RNS Number:8931Z
Gippsland Limited
16 March 2006
GIPPSLAND LIMITED
ABN 31 004 766 376
FINANCIAL REPORT
FOR THE HALF YEAR ENDED
31 DECEMBER 2005
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
DIRECTORS' REPORT
The Directors present the financial report of the economic entity being
Gippsland Limited ("the Company") and its controlled entities for the half year
ended 31 December 2005.
DIRECTORS
The following persons were Directors of the Company who held office during or
since the end of the half year:
Robert John (Jack) Telford
John Morrison Chisholm
John Damian Kenny
John Dunlop (appointed 1 July 2005)
REVIEW OF OPERATIONS
The consolidated operating loss after tax for the half year was $1,234,588 (2004
- $1,046,061).
The Company continued its business of mineral exploration with the main focus
being on the development of the Abu Dabbab tantalite, tin and feldspar project
in Egypt in which Gippsland has a 50% economic interest by way of an
incorporated joint venture with the Egyptian Government. The Bankable
Feasibility Study ("BFS") was completed in November 2004 by Lycopodium Pty Ltd
and has been subsequently updated for financing purposes. The results of the
BFS determined that the 40Mt Abu Dabbab Project will produce in excess of
650,000 pounds of tantalum pentoxide ("Ta2O5") per year which will firmly
establish the operation as the world's second largest tantalum producer. The
Project will also produce 1,530 tonnes of tin metal per year.
The BFS determined that the Project will generate gross sales revenue in excess
of US$500 million during the first 13 years of its estimated 20-year mine life.
These sales will be from tantalum and tin only and exclude all potential
feldspar sales revenues.
On 11 October 2005 the Company completed a share placement to UK based investors
by issuing 15,000,000 ordinary shares at an issue price of 4 UK pence (approx
9.3 cents) per share which raised a total of $1.4 million (#600,000)
before issue costs.
The funds raised will be applied to the continued development of the Abu Dabbab
Project in Egypt, and to fund additional exploration at the Wadi Allaqi project.
On March 7 2006 the Directors announced that the International Finance
Corporation ("IFC"), a member of the World Bank Group, has been mandated as Lead
Debt Arranger for Gippsland's Abu Dabbab Tantalum-Tin Project (the "Project") in
Egypt.
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditors' independence declaration as required under section 307C
of the Corporations Act 2001 is set out on page 12.
Signed in accordance with a resolution of the Board and dated 16th March 2006.
R J TELFORD
DIRECTOR
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
CONSOLIDATED INCOME STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
Economic Entity
31 December 2005 31 December 2004
$ $
Revenues from ordinary activities 10,669 9,390
Employee expenses (59,160) (31,468)
Depreciation (10,643) (3,288)
Project feasibility and exploration expenses (531,891) (637,068)
Management and consulting expenses (71,424) (109,360)
Corporate office expenses (29,069) (50,047)
AIM administration expenses (91,160) (87,103)
Unrealised foreign exchange gains / (losses) 16,757 (49,127)
Provision for diminution in exploration (194,143) -
Option Expenses (77,827) -
Other expenses from ordinary activities (196,697) (87,990)
Loss from ordinary activities before income tax expense (1,234,588) (1,046,061)
Income tax expense relating to ordinary activities ________- ________-
Net loss attributable to members of the parent entity (1,234,588) (1,046,061)
Basic loss per share (cents per share) (0.7) (0.7)
Diluted loss per share (cents per share) (0.7) (0.7)
The accompanying notes form part of these financial statements
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2005
Economic Entity
31 December 30 June 31 December
2005 2005 2004
$ $ $
CURRENT ASSETS
Cash and cash equivalents 826,916 589,522 1,285,429
Trade and other receivables 42,650 33,078 29,000
Other assets 3,650 15,270 2,759
TOTAL CURRENT ASSETS 873,216 637,870 1,317,188
NON CURRENT ASSETS
Tenement guarantees - - 55,164
Property, plant and equipment 43,004 41,942 12,383
TOTAL NON CURRENT ASSETS 43,004 41,942 67,547
TOTAL ASSETS 916,220 679,812 1,384,735
CURRENT LIABILITIES
Trade and other payables 172,948 99,225 100,943
Short term provisions 9,000 9,000 10,350
TOTAL CURRENT LIABILITIES 181,948 108,225 111,293
TOTAL LIABILITIES 181,948 108,225 111,293
NET ASSETS 734,272 571,587 1,273,442
EQUITY
Contributed equity 17,187,682 15,868,236 15,620,944
Share Option reserve 77,827 - -
Accumulated losses (16,531,237) (15,296,649) (14,347,502)
TOTAL EQUITY 734,272 571,587 1,273,442
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
Opening Balance - Equity 571,587 1,273,442 902,472
New Equity Issues (net of costs) 1,319,446 247,293 1,417,031
Share Option reserve 77,827 - -
Losses attributable to members of the
parent entity (1,234,588) (949,148) (1,046,061)
Closing Balance - Equity 734,272 571,587 1,273,442
The accompanying notes form part of these financial statements.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
Economic Entity
2005 2004
$ $
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from operations - 58,825
Payments to suppliers and employees (884,767) (1,160,664)
Interest received 10,669 9,390
Net cash used in operating
activities (874,098) (1,092,449)
CASH FLOW FROM INVESTING ACTIVITIES
Payments for property, plant and
equipment (11,705) (2,195)
Payments for exploration/tenement
guarantees (179,492) (55,164)
Net cash used in investing
activities (191,197) (57,359)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from share issues 1,388,890 1,491,612
Payments for share issues (69,444) (57,707)
Net cash provided by financing
activities 1,319,446 1,433,905
Net increase in cash held 254,151 284,097
Effects of exchange rate changes
on cash (16,757) (49,127)
Add opening cash brought
forward 589,522 1,050,459
Closing cash carried forward 826,916 1,285,429
The accompanying notes form part of these financial statements.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
NOTES TO THE FINANCIAL REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
NOTE 1: STATEMENT OF ACCOUNTING POLICIES
BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT
1. BASIS OF PREPARATION
The half-year consolidated financial statements are a general purpose financial
report prepared in accordance with the requirements of the Corporations Act
2001, Australian Accounting Standard AASB 134: Interim Financial Reporting,
Urgent Issues Group Interpretations and other authoritative pronouncements of
the Australian Accounting Standards Board.
It is recommended that this financial report be read in conjunction with the
annual financial report for the year ended 30 June 2005 and any public
announcements made by Gippsland Limited and its controlled entities during the
half-year in accordance with continuous disclosure requirements arising under
the Corporations Act 2001.
As this is the first interim financial report prepared under Australian
equivalents to IFRS, the accounting policies applied are inconsistent with those
applied in the 30 June 2005 annual report as this report was presented under
previous Australian GAAP. Accordingly, a summary of the significant accounting
policies under Australian equivalents to IFRS has been included below. A
reconciliation of equity and profit and loss between previous GAAP and
Australian equivalents to IFRS has been prepared in Note 2.
The half-year report does not include full disclosures of the type normally
included in an annual financial report.
(a) Principles of Consolidation
A controlled entity is any entity controlled by Gippsland Limited ("Gippsland")
whereby Gippsland has the power to control the financial and operating policies
of an entity so as to obtain benefits from its activities
All inter-company balances and transactions between entities in the economic
entity, including any unrealised profits or losses, have been eliminated on
consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistencies with those policies applied by the parent
entity.
Where controlled entities have entered or left the economic entity during the
year, their operating results have been included/excluded from the date control
was obtained or until the date control ceased.
(b) Income Tax
Deferred tax is accounted for using the balance sheet liability method in
respect of temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. No deferred
income tax will be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or liability is settled. Deferred tax is
credited in the income statement except where it relates to items that may be
credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
Deferred income tax assets are recognised to the extent that it is probable that
future tax profits will be available against which deductible temporary
differences can be utilised.
The amount of benefits brought to account or which may be realised in the future
is based on the assumption that no adverse change will occur in income taxation
legislation and the anticipation that the economic entity will derive sufficient
future assessable income to enable the benefit to be realised and comply with
the conditions of deductibility imposed by the law.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
NOTES TO THE FINANCIAL REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
1. BASIS OF PREPARATION (Continued)
(c) Plant and Equipment
Each class of plant and equipment is carried at cost or fair value less, where
applicable, any accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis less depreciation and
impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to
ensure it is not in excess of the recoverable amount from these assets. The
recoverable amount is assessed on the basis of the expected net cash flows that
will be received from the assets employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in
determining recoverable amounts.
Depreciation
The depreciable amount of all fixed assets are depreciated on a straight line
basis over their useful lives to the economic entity commencing from the time
the asset is held ready for use.
The depreciation rate used for each class of depreciable assets range between
10% and 33%
(d) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of
each identifiable area of interest. These costs are only carried forward to the
extent that they are expected to be recouped through the successful development
of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable
reserves.
Accumulated costs in relation to an abandoned area are written off in full
against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of
interest.
Costs of site restoration are provided over the life of the facility from when
exploration commences and are included in the costs of that stage. Site
restoration costs include the dismantling and removal of mining plant, equipment
and building structures, waste removal, and rehabilitation of the site in
accordance with clauses of the mining permits. Such costs have been determined
using estimates of future costs, current legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis.
In determining the costs of site restoration, there is uncertainty regarding the
nature and extent of the restoration due to community expectations and future
legislation. Accordingly the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
(e) Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which
includes transaction costs, when the related contractual rights or obligations
exist. Subsequent to initial recognition these instruments are measured as set
out below.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
NOTES TO THE FINANCIAL REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
1. BASIS OF PREPARATION (Continued)
Financial assets at fair value through profit and loss
A financial asset is classified in this category if acquired principally for the
purpose of selling in the short term or if so designated by management.
Derivatives are also categorised as held for trading unless they are designated
as hedges. Realised and unrealised gains and losses arising from changes in the
fair value of these assets are included in the income statement in the period in
which they arise.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and are stated at
amortised cost using the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost,
comprising original debt less principal payments and amortisation.
Fair value
Fair value is determined based on current bid prices for all quoted investments.
Valuation techniques are applied to determine the fair value for all unlisted
securities, including recent arm's length transactions, reference to similar
instruments and option pricing models.
Impairment
At each reporting date, the group assess whether there is objective evidence
that a financial instrument has been impaired. In the case of available-for sale
financial instruments, a prolonged decline in the value of the instrument is
considered to determine whether an impairment has arisen. Impairment losses are
recognised in the income statement.
(f) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the group's entities is measured using the
currency of the primary economic environment in which that entity operates. The
consolidated financial statements are presented in Australian dollars which is
the parent entity's functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the
exchange rates prevailing at the date of the transaction. Foreign currency
monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the
date of the transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised
in the income statement, except where deferred in equity as a qualifying cash
flow or net investment hedge.
Exchange difference arising on the translation of non-monetary items are
recognised directly in equity to the extent that the gain or loss is directly
recognised in equity, otherwise the exchange difference is recognised in the
income statement.
Group companies
The financial results and position of foreign operations whose functional
currency is different from the group's presentation currency are translated as
follows:
* Assets and liabilities are translated at year-end exchange rates
prevailing at that reporting date.
* Income and expenses are translated at average exchange rates for the
period.
* Retained profits are translated at the exchange rates prevailing at
the date of the transaction.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
NOTES TO THE FINANCIAL REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
1. BASIS OF PREPARATION (Continued)
Group companies (continued)
Exchange differences arising on translation of foreign operations are
transferred directly to the group's foreign currency translation reserve in the
balance sheet. These differences are recognised in the income statement in the
period in which the operation is disposed.
(g) Employee Benefits
Provision is made for the company's liability for employee benefits arising from
services rendered by employees to balance date. Employee benefits that are
expected to be settled within one year have been measured at the amounts
expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present
value of the estimated future cash outflows to be made for those benefits.
(h) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less, and bank overdrafts. Bank overdrafts are shown within
short-borrowings in current liabilities on the balance sheet.
(i) Revenue
Revenue from the sale of goods is recognised upon the delivery of goods to
customers.
Interest revenue is recognised on a proportional basis taking into account the
interest rates applicable to the financial assets.
Dividend revenue is recognised when the right to receive a dividend has been
established. Dividends received from associates and joint venture entities are
accounted for in accordance with the equity method of accounting.
Revenue from the rendering of a service is recognised upon the delivery of the
service to the customers.
All revenue is stated net of the amount of goods and services tax (GST).
(j) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except
where the amount of GST incurred is not recoverable from the Australian Tax
Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and
payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for
the GST component of investing and financing activities, which are disclosed as
operating cash flows.
(k) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to
conform to changes in presentation for the current financial year.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
NOTES TO THE FINANCIAL REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
2. FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO
INTERNATIONAL FINANCIAL REPORTING STANDARDS
(a) Reconciliation of equity at 1 July 2004, 31 December 2004 and 30 June 2005
On adoption of the new AIFRS standards, there were no differences between equity
presented under AIFRS with that presented under AGAAP.
(b) Reconciliation of net loss for the half year ended 31 December 2004, and
the year ended 30 June 2005
On adoption of the new AIFRS standards, there were no differences between net
loss presented under AIFRS with that presented under AGAAP.
NOTE 3: SEGMENT INFORMATION
The Company operates within the mineral exploration industry in Australia and
Egypt.
Australia Egypt Consolidated
Dec Dec Dec Dec Dec Dec
2005 2004 2005 2004 2005 2004
$ $ $ $ $ $
Total Segment Revenue 10,669 9,390 - - 10,669 9,390
Segment Result (508,554) (408,993) (726,034) (637,068) (1,234,588) (1,046,061)
NOTE 4: CONTRIBUTED EQUITY
31 December 31 December
2005 2005
$ Number
Issued capital:
177,818,926 (June 2005: 162,818,926) fully paid
ordinary shares 17,187,682 177,818,926
Movement
Opening Balance 15,868,237 162,818,926
Issue of 15,000,000 shares at an issue price of
4 UK pence (9.3 cps) pursuant to a share
placement - funds applied to the Abu Dabbab 1,388,889 15,000,000
development and Wadi Allaqi exploration
Less: Issue costs of capital raising (69,444) -
Closing balance 17,187,682 177,818,926
As at 31 December 2005 the Company had the following options on issue:
(i) 43,771,393 listed options exercisable at 9 cents each by 31 December 2007;
(ii) 10,000,000 unlisted options exercisable at 4 UK pence each by 31 December
2007; and
(iii)2,250,000 unlisted options exercisable at 15 cents each by 31 December
2007.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
NOTES TO THE FINANCIAL REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2005
NOTE 5: EVENTS SUBSEQUENT TO REPORTING DATE
Since 31 December 2005, no event has arisen that would be likely to materially
affect the operations of the Company, the results of the Company or the state of
affairs of the Company not otherwise disclosed in the Company's financial
statements.
NOTE 6: CONTINGENT LIABILITIES
There have been no changes in contingent liabilities since the last annual
reporting date.
GIPPSLAND LIMITED ABN 31 004 766 376
and Controlled Entities
DIRECTOR'S DECLARATION
The directors of Gippsland Limited declare that:
1. The financial statements and notes, as set out on pages 3 to 11:
a) comply with Accounting Standard AASB 134: Interim Financial Reporting
and the Corporations Regulations 2001; and
b) give a true and fair view of the consolidated entity's financial
position as at 31 December 2005 and its performance for the half-year ended on
that date.
2. In the directors' opinion, there are reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and
payable.
This declaration is made in accordance with a resolution of the Board of
Directors dated this 16th day of March 2006.
R.J. Telford
Chairman
AUDITOR'S INDEPENDENCE DECLARATION
In accordance with the requirements of section 307C of the Corporations Act
2001, as auditor for the review of Gippsland Limited for the half-year ended 31
December 2005, I declare that, to the best of my knowledge and belief, there
have been:
(a) no contraventions of the auditor independence requirements
of the Corporations Act 2001 in relation to the review; and
(b) no contraventions of any applicable code of professional
conduct in relation to the audit.
SEAN MCGURK
Partner
Grant Thornton Western Australian Partnership
Perth
16th March 2006
INDEPENDENT REVIEW REPORT
TO THE MEMBERS OF GIPPSLAND LIMITED
Scope
The half-year financial report and directors' responsibility
The half-year financial report comprises the balance sheet, income statement,
statement of changes in equity, cash flow statement, notes to the financial
statements and the directors' declaration for the consolidated entity, for the
half year ended 31 December 2005. The consolidated entity comprises both the
Gippsland Limited (the company) and the entities it controlled during that
half-year.
The directors of the company are responsible for the preparation and true and
fair presentation of the half-year financial report in accordance with the
Corporations Act 2001. This includes responsibility for the maintenance of
adequate accounting records and internal controls that are designed to prevent
and detect fraud and error, and for the accounting policies and accounting
estimates inherent in the half-year financial report.
Review approach
We conducted an independent review of the half-year financial report in order to
state whether, on the basis of the procedures described, anything has come to
our attention that would indicate that the half-year financial report is not
presented fairly in accordance with Accounting Standard AASB 134: Interim
Financial Reporting and other mandatory professional reporting requirements in
Australia and statutory requirements so as to present a view which is consistent
with our understanding of the consolidated entity's financial position and
performance as represented by the results of its operations and its cash flows,
and in order for the company to lodge the half-year financial report with the
Australian Securities & Investments Commission/Australian Stock Exchange
Limited.
Our review has been conducted in accordance with Australian Auditing Standards
applicable to review engagements. A review is limited primarily to inquiries of
company personnel and analytical procedures applied to the financial data.
These procedures do not provide all the evidence that would be required in an
audit, thus the level of assurance provided is less than given in an audit. We
have not performed an audit and, accordingly, we do not express an audit
opinion.
Independence
In conducting our review, we followed the applicable independence requirements
of Australian professional and ethical pronouncements and the Corporations Act
2001.
In accordance with ASIC Class Order 05/83, we declare to the best of our
knowledge and belief that the auditor's independence declaration has not changed
as at the date of providing our review opinion.
Statement
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the half-year financial report of Gippsland
Limited is not in accordance with:
a) the Corporations Act 2001, including:
i) giving a true and fair view of the consolidated entity's financial
position as at 31 December 2005 and of its performance for the period ended on
that date; and
ii) complying with Accounting Standard AASB 134: Interim Financial
Reporting and the Corporations Regulations 2001; and
b) other mandatory financial reporting requirements in Australia.
GRANT THORNTON WESTERN AUSTRALIAN PARTNERSHIP
Sean McGurk Dated this 16th day of March 2006
Partner Perth, WA
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKAKNFBKKOND
Gippsland (LSE:GIP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gippsland (LSE:GIP)
Historical Stock Chart
From Jul 2023 to Jul 2024
