyses financial assets measured at fair value at the end of the reporting period by the
level in the fair value hierarchy into which the fair value measurement is categorised:
- Level 1: The fair values are measured using quoted prices in active markets.
- Level 2: The fair values are measured using inputs, other than quoted prices, that are included within
level 1, that are observable for the asset.
- Level 3: The fair values are measured using inputs for the asset or liability that are not based on
observable market data.
Consolidated
Financial assets
Investments
Level 1
Level 2
Level 3
32,979,896
-
3,250,000
The following table shows a reconciliation from opening balances to closing balances for fair value
measurements in level 3 investments of the fair value hierarchy:
Acquisition at 21 May 2013
Total gains or losses recognised in:
- Profit or loss
Balance at 30 June 2013
Company
Financial assets
Investments
Investment in subsidiary
Level 3
3,200,000
50,000
3,250,000
Level 1
Level 2
Level 3
32,979,896
-
-
-
3,250,000
10,275,233
The following table shows a reconciliation from opening balances to closing balances for fair value
measurements in level 3 investments of the fair value hierarchy:
Balance at acquisition
Total gains or losses recognised in:
- fair value through profit or loss
Level 3 Investments
Level 3 Investments
in Subsidiary
3,200,000
13,406,515
50,000
(3,131,282)
Balance at 30 June 2013
3,250,000
10,275,233
23.5 Capital Risk Management
The objective of the group is stated as being to maximise shareholder returns by identifying and investing
in investments where the underlying value is not reflected in the market price. In pursuing this long term
objective, the Board has a responsibility for ensuring the group’s ability to continue as a going concern.
It must therefore maintain an optimal capital structure through varying market conditions. This involves
the ability to: issue and buy back share capital within limits set by the shareholders in general meeting;
borrow monies in the short and long term; and pay dividends to shareholders out of current year earnings
as well as out of brought forward reserves.
24. Related Parties
24.1 Material Related Parties
Holding Company
The company’s holding company is Utilico Investments Limited which held 70.9% of the company’s issued
share capital on 30 June 2013. Utilico Investments Limited is in turn held 57.2% by General Provincial Life
Pension Fund (L) Limited.
Subsidiary Company
The only subsidiary is Kumarina Resources Limited, a 100% held subsidiary.
Key Management Personal
Key management personnel and their close family members and entities which they control, jointly or over
which they exercise significant influence are considered related parties of the company. The company’s
directors, as listed in the Directors’ report are considered to be key management personnel of the
company.
Investment Manager
ICM Limited is the investment manager of both the company and its holding company.
56 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 57
NOTES TO THE FINANCIAL STATEMENTS continued
24. Related Parties Continued
24.2 Material Related Party Transactions
Nature of transactions
Investments in related parties:
- Kumarina Resources Limited
Consolidated
2013
$
10,275,233
During the period the company acquired 100% of the share capital of Kumarina Resources Limited
valued at $13,406,515. The company issued 17,775,514 ordinary shares and 3,555,095 options (see note 13)
as consideration paid for the company. At the date of acquisition of Kumarina Resources Limited, Utilico
Investments Limited was the holder of 10% of the issued shares in Kumarina Resources Limited.
Loans from related parties:
- Utilico Investments Limited
- Kumarina Resources Limited
Interest charged by the subsidiary
Fees paid to the investment manager
During the period the company acquired a portfolio of investments
from its holding company valued at A$32,835,042. The company issued
22,835,042 ordinary shares and 6,567,008 options (see note 13) as
consideration paid for the investment portfolio.
Consolidated
2013
$
4,577,000
5,468,485
21,209
26,925
32,222,164
25. Segmental Reporting
The group has four reportable segments, as described below, which are considered to be the group’s strategic
investments areas. For each investment area, the group’s chief operating decision maker (“CODM”) (ICM
Limited - investment manager) reviews internal management reports on at least a monthly basis. The following
summary describes each of the groups reportable segments.
- Gold: investments in companies which mine gold.
- Oil & Gas: investments in companies which extract or prospect for oil or gas.
- Mineral Exploration: investments in companies who mine minerals other than gold.
- Other segments: activities which do not fit into one of the above segments.
Information regarding the results of each reportable segment is included below. Performance is measured
based on segment profit before tax, as included in the internal management reports that are reviewed by the
group’s CODM. Segment profit is used to measure performance as management believes that such information
is the most relevant in evaluating the performance of certain segments relative to other entities that operate
within these industries.
Information about Reportable Segments
Gold
Oil & Gas
Mineral
Exploration
Other
Segments
Total
External revenues
(4,309,690)
(2,214,007)
Reportable segment revenue
(4,309,690)
(2,214,007)
Interest revenue
Impairment - goodwill on
acquisition of subsidiary
Reportable segment loss
before tax
51,832
(3,033,469)
-
-
(142)
(142)
-
-
-
-
-
-
(6,523,839)
(6,523,839)
51,832
(3,033,469)
(7,671,964)
(2,214,007)
(142)
988
(9,885,125)
Reportable segment assets
16,674,951
24,759,348
15,004
2,383,913
43,833,216
Reportable segment liabilities
(822,685)
(2,460,810)
(4,400)
(4,616,689)
(7,904,584)
During the period there were no transactions between segments which results in income or expenditure.
Reconciliations of Reportable Segment Revenues, Profit or Loss, Assets and Liabilities, and Other
Material Items
Revenues
Total revenue for reportable segments
Revenue for other segments
Consolidated revenue
Profit or Loss
Total profit or loss for reportable segments
Profit or loss for other segments
Consolidated loss before tax
Assets
Total assets for reportable segments
Assets for other segments
Consolidated total assets
Liabilities
Total liabilities for reportable segments
Liabilities for other segments
Consolidated total liabilities
Consolidated
2013
$
(6,523,839)
-
(6,523,839)
(9,886,113)
988
(9,885,125)
41,449,303
2,383,913
43,833,216
(3,287,895)
(4,616,689)
(7,904,584)
58 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 59
NOTES TO THE FINANCIAL STATEMENTS continued
ADDITIONAL ASX INFORMATION
25. Segmental Reporting Continued
Geographic Information
In presenting information on the basis of geography, segment revenue and segment assets are based on the
geographical location of the operating assets of the investment held by the group.
Revenue
Australia
Egypt
Ethiopia
Falkland Islands
Ghana
Indonesia
Mali
Namibia
New Zealand
Papua New Guinea
Timor-Leste
Vietnam
Consolidated revenue
Assets
Australia
Egypt
Ethiopia
Falkland Islands
Ghana
Indonesia
Mali
Namibia
New Zealand
Papua New Guinea
Timor-Leste
Vietnam
Consolidated assets
Consolidated
2013
US$
(780,520)
(1,339,842)
(70,518)
(3,584)
(299,988)
(123,732)
(1,829,310)
50,000
(2,117,627)
(1,350)
(3,684)
(3,684)
(6,523,839)
9,247,077
4,545,929
239,259
222,712
1,701,564
1,161,549
3,428,466
3,250,000
19,973,502
11,534
25,812
25,812
43,833,216
1. Substantial Shareholders
Substantial shareholders as shown in substantial shareholder notices received by the company as at
1 October 2013 are:
Utilico Investments Limited
39,148,200 (77.35%)
Peter Ross Sullivan
3,220,566 (6.36%)
2. Distribution Schedule of Ordinary Shares Held at 1 October 2013:
Holding Ranges
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
No. of
Shares
3,434
749,886
292,765
1,879,650
47,688,821
50,614,556
No. of Ordinary
Shareholders
% of Issued
Capital
10
219
33
66
13
341
0.01
1.48
0.58
3.71
94.22
100.00
The number of shareholders holding less than a marketable parcel of ordinary shares at 1 October 2013 is
10 and they hold 3,434 securities.
3. Distribution Schedule of Listed Options to Acquire Ordinary Shares Held at 1 October 2013:
Holding Ranges
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
No. of Listed
Options
No. of Listed
Option Holders
% of Listed
Options
167,888
254,297
112,579
792,983
8,795,156
10,122,903
251
92
14
21
5
383
1.66
2.51
1.12
7.83
86.88
100.00
The number of option holders holding less than a marketable parcel of options to acquire ordinary shares at
1 October 2013 is 366 and they hold 691,098 listed options.
26. Events After the Reporting Date
After the reporting date the group’s holding company increased the available loan facility from A$5,000,000
to A$10,000,000 to enable the company to continue with the acquisition of further investments in the
resources sector.
60 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 61
ADDITIONAL ASX INFORMATION continued
4. Top 20 Holdings of Fully Paid Ordinary Shares as at 1 October 2013*
6. Top 20 Holdings of Listed Options as at 1 October 2013*
Name
Shares
% of Issued
Capital
Name
HSBC Custody Nominees Australia Limited
36,964,358
73.03
J P Morgan Nominees Australia Limited
James Noel Sullivan
Wayne C Van Blitterswyk
Aumex Mining Pty Limited
Hardrock Capital Pty Limited ATF CGLW Superannuation Fund
Hardrock Capital Pty Limited
Geomett Pty Limited
Hotlake Pty Limited
Anthony John + S J Power
Pendan Pty Limited
Gail Sullivan
Navigator Australia Limited
Mandalup Investments Pty Limited
T J + K M Russell
MMP WA Pty Limited
Bouchi Pty Limited
Alistair James Sullivan
Scalise Holdings Pty Limited
Oliver James Sullivan
Total for Top 20
4,597,407
1,575,025
1,328,999
1,306,357
525,000
414,000
250,000
250,000
135,000
127,675
125,000
115,000
100,000
100,000
74,999
64,000
60,425
52,500
50,000
9.08
3.11
2.63
2.58
1.03
0.82
0.49
0.49
0.27
0.25
0.25
0.23
0.20
0.20
0.15
0.13
0.12
0.10
0.10
HSBC Custody Nominees Australia Limited
J P Morgan Nominees Australia Limited
Wayne C Van Blitterswyk
James Noel Sullivan
Aumex Mining Pty Limited
Hardrock Capital Pty Limited ATF CGLW Superannuation Fund
Hardrock Capital Pty Limited
Kesli Chemicals Pty Limited
Cherryburn Pty Limited
Molonglo Pty Limited
CS Fourth Nominees Pty Limited
Geomett Pty Limited
Hotlake Pty Limited
UBS Wealth Management Australia Nominees Pty Limited
Anthony John + S J Power
Pendan Pty Limited
Gail Sullivan
Navigator Australia Limited
Aradia Ventures Pty Limited
T J + K M Russell ATF Terry Russell Superannuation Fund
Shares
7,446,283
418,868
325,000
315,005
290,000
105,000
82,800
62,314
57,000
54,000
53,000
50,000
50,000
50,000
27,000
25,535
25,000
23,000
21,550
20,000
9,501,355
% of Issued
Capital
73.56
4.14
3.21
3.11
2.86
1.03
0.82
0.62
0.56
0.53
0.52
0.49
0.49
0.49
0.27
0.25
0.25
0.23
0.21
0.20
93.84
48,215,745
95.26
Total for Top 20
*The Top 20 Holders list is comprised of some aggregated holdings where the names of the holders are
identical.
*The Top 20 Holders list is comprised of some aggregated holdings where the names of the holders are
identical.
5. Voting Rights
All ordinary shares carry one vote per share without restriction.
7. Use of Capital
Pursuant to the requirements of ASX listing rule 4.10.19 the company has used all cash and assets in a form
readily convertible to cash, that it held at the time of admission, in a way consistent with its business objectives.
8. Application of Chapters 6, 6A, 6B and 6C of the Corporations Act 2001
The company is not subject to Chapters 6, 6A, 6B and 6C of the Corporations Act dealing with the acquisition
of its shares. In addition neither the Bermuda Companies Act 1981 nor the company’s Bye-laws prescribe a
regime for the conduct of takeovers or contain a general prohibition on acquisitions of interests in Bermuda
companies beyond a certain threshold in the same way as the Australian Corporations Act 2001.
62 Zeta Resources Limited - 2013 Annual Report
Zeta Resources Limited - 2013 Annual Report 63
COMPANY INFORMATION
ZETA RESOURCES LIMITED
ESTABLISHED AUGUST 2012
Zeta Resources Limited
Company ARBN: 162 902 481
www.zetaresources.co
Directors (Non-Executive)
Peter Sullivan (Chairman)
Marthinus (Martin) Botha
Xi Xi
Assistant Secretary
Mark Pitts
Endeavour Corporate
Suite 8, 7 The Esplanade
Mt Pleasant WA 6153
Australia
LISTED ON THE ASX 12 JUNE 2013
Registered Office
19 Par-la-Ville Road
Hamilton HM 11
Bermuda
GROSS ASSETS OF US$48.9
MILLION AS AT 30 JUNE 2013
Australian Registered Office
Suite 8
7 The Esplanade
Mt Pleasant WA 6153
Australia
Telephone: +61 8 9316 9100
Investment Manager
ICM Limited
1st Floor
19 Par-la-Ville Road
Hamilton HM 11
Bermuda
Telephone: +1 441 299 2897
Email: contact@icmnz.co.nz
Secretary
BCB Charter Corporate Services Limited
Trinity Hall
43 Cedar Avenue
Hamilton HM 12
Bermuda
Auditor
KPMG Inc
MSC House
1 Mediterranean Street, Foreshore
8001, Cape Town
South Africa
Custodian
Bermuda Commercial Bank Limited
19 Par-la-Ville Road
Hamilton HM 11
Bermuda
Registrar
Security Transfer Registrars Pty Limited
770 Canning Highway
Applecross WA 6153
Australia
Telephone: +61 8 9315 2333
Stock Exchange Listing
The company’s shares are quoted on the Official
List of the Australian Securities Exchange,
Ticker code: ZER
Zeta’s investment aim is to maximise total returns for shareholders by identifying and investing in resource assets
and companies where the underlying value is not refl ected in the market price. The company invests in a range of
resources entities, including those focused on oil and gas, gold and base metals exploration and production.
64 Zeta Resources Limited - 2013 Annual Report
Managed by
ARBN 162 902 481
www.zetaresources.co