TIDMLRL
RNS Number : 5031S
Leyshon Resources Limited
10 September 2010
FINANCIAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2010
The Directors of Leyshon Resources Limited present their report on the
Consolidated Entity consisting of Leyshon Resources Limited ("the Company" or
"Leyshon Resources") and the entities it controlled at the end of, or during,
the financial year ended 30 June 2010 ("Consolidated Entity").
For further information contact:
Leyshon Resources Limited
Paul Atherley - Managing Director
Tel: +61 417 475 038 or China +86 137 1800 1914
patherley@leyshonresources.com
Seymour Pierce
John Cowie/Jonathan Wright
Tel: +44 (0)207 107 8000
DIRECTORS
The following persons were Directors of the Company during the financial year
and up to the date of this report:
John W S Fletcher
Paul C Atherley
Richard P Seville
Andrew Berry III
INFORMATION ON DIRECTORS
John WS Fletcher CBE
Non-Executive Chairman from date of appointment 7 April 2006
Member of the Audit Committee and Chairman of the Remuneration Committee
Mr Fletcher served as an Executive and main Board Director of the Trafalgar
Group ("Trafalgar") for more than 20 years, which at the time was one of the
UK's largest industrial groups. Following the acquisition of Trafalgar by
Kvaerner ASA ("Kvaerner"), he became Chairman and President of Kvaerner's
engineering and construction worldwide operations.
In 1996, he was awarded the title of CBE (Commander of the British Empire) for
his contribution to British industry. He was a member of the international
advisory team to the Beijing Mayor in 1998 and later held the position of
Executive Vice Chairman of the Construction Supervision Committee for the
National Stadium for the Beijing 2008 Olympics.
Mr Fletcher is based in Hong Kong and is a director and shareholder of Somerley
Group Limited ("Somerley"), the holding company for Somerley Limited (a
specialist financial services company which has been operating for more than 25
years with a Beijing Representative Office), Somerley China Associates Limited,
Somerley Asset Management Limited, Somerley Singapore Pte Limited, Somerley
Investment Consulting (Shanghai) Limited and Somerley Australia Limited.
Somerley also own 40% of Sydney based financial advisory firm Inteq Limited in
which Mr Fletcher is a Somerley Director. Somerley advises both Chinese and
international groups from its Hong Kong, Beijing, Shanghai, Sydney and Perth
offices on access to capital via the Hong Kong Stock Exchange and via foreign
direct investment. Mr Fletcher continues to maintain his well-established
industry, government and financial connections in London.
Mr Fletcher also sits on the Advisory Board of Ambienta SGR S.p.A a fund
management company focusing on the environment based in Italy as well as
Luxottica China Advisory Board.
During the three year period to the end of the financial year, Mr Fletcher has
held directorships in Pacific Energy Limited (August 1996 - September 2007) and
KTL Limited (December 2004 - December 2007).
Paul C Atherley
Managing Director from date of appointment 4 May 2004
Qualifications - BSc (Hons), MappSC, MBA, MAusIMM, ARSM
Mr Atherley graduated in mining engineering from the Royal School of Mines,
Imperial College in 1982 and has over 25 years industry operating experience
including periods with British Coal in the UK and Mount Isa Mines Ltd in
Australia. He was an Executive Director of the Investment Bank arm of HSBC
Australia where he undertook a range of advisory roles in the resources sector.
In August 2004 he retired from the position of Managing Director of an ASX and
AIM listed mining company, a position he held since the company's flotation in
1994. During this period he completed a number of acquisitions and financings of
resource projects in Australia, South-East Asia, Africa and Western Europe.
During the three year period to the end of the financial year, Mr Atherley has
not held a directorship in any other listed company.
INFORMATION ON DIRECTORS (Cont'd)
Richard Seville
Non-Executive Director from date of appointment 1 February 2007
Member of the Audit Committee and Remuneration Committee
Qualifications - BSC (Hon), MEngSc, MAusIMM, MAICD, ARSM
Mr Seville is a mining geologist and geotechnical engineer with 25 years
experience covering exploration, mine development and mine operations in gold,
base metals and coal projects in Australia, Africa and Asia. Mr Seville also
has significant corporate experience and held the roles of operations director
and/or managing director for ASX/AIM listed companies since 1994.
During the three year period to the end of the financial year, Mr Seville
has held directorships in Renison Consolidated Mines NL and Northern Energy
Corporation Ltd (both of these roles ceasing in November 2006) and Orocobre
Limited (November 2007 - present)
Andrew Berry III
Non-Executive Director from date of appointment 10 October 2008
Chairman of the Audit Committee
Qualifications - BS Geological Engineering and MBA
Mr Berry has over 35 years experience in financing projects mainly with Chase
Manhattan Bank in the Far East and Australia. During this period Mr Berry played
an integral role in the completion of over US$25 billion in transactions for
power generation, mining and petroleum companies in Australia and throughout the
international arena.
He is currently the Chairman of Viridis Investment Management Limited which is
the Responsible Entity of the ASX listed Viridis Clean Energy Group and a
Non-Executive Director of the unlisted Corporative Fund Limited. Previously Mr.
Berry was a Non-Executive Director of several listed and unlisted Australian
resource focused companies including the ASX and Port Moresby Stock Exchange
listed Highlands Pacific Limited. Mr. Berry is a citizen of the United States
and Australia.
During the three year period to the end of the financial year, Mr Berry has held
directorships in CorporActive Fund Limited (September 2007 - Present), Viridis
Investment Management Limited (July 2005 - Present) and Highlands Pacific
Limited (August 1998 - role ceased May 2008).
Company Secretary
Stacey Apostolou
Company Secretary from date of appointment 7 April 2006
Qualifications - B Bus, CPA
Ms Apostolou has been employed with the Company since August 2005. She has
previously acted as Finance Director to the Company and another ASX/AIM listed
company, has held company secretarial roles for publicly listed companies within
the mining and exploration industry and has over 20 years relevant industry
experience. Ms Apostolou has been responsible for the corporate, treasury,
finance, accounting and administration functions for these companies.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year consisted of
gold and other minerals exploration. There was no significant change in the
nature of those activities during the financial year.
CONSOLIDATED RESULTS
+--------------------------------------------+------------+-------------+
| | 2010 | 2009 |
| | $ | $ |
+--------------------------------------------+------------+-------------+
| | | |
+--------------------------------------------+------------+-------------+
| Profit/(loss) of the Consolidated Entity | 26,655,096 | (3,397,827) |
| before income tax | | |
+--------------------------------------------+------------+-------------+
| Income tax | (158,261) | - |
+--------------------------------------------+------------+-------------+
| Net profit/(loss) attributable to members | 26,496,835 | (3,397,827) |
| of Leyshon Resources Limited | | |
+--------------------------------------------+------------+-------------+
REVIEW OF OPERATIONS
During the 2010 financial year, the Company completed the sale of its 70%
interest in the Zheng Guang Project in China. The sale was achieved with minimal
associated costs and represents a gain of $28.4 million.
Business Strategies and Prospects
With the support of its shareholders, the Company adopted an investment policy
that aims to capitalise on its extensive experience in China. The policy focuses
on acquiring and developing mineral and energy projects in those commodities and
located in those countries which it believes will be of interest to Chinese
mining and other groups for either offtake, partnership or sale.
The Company continues to review, and in some cases carry out due diligence, on a
number of possible projects both internationally and within China, with a focus
on opportunities in North Western China and Southern Mongolia including coking
coal, iron ore, copper and gold projects.
DIVIDENDS
No interim or final dividend has been declared in respect to the financial year
ended 30 June 2010 (2009: nil).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the 2010 financial year, the Company completed the sale of its 70%
interest in the Zheng Guang Project in China. The Company also undertook an
on-market buy back of 2,165,098 fully paid ordinary shares. There were no other
significant changes in the state of affairs of the Company during the year.
SUBSEQUENT EVENTS
As at the date of this report there are no matters or circumstances which have
arisen since 30 June 2010 that have significantly affected or may significantly
affect:
a) the operations, in financial years subsequent to 30 June 2010, of the
Consolidated Entity constituted by Leyshon Resources Limited and the entities it
controls from time to time;
b) the results of those operations; or
c) the state of affairs, in financial years subsequent to 30 June 2010,
of the Consolidated Entity.
LIKELY DEVELOPMENTS
The Company continues to receive investment proposals from many locations around
the world and it actively considers each one in light of its competitive
advantage of being able to access the Chinese end user market.
The Company remains diligent in its assessment of assets at all times and is
therefore prepared to commit significant expenditure on due diligence and other
studies before committing to a transaction. The Company can give no assurance
that these due diligence investigations and/or discussions will successfully
conclude in an acquisition.
In the opinion of the Directors, any further disclosure of information regarding
likely developments in the operations of the Consolidated Entity and the
expected results of these operations in subsequent financial years may prejudice
the interests of the Consolidated Entity and accordingly, has not been
disclosed.
ENVIRONMENTAL REGULATIONS
The Consolidated Entity's operations are subject to various environmental laws
and regulations under the relevant government's legislation. Full compliance
with these laws and regulations is regarded as a minimum standard for all
operations to achieve.
Instances of environmental non-compliance by an operation are identified either
by external compliance audits or inspections by relevant government authorities.
Pursuant to an agreement between the Company and Newmont Australia Limited
("Newmont"), Newmont is responsible for all environmental obligations in respect
of the Mt Leyshon leases in perpetuity regardless of changes to those
obligations arising from changes to regulatory requirements and has indemnified
the Company to that effect.
SHARES
During the year:
· there were no shares issued; and
· 2,165,098 fully paid ordinary shares were acquired at an average cost of
17.4 cents per share and subsequently cancelled under a share buy back
programme.
OPTIONS
During the year the following options were issued/expired:
· on 30 November 2009, 700,000 unlisted options at an exercise price of
$0.40 each lapsed in accordance with their terms and conditions; and
· on 30 November 2009, 550,000 unlisted options at an exercise price of
$0.55 each lapsed in accordance with their terms and conditions.
Unissued ordinary shares of Leyshon Resources under option at the date of this
report are as follows:
Unlisted Options
· 4,000,000 options at an exercise price of $0.70 each that expire on 30
November 2010; and
· 750,000 options at an exercise price of $0.70 each that expire on 30 June
2011.
No option holder has any right under the options to participate in any other
share issue of the Company or any other entity. Each option is for one ordinary
share of the Company.
During the financial year no shares were issued as a result of the exercise of
options. Since 30 June 2010, no shares have been issued as a result of the
exercise of options.
INSURANCE OF OFFICERS AND AUDITORS
During the financial year, the Company paid a premium in respect of a contract
insuring the directors of the Company, the company secretary and all executive
officers of the Company and of any related body corporate against a liability
incurred as such a director, secretary or executive officer to the extent
permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during the financial year, indemnified or agreed
to indemnify an officer or auditor of the Company or of any related body
corporate against a liability incurred as such an officer or an auditor.
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company's directors
held during the financial year ended 30 June 2010, and the number of meetings
attended by each director.
+--------------+-------+----------+-------+----------+--------+----------+
| | Board | Audit | Remuneration |
| | Meetings | Committee | Committee |
| | | Meetings | Meetings |
+--------------+------------------+------------------+-------------------+
| | Held |Attended | Held |Attended | Held |Attended |
+--------------+-------+----------+-------+----------+--------+----------+
| | | | | | | |
+--------------+-------+----------+-------+----------+--------+----------+
| Directors | | | | | | |
+--------------+-------+----------+-------+----------+--------+----------+
| John WS | 9 | 9 | 2 | 2 | 1 | 1 |
| Fletcher | | | | | | |
+--------------+-------+----------+-------+----------+--------+----------+
| Paul C | 9 | 9 | N/A | N/A | N/A | N/A |
| Atherley | | | | | | |
+--------------+-------+----------+-------+----------+--------+----------+
| Richard | 9 | 9 | 2 | 2 | 1 | 1 |
| Seville | | | | | | |
+--------------+-------+----------+-------+----------+--------+----------+
| Andrew Berry | 9 | 8 | 2 | 2 | N/A | N/A |
| III | | | | | | |
+--------------+-------+----------+-------+----------+--------+----------+
INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF LEYSHON RESOURCES
+--------------+------------+-----------+
| | Interest in |
| | Securities |
| | at the date of this |
| | Report |
+--------------+------------------------+
| | Ordinary | Options |
| | Shares | |
+--------------+------------+-----------+
| | | |
+--------------+------------+-----------+
| John WS | 2,316,324 | 1,000,000 |
| Fletcher | | |
+--------------+------------+-----------+
| Paul C | 29,530,000 | - |
| Atherley | | |
+--------------+------------+-----------+
| Richard | 750,000 | 1,000,000 |
| Seville | | |
+--------------+------------+-----------+
| Andrew Berry | - | - |
| III | | |
+--------------+------------+-----------+
REMUNERATION REPORT (AUDITED)
This remuneration report which forms part of the directors' report, sets out
information about the remuneration of Leyshon Resources Limited's directors and
its senior management for the financial year ended 30 June 2010. The prescribed
details for each person covered by this report are detailed below.
Director and Senior Management Details
The following persons acted as directors of Leyshon Resources Limited during or
since the end of the financial year:
· John WS Fletcher (Chairman)
· Paul C Atherley (Managing Director)
· Richard P Seville (Non Executive Director)
· Andrew J Berry III ( Non Executive Director)
The term 'senior management' is used in this remuneration report to refer to the
following persons. Except as noted, the named persons held their current
position for the whole of the financial year and since the end of the financial
year:
· Peter Niu - Financial Controller, Leyshon Resources Limited (Appointed
17 March 2008)
· Stacey Apostolou - Company Secretary (Ceased as a Director 10 October
2008)
· Henry Tebar - Exploration Manager (Appointed 16 November 2009)
There were no other group executives or Company executives during the year.
Remuneration policies
Executive remuneration
The Company's remuneration policy for executive directors and senior management
is designed to promote superior performance and long term commitment to the
Company. Remuneration packages are set at levels that are intended to attract
and retain executives capable of managing the Company's operations. Executives
receive a base remuneration which is market related, together with an element of
performance based remuneration.
Overall remuneration policies are subject to the discretion of the Board and
will be adapted to reflect competitive market and business conditions where it
is in the interests of the Company and shareholders to do so. Within this
framework, the remuneration committee (established 9 May 2007) considers
remuneration policies and practices generally, and determines specific
remuneration packages and other terms of employment for executive directors and
senior executive management.
Executive remuneration and other terms of employment are reviewed annually by
the committee having regard to performance, relevant comparative information and
expert advice.
The objective of any short term incentives is to link achievement of the
Company's operational targets with the remuneration received by executives
charged with meeting those targets. The objective of long term incentives is to
reward executives in a manner which aligns this element of their remuneration
with the creation of shareholder wealth.
The committee's remuneration policies are designed to align executive's
remuneration with shareholders' interests and to retain appropriately qualified
executive talent for the benefit of the Company. The main principles of the
policies are that:
· Reward reflects the competitive market in which the Company operates;
· Individual reward should be linked to performance criteria; and
· Executives should be rewarded for both financial and non-financial
performance.
REMUNERATION REPORT (Cont'd)
The structure of remuneration packages for executive directors and other senior
executive management consists of the following:
· Salary - executive directors and senior executives receive a fixed sum
base salary payable monthly in cash;
· Short term incentives - through eligibility to participate in performance
bonus plans;
· Long term incentives - executive directors are eligible to participate in
share option schemes with the prior approval of shareholders. Senior management
may also participate in employee share option schemes, with any option issues
generally being made in accordance with thresholds set in plans approved by
shareholders. The Board however, considers it appropriate to retain the
flexibility to issue shares or options to senior management outside of approved
employee option plans and in the event that no employee option plan exists; and
· Other benefits - executive directors and senior management, where
applicable, are eligible to participate in superannuation schemes.
Non-executive directors' remuneration
In accordance with current corporate governance practices, the structure for the
remuneration of non-executive directors and senior management is separate and
distinct. Shareholders approve the maximum aggregate remuneration for
non-executive directors. The remuneration committee recommends the actual
payments to directors and the Board is responsible for ratifying any
recommendations, as appropriate. The maximum aggregate remuneration approved for
non-executive directors is currently $250,000 which does not include any share
based payments. The Board approves any consultancy arrangements for
non-executive directors who provide services outside of and in addition to their
duties as non-executive directors.
Non-executive directors are entitled to statutory superannuation benefits if
applicable. At the current stage of the Company's development, non-executive
directors may also be entitled to participate in equity based remuneration
schemes.
All directors are entitled to have their indemnity insurance paid by the
Company.
Relationship between the remuneration policy and Company performance
The table below sets out summary information about the Consolidated Entity's
earnings and movements in shareholder wealth for the five years to June 2009:
+------------------+------------+-------------+--------------+--------------+-------------+
| | 30 | 30 | 30 | 30 | 30 |
| | June | June | June | June | June |
| | 2010 | 2009 | 2008 | 2007 | 2006 |
+------------------+------------+-------------+--------------+--------------+-------------+
| | $ | $ | $ | $ | $ |
+------------------+------------+-------------+--------------+--------------+-------------+
| Revenue | 29,913,031 | 518,802 | 1,048,631 | 628,530 | 349,677 |
+------------------+------------+-------------+--------------+--------------+-------------+
| Net | 26,655,096 | (3,397,827) | (10,411,177) | (10,081,813) | (7,172,707) |
| profit/(loss) | | | | | |
| before tax | | | | | |
+------------------+------------+-------------+--------------+--------------+-------------+
| Net | 26,496,835 | (3,397,827) | (10,411,177) | (10,081,813) | (7,172,707) |
| profit/(loss) | | | | | |
| after tax | | | | | |
+------------------+------------+-------------+--------------+--------------+-------------+
| Share price at | 0.1000 | 0.5000 | 0.6250 | 0.3150 | 0.2600 |
| start of year | | | | | |
+------------------+------------+-------------+--------------+--------------+-------------+
| Share price at | 0.2000 | 0.1000 | 0.5000 | 0.6250 | 0.3150 |
| end of year | | | | | |
+------------------+------------+-------------+--------------+--------------+-------------+
| Dividend paid | - | - | - | - | - |
+------------------+------------+-------------+--------------+--------------+-------------+
| Diluted | 12.2 | (1.6) | (4.8) | (5.8) | (5.4) |
| profit/(loss) | | | | | |
| per share | | | | | |
| (cents) | | | | | |
+------------------+------------+-------------+--------------+--------------+-------------+
There is no relationship between the remuneration for key management personnel
and the Company's financial performance.
REMUNERATION REPORT (Cont'd)
Service Agreements
Non Executive Directors
Mr Fletcher
The Company has entered into a service agreement with Mr Fletcher whereby he is
paid a fee of $66,000 per annum in his capacity as Chairman with effect from 1
January 2009 ($90,000 prior to 1 January 2009). Mr Fletcher is entitled to
receive reimbursement for out of pocket expenses incurred whilst on Company
business. The agreement is for no fixed term, does not provide for the payment
of termination benefits and may be terminated by either party by providing 90
days written notice.
Mr Seville
The Company has entered into a service agreement with Mr Seville whereby he is
paid a fee of $45,000 per annum including superannuation in his capacity as
Non-Executive Director with effect from 1 January 2009 ($50,000 prior to 1
January 2009). Mr Seville is entitled to receive reimbursement for out of
pocket expenses incurred whilst on Company business. The agreement is for no
fixed term, does not provide for the payment of termination benefits and may be
terminated by either party by providing 90 days written notice.
In addition, the Company has entered into a consultancy arrangement with Richard
Seville & Associates Pty Ltd in relation to the provision of technical services
by Mr Seville at the rate of $1,600 per day. The consultancy agreement can be
terminated by either party providing three months written notice.
Mr Berry
The Company has entered into a service agreement with Mr Berry whereby he is
paid a fee of $45,000 per annum including superannuation in his capacity as
Non-Executive Director with effect from 1 January 2009 ($50,000 prior to 1
January 2009). Mr Berry is entitled to receive reimbursement for out of pocket
expenses incurred whilst on Company business. The agreement is for no fixed
term, does not provide for the payment of termination benefits and may be
terminated by either party by providing 90 days written notice.
Executive Director
Mr Atherley
The service agreement in place with Mr Atherley during the financial year
contains the following key provisions:
· Entered into with effect from 1 July 2006 for a rolling twelve month term
as Managing Director;
· May be terminated by the Company by providing no more than three months
notice;
· May be terminated by Mr Atherley by providing at least six months notice;
· If Mr Atherley is removed as a director of the Company by shareholders,
or as the managing director of the Company, then the Company will be deemed to
have terminated the contract;
· Base salary of $300,000 per annum with effect from 1 September 2008
($450,000 prior to 1 September 2008);
· An expatriate allowance of $75,000 per annum with effect from 1 January
2010;
· A discretionary cash bonus of up to $500,000 per annum is payable based
on, in the Board's view, the contribution of Mr Atherley towards the Company's
achievement of its overall objectives. A cash bonus of $250,000 was granted
during 2010 (2009: Nil);
· No amount is payable in the event of termination for neglect of duty or
gross misconduct; and
REMUNERATION REPORT (Cont'd)
· If Mr Atherley's contract is terminated, other than for neglect of duty
or gross misconduct, then the Company shall pay to Mr Atherley a Termination
Payment. The Termination Payment shall be the aggregate of the contract rate
that would be payable for the period commencing when the contract terminates and
ending at the end of the contract term. In the event that the Termination
Payment exceeds the amount calculated in accordance with section 200F of the
Corporations Act or Chapter 10.19 of the ASX Listing Rules, then the Termination
Payment will be reduced by such amount as is necessary so as to not exceed the
amount permitted.
Senior Management
Mr Niu
The service agreement in place with Mr Niu during the financial year contains
the following key provisions:
· Entered into with effect from 17 March 2008 for no defined period;
· May be terminated by the Company or Mr Niu by providing three months
notice. No payment, other than for notice, is payable upon termination;
· Base salary of RMB1,200,000 per annum;
· An expatriate allowance of $75,000 per annum with effect from 1 January
2010
· May become entitled to receive incentive options in the Company at a
price to be determined by the Board at the time of issue; and
· May become entitled to receive a cash bonus of up to 100% of his base
salary at the discretion of the Board. A cash bonus of $200,000 was granted
during 2010 (2009: Nil)
Ms Apostolou
The consultancy arrangement in place during the financial year with Apostman
Holdings Pty Ltd in relation to the provision of company secretarial and
corporate services by Ms Apostolou, contains the following key provisions:
· Entered into with effect from 10 October 2008 for no defined period;
· May be terminated by the Company by providing three months notice or by
Ms Apostolou by providing one month notice. No payment, other than for notice,
is payable upon termination;
· Consultancy fee of $12,500 per month ($5,000 per month prior to 1
February 2010);
· May become entitled to receive incentive options in the Company at a
price to be determined by the Board at the time of issue; and
· May become entitled to receive a cash bonus at the discretion of the
Board. A cash bonus of $75,000 was granted during 2010 (2009: Nil).
Mr Tebar
The service agreement in place with Mr Tebar during the financial year contains
the following key provisions:
· Entered into with effect from 16 November 2009 for no defined period;
· May be terminated by the Company or Mr Tebar by providing one month
notice. Payment of two months remuneration is payable upon termination;
· Base salary of $150,000 per annum;
· May become entitled to receive incentive options in the Company at a
price to be determined by the Board at the time of issue; and
· May become entitled to receive a cash bonus of up to 50% of his base
salary at the discretion of the Board. No cash bonus was granted during 2010.
REMUNERATION REPORT (Cont'd)
Details of Remuneration
The emoluments (paid or payable) of each Director and the executive officers for
the financial year ended 30 June 2010 are as follows:
+------------+---------+---------+----------+-----------------+-------------+---------+--------+--------+
| | Short-term employee |Post-employment |Termination | Share | | |
| | benefits | | Benefits | Based | | |
| | | | |Payment | | |
+------------+------------------------------+-----------------+-------------+---------+--------+--------+
| | Salary | Bonus |Other(1) |Super-annuation | | Shares | Total | |
| | & fees | | | | | issued | | |
| | | | | | | | | |
| | $ | $ | | $ | $ | $ | $ | |
| | | | $ | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+--------+--------+
| | | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+--------+--------+
| Directors | | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+--------+--------+
| John | 66,000 | - | - | - | - | - | 66,000 |
| WS | | | | | | | |
| Fletcher | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| Paul C | 300,000 | 250,000 | 37,500 | - | - | - | 587,500 |
| Atherley | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| Richard | 43,142 | - | - | 1,858 | - | - | 45,000 |
| Seville | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| Andrew | 41,284 | - | - | 3,716 | - | - | 45,000 |
| Berry | | | | | | | |
| III | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| Group | | | | | | | |
| executives | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| Peter | 214,969 | 200,000 | 37,500 | - | - | - | 452,469 |
| Niu | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| Stacey | 90,000 | 75,000 | - | - | - | - | 165,000 |
| Apostolou | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+-----------------+
| Henry | 100,478 | - | - | - | - | - | 100,478 |
| Tebar(2) | | | | | | | |
+------------+---------+---------+----------+-----------------+-------------+---------+--------+--------+
(1) Expatriate allowance.
(2) Commenced as Exploration Manager 16 November 2009.
The emoluments (paid or payable) of each Director and the executive officers for
the financial year ended 30 June 2009 are as follows:
+------------+---------+--------+--------+-----------------+-------------+---------+--------+--------+
| | Short-term employee |Post-employment |Termination | Share | | |
| | benefits | | Benefits | Based | | |
| | | | |Payment | | |
+------------+---------------------------+-----------------+-------------+---------+--------+--------+
| | Salary | Bonus | Other |Super-annuation | | Shares | Total | |
| | & fees | | | | | issued | | |
| | | | | | | | | |
| | $ | $ | | $ | $ | $ | $ | |
| | | | $ | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+--------+--------+
| | | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+--------+--------+
| Directors | | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+--------+--------+
| John | 78,000 | - | - | - | - | - | 78,000 |
| WS | | | | | | | |
| Fletcher | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Paul C | 325,000 | - | - | - | - | - | 325,000 |
| Atherley | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Richard | 48,620 | - | - | - | - | - | 48,620 |
| Seville | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Andrew | 31,000 | - | - | 1,861 | - | - | 32,861 |
| Berry | | | | | | | |
| III(1) | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Stacey | 132,832 | - | - | 3,440 | - | - | 136,271 |
| Apostolou | | | | | | | |
| (2) | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Group | | | | | | | |
| executives | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Vic | 282,932 | - | - | - | - | 37,368 | 320,300 |
| McLaglen | | | | | | (5) | |
| (3) | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Dong | 75,000 | - | - | - | - | - | 75,000 |
| Ping | | | | | | | |
| Ye (4) | | | | | | | |
+------------+---------+--------+--------+-----------------+-------------+---------+-----------------+
| Peter | 244,628 | - | - | - | - | 8,968 | 253,596 |
| Niu | | | | | | (6) | |
+------------+---------+--------+--------+-----------------+-------------+---------+--------+--------+
(1) Commenced as a director 10 October 2008.
(2) Ceased as a director 10 October 2008.
(3) Ceased employment 30 April 2009.
(4) Ceased employment 12 September 2008.
(5) Represents 116,775 shares issued at $0.32 in consideration for Mr
McLaglen taking a reduction in his salary. 11% of Mr McLaglen's total
remuneration was comprised of the value of shares (2008: nil). Fair value was
determined based on the volume weighted average share price on the ASX for the
previous 10 trading days before they were issued.
(6) Represents 28,026 shares issued at $0.32 in consideration for Mr Niu
taking a reduction in his salary. 4% of Mr Niu's total remuneration was
comprised of the value of shares (2008: nil). Fair value was determined based on
the volume weighted average share price on the ASX for the previous 10 trading
days before they were issued.
REMUNERATION REPORT (Cont'd)
Share-based Compensation
No options were granted, vested, exercised or lapsed in relation to Directors
and executive officers during the year. Details of options held by Directors and
executive offers during the year are as follows:
+-------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| | Balance | Granted |Exercised | Other | Balance |Vested | Vested |
| | at the | as | |changes | at the |during | and |
| | start |remuneration | | | end of | the |exercisable |
| | of the | | | | the | year | at the end |
| | year | | | | year | |of the year |
| | | | | | | | |
+-------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| 2010 | | | | | | | |
+-------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Mr John | 1,000,000 | - | - | - | 1,000,000 | - | 1,000,000 |
| Fletcher | | | | | | | |
+-------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Mr Richard | 1,000,000 | - | - | - | 1,000,000 | - | 1,000,000 |
| Seville | | | | | | | |
+-------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
Note 1 - All options exercisable @ $0.70 each on or before 30 November 2010.
The grant of share options is not directly linked to previously determined
performance milestones or hurdles as the current stage of the Group's activities
make it difficult to determine effective and appropriate key performance
indicators and milestones. No options were forfeited during the year.
There is currently no Board policy in relation to the person granted the option
limiting his or her exposure to risk in relation to the securities as the
options are issued in addition to their separate remuneration package.
NON-AUDIT SERVICES
The Directors are satisfied that the provision of non-audit services during the
year by the auditor (or by another person or firm on the auditor's behalf) is
compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The Audit Committee assesses the provision of non-audit
services by the auditors to ensure that the auditor independence requirements of
the Corporations Act 2001 in relation to the audit are met.
Details of amounts paid or payable to the auditor for non-audit services
provided during the year by the auditor are outlined in note 5 to the financial
statements.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Deloitte Touche
Tohmatsu, to provide the directors of Leyshon Resources with an Independence
Declaration in relation to the audit of the attached Financial Statements. This
Independence Declaration is included in this Financial Report at page 14 and
forms part of this Directors' Report.
Signed in accordance with a resolution of the Board of Directors.
On behalf of the Directors
Paul Atherley
Managing Director
Beijing, China
10 September 2010
Audit Independence Declaration
DIRECTORS' DECLARATION
The directors declare that:
(a) 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;
(b) in the directors' opinion, the attached financial statements and notes
thereto are in accordance with the Corporations Act 2001, including compliance
with accounting standards and giving a true and fair view of the financial
position and performance of the Company and the consolidated entity;
(c) in the directors' opinion, the attached financial statements and notes
thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board, as stated in note 1; and
(d) the directors have been given the declarations required by s.295A of the
Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to
s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Paul Atherley
Managing Director
Beijing, China
10 September 2010
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2010
+---------------------------------+-------+-------------+-------------+
| | Note | Year Ended | Year Ended |
| | | 30 June | 30 June |
| | | 2010 | 2009 |
| | | $ | $ |
+---------------------------------+-------+-------------+-------------+
| Continuing operations | | | |
+---------------------------------+-------+-------------+-------------+
| Revenue | 2 | 1,468,472 | 518,802 |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| Other income | | 6,230 | 4,093 |
+---------------------------------+-------+-------------+-------------+
| Exploration expenses | | (185,839) | (967,422) |
+---------------------------------+-------+-------------+-------------+
| Corporate and administration | | (2,500,831) | (1,400,665) |
| expenses | | | |
+---------------------------------+-------+-------------+-------------+
| Project evaluation expenses | | (293,849) | - |
+---------------------------------+-------+-------------+-------------+
| Business development expenses | | - | (181,181) |
+---------------------------------+-------+-------------+-------------+
| Foreign exchange gains/(losses) | | (283,646) | 138,765 |
+---------------------------------+-------+-------------+-------------+
| Share based payments | | - | (46,336) |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| Loss before tax | | (1,789,463) | (1,933,944) |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| Income tax expense | 4 | (158,261) | - |
+---------------------------------+-------+-------------+-------------+
| Loss for the year from | | (1,947,724) | (1,933,944) |
| continuing operations | | | |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| Discontinued operations | | | |
+---------------------------------+-------+-------------+-------------+
| | | | |
| Profit/(loss) for the year from | | | |
| discontinued operations | 3 | 28,444,569 | (1,463,883) |
+---------------------------------+-------+-------------+-------------+
| | | 26,496,835 | (3,397,827) |
| Profit/(Loss) attributable to | | | |
| members of Leyshon Resources | | | |
| Limited | | | |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| Earnings Per Share | | | |
+---------------------------------+-------+-------------+-------------+
| From continuing and | | | |
| discontinued operations | | | |
+---------------------------------+-------+-------------+-------------+
| Basic (cents per share) | 19 | 12.2 | (1.6) |
+---------------------------------+-------+-------------+-------------+
| Diluted (cents per share) | 19 | 12.2 | (1.6) |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| From continuing operations | | | |
+---------------------------------+-------+-------------+-------------+
| Basic earnings per share (cents | 19 | (0.9) | (0.9) |
| per share) | | | |
+---------------------------------+-------+-------------+-------------+
| Diluted earnings per share | 19 | (0.9) | (0.9) |
| (cents per share) | | | |
+---------------------------------+-------+-------------+-------------+
The above Consolidated Income Statement should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2010
+---------------------------------+-------+-------------+-------------+
| | Note | Year Ended | Year Ended |
| | | 30 June | 30 June |
| | | 2010 | 2009 |
| | | $ | $ |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| Profit/(loss) for the year | | 26,496,835 | (3,397,827) |
+---------------------------------+-------+-------------+-------------+
| | | | |
+---------------------------------+-------+-------------+-------------+
| Other comprehensive income | | | |
+---------------------------------+-------+-------------+-------------+
| Exchange differences on | | | |
| translating foreign operations | | | |
+---------------------------------+-------+-------------+-------------+
| Exchange differences arising | | (876,170) | |
| during the year | | | 986,685 |
+---------------------------------+-------+-------------+-------------+
| Reclassification adjustment | | | |
| relating to foreign operations | | | |
| disposed of in the year (Note | | 393,389 | - |
| 3) | | | |
+---------------------------------+-------+-------------+-------------+
| Other comprehensive income for | | | |
| the year net of tax | | (482,781) | 986,685 |
| | | | |
+---------------------------------+-------+-------------+-------------+
| Total comprehensive income | | 26,014,054 | (2,411,142) |
| attributable to members of | | | |
| Leyshon Resources Limited | | | |
+---------------------------------+-------+-------------+-------------+
The above Consolidated Income Statement should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2010
+----------------------------------+-------+--------------+----------+--------------+
| | Note | 30 June | | 30 June |
| | | 2010 | | 2009 |
| | | $ | | $ |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| ASSETS | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Current Assets | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Cash and bank balances |27(a) | 46,193,725 | | 3,918,963 |
+----------------------------------+-------+--------------+----------+--------------+
| Trade and other receivables | 6 | 1,145,616 | | 76,010 |
+----------------------------------+-------+--------------+----------+--------------+
| Other assets | 7 | 13,260 | | 14,078 |
+----------------------------------+-------+--------------+----------+--------------+
| | | 47,352,601 | | 4,009,051 |
+----------------------------------+-------+--------------+----------+--------------+
| Non-Current Assets held for sale | 8 | - | | 24,328,083 |
+----------------------------------+-------+--------------+----------+--------------+
| | | 47,352,601 | | 28,337,134 |
| Total Current Assets | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Non-Current Assets | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Other financial assets at fair | | 1 | | 1 |
| value through profit and loss | 9 | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Other financial assets | 10 | 14,999 | | 14,999 |
+----------------------------------+-------+--------------+----------+--------------+
| Property, plant and equipment | 11 | 28,938 | | 2,771 |
+----------------------------------+-------+--------------+----------+--------------+
| | | 43,938 | | 17,771 |
| Total Non-Current Assets | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| TOTAL ASSETS | | 47,396,539 | | 28,354,905 |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| LIABILITIES | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Current Liabilities | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Trade and other payables | 13 | 158,455 | | 1,567,699 |
+----------------------------------+-------+--------------+----------+--------------+
| Current tax liabilities | 4 | 158,261 | | - |
+----------------------------------+-------+--------------+----------+--------------+
| Provisions | 14 | 64,112 | | 45,452 |
+----------------------------------+-------+--------------+----------+--------------+
| | | 380,828 | | 1,613,151 |
+----------------------------------+-------+--------------+----------+--------------+
| Non-Current Liabilities held for | | - | | 5,363,607 |
| sale | 15 | | | |
+----------------------------------+-------+--------------+----------+--------------+
| | | 380,828 | | 6,976,758 |
| Total Current Liabilities | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| TOTAL LIABILITIES | | 380,828 | | 6,976,758 |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| NET ASSETS | | 47,015,711 | | 21,378,147 |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| EQUITY | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| Issued capital | 16 | 64,175,728 | | 64,552,218 |
+----------------------------------+-------+--------------+----------+--------------+
| Reserves | 17 | 1,379,309 | | 2,430,810 |
+----------------------------------+-------+--------------+----------+--------------+
| Accumulated losses | 18 | (18,539,326) | | (45,604,881) |
+----------------------------------+-------+--------------+----------+--------------+
| | | | | |
+----------------------------------+-------+--------------+----------+--------------+
| TOTAL EQUITY | | 47,015,711 | | 21,378,147 |
+----------------------------------+-------+--------------+----------+--------------+
The above Consolidated Statement of Financial Position should be read in
conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2010
+----------------------------------+-------+------------+------------+
| | | Year | Year |
| | | Ended | Ended |
| | | 30 June | 30 June |
| | | 2010 | 2009 |
| | | $ | $ |
+----------------------------------+-------+------------+------------+
| Issued Capital | | |
+------------------------------------------+------------+------------+
| Issued and paid up capital - at the | 64,552,218 | 64,507,082 |
| beginning of the year | | |
+------------------------------------------+------------+------------+
| Transactions with equity holders in | | |
| their capacity as equity holders: | | |
+------------------------------------------+------------+------------+
| Issue of shares as part of | - | 46,336 |
| employee benefits | | |
+------------------------------------------+------------+------------+
| Less share transaction costs | - | (1,200) |
+------------------------------------------+------------+------------+
| Buy back of shares | (374,284) | - |
+------------------------------------------+------------+------------+
| Share transaction costs | (2,206) | - |
+------------------------------------------+------------+------------+
| | (376,490) | 45,136 |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Issued and paid up capital - at the end | 64,175,728 | 64,552,218 |
| of the year | | |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Employee Benefit Reserve | | |
+------------------------------------------+------------+------------+
| Balance at the beginning of the year | 1,941,893 | 1,941,893 |
+------------------------------------------+------------+------------+
| Transactions with equity holders in | | |
| their capacity as equity holders: | | |
+------------------------------------------+------------+------------+
| Expiry of options | (568,720) | - |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Employee benefit reserve at the end of | 1,373,173 | 1,941,893 |
| the year | | |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Option Premium Reserve | | |
+------------------------------------------+------------+------------+
| Option premium reserve at the beginning | - | 112,841 |
| of the year | | |
+------------------------------------------+------------+------------+
| Expiry of options | - | (112,841) |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Option premium reserve at the end of the | - | - |
| year | | |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Foreign Exchange Reserve | | |
+------------------------------------------+------------+------------+
| Foreign exchange reserve at the | 488,917 | (497,768) |
| beginning of the year | | |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Exchange differences arising during the | (876,170) | 986,685 |
| year on translation of foreign | | |
| operations attributable to members of | | |
| Leyshon Resources Limited | | |
+------------------------------------------+------------+------------+
| Transfer to Income Statement on sale of | 393,389 | - |
| foreign operations as stated in Note 3 | | |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Total comprehensive income for the year | (482,781) | 986,685 |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Foreign exchange reserve at the end of | 6,136 | 488,917 |
| the year | | |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Total reserves at the end of the year | 1,379,309 | 2,430,810 |
+----------------------------------+-------+------------+------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2010 (CONTINUED)
+----------------------------------+-------+--------------+--------------+
| | | Year | Year |
| | | Ended | Ended |
| | | 30 June | 30 June |
| | | 2010 | 2009 |
| | | $ | $ |
+----------------------------------+-------+--------------+--------------+
| | | |
+------------------------------------------+--------------+--------------+
| Accumulated Losses | | |
+------------------------------------------+--------------+--------------+
| Accumulated losses at the beginning of | (45,604,881) | (42,319,895) |
| the year | | |
+------------------------------------------+--------------+--------------+
| | | |
+------------------------------------------+--------------+--------------+
| Profit/(Loss) for the year attributable | 26,496,835 | (3,397,827) |
| to members of Leyshon Resources Limited | | |
+------------------------------------------+--------------+--------------+
| Other comprehensive income | - | - |
+------------------------------------------+--------------+--------------+
| | 26,496,835 | (3,397,827) |
| Total comprehensive income for the year | | |
+------------------------------------------+--------------+--------------+
| | | |
| Transactions with equity holders in | | |
| their capacity as equity holders: | | |
+------------------------------------------+--------------+--------------+
| Transfer from employee | 568,720 | - |
| benefit reserve | | |
+------------------------------------------+--------------+--------------+
| Transfer from option premium | - | 112,841 |
| reserve | | |
+------------------------------------------+--------------+--------------+
| | | |
+------------------------------------------+--------------+--------------+
| Accumulated losses at the end of the | (18,539,326) | (45,604,881) |
| year | | |
+----------------------------------+-------+--------------+--------------+
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2010
+--------------------------------+---+---+-------------+-+--------------+
| | Note | Year Ended | | Year Ended |
| | | 30 June | | 30 June |
| | | 2010 | | 20099 |
| | | $ | | $ |
+--------------------------------+-------+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| CASH FLOWS FROM OPERATING | | | | |
| ACTIVITIES | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| Payments to suppliers and | | (3,206,459) | | (3,687,184) |
| employees | | | | |
+------------------------------------+---+-------------+-+--------------+
| Interest received | | 398,823 | | 272,207 |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | (2,807,636) | | (3,414,977) |
| Net cash flows used in operating | | | | |
| activities | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| CASH FLOWS FROM INVESTING | | | | |
| ACTIVITIES | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| Acquisition of plant and equipment | | (26,461) | | (2,580) |
+------------------------------------+---+-------------+-+--------------+
| Proceeds from sale of interest in | | 46,039,933 | | - |
| jointly controlled entity |3 | | | |
+------------------------------------+---+-------------+-+--------------+
| Loans to other entities | | (50,276) | | (702,176) |
+------------------------------------+---+-------------+-+--------------+
| Development expenditure |3 | (458,097) | | (1,324,435) |
+------------------------------------+---+-------------+-+--------------+
| | | 45,505,099 | | (2,029,191) |
| Net cash flows provided by/(used | | | | |
| in) investing activities | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| CASH FLOWS FROM FINANCING | | | | |
| ACTIVITIES | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| Proceeds from issue of shares | | - | | - |
+------------------------------------+---+-------------+-+--------------+
| Share issue costs | | - | | (1,200) |
+------------------------------------+---+-------------+-+--------------+
| Payment for buy-back of shares | | (374,284) | | - |
+------------------------------------+---+-------------+-+--------------+
| Share buy-back costs | | (2,206) | | - |
+------------------------------------+---+-------------+-+--------------+
| | | (376,490) | | (1,200) |
| Net cash flows provided by/(used | | | | |
| in) investing activities | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| NET INCREASE/(DECREASE) IN CASH | | 42,320,973 | | (5,445,368) |
| AND CASH EQUIVALENTS | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| Cash and cash equivalents at the | | 3,918,963 | | 9,399,324 |
| beginning of the year | | | | |
+------------------------------------+---+-------------+-+--------------+
| Effects of exchange rate changes | | (46,211) | | (34,993) |
| on cash and cash equivalents | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | 46,193,725 | | 3,918,963 |
| CASH AND CASH EQUIVALENTS AT THE | | | | |
| END OF THE YEAR | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | |
+------------------------------------+---+-------------+-+--------------+
| | | | | | |
+--------------------------------+---+---+-------------+-+--------------+
The above Consolidated Statement of Cash Flows should be read in conjunction
with the accompanying notes.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
These financial statements are a general purpose financial report which has been
prepared in accordance with the Corporations Act 2001, Accounting Standards and
Interpretations, and comply with other requirements of the law.
Accounting Standards include Australian equivalents to International Financial
Reporting Standards ('A-IFRS'). Compliance with A-IFRS ensures that the
financial statements and notes of the Company and the Group comply with
International Financial Reporting Standards ('IFRS').
The financial statements were authorised for issue by the directors on 10
September 2010.
Basis of preparation
The financial report has been prepared on the basis of historical cost, except
for the revaluation of certain non-current assets and financial instruments.
Cost is based on the fair values of the consideration given in exchange for
assets. All amounts are presented in Australian dollars, unless otherwise noted.
Adoption of new and revised Accounting Standards
In the current year, the Consolidated Entity has adopted all of the new and
revised Standards and Interpretations issued by the Australian Accounting
Standards Board ("AASB") that are relevant to its operations and effective for
annual reporting periods beginning on or after 1 July 2009. The standards
adopted are:
· AASB 3 : "Business Combinations"
· AASB 8 : "Operating Segments"
· AASB 2007-3 "Amendments to Australian Accounting Standards arising from
AASB 8"
· AASB 101 : "Presentation of Financial Statements"
· AASB 127 : "Consolidated and Separate Financial Statements"
· AASB 2009-4 : "Amendments to Australian Accounting Standards arising from
the Annual Improvements Project"
The adoption of these new and revised Standards and Interpretations has resulted
in some disclosure changes being made.
At the date of authorisation of the financial report, the Standards and
Interpretations listed below were in issue but not yet effective.
Initial application of the following Standards will not affect any of the
amounts recognised in the financial report, but will change the disclosures
presently made in relation to the Group and the Company's financial report:
+-----------------------------+----------------+-----------------+
| Standard / Interpretation | Effective for | Expected to be |
| | annual | initially |
| | reporting | applied in the |
| | periods | financial year |
| | beginning on | ending: |
| | or after: | |
+-----------------------------+----------------+-----------------+
| AASB 9 Financial |1 January 2013 | 30 June 2014 |
| Instruments, AASB 2009-11 | | |
| Amendments to Australian | | |
| Accounting Standards | | |
| arising from AASB 9. AASB 9 | | |
| introduces new requirements | | |
| for classifying and | | |
| measuring. | | |
| | | |
+-----------------------------+----------------+-----------------+
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
Initial application of the following standards is not expected to have any
material impact on the financial report of the Group and Company.
+-----------------------------+----------------+-----------------+
| Standard / Interpretation | Effective for | Expected to be |
| | annual | initially |
| | reporting | applied in the |
| | periods | financial year |
| | beginning on | ending: |
| | or after: | |
+-----------------------------+----------------+-----------------+
| AASB 124 Related Party |1 January 2011 | 30 June 2011 |
| Disclosures (2009), AASB | | |
| 2009-12 Amendments to | | |
| Australian Accounting | | |
| Standards Amends the | | |
| requirements of the | | |
| previous version of AASB | | |
| 124. | | |
| | | |
+-----------------------------+----------------+-----------------+
| AASB 2009-5 'Further |1 January 2010 | 30 June 2011 |
| Amendments to Australian | | |
| Accounting Standards | | |
| arising from the Annual | | |
| Improvements Process'. | | |
| | | |
+-----------------------------+----------------+-----------------+
| AASB 2009-8 Amendments to |1 January 2010 | 30 June 2011 |
| Australian Accounting | | |
| Standards - Group | | |
| Cash-Settled Share-based | | |
| Payment Transactions Amends | | |
| AASB 2 Share-based Payment | | |
| to clarify the accounting | | |
| for group cash-settled | | |
| share-based payment | | |
| transactions. An entity | | |
| receiving goods or services | | |
| in a share-based payment | | |
| arrangement must account | | |
| for those goods or services | | |
| no matter which entity in | | |
| the group settles the | | |
| transaction, and no matter | | |
| whether the transaction is | | |
| settled in shares or cash. | | |
| | | |
+-----------------------------+----------------+-----------------+
| AASB 2009-10 Amendments to | 1 February | 30 June 2011 |
| Australian Accounting | 2010 | |
| Standards - Classification | | |
| of Rights Issues Amends | | |
| AASB 132 Financial | | |
| Instruments: Presentation | | |
| to require a financial | | |
| instrument that gives the | | |
| holder the right to acquire | | |
| a fixed number of the | | |
| entity's own equity | | |
| instruments for a fixed | | |
| amount of any currency to | | |
| be classified as an equity | | |
| instrument if, and only if, | | |
| the entity offers the | | |
| financial instrument pro | | |
| rata to all of its existing | | |
| owners of the same class of | | |
| its own non-derivative | | |
| equity instruments. Prior | | |
| to this amendment, rights | | |
| issues (rights, options, or | | |
| warrants) denominated in a | | |
| currency other than the | | |
| functional currency of the | | |
| issuer were accounted for | | |
| as derivative instruments. | | |
| | | |
+-----------------------------+----------------+-----------------+
| AASB 2010-3 Amendments to | 1 July 2010 | 30 June 2011 |
| Australian Accounting | | |
| Standards arising from the | | |
| Annual Improvements Project | | |
| Amends a number of | | |
| pronouncements as a result | | |
| of the IASB's 2008-2010 | | |
| cycle of annual | | |
| improvements to provide | | |
| clarification of certain | | |
| matters. | | |
| | | |
+-----------------------------+----------------+-----------------+
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
+-----------------------------+----------------+-----------------+
| Standard / Interpretation | Effective for | Expected to be |
| | annual | initially |
| | reporting | applied in the |
| | periods | financial year |
| | beginning on | ending: |
| | or after: | |
+-----------------------------+----------------+-----------------+
| AASB 2010-4 Further |1 January 2011 | 30 June 2011 |
| Amendments to Australian | | |
| Accounting Standards | | |
| arising from the Annual | | |
| Improvements Project Amends | | |
| a number of pronouncements | | |
| as a result of the IASB's | | |
| 2008-2010 cycle of annual | | |
| improvements. | | |
| | | |
+-----------------------------+----------------+-----------------+
| AASB Interpretation 19 | 1 July 2010 | 30 June 2011 |
| Extinguishing Liabilities | | |
| with Equity Instruments | | |
| Requires the extinguishment | | |
| of a financial liability by | | |
| the issue of equity | | |
| instruments to be measured | | |
| at fair value (preferably | | |
| using the fair value of the | | |
| equity instruments issued) | | |
| with the difference between | | |
| the fair value of the | | |
| instrument issued and the | | |
| carrying value of the | | |
| liability extinguished | | |
| being recognised in profit | | |
| or loss. The Interpretation | | |
| does not apply where the | | |
| conversion terms were | | |
| included in the original | | |
| contract (such as in the | | |
| case of convertible debt) | | |
| or to common control | | |
| transactions. | | |
| | | |
+-----------------------------+----------------+-----------------+
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are described in
Note 1, the Directors' are required to make judgments, estimates and assumptions
about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Key sources of estimation uncertainty
There are no key assumptions concerning the future, and other key sources of
estimation uncertainty at the balance sheet date, that have a significant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
Significant accounting policies
The following significant accounting policies have been adopted in the
preparation and presentation of the financial report:
(a) Going Concern Basis
The financial report has been prepared on the going concern basis, which
contemplates the continuity of normal business activity and the realisation of
assets and the settlement of liabilities in the normal course of business.
(b) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) as at 30
June 2010 and the results of all subsidiaries for the year then ended. Leyshon
Resources Limited and its subsidiaries together are referred to as the Group or
the Consolidated Entity. A list of subsidiaries is provided in Note 23.
Subsidiaries are all those entities (including special purpose entities) over
which the Group has the power to govern the financial and operating policies so
as to obtain benefits from their activities, generally accompanying a
shareholding of more than one-half of the voting rights. The existence and
effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control
ceases.
The acquisition method of accounting is used to account for the acquisition of
subsidiaries by the Group (refer to note 1(h)). Subsequent to initial
recognition, investments in subsidiaries are measured at cost in the Company's
financial statements.
Intercompany transactions and balances, and unrealised gains on transactions
between Group companies, are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown
separately in the consolidated income statement and statement of financial
position respectively.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(c) Interests in Joint Ventures
The Group accounts for its interests in jointly controlled entities with
proportionate consolidation. Proportionate consolidation is a method of
accounting whereby the Group's share of each of the assets, liabilities, income
and expenses of its jointly controlled entities is reported on a line-by-line
basis in the consolidated entity's financial statements. The Group considers
that proportionate consolidation provides users of the financial report with
reliable and relevant information.
(d) Foreign Currency Translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ("the functional currency"). The consolidated financial
statements are presented in Australian dollars, which is the Company's
functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and
from the translation at period-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement.
(iii) Group companies
The results and financial position of all the Group entities (none of which has
the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
· Assets and liabilities for each balance sheet presented are translated at
the closing rate at the date of that balance sheet;
· Income and expenses for each income statement are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the dates of the transactions); and
· All resulting exchange differences are recognised as a separate component
of equity in the foreign currency translation reserve.
Where a foreign operation is sold or borrowings repaid, a proportionate share of
such exchange differences are recognised in the income statement as part of the
gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
(e) Revenue Recognition
Revenue is measured at the fair value of the consideration received or
receivable. The following specific recognition criteria must also be met before
revenue is recognised:
Interest
Interest is recognised on a time proportionate basis that takes into account the
effective yield on the financial asset.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(f) Income Tax
The income tax expense or income for the period is the tax payable on the
current period's taxable income based on the national income tax rate for each
jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements, and to
unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at
the tax rates expected to apply when the assets are recovered or liabilities are
settled, based on those tax rates which are enacted or substantively enacted for
each jurisdiction. The relevant tax rates are applied to the cumulative amounts
of deductible and taxable temporary differences to measure the deferred tax
asset or liability. An exception is made for certain temporary differences
arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences
if they arose in a transaction, other than a business combination, that at the
time of the transaction did not affect either accounting profit or taxable
profit or loss.
Deferred tax assets are recognised for deductible temporary differences and
unused tax losses only if it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in
equity are also recognised directly in equity.
Leyshon Resources Limited and its wholly owned Australian controlled entities
have not implemented the tax consolidation legislation.
(g) Operating Leased Assets
Leases are classified at their inception as either operating or finance leases
based on the economic substance of the agreement so as to reflect the risks and
benefits incidental to ownership.
Operating leased assets, where the lessor effectively retains substantially all
of the risks and benefits of ownership of the leased item, are not capitalised
and rental payments are expensed to the income statement over the lease term on
a straight line basis except where another systematic basis is more
representative of the time pattern in which economic benefits from the leased
asset are consumed.
(h) Business Combinations
Acquisitions of subsidiaries and businesses are accounted for using the
acquisition method. The consideration for each acquisition is measured at the
aggregate of the fair values (at the date of exchange) of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised
in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or
liability resulting from a contingent consideration arrangement, measured at its
acquisition-date fair value. Subsequent changes in such fair values are adjusted
against the cost of acquisition where they qualify as measurement period
adjustments (see below). All other subsequent changes in the fair value of
contingent consideration classified as an asset or liability are accounted for
in accordance with relevant Standards. Changes in the fair value of contingent
consideration classified as equity are not recognised.
Where a business combination is achieved in stages, the Group's previously held
interests in the acquired entity are remeasured to fair value at the acquisition
date (i.e. the date the Group attains control) and the resulting gain or loss,
if any, is recognised in profit or loss. Amounts arising from interests in the
acquiree prior to the acquisition date that have previously been recognised in
other comprehensive income are reclassified to profit or loss, where such
treatment would be appropriate if that interest were disposed of.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
The acquiree's identifiable assets, liabilities and contingent liabilities that
meet the conditions for recognition under AASB 3(2008) are recognised at their
fair value at the acquisition date, except that:
· deferred tax assets or liabilities and liabilities or assets related to
employee benefit arrangements are recognised and measured in accordance with
AASB 112 Income Taxes and AASB 119 Employee Benefits respectively;
· liabilities or equity instruments related to the replacement by the Group
of an acquiree's sharebased payment awards are measured in accordance with AASB
2 Share-based Payment; and
· assets (or disposal groups) that are classified as held for sale in
accordance with AASB 5 Noncurrent Assets Held for Sale and Discontinued
Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the end of
the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see below), or
additional assets or liabilities are recognised, to reflect new information
obtained about facts and circumstances that existed as of the acquisition date
that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date
the Group obtains complete information about facts and circumstances that
existed as of the acquisition date - and is
subject to a maximum of one year.
(i) Impairment of Assets
Assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset's fair
value less costs to sell and value in use. For the purposes of assessing
impairment where an asset does not generate cash flows that are independent from
other assets, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units).
(j) Cash and Cash Equivalents
"Cash and cash equivalents" includes cash on hand, deposits held at call with
financial institutions, other short-term highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts. Bank overdrafts
are shown within borrowings in current liabilities on the statement of financial
position.
(k) Receivables
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost less provision for doubtful debts.
Trade receivables are due for settlement no more than 30 days from the date of
recognition.
(l) Other Financial Assets
The Group classifies its investments in the following categories: financial
assets at fair value through profit or loss, loans and receivables,
held-to-maturity investments, and available-for-sale financial assets. The
classification depends on the purpose for which the investments were acquired.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(i) Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for trading, and
those designated at fair value through profit or loss on initial recognition.
Derivatives are also categorised as held for trading unless they are designated
as hedges. Assets in this category are classified as current assets if they are
either held for trading or are expected to be realised within twelve months of
the balance sheet date.
(ii) Loans and receivables
Trade receivables, loans and other receivables are recorded at amortised costs
less impairment.
(m) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated
for recognition and measurement.
The fair value of financial instruments traded in active markets (such as
publicly traded derivatives, and trading and available-for-sale securities) is
based on quoted market prices at the balance sheet date. The quoted market
price used for financial assets held by the Group is the current bid price; the
appropriate quoted market price for financial liabilities is the current ask
price.
(n) Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale if their
carrying amount will be recovered principally through a sale transaction rather
than through continuing use. This condition is regarded as met only when the
sale is highly probable and the asset (or disposal group) is available for
immediate sale in its present condition. Management must be committed to the
sale, which should be expected to qualify for recognition as a completed sale
within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are
measured at the lower of their previous carrying amount and fair value less
costs to sell.
(o) Property, Plant and Equipment
Plant and equipment is stated at historical cost less depreciation. Historical
cost includes expenditure that is directly attributable to the acquisition of
the items.
Subsequent costs are included in the asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. All other repairs and maintenance are charged to
the income statement during the financial period in which they are incurred.
Plant and equipment are depreciated at rates based upon their expected useful
lives as follows:
+-----------------------+----------+-------------+
| | Life | Method |
+-----------------------+----------+-------------+
| | | |
+-----------------------+----------+-------------+
| Plant and Equipment | 2 - 15 |Diminishing |
| | years | value |
+-----------------------+----------+-------------+
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable amount
(note 1(i)). Gains and losses on disposals are determined by comparing proceeds
with carrying amount. These are included in the income statement.
(p) Payables
These amounts represent liabilities for goods and services provided to the Group
prior to the end of the financial period which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition.
(q) Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits, annual
leave, accumulating sick leave and long service leave expected to be settled
within twelve months of the reporting date are recognised in provisions in
respect of employees' services up to the reporting date and are measured at the
amounts expected to be paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken and measured
at the rates paid or payable.
The liability for long service leave not expected to be settled within 12 months
is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by
employees up to the reporting date. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity and currency
that match, as closely as possible, the estimated future cash outflows.
Contributions to the defined contribution superannuation fund are recognised as
an expense as they become payable. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction in future payments is
available.
(r) Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration
received by the Company.
Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
(s) Dividends
Provision is made for the amount of any dividend declared on or before the end
of the year but not distributed at statement of financial position date.
(t) Earnings per Share (EPS)
Basic earnings per share is calculated by dividing the consolidated
profit/(loss) attributable to equity holders of the company, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the year, adjusted for bonus elements in
ordinary shares issued during the year.
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account the after income tax effect of
interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(u) Exploration and evaluation expenditure
Exploration and evaluation expenditure encompasses expenditures incurred by the
Group in connection with the exploration for and evaluation of mineral resources
before the technical feasibility and commercial viability of extracting a
mineral resource are demonstrable.
Exploration and evaluation expenditure incurred by the Group is accumulated for
each area of interest and recorded as an asset if:
(1) the rights to tenure of the area of interest are current; and
(2) the exploration and evaluation expenditures are expected to be recouped
through successful development and exploitation of the area of interest, or
alternatively, by its sale.
For each area of interest, expenditure incurred in the acquisition of rights to
explore is capitalised, classified as tangible or intangible, and recognised as
an exploration and evaluation asset. Exploration and evaluation assets are
measured at cost at recognition. Exploration and evaluation expenditure
incurred by the Group subsequent to acquisition of the rights to explore is
expensed as incurred until it is determined that expenditures are expected to be
recouped and an asset is recognised.
(v) Development Expenditure
Development expenditure represents the costs incurred in preparing mines for
production. The costs are carried forward to the extent that these costs are
expected to be recouped through the successful exploitation of the Company's
mining properties and then amortised over the life of the reserves associated
with the area of interest once mining operations have commenced.
Development expenditure is reviewed at each reporting date to establish whether
an indication of impairment exists. If any such indication exists, the
recoverable amount of the development expenditure is estimated to determine the
extent of the impairment loss (if any). Where an impairment loss subsequently
reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in previous years.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(w) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST except:
· where the GST incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
· receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the balance sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST
components of cash flows arising from investing and financing activities, which
are recoverable from, or payable to, the taxation authority are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable
from, or payable to, the taxation authority.
(x) Share Based Payments
Share based payments may be provided to directors, employees, consultants and
other advisors.
For shares issued as payment, the fair value of the shares issued is recognised
as an expense with a corresponding increase in equity. The fair value of the
shares issued is based on the volume weighted average share price on the ASX for
the previous 10 trading days before they are issued.
For share options granted after 7 November 2002 and vested after 1 January 2005,
the following treatment is adopted:
The fair value of options granted is recognised as an expense with a
corresponding increase in equity. The fair value is measured at grant date and
recognised over the period during which the holders become unconditionally
entitled to the options.
The fair value at grant date is independently determined using a Black-Scholes
option pricing model that takes into account the exercise price, the term of the
option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk-free interest rate
for the term of the option.
The fair value of the options granted excludes the impact of any non-market
vesting conditions. Non-market vesting conditions are included in assumptions
about the number of options that are expected to become exercisable. At each
balance sheet date, the entity revises its estimate of the number of options
that are expected to become exercisable. The expense recognised each period
takes into account the most recent estimate.
Upon the exercise of options, the balance of the reserve relating to those
options is transferred to share capital.
+---------------------------+-----------+-----------+---------+-----------+------+----+-----------+
| | Continuing | Discontinued | Total |
+---------------------------+-----------------------+----------------------------+----------------+
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| 2. LOSS FROM OPERATIONS | $ | $ | | | $ | $ |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| (a) Revenue | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Revenue consisted of the | | | | | | |
| following items: | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Interest | 1,468,472 | 518,802 | - | - | 1,468,472 | 518,802 |
| received/receivable | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Total revenue | 1,468,472 | 518,802 | - | - | 1,468,472 | 518,802 |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| (b) Loss before income | | | | | | |
| tax | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Loss before income tax | | | | | | |
| has been arrived at after | | | | | | |
| crediting the following | | | | | | |
| gains: | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Sundry income | 6,230 | 4,093 | - | - | 6,230 | 4,093 |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Total other income | 6,230 | 4,093 | - | - | 6,230 | 4,093 |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Loss before income tax | | | | | | |
| has been arrived at after | | | | | | |
| charging the following | | | | | | |
| losses and expenses: | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Depreciation and | 13,046 | 13,408 | | | 13,046 | 13,408 |
| amortisation | | | - | - | | |
| - plant and equipment | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Net movement in | | | | | | |
| provisions for | 18,660 | (75,495) | - | - | 18,660 | (75,495) |
| - employee entitlements | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Exploration expenses | 185,839 | 527,682 | 156,714 | 1,463,883 | 342,553 | 1,991,565 |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Project evaluation | 293,849 | - | - | - | 293,849 | - |
| expenses | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Foreign exchange | 283,646 | (138,765) | - | - | 283,646 | (138,765) |
| (gain)/loss | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Rental expense relating | 54,327 | 126,669 | | | 54,327 | 126,669 |
| to operating leases | | | - | - | | |
| (minimum lease payments) | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Equity settled share | - | 46,336 | - | - | - | 46,336 |
| based payments | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| Post-employment benefits | 9,540 | 12,798 | - | - | 9,540 | 12,798 |
+---------------------------+-----------+-----------+---------+-----------+-----------+-----------+
| | | | | | | | |
+---------------------------+-----------+-----------+---------+-----------+------+----+-----------+
3. GAIN ON DISPOSAL OF INTEREST IN JOINTLY CONTROLLED ENTITY
On 2 December 2009 the Company disposed of its 70% interest in the
Sino Foreign Joint Venture company Black Dragon Mining Company Limited (Black
Dragon), which owns the Zheng Guang Gold Project.
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | | | Period | | Year | |
| | | | from | | Ended | |
| | | | 1 July | | 30 June | |
| | | | 2009 to | | 2009 | |
| | | | 2 | | $ | |
| | | | December | | | |
| | | | 2009 | | | |
| | | | $ | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | | | | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | Exploration loss for the period | | (156,714) | | (1,463,883) | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | Gain on disposal of interest in | | 28,601,273 | | - | |
| | Black Dragon | | | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | | | | | (1,463,883) | |
| | | | 28,444,559 | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
The following were the results for the Consolidated Entity's interest
in Black Dragon for the period:
+-----+-----------------------------------+------+-----------+----------+-------------+----------+
| | Revenue | | - | | - | |
+-----+-----------------------------------+------+-----------+----------+-------------+----------+
| | Operating expenses | | (156,714) | | (1,463,883) | |
+-----+-----------------------------------+------+-----------+----------+-------------+----------+
| | | | | | | |
| | Loss before income tax | | (156,714) | | (1,463,883) | |
+-----+-----------------------------------+------+-----------+----------+-------------+----------+
| | | | - | | - | |
| | Income tax expense | | | | | |
+-----+-----------------------------------+------+-----------+----------+-------------+----------+
| | | | | | | |
| | Loss after income tax | | (156,714) | | (1,463,883) | |
+-----+-----------------------------------+------+-----------+----------+-------------+----------+
3. GAIN ON DISPOSAL OF INTEREST IN JOINTLY CONTROLLED ENTITY (Continued)
The following cash flows for the Consolidated Entity's interest in
Black Dragon for the period have been included in the Consolidated Entity's
Statement of Cash Flows:
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | | | *Period | | Year | |
| | | | from | | Ended | |
| | | | 1 July | | 30 June | |
| | | | 2009 to | | 2009 | |
| | | | 2 | | $ | |
| | | | December | | | |
| | | | 2009 | | | |
| | | | $ | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | | | | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | Net cash outflows from operating | | - | | - | |
| | activities | | | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | Net cash inflows/(outflows) from | | 45,581,836 | | (1,486,355) | |
| | investing activities | | | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | Net cash outflows from financing | | - | | - | |
| | activities | | | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
| | | | | | (1,486,355) | |
| | Net cash inflows/(outflows) | | 45,581,836 | | | |
+-----+-----------------------------------+------+------------+----------+-------------+----------+
The Consolidated Entity's interest in the net assets of Black Dragon
at the date of disposal was as follows:
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | 2 | | | |
| | | | December | | | |
| | | | 2009 | | | |
| | | | $ | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Book value of net assets sold | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Current assets | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Cash and cash equivalents | | 5,699 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Trade and other receivables | | 852,471 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Non-current assets | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Development properties | | 23,918,553 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Other financial assets | | 3,560,518 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Exchange differences transferred | | | | | |
| | from foreign exchange reserve | | 393,389 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Current liabilities | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Trade and other payables | | (872,195) | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Non-current liabilities | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Deferred tax liabilities | | (3,604,688) | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Net assets disposed | | 24,253,747 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Less withholding tax for equity | | (3,077,876) | | | |
| | transfer | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | | | | |
| | | | 21,175,871 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Gain on disposal | | 28,601,273 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | 49,777,144 | | | |
| | Total consideration | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Consideration | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Cash and cash equivalents | | 46,039,933 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | Liabilities assumed by purchaser | | 3,737,211 | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
| | | | 49,777,144 | | | |
| | | | | | | |
+-----+-----------------------------------+------+-------------+----------+-----------+----------+
A gain of $28,444,559 was recognised on the disposal of the
Consolidated Entity's interest in Black Dragon. People's Republic of China
withholding tax of $3,077,876 was withheld from the sale proceeds. No other tax
charge or credit arose on the transaction.
+---------------------------------------------------+---------+-------+
| | 2010 | 2009 |
+---------------------------------------------------+---------+-------+
| 4. INCOME TAX | $ | $ |
+---------------------------------------------------+---------+-------+
| | | |
| Income tax expense | | |
+---------------------------------------------------+---------+-------+
| Current tax | 158,261 | - |
+---------------------------------------------------+---------+-------+
| Deferred tax | - | - |
+---------------------------------------------------+---------+-------+
| | 158,261 | - |
+---------------------------------------------------+---------+-------+
Numerical reconciliation of income tax expense to prima facie tax payable
+---------------------------------------------------+-------------+-------------+
| Loss from continuing operations before income tax | (1,789,463) | (3,397,827) |
| expense | | |
+---------------------------------------------------+-------------+-------------+
| | (536,839) | (1,019,348) |
| Tax at the Australian tax rate of 30% (2009: 30%) | | |
+---------------------------------------------------+-------------+-------------+
| Tax effect of amounts which are not deductible in | | |
| calculating taxable income: | | |
+---------------------------------------------------+-------------+-------------+
| Share based payments | - | 13,901 |
+---------------------------------------------------+-------------+-------------+
| Other non-deductible expenditure | 325,013 | 623,695 |
+---------------------------------------------------+-------------+-------------+
| | (211,826) | (381,752) |
+---------------------------------------------------+-------------+-------------+
| Tax losses not brought to account | 370,087 | 381,752 |
+---------------------------------------------------+-------------+-------------+
| | | |
+---------------------------------------------------+-------------+-------------+
| Income tax expense | 158,261 | - |
+---------------------------------------------------+-------------+-------------+
Current tax and income tax expense relate to assessable income in China Metals
Pty Ltd as this entity is not included in the tax consolidated group.
Deferred tax liabilities
+---------------------------------------------------+---------+--------+
| The balance comprises temporary differences | | |
| attributable to: | | |
+---------------------------------------------------+---------+--------+
| Fair value adjustments on acquisition of | - | - |
| subsidiary (i) | | |
+---------------------------------------------------+---------+--------+
| | - | - |
+---------------------------------------------------+---------+--------+
(i) The deferred tax liability arises upon adoption of the balance sheet method
required by AASB 112 Income Taxes. Although this does not represent a cash
liability payable by the controlled entity, nonetheless the adoption of AASB 112
requires that it be brought to account. On the basis that the controlled entity
receives revenue in the future from its operations in China, it will receive an
income tax benefit to its Income Statement representing the amortization of the
deferred tax liability in line with the amortization of the Exploration and
Evaluation expenditure which has since been transferred to development
properties which has been carried forward in respect of this asset. The
deferred tax liability has now been transferred to Non-Current Liabilities held
for resale following the Company entering into an equity transfer agreement with
respect to the sale of its Zheng Guang gold project in China.
Movements
+----------------------------------------------+------+---------+-------------+
| Opening balance at 1 July | | - | 3,604,688 |
+----------------------------------------------+------+---------+-------------+
| Charged/(credited) to the income statement | | - | - |
+----------------------------------------------+------+---------+-------------+
| Transferred to Non-Current Liabilities held | | | |
| for sale | Note | - | (3,604,688) |
| | 15 | | |
+----------------------------------------------+------+---------+-------------+
| Closing balance at 30 June | | - | - |
+----------------------------------------------+------+---------+-------------+
Unrecognised Deferred Tax Balances
The following deferred tax assets have not been brought to account as assets:
+----------------------------------------------------+-----------+-----------+
| Tax losses - revenue | 9,895,628 | 9,525,541 |
+----------------------------------------------------+-----------+-----------+
| | 9,895,628 | 9,525,541 |
+----------------------------------------------------+-----------+-----------+
4. INCOME TAX (continued)
Tax Consolidations
Legislation to allow groups, comprising a parent entity and its Australian
resident wholly-owned entities, to elect to consolidate and be treated as a
single entity for income tax purposes was substantively enacted on 21 October
2002. The Company and its wholly owned Australian resident entities are
eligible to consolidate for tax purposes under this legislation.
The Board has not yet resolved to consolidate eligible entities within the
Consolidated Entity for tax purposes. The Board will review this position
annually, before lodging of that year's income tax return.
+-------------------------------------------------+--+--------+--------+
| | | 2010 | 2009 |
+-------------------------------------------------+--+--------+--------+
| 5. REMUNERATION OF AUDITORS | | $ | $ |
| | | | |
+-------------------------------------------------+--+--------+--------+
| Auditor of the parent entity | | | |
+-------------------------------------------------+--+--------+--------+
| Audit Services | | 49,000 | 47,215 |
| Fees paid to Deloitte Touche Tohmatsu | | | |
| - Audit and review of the financial reports and | | | |
| other audit work | | | |
+-------------------------------------------------+--+--------+--------+
| Other non-audit services | | 15,450 | 6,690 |
| - Taxation advice | | | |
+-------------------------------------------------+--+--------+--------+
| Total remuneration | | 64,450 | 53,905 |
+-------------------------------------------------+--+--------+--------+
| | | | |
+-------------------------------------------------+--+--------+--------+
+------------------------------------------------+--+-----------+--------+
| 6. TRADE AND OTHER RECEIVABLES | | | |
| | | | |
+------------------------------------------------+--+-----------+--------+
| Current | | | |
+------------------------------------------------+--+-----------+--------+
| Amounts relating to: | | | |
+------------------------------------------------+--+-----------+--------+
| - interest receivable | | 1,089,765 | - |
+------------------------------------------------+--+-----------+--------+
| - other persons | | 55,851 | 76,010 |
+------------------------------------------------+--+-----------+--------+
| | | 1,145,616 | 76,010 |
+------------------------------------------------+--+-----------+--------+
| | | | |
+------------------------------------------------+--+-----------+--------+
7. OTHER ASSETS
+------------------------------------------------+---+--------+--------+
| Current | | | |
+------------------------------------------------+---+--------+--------+
| Prepayments | | 13,260 | 14,078 |
+------------------------------------------------+---+--------+--------+
8. NON-CURRENT ASSETS HELD FOR SALE
Zheng Guang assets and liabilities were recognised as held for sale. The Group
completed the sale of its interest in Black Dragon Mining Company Limited (BDM)
on 2 December 2009 (Note 3).
+----------------------------------------------------+----------+---+----------+--------+--+---------+-+
| Transferred from: | | | |
+---------------------------------------------------------------+--------------+-----------+-----------+
| Property, plant and equipment | 11 | - | 12,752 | |
+----------------------------------------------------+--------------+-------------------+------------+-+
| Other financial assets | 10 | - | 4,026,976 | |
+----------------------------------------------------+--------------+-------------------+------------+-+
| Development properties | 12 | - | 20,288,355 | |
+----------------------------------------------------+--------------+-------------------+------------+-+
| | | - | 24,328,083 | |
+----------------------------------------------------+--------------+-------------------+------------+-+
| | | | | | | | |
+----------------------------------------------------+----------+---+----------+--------+--+---------+-+
Additions to development properties of $3,630,198 during 2010 are included in
the net value of assets sold (Note 3).
+----------------------------------------------+--+--------+--------+
| 9. OTHER FINANCIAL ASSETS AT FAIR | | 2010 | 2009 |
| VALUE THROUGH PROFIT OR LOSS | | $ | $ |
+----------------------------------------------+--+--------+--------+
| | | | |
+----------------------------------------------+--+--------+--------+
| Non-current | | | |
+----------------------------------------------+--+--------+--------+
| Shares in other entities | | 1 | 1 |
+----------------------------------------------+--+--------+--------+
+-----------------------------------------------+--+--------+-------------+
| 10. OTHER FINANCIAL ASSETS | | | |
+-----------------------------------------------+--+--------+-------------+
| Non-current | | | |
+-----------------------------------------------+--+--------+-------------+
| Security deposits | | 14,999 | 14,999 |
+-----------------------------------------------+--+--------+-------------+
| | | | |
+-----------------------------------------------+--+--------+-------------+
| Loans to other entities (1) | | - | 4,026,976 |
+-----------------------------------------------+--+--------+-------------+
| Transferred to Non-current assets held | | - | (4,026,976) |
| for sale | | | |
+-----------------------------------------------+--+--------+-------------+
| Total Loans to other entities | | - | - |
+-----------------------------------------------+--+--------+-------------+
| | | | |
+-----------------------------------------------+--+--------+-------------+
| | | 14,999 | 14,999 |
+-----------------------------------------------+--+--------+-------------+
(1) This represents money paid on behalf of the Consolidated Entity's joint
venture partner, Qiqiha'er Brigade ("Qiqiha'er Brigade") of the Heilongjiang
Bureau of Geology and Mineral Resources, in accordance with the joint venture
agreement entered into in April 2006. The loan to the Qiqiha'er Brigade
commenced accruing in September 2006 when the Consolidated Entity had satisfied
its expenditure commitment for a 70% interest in Black Dragon Mining Company
Limited. The loan was repaid during the settlement of the sale of the Zheng
Guang project that was completed 2 December 2009.
Each reporting period, the recoverable amount of all non-current assets is
assessed. Where the carrying amount of a non-current asset is greater than its
recoverable amount, the asset is written down to its recoverable amount. The
recoverable amount of the asset has been based on its fair value less costs to
sell. The recoverable amount write down represents the excess of the carrying
amount over the recoverable amount as determined by the directors.
+------------------------------------------------+---+--+-------+-----------+
| | Note | |
+------------------------------------------------+------+-------------------+
| | | 2010 | 2009 |
| | | $ | $ |
+----------------------------------------------------+--+-------+-----------+
| | | | | |
+------------------------------------------------+---+--+-------+-----------+
11. PROPERTY, PLANT AND EQUIPMENT
+------------------------------------------------+---+----------+----------+
| Plant & equipment | | | |
+------------------------------------------------+---+----------+----------+
| At cost | | 100,677 | 20,714 |
+------------------------------------------------+---+----------+----------+
| Accumulated depreciation | | (71,739) | (17,943) |
+------------------------------------------------+---+----------+----------+
| Total plant and equipment (Note 11(a)) | | 28,938 | 2,771 |
+------------------------------------------------+---+----------+----------+
| | | | |
+------------------------------------------------+---+----------+----------+
| (a) Reconciliation | | | |
+------------------------------------------------+---+----------+----------+
| | | | |
+------------------------------------------------+---+----------+----------+
| Plant and Equipment | | | |
+------------------------------------------------+---+----------+----------+
| Carrying amount at beginning of year | | 2,771 | 26,352 |
+------------------------------------------------+---+----------+----------+
| Additions | | 26,461 | 2,580 |
+------------------------------------------------+---+----------+----------+
| Disposals | | - | - |
+------------------------------------------------+---+----------+----------+
| Depreciation expense | | (11,346) | (13,408) |
+------------------------------------------------+---+----------+----------+
| Transferred to Non-Current Assets held for | | - | (12,752) |
| sale | | | |
+------------------------------------------------+---+----------+----------+
| Adjustment to Non-Current Assets held for sale | | 11,052 | - |
| (1) | | | |
+------------------------------------------------+---+----------+----------+
| Total plant & equipment | | 28,938 | 2,771 |
+------------------------------------------------+---+----------+----------+
(1) The decision was made not to sell the previously identified plant and
equipment and therefore the adjustment includes depreciation of $1,700 for the
period to 2 December 2009.
12. DEVELOPMENT PROPERTIES
+------------------------------------------------+---+-------------+--------------+
| Balance brought forward | | - | 16,324,326 |
+------------------------------------------------+---+-------------+--------------+
| Development expenditure incurred | | 3,630,198 | 3,964,029 |
+------------------------------------------------+---+-------------+--------------+
| Subtotal | | 3,630,198 | 20,288,355 |
+------------------------------------------------+---+-------------+--------------+
| Transferred to Non-Current Assets held for | 8 | (3,630,198) | (20,288,355) |
| sale | | | |
+------------------------------------------------+---+-------------+--------------+
| Closing balance | | - | - |
+------------------------------------------------+---+-------------+--------------+
Development expenditure in 2010 includes $3,289,484 for liabilities assumed by
the purchaser.
+------------------------------+---+--------+---------+----+---------+-------------+
| | | | | | |
| 13. TRADE AND OTHER | | | | | |
| PAYABLES | | | | | |
+------------------------------+---+--------+--------------+---------+-------------+
| | | | |
+-----------------------------------------------------+----+---------+-------------+
| Current | | | |
+-----------------------------------------------------+----+---------+-------------+
| Trade creditors and accruals (unsecured) | | 158,455 | 1,567,699 |
+-----------------------------------------------------+----+---------+-------------+
| | | | |
+-----------------------------------------------------+----+---------+-------------+
| Non-current | | | |
+-----------------------------------------------------+----+---------+-------------+
| Trade creditors and accruals (unsecured) | | - | 1,758,919 |
+-----------------------------------------------------+----+---------+-------------+
| Transferred to Non-Current Liabilities held for | 15 | - | (1,758,919) |
| sale | | | |
+-----------------------------------------------------+----+---------+-------------+
| | | - | - |
+-----------------------------------------------------+----+---------+-------------+
| | | | | | | |
+------------------------------+---+--------+---------+----+---------+-------------+
These amounts represent liabilities for goods and services provided to the Group
prior to the end of the financial period which are unpaid. The amounts are
unsecured and non-interest bearing with average payment terms of 30 days.
14. PROVISIONS
+------------------------------------------------+--+--------+---------+
| Employee benefits | | 64,112 | 45,452 |
+------------------------------------------------+--+--------+---------+
+--------------------------------------------+------+--------+---------+
| | Note | |
+--------------------------------------------+------+------------------+
| | | 2010 | 2009 |
| | | $ | $ |
+--------------------------------------------+------+--------+---------+
15. NON-CURRENT LIABILITIES HELD FOR SALE
Zheng Guang assets and liabilities were recognised as held for sale. The Group
completed the sale of its interest in Black Dragon Mining Company Limited (BDM)
on 2 December 2009 (Note 3).
+------------------------------------------------+-----+---------+-----------+
| Transferred from: | | | |
+------------------------------------------------+-----+---------+-----------+
| - Trade and other payables | 13 | - | 1,758,919 |
+------------------------------------------------+-----+---------+-----------+
| - Deferred tax liabilities | 4 | - | 3,604,688 |
+------------------------------------------------+-----+---------+-----------+
| | | - | 5,363,607 |
+------------------------------------------------+-----+---------+-----------+
16. ISSUED CAPITAL
+---------------------------------+---------+----+---+-----+------+-------------+
| (a) Issued and paid up capital | | | |
+---------------------------------+---------+--------------+--------------------+
| | | | |
+------------------------------------------------+---+------------+-------------+
| 216,090,594 (2009: 218,255,692) fully paid | | 64,175,728 | 64,552,218 |
| ordinary shares | | | |
+------------------------------------------------+---+------------+-------------+
| | | | |
+------------------------------------------------+---+------------+-------------+
| | | | | | | |
+---------------------------------+---------+----+---+-----+------+-------------+
Changes to the then Corporations Law abolished the authorised capital and par
value concept in relation to share capital from 1 July 1998. Therefore, the
Company does not have a limited amount of authorised capital and issued shares
do not have a par value.
(b) Movements in share capital during the past two years were as follows
(Consolidated Entity and Company):-
+----------+----------+-------------+------------+------------+
| Date | Details | Ordinary | Ordinary | Total |
| | | Shares | Shares | ($) |
| | | (Number) | ($) | |
| | | | | |
+----------+----------+-------------+------------+------------+
| 1/07/08 | Opening | 218,110,891 | 64,507,082 | 64,507,082 |
| | Balance | | | |
+----------+----------+-------------+------------+------------+
| | | | | |
+----------+----------+-------------+------------+------------+
| 8/10/08 | Issue | 144,801 | 46,336 | 64,553,418 |
| | of | | | |
| | shares | | | |
| | (i) | | | |
+----------+----------+-------------+------------+------------+
| | Share | - | (1,200) | 64,552,218 |
| | issue | | | |
| | costs | | | |
+----------+----------+-------------+------------+------------+
| 30/06/09 | Closing | 218,255,692 | 64,552,218 | 64,552,218 |
| | Balance | | | |
+----------+----------+-------------+------------+------------+
| | | (2,165,098) | (374,284) | 64,177,934 |
| 21/01/10 | Buy-back | | | |
| | of | | | |
| | shares | | | |
| | (ii) | | | |
+----------+----------+-------------+------------+------------+
| | Share | - | (2,206) | 64,175,728 |
| | buy-back | | | |
| | costs | | | |
+----------+----------+-------------+------------+------------+
| 30/06/10 | Closing | 216,090,594 | 64,175,728 | 64,175,728 |
| | Balance | | | |
+----------+----------+-------------+------------+------------+
Note
(i) On 8 October 2008, the Company issued 144,801 fully paid ordinary
shares at $0.32 as part of employee benefits, fair value was determined based on
the volume weighted average share price on the ASX for the previous 10 trading
days before they were issued.
(ii) On 21 January 2010, the Company cancelled 2,165,098 fully paid
ordinary shares that were acquired in an on market share buy-back at an average
price of 17.4 cents per share.
(iii) Fully paid ordinary shares carry one vote per share and carry the
right to dividends.
+-------------------------------------------+--+-----------+-----------+
| | | 2010 | 2009 |
+-------------------------------------------+--+-----------+-----------+
| | | $ | $ |
+-------------------------------------------+--+-----------+-----------+
| 17. RESERVES | | | |
+-------------------------------------------+--+-----------+-----------+
| | | | |
+-------------------------------------------+--+-----------+-----------+
| Employee benefits reserve | | 1,373,173 | 1,941,893 |
+-------------------------------------------+--+-----------+-----------+
| Foreign currency translation reserve | | 6,135 | 488,917 |
+-------------------------------------------+--+-----------+-----------+
| | | 1,379,308 | 2,430,810 |
+-------------------------------------------+--+-----------+-----------+
| | | | |
+-------------------------------------------+--+-----------+-----------+
Movement in reserves
The movement in each of the reserves has been set out in the Statement of
Changes in Equity.
Nature and purpose of reserves
Employee benefits reserve
The employee benefits reserve is used to recognise the fair value of services
provided to the Company by employees who are paid through the issue of options
in the Company.
Details of the options that comprise the employee benefits reserve are as
follows:
+------------------------------------------------+-----------+-----------+
| Nil (2009: 700,000) $0.40 options | - | 268,100 |
+------------------------------------------------+-----------+-----------+
| Nil (2009: 550,000) $0.55 options | - | 300,620 |
+------------------------------------------------+-----------+-----------+
| 4,750,000 (2009: 4,750,000) $0.70 options | 1,373,173 | 1,373,173 |
+------------------------------------------------+-----------+-----------+
| | 1,373,173 | 1,941,893 |
+------------------------------------------------+-----------+-----------+
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are
taken to the foreign currency translation reserve as described in note 1(e).
The accumulated exchange difference is recognised in profit and loss when the
net investment is disposed of.
+-----------------------------------------+--+--------------+--------------+
| 18. ACCUMULATED LOSSES | | | |
+-----------------------------------------+--+--------------+--------------+
| | | | |
+-----------------------------------------+--+--------------+--------------+
| Balance at the beginning of the | | (45,604,881) | (42,319,895) |
| financial year | | | |
+-----------------------------------------+--+--------------+--------------+
| Net profit/(loss) attributable to | | 26,496,835 | (3,397,827) |
| members of Leyshon Resources | | | |
+-----------------------------------------+--+--------------+--------------+
| Transfer from Employee Benefits Reserve | | 568,720 | - |
+-----------------------------------------+--+--------------+--------------+
| Transfer from Option Premium Reserve | | - | 112,841 |
+-----------------------------------------+--+--------------+--------------+
| | | (18,539,236) | (45,604,881) |
| Balance at the end of the financial | | | |
| year | | | |
+-----------------------------------------+--+--------------+--------------+
| | | | |
+-----------------------------------------+--+--------------+--------------+
| Adjusted franking account balance (tax | | 6,913,764 | 6,913,764 |
| paid basis) | | | |
+-----------------------------------------+--+--------------+--------------+
19. EARNINGS PER SHARE
+----------------------------------------------+-----------+----------+
| | 2010 | 2009 |
+----------------------------------------------+-----------+----------+
| | $ | $ |
+----------------------------------------------+-----------+----------+
| | | |
+----------------------------------------------+-----------+----------+
| From continuing and discontinued operations | | |
+----------------------------------------------+-----------+----------+
| Basic profit/(loss) per share (cents per | 12.2 | (1.6) |
| share) | | |
+----------------------------------------------+-----------+----------+
| Dilutive profit/(loss) per share (cents per | 12.2 | (1.6) |
| share) | | |
+----------------------------------------------+-----------+----------+
| | | |
+----------------------------------------------+-----------+----------+
| From continuing operations: | | |
+----------------------------------------------+-----------+----------+
| Basic loss per share (cents per share) | (0.9) | (0.9) |
+----------------------------------------------+-----------+----------+
| Diluted loss per share (cents per share) | (0.9) | (0.9) |
+----------------------------------------------+-----------+----------+
The following reflects the earnings and average number of ordinary shares and
potential ordinary shares used in the calculations of basic and diluted earnings
per share:
+----------------------------------------------+-------------+-------------+
| | 2010 | 2009 |
+----------------------------------------------+-------------+-------------+
| | $ | $ |
+----------------------------------------------+-------------+-------------+
| | | |
+----------------------------------------------+-------------+-------------+
| Net profit/(loss) used in calculating basic | 26,496,835 | (3,397,827) |
| earnings per share | | |
+----------------------------------------------+-------------+-------------+
| Adjustment to exclude profit from | 28,444,559 | 1,433,879 |
| discontinued operations | | |
+----------------------------------------------+-------------+-------------+
| Earnings used in calculating basic and | (1,947,724) | (1,963,948) |
| diluted earnings per share from continuing | | |
| operations | | |
+----------------------------------------------+-------------+-------------+
+----------------------------------------------+-------------+-------------+
| | Number of | Number |
| | | of |
+----------------------------------------------+-------------+-------------+
| | Shares | shares |
+----------------------------------------------+-------------+-------------+
| | 2010 | 2009 |
+----------------------------------------------+-------------+-------------+
| Weighted average number of ordinary shares | 217,306,608 | 218,216,417 |
| used in calculating basic earnings per share | | |
+----------------------------------------------+-------------+-------------+
| Effect of dilutive securities | | |
+----------------------------------------------+-------------+-------------+
| Adjusted weighted average number of ordinary | 217,306,608 | 218,216,417 |
| shares and potential ordinary shares used in | | |
| calculating diluted earnings per share | | |
+----------------------------------------------+-------------+-------------+
(a) Conversions, calls, subscriptions or issues after 30 June 2010
There have been no conversions to, calls of, or subscriptions for ordinary
shares or issues of potential ordinary shares since the reporting date and
before the completion of this financial report.
(b) Non-dilutive securities
The following potential ordinary shares are anti-dilutive and are therefore
excluded from the weighted average number of ordinary shares used in the
calculation of diluted earnings per share from continuing and discontinued
operations:
+----------------------------------+-----------+-----------+
| | Number | Number |
| | of | of |
+----------------------------------+-----------+-----------+
| | potential | potential |
+----------------------------------+-----------+-----------+
| | shares | shares |
+----------------------------------+-----------+-----------+
| | 2010 | 2009 |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| Options - 40 cents exercise | - | 700,000 |
| price | | |
+----------------------------------+-----------+-----------+
| Options - 55 cents exercise | - | 550,000 |
| price | | |
+----------------------------------+-----------+-----------+
| Options - 70 cents exercise | 4,750,000 | 4,750,000 |
| price | | |
+----------------------------------+-----------+-----------+
20. DIVIDENDS PAID OR PROVIDED FOR
No dividends have been paid or provided for during the year.
+---------------------------------------------------+--------+-----------+
| | 2010 | 2009 |
+---------------------------------------------------+--------+-----------+
| 21. COMMITMENTS FOR EXPENDITURE | $ | $ |
+---------------------------------------------------+--------+-----------+
| | | |
+---------------------------------------------------+--------+-----------+
| Development Expenditure | | |
+---------------------------------------------------+--------+-----------+
| Not longer than 1 year (i) | - | 1,888,944 |
+---------------------------------------------------+--------+-----------+
| Longer than 1 year and not longer than 5 years | - | - |
+---------------------------------------------------+--------+-----------+
| Longer than 5 years | - | - |
+---------------------------------------------------+--------+-----------+
| Total Development Commitment | - | 1,888,944 |
+---------------------------------------------------+--------+-----------+
| | | |
+---------------------------------------------------+--------+-----------+
| Total Commitments | - | 1,888,944 |
+---------------------------------------------------+--------+-----------+
(i) Following the sale of the consolidated entity's interest in Black
Dragon Mining Company Limited and the Zheng Guang projects, the consolidated
entity no longer has these commitments.
+---------------------------------------------------+---------+--------+
| 22. LEASE COMMITMENTS | | |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| Operating leases | | |
+---------------------------------------------------+---------+--------+
| Leasing arrangements | | |
+---------------------------------------------------+---------+--------+
| The operating leases relate to the lease of an office in China and |
| an office in Mongolia. The current lease in China is for a period |
| of two years commencing 28 March 2009 and the lease in Mongolia is |
| for a period of six months commencing 27 April 2010. The |
| Consolidated Entity does not have an option to acquire the leased |
| assets at the expiry of the lease period. |
+----------------------------------------------------------------------+
| | | |
+---------------------------------------------------+---------+--------+
| Non-cancellable operating leases | | |
+---------------------------------------------------+---------+--------+
| Not longer than 1 year | 94,746 | 22,057 |
+---------------------------------------------------+---------+--------+
| Longer than 1 year and not longer than 5 years | 87,696 | - |
+---------------------------------------------------+---------+--------+
| Longer than 5 years | - | - |
+---------------------------------------------------+---------+--------+
| | 182,442 | 22,057 |
+---------------------------------------------------+---------+--------+
23. SUBSIDIARIES
+------------------------------+---------------+----------+--------+-------+
| Name of Entity | Country of |Class of |Equity Holding |
| |Incorporation | Shares | |
+------------------------------+---------------+----------+----------------+
| | | | 2010 | 2009 |
+------------------------------+---------------+----------+--------+-------+
| Parent Entity | | | % | % |
+------------------------------+---------------+----------+--------+-------+
| Leyshon Resources Limited | Australia | | | |
+------------------------------+---------------+----------+--------+-------+
| | | | | |
+------------------------------+---------------+----------+--------+-------+
| Controlled Entities | | | | |
+------------------------------+---------------+----------+--------+-------+
| China Metals Pty Ltd | Australia |Ordinary | 100 | 100 |
+------------------------------+---------------+----------+--------+-------+
| Ikh Zuchi Resources LLC | Mongolia |Ordinary | 100 | - |
+------------------------------+---------------+----------+--------+-------+
| South Gobi Coal Company | Cayman |Ordinary | 100 | - |
| Limited | Islands | | | |
+------------------------------+---------------+----------+--------+-------+
24. SEGMENT INFORMATION
The Consolidated Entity has adopted AASB 8 Operating Segments and AASB 2007-3
Amendments to Australian Accounting Standards arising from AASB 8 with effect
from 1 January 2009. AASB 8 requires operating segments to be identified on the
basis of internal reports about components of the Consolidated Entity that are
regularly reviewed by the chief operating decision maker in order to allocate
resources to the segment and to assess its performance. In contrast, the
predecessor Standard (AASB 114 Segment Reporting) required an entity to identify
two sets of segments (business and geographical), using a risks and rewards
approach, with the entity's 'system of internal financial reporting to key
management personnel' serving only as the starting point for the identification
of such segments. As a result, following the adoption of AASB 8, the
identification of the Consolidated Entity's reportable segments has changed.
In previous years, segment information reported externally was analysed on the
basis of the geographical areas in which it operated its business of exploration
of gold and other minerals. However, information reported to the Consolidated
Entity's Managing Director for the purposes of resource allocation and
assessment of performance is more specifically focused on one operating segment,
being the exploration of gold and other minerals.
The accounting policies of the new reportable segment are the same as those of
the Consolidated Entity. As the Consolidated Entity has only one operating
segment, all the necessary reporting disclosures are disclosed elsewhere in the
notes to the financial statements.
On 2 December 2009 the Consolidated Entity sold its interest in the Zheng Guang
Gold Project in China and is actively seeking other projects in the China region
to invest in that meet its investment guidelines.
25. RELATED PARTY DISCLOSURES
(a) Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed
in Note 23 to the financial statements.
(b) Key management personnel compensation
The directors' and key management personnel of the Consolidated Entity during
the year were as follows. Unless otherwise specified each person held their
position for the full financial year.
· John WS Fletcher (Chairman)
· Paul C Atherley (Managing Director)
· Richard Seville (Non Executive Director)
· Andrew J Berry III (Non Executive Director)
· Peter Niu - Financial Controller, Leyshon Resources Limited
· Stacey Apostolou - Company Secretary
· Henry Tebar - Exploration Manager - Appointed 16 November 2009
25. RELATED PARTY DISCLOSURES (cont'd)
The aggregate compensation made to key management personnel of the Company and
the Group is set out below:
+------------------------+------------------+-----------+-----------+
| | | 2010 | 2009 |
+------------------------+------------------+-----------+-----------+
| | | $ | $ |
+------------------------+------------------+-----------+-----------+
| | | |
+-------------------------------------------+-----------+-----------+
| Short-term employee benefits | 1,455,873 | 1,158,012 |
+-------------------------------------------+-----------+-----------+
| Post-employment benefits | 5,574 | 5,302 |
+-------------------------------------------+-----------+-----------+
| Termination benefits | - | - |
+-------------------------------------------+-----------+-----------+
| Share-based payment | - | 46,336 |
| | | (i) |
+-------------------------------------------+-----------+-----------+
| | 1,461,447 | 1,209,650 |
+------------------------+------------------+-----------+-----------+
(i) Represents 144,801 fully paid ordinary shares issued at $0.32 in
consideration of a reduction in the cash component of the individual's
remuneration during the 2009 financial year.
Details of individual key management personnel compensation are disclosed in the
Remuneration Report.
(c) Key management personnel equity holdings
Fully paid ordinary shares of Leyshon Resources
+----------------------+------+-----+----+-----+----------+----+-----+----------+----+-----+-------+---+-----+------+
| | Balance | Purchases | Received on | Other |Disposals | Balance |
| | at the | |exercise of options | changes | | at the |
| | start of | | | (1) | | end of |
| | the year | | | | | the year |
+----------------------+------------+---------------------+---------------------+----------+-----------+------------+
| 2010 | | | | | | |
+-----------------------------+----------+---------------------+---------------------+-------------+---------+------+
| Mr Paul Atherley | 29,000,000 | 530,000 | - | - | - | 29,530,000 |
+----------------------+------------+----------+---------------------+---------------------+-----------+------------+
| Mr John Fletcher | 2,202,824 | 113,500 | - | - | - | 2,316,324 |
+----------------------+------------+----------+---------------------+---------------------+-----------+------------+
| Mr Richard Seville | - | 750,000 | - | - | - | 750,000 |
+----------------------+------------+----------+---------------------+---------------------+-----------+------------+
| Mr Andrew Berry III | - | - | - | - | - | - |
+----------------------+------------+----------+---------------------+---------------------+-----------+------------+
| Mr Peter Niu | 28,026 | - | - | - | - | 28,026 |
+----------------------+------------+----------+---------------------+---------------------+-----------+------------+
| Ms Stacey Apostolou | 100,000 | - | - | - | - | 100,000 |
+----------------------+------------+----------+---------------------+---------------------+-----------+------------+
| Mr Henry Tebar | - | - | - | - | - | - |
+----------------------+------------+----------+---------------------+---------------------+-----------+------------+
| | | | | | | | | | | | | | | |
+----------------------+------+-----+----+-----+----------+----+-----+----------+----+-----+-------+---+-----+------+
+-----------------------+-----+------+----+----+-----+------+-----+------+-----+---+----+-------+
| 2009 | | | | | | |
+-----------------------------+-----------+----------+------------+------------+--------+-------+
| Mr Paul Atherley | 29,000,000 | - | - | - | - | 29,000,000 |
+-----------------------+------------+---------+------------+------------+---------+------------+
| Mr John Fletcher | 2,202,824 | - | - | - | - | 2,202,824 |
+-----------------------+------------+---------+------------+------------+---------+------------+
| Mr Richard Seville | - | - | - | - | - | - |
+-----------------------+------------+---------+------------+------------+---------+------------+
| Mr Andrew Berry III | - | - | - | - | - | - |
+-----------------------+------------+---------+------------+------------+---------+------------+
| Ms Stacey Apostolou | 100,000 | - | - | - | - | 100,000 |
+-----------------------+------------+---------+------------+------------+---------+------------+
| Mr Vic McLaglen (2) | - | - | - | 116,775 | - | 116,775 |
+-----------------------+------------+---------+------------+------------+---------+------------+
| Mr Peter Niu | - | - | - | 28,026 | - | 28,026 |
+-----------------------+------------+---------+------------+------------+---------+------------+
| | | | | | | | | | | | | |
+-----------------------+-----+------+----+----+-----+------+-----+------+-----+---+----+-------+
(1) 2009 - shares issued in return for accepting a reduction in cash
remuneration
(2) 2009 - Mr Vic McLaglen ceased employment during the year
25. RELATED PARTY DISCLOSURES (cont'd)
Options exercisable @ $0.70 each on or before 30 November 2010 or 30 June 2011
(as appropriate)
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| | Balance | Granted |Exercised | Other | Balance |Vested | Vested |
| | at the | as | |changes | at the |during | and |
| | start |remuneration | | | end of | the |exercisable |
| | of the | | | | the | year | at the end |
| | year | | | | year | |of the year |
| | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| 2010 | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Mr John | | | | | | | |
| Fletcher - | 1,000,000 | - | - | - | 1,000,000 | - | 1,000,000 |
| 2010 Options | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Mr Richard | | | | | | | |
| Seville - | 1,000,000 | - | - | - | 1,000,000 | - | 1,000,000 |
| 2010 Options | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Ms Stacey | | | | | | | |
| Apostolou - | 2,000,000 | - | - | - | 2,000,000 | - | 2,000,000 |
| 2010 Options | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| | Balance | Granted |Exercised | Other | Balance |Vested | Vested |
| | at the | as | |changes | at the |during | and |
| | start |remuneration | | | end of | the |exercisable |
| | of the | | | | the | year | at the end |
| | year | | | | year | |of the year |
| | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| 2009 | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Mr John | | | | | | | |
| Fletcher - | 1,000,000 | - | - | - | 1,000,000 | - | 1,000,000 |
| 2010 Options | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Mr Richard | | | | | | | |
| Seville - | 1,000,000 | - | - | - | 1,000,000 | - | 1,000,000 |
| 2010 Options | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Ms Stacey | | | | | | | |
| Apostolou - | 2,000,000 | - | - | - | 2,000,000 | - | 2,000,000 |
| 2010 Options | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
| Dong Ping Ye | | | | | | | |
| - (1) | 750,000 | - | - | - | 750,000 | - | 750,000 |
| 2011 Options | | | | | | | |
+---------------+-----------+--------------+-----------+---------+-----------+--------+-------------+
(1) 2009 - Mr Dong Ping Ye ceased employment during the year
Options exercisable @ $0.40 or $0.55 (as appropriate) each on or before 30
November 2009
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| |Balance | Granted |Exercised | Other |Balance |Vested | Vested |
| | at the | as | | changes | at the |during | and |
| | start |remuneration | | | end of | the |exercisable |
| | of the | | | | the | year | at the end |
| | year | | | | year | |of the year |
| | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| 2010 | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| Mr Vic | | | | | | | |
| McLaglen - | 550,000 | - | - | (550,000) | - | - | - |
| $0.40 | | | | | | | |
| Options | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| Mr Vic | | | | | | | |
| McLaglen- | 550,000 | - | - | (550,000) | - | - | - |
| $0.55 | | | | | | | |
| Options | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| 2009 | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| Mr Vic | | | | | | | |
| McLaglen - | 550,000 | - | - | - | 550,000 | - | 550,000 |
| $0.40 | | | | | | | |
| Options | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
| Mr Vic | | | | | | | |
| McLaglen- | 550,000 | - | - | - | 550,000 | - | 550,000 |
| $0.55 | | | | | | | |
| Options | | | | | | | |
+--------------+---------+--------------+-----------+-----------+---------+--------+-------------+
(d) Other transactions with key management personnel (and their related
parties) of Leyshon Resources
Richard Seville & Associates Pty Ltd, a company of which Mr Richard Seville is a
director and beneficial shareholder, was paid nil (2009: $4,752) for the
provision of technical services. This amount is included in exploration expenses
for the year.
25. RELATED PARTY DISCLOSURES (cont'd)
(e) Transactions with other related parties
Transactions between Leyshon and its subsidiaries
Inter-company Account
Leyshon provides working capital to its controlled entities. Transactions
between Leyshon and other controlled entities in the wholly owned group during
the financial year ended 30 June 2010 consisted of:
(i) Working capital advanced by Leyshon;
(ii) Working capital repaid to Leyshon; and
The above transactions were made interest free with no fixed terms for the
repayment of principal on the working capital advanced by Leyshon.
At balance date amounts receivable from controlled entities totalled $440,518
(2009: $31,392,366).
(f) Parent entities
The parent entity in the consolidated entity and the ultimate parent entity is
Leyshon Resources Limited.
26. SUBSEQUENT EVENTS AFTER BALANCE DATE
There were no significant events occurring after balance date requiring
disclosure in the financial statements.
27. notes to the CASH FLOW STATEMENT
(a) Reconciliation of cash and cash equivalents
Cash and cash equivalents at the end of the financial year as shown in the cash
flow statement is reconciled to the related items in the balance sheet as
follows:
+------------------------------------------+--+------------+-----------+
| | | 2010 | 2009 |
+------------------------------------------+--+------------+-----------+
| | | $ | $ |
+------------------------------------------+--+------------+-----------+
| Cash and cash equivalents | | 46,193,725 | 3,918,963 |
+------------------------------------------+--+------------+-----------+
(b) Reconciliation of loss for the year to net cash provided (used) by
operating activities
+-------------------------------------------+----------+--------------+-------------+
| Profit/(loss) for the year | | 26,496,835 | (3,397,827) |
+-------------------------------------------+----------+--------------+-------------+
| | | | |
+-------------------------------------------+----------+--------------+-------------+
| Depreciation and amortisation | | 13,046 | 13,408 |
+-------------------------------------------+----------+--------------+-------------+
| Increase in provision for employee | | 18,660 | (75,495) |
| entitlements | | | |
+-------------------------------------------+----------+--------------+-------------+
| Interest on loan to joint venture partner | | - | (270,418) |
+-------------------------------------------+----------+--------------+-------------+
| Unrealised foreign exchange differences | | 283,646 | (138,765) |
+-------------------------------------------+----------+--------------+-------------+
| | | | |
+-------------------------------------------+----------+--------------+-------------+
| (Gain)/loss from sale of interest in | | (28,444,559) | - |
| Black Dragon Mining | | | |
+-------------------------------------------+----------+--------------+-------------+
| Share based payment expense | | - | 46,336 |
+-------------------------------------------+----------+--------------+-------------+
| (Increase)/decrease in trade and other | | (1,075,367) | (85,330) |
| receivables and other assets | | | |
+-------------------------------------------+----------+--------------+-------------+
| (Decrease)/increase in payables | | (99,897) | 493,114 |
+-------------------------------------------+----------+--------------+-------------+
| Net cash provided (used) by operating | | (2,807,636) | (3,414,977) |
| activities | | | |
+-------------------------------------------+----------+--------------+-------------+
27. notes to the CASH FLOW STATEMENT
(c) Non cash transactions
30 June 2010
During the financial year:
a) On 30 November 2009, 700,000 options with an exercise price of 40 cents
expired.
b) On 30 November 2009, 550,000 options with an exercise price of 55 cents
expired.
c) Grant of options - there were no options granted by the Company during the
year.
30 June 2009
During the financial year:
a) On 8 October 2008, 144,801 shares valued at $46,336 were issued to
employees as consideration for negotiated reductions in cash remuneration;
28. JOINTLY CONTROLLED ENTITY
The Group was a venturer in the following jointly controlled entity:
+----------------------------+----------------------+-------+------+
| | | Interest |
+----------------------------+----------------------+--------------+
| | | 2010 |2009 |
| Name of venture | Principal activity | % | % |
+----------------------------+----------------------+-------+------+
| Black Dragon Mining | Exploration and | - | 70 |
| Company Limited | development | | |
+----------------------------+----------------------+-------+------+
The Group's interest in assets employed in the above jointly controlled entity
is detailed below. The amounts are included in the consolidated financial
statements under their respective assets categories:
+------------------------------------------------+--------+-----------+
| | 2010 | 2009 |
| | $ | $ |
+------------------------------------------------+--------+-----------+
| Current assets | | |
+------------------------------------------------+--------+-----------+
| Cash | - | 51,387 |
+------------------------------------------------+--------+-----------+
| Other | - | 6,579 |
+------------------------------------------------+--------+-----------+
| Total current assets | - | 57,966 |
+------------------------------------------------+--------+-----------+
| Non current assets | | |
+------------------------------------------------+--------+-----------+
| Other | - | - |
+------------------------------------------------+--------+-----------+
| Development properties | - | 6,475,892 |
+------------------------------------------------+--------+-----------+
| Total non current assets | - | 6,475,892 |
+------------------------------------------------+--------+-----------+
| Total assets | - | 6,533,858 |
+------------------------------------------------+--------+-----------+
As disclosed in note 3, the Group completed the sale of its interest in Black
Dragon Mining Company Limited on 2 December 2009.
During the year, the Company announced that it was entering into a 51% joint
venture interest in the QHD Iron Mountain project. After completing its
assessment, the Company decided to withdraw from the project.
29. FINANCIAL RISK MANAGEMENT
Overview
This note presents information about the Company's and Group's exposure to
credit, liquidity and market risks, their objectives, policies and processes for
measuring risk, and management of capital.
The Company and the Group does not use any form of derivatives as it is not at a
level of exposure that requires the use of derivatives to hedge its exposure.
Exposure limits are reviewed by management on a continuous basis. The Group does
not enter into or trade financial instruments, including derivative financial
instruments, for speculative purposes.
The Board of Directors has overall responsibility for the establishment and
oversight of the risk management framework. Management monitors and manages the
financial risks relating to the operations of the group through regular reviews
of the risks.
Significant Accounting Policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
revenues and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in Note 1 to the
financial statements.
Net Fair Value
The carrying amount of financial assets and financial liabilities recorded in
the financial statements represents their respective net fair values, determined
in accordance with the accounting policies disclosed in Note 1 to the financial
statements.
Credit risk
Credit risk refers to the risk that counter-party will default on its
contractual obligations resulting in financial loss to the consolidated entity.
The consolidated entity has adopted the policy of only dealing with creditworthy
counter-parties and obtaining sufficient collateral or other security where
appropriate, as a means of mitigating the risk of financial loss from defaults.
The consolidated entity measures credit risk on a fair value basis. The
consolidated entity does not have any significant credit risk exposure to any
single counter-party.
29. FINANCIAL RISK MANAGEMENT (cont'd)
Cash and cash equivalents
The Group limits its exposure to credit risk by only investing in liquid
securities and only with counterparties that have an acceptable credit rating.
Trade and other equivalents
As the Group operates primarily in exploration activities, it does not have
trade receivable and therefore is not exposed to credit risk in relation to
trade receivables.
The Company and Group have established an allowance for impairment that
represents their estimate of incurred losses in respect of other receivables
(mainly relates to staff advances and security bonds) and investments. The
management does not expect any counterparty to fail to meet its obligations.
Exposure to credit risk
The carrying amount of the Group's financial assets represents the maximum
credit exposure. The Group's maximum exposure to credit risk at the reporting
date was:
+----------------------------------------+------------+-----------+
| | 2010 | 2009 |
+----------------------------------------+------------+-----------+
| | $ | $ |
+----------------------------------------+------------+-----------+
| Loans and receivables | 1,145,616 | 4,093,650 |
+----------------------------------------+------------+-----------+
| Cash and cash equivalents | 46,193,725 | 3,918,963 |
+----------------------------------------+------------+-----------+
| | 47,339,342 | 8,012,613 |
+----------------------------------------+------------+-----------+
Impairment losses
None of the Groups' other receivables are past due (2009: Nil).
Liquidity risk
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
meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group's
reputation.
The Group manages liquidity risk by maintaining adequate cash reserves from
funds raised in the market and by continuously monitoring forecast and actual
cash flows. The Group does not have any external borrowings.
On 2 December 2009 the Company completed the sale of the Group's interests in
Black Dragon Mining Company Limited which holds the Zheng Guang development
project. As part of the sale, an amount of more than A$34 million cash and cash
equivalents was received. Accordingly it is unlikely that the Group will need to
raise additional capital in the next 12 months to meet its currently known
obligations.
29. FINANCIAL RISK MANAGEMENT (cont'd)
The following are the maturities of financial assets including estimated
interest receipts and excluding the impact of netting agreements of the Group:
+-------------------------------------------+------------+-----------+
| | 2010 | 2009 |
| | $ | $ |
+-------------------------------------------+------------+-----------+
| | | |
+-------------------------------------------+------------+-----------+
| Less than 6 months | 47,339,342 | 8,012,613 |
+-------------------------------------------+------------+-----------+
| 6 months to 1 year | - | - |
+-------------------------------------------+------------+-----------+
| 1 to 5 years | - | - |
+-------------------------------------------+------------+-----------+
| Over 5 years | - | - |
+-------------------------------------------+------------+-----------+
| | 47,339,342 | 8,012,613 |
+-------------------------------------------+------------+-----------+
The following are the maturities of financial liabilities, including estimated
interest payments and excluding the impact of netting agreements of the Group:
+-------------------------------------------+-----------+-----------+-+
| | 2010 | 2009 | |
| | $ | $ | |
+-------------------------------------------+-----------+-----------+-+
| | | | |
+-------------------------------------------+-----------+-----------+-+
| Less than 6 months | 158,455 | 286,745 | |
+-------------------------------------------+-----------+-----------+-+
| 6 months to 1 year | - | 726,150 | |
+-------------------------------------------+-----------+-----------+-+
| 1 to 5 years | - | 2,313,723 |
| | | (i) |
+-------------------------------------------+-----------+-------------+
| Over 5 years | - | - | |
+-------------------------------------------+-----------+-----------+-+
| | 158,455 | 3,326,618 | |
+-------------------------------------------+-----------+-----------+-+
(i) Consists of $1,758,919 of Non-Current Liabilities Held for Sale that were
settled or assumed by the purchaser and $554,804 of Non-Current liabilities
which have been classed as Current given that they were dealt with as part of
the overall sale process.
All financial liabilities of the Group and Company are non-interest bearing.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange
rates, interest rates and equity prices will affect the Group's income or the
value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposure within acceptable
parameters, whilst optimising the return. The Group manages market risk by
ensuring it only holds short-term, predominantly fixed interest financial
instruments with maturities of less than three months.
Currency Risk
The Group is exposed to currency risk on investments, purchases and borrowings
that are denominated in a currency other than the respective functional
currencies of Group entities, which is primarily the Australian Dollar (AUD).
The currencies in which these transactions primarily are denominated are USD,
GBP and RMB.
The Group has not entered into any derivative financial instruments to hedge
such transactions.
The Group's investments in its subsidiaries are not hedged as those currency
positions are considered to be long term in nature.
29. FINANCIAL RISK MANAGEMENT (cont'd)
Exposure to Currency Risk
The Group's exposure to foreign currency risk at balance date based on notional
amounts was as follows:
+--------------------+-------------+-----------+----------+-------------+
| | A$ |
+--------------------+--------------------------------------------------+
| | RMB | USD | GBP | Total |
+--------------------+-------------+-----------+----------+-------------+
| 30 June 2010 | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Financial Assets | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Cash and cash | 43,159 | 120,563 | 1,162 | 164,884 |
| equivalents | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Financial | | | | |
| Liabilities | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Amortised cost | (39,314) | (9,800) | (3,360) | (52,474) |
+--------------------+-------------+-----------+----------+-------------+
| Net balance sheet | | | | |
| exposure | 3,845 | 110,763 | (2,198) | 112,410 |
+--------------------+-------------+-----------+----------+-------------+
| | | | | |
+--------------------+-------------+-----------+----------+-------------+
| 30 June 2009 | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Financial Assets | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Cash and cash | 69,817 | 1,427 | 295,794 | 367,038 |
| equivalents | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Loans and | 4,057,739 | - | - | 4,057,739 |
| receivables | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Financial | | | | |
| Liabilities | | | | |
+--------------------+-------------+-----------+----------+-------------+
| Amortised cost | (2,377,709) | (117,383) | (14,621) | (2,509,713) |
+--------------------+-------------+-----------+----------+-------------+
| Net balance sheet | | | | |
| exposure | 1,749,847 | (115,956) | 281,173 | 1,915,064 |
+--------------------+-------------+-----------+----------+-------------+
| | | | | |
+--------------------+-------------+-----------+----------+-------------+
Sensitivity analysis
A 20 percent strengthening of the Australian dollar against the following
currencies at 30 June would have increased (decreased) equity and profit or loss
by the amounts shown below. This analysis assumes that all other variables, in
particular interest rates, remain constant. The analysis is performed on the
same basis for 2009.
+---------------------------------------+------------+------------+
| | Other | Profit or |
| 30 June 2010 | Equity | loss |
| | A$ | A$ |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| RMB | - | 769 |
+---------------------------------------+------------+------------+
| USD | - | 22,153 |
+---------------------------------------+------------+------------+
| GBP | - | 440 |
+---------------------------------------+------------+------------+
| | - | 22,482 |
+---------------------------------------+------------+------------+
+---------------------------------------+------------+------------+
| | Other | Profit or |
| 30 June 2009 | Equity | loss |
| | A$ | A$ |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| RMB | - | 349,970 |
+---------------------------------------+------------+------------+
| USD | - | (23,191) |
+---------------------------------------+------------+------------+
| GBP | - | 56,234 |
+---------------------------------------+------------+------------+
| | - | 383,013 |
+---------------------------------------+------------+------------+
29. FINANCIAL RISK MANAGEMENT (cont'd)
A 20 percent weakening of the Australian dollar against the above currencies at
30 June would have had an equal but opposite effect on the above currencies to
the amounts shown above, on the basis that all other variables remain constant.
Interest rate risk
The Group is exposed to interest rate risk (primarily on its cash and cash
equivalents), which is the risk that a financial instrument's value will
fluctuate as a result of changes in the market interest rates on
interest-bearing financial instruments. The Group does not use derivatives to
mitigate these exposures.
The Group adopts a policy of ensuring that as far as possible it maintains
excess cash and cash equivalents in short terms deposit at interest rates
maturing over 90 day rolling periods.
+------------------+-----------+------------+-----------+------------+
| | Weighted | | Fixed | |
| | Average | | Interest | |
| |Effective | Variable | Rate | Total |
| | Interest | Interest | | |
| | Rate | Rate | | |
+------------------+-----------+------------+-----------+------------+
| | % | $ | $ | $ |
+------------------+-----------+------------+-----------+------------+
| 2010 | | | | |
+------------------+-----------+------------+-----------+------------+
| Financial Assets | | | | |
+------------------+-----------+------------+-----------+------------+
| Cash and cash | 6.0% | 46,193,725 | - | 46,193,725 |
| equivalents | | | | |
+------------------+-----------+------------+-----------+------------+
| Financial | | | | |
| Liabilities | | | | |
+------------------+-----------+------------+-----------+------------+
| Financial | | - | - | - |
| liabilities | | | | |
+------------------+-----------+------------+-----------+------------+
| | | 46,193,725 | - | 46,193,725 |
+------------------+-----------+------------+-----------+------------+
| 2009 | | | | |
+------------------+-----------+------------+-----------+------------+
| Financial Assets | | | | |
+------------------+-----------+------------+-----------+------------+
| Cash and cash | 3.4% | 3,918,963 | - | 3,918,963 |
| equivalents | | | | |
+------------------+-----------+------------+-----------+------------+
| Other financial | 5.8% | 4,026,976 | - | 4,026,976 |
| assets | | | | |
+------------------+-----------+------------+-----------+------------+
| Financial | | | | |
| Liabilities | | | | |
+------------------+-----------+------------+-----------+------------+
| Financial | | - | - | - |
| liabilities | | | | |
+------------------+-----------+------------+-----------+------------+
| | | 7,945,939 | - | 7,945,939 |
+------------------+-----------+------------+-----------+------------+
At the reporting date the interest rate profile of the Group's and the Company's
interest-bearing financial instruments was:
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have
increased (decreased) equity and profit or loss by the amounts shown below. This
analysis assumes that all other variables, in particular foreign currency rates,
remain constant. The analysis is performed on the same basis for 2009.
+---------------------------------------+-----------+-----------+
| | Other |Profit or |
| | Equity | loss |
| | A$ | A$ |
+---------------------------------------+-----------+-----------+
| | | |
+---------------------------------------+-----------+-----------+
| 30 June 2010 | | |
+---------------------------------------+-----------+-----------+
| Variable rate instruments | - | 461,937 |
+---------------------------------------+-----------+-----------+
| | | |
+---------------------------------------+-----------+-----------+
| 30 June 2009 | | |
+---------------------------------------+-----------+-----------+
| Variable rate instruments | - | 78,611 |
+---------------------------------------+-----------+-----------+
29. FINANCIAL RISK MANAGEMENT (cont'd)
Commodity Price Risk
The Group is still operating primarily in the evaluation and development phase
and accordingly the Group's financial assets and liabilities are not yet subject
to commodity price risk.
Capital Management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern and to maintain a strong capital base
sufficient to maintain future exploration and development of its projects. In
order to maintain or adjust the capital structure, the Group may return capital
to shareholders, issue new shares or sell assets to reduce debt. The Group's
focus has been to raise sufficient funds through equity to fund exploration and
evaluation activities.
There were no changes in the Group's approach to capital management during the
year. Risk management policies and procedures are established with regular
monitoring and reporting.
Neither the Company nor any of its subsidiaries are subject to externally
imposed capital requirements.
The capital structure of the Group consists of equity attributable to equity
holders of the parent, comprising issued capital, reserves and retained losses
as disclosed in Notes 16, 17 and 18 respectively.
30. SHARE BASED PAYMENTS
The Company does not have a formal employee share option plan, however the Board
has from time to time granted shares or options to employees and officers on a
discretionary basis as it is considered that this provides a cost-effective and
efficient means of remunerating and incentivising employees. In addition,
shareholders have in General Meeting approved the granting of all incentive
options to Directors. The share based payment expenses have been recognised in
respect of the fair value of shares or options granted as remuneration.
Valuation of Securities
30 June 2010
There were no share based payments or options granted by the Company during the
year.
30 June 2009
There were no options granted by the Company during the year. In October 2008
there were 144,801 fully paid ordinary shares issued to employees of the Company
in accordance with agreements for negotiated salary reductions. Valuation of the
shares was determined from the volume weighted average price on ASX over a 10
day period prior to issue.
31. PARENT ENTITY DISCLOSURES
Financial Statements
(a) Financial Position
+----------------------------------------------+--------------+--------------+
| | 2010 | 2009 |
+----------------------------------------------+--------------+--------------+
| | $ | $ |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Assets | | |
+----------------------------------------------+--------------+--------------+
| Current assets | 33,093,092 | 3,894,195 |
+----------------------------------------------+--------------+--------------+
| Non-current assets | 9,700,989 | 40,544,766 |
+----------------------------------------------+--------------+--------------+
| Total assets | 42,794,081 | 44,438,961 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Liabilities | | |
+----------------------------------------------+--------------+--------------+
| Current liabilities | 171,253 | 215,094 |
+----------------------------------------------+--------------+--------------+
| Total liabilities | 171,253 | 215,094 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Equity | | |
+----------------------------------------------+--------------+--------------+
| Issued capital | 64,175,728 | 64,552,218 |
+----------------------------------------------+--------------+--------------+
| Retained losses | (22,926,073) | (22,270,244) |
+----------------------------------------------+--------------+--------------+
| Employee benefits reserve | 1,373,173 | 1,941,893 |
+----------------------------------------------+--------------+--------------+
| Total equity | 42,622,828 | 44,223,867 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| (b) Financial performance | | |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Loss for the year | (1,224,550) | (1,481,030) |
+----------------------------------------------+--------------+--------------+
| Other comprehensive income | - | - |
+----------------------------------------------+--------------+--------------+
| Total comprehensive income | (1,224,550) | (1,481,030) |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| (c) Guarantees entered into by the parent | | |
| entity in relation to the debts of its | - | - |
| subsidiaries | | |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| (d) Contingent liabilities of the parent | - | - |
| entity | | |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| (e) Commitments for the acquisition of | | |
| property, plant and equipment by the parent | - | - |
| entity | | |
+----------------------------------------------+--------------+--------------+
Report on the Financial Report
We have audited the accompanying financial report of Leyshon Resources Limited ,
which comprises the statement of financial position as at 30 June 2010, the
income statement, the statement of comprehensive income, the statement of cash
flows and the statement of changes in equity for the year ended on that date,
notes comprising a summary of significant accounting policies and other
explanatory information, and the directors' declaration of the consolidated
entity comprising the company and the entities it controlled at the year's end
or from time to time during the financial year as set out on pages 15 to 54.
Directors' Responsibility for the Financial Report
The directors of the company are responsible for the preparation and fair
presentation of the financial report in accordance with Australian Accounting
Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. This responsibility includes establishing and maintaining
internal control relevant to the preparation and fair presentation of the
financial report that is free from material misstatement, whether due to fraud
or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances. In Note 1, the
directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that compliance with the Australian
equivalents to International Financial Reporting Standards ensures that the
financial report, comprising the financial statements and notes, complies with
International Financial Reporting Standards.
Auditor's Responsibility
Our responsibility is to express an opinion on the financial report based on our
audit. We conducted our audit in accordance with Australian Auditing Standards.
These Auditing Standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial report. The procedures selected depend
on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the financial report in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity's
internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by
the directors, as well as evaluating the overall presentation of the financial
report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Auditor's Independence Declaration
In conducting our audit, we have complied with the independence requirements of
the Corporations Act 2001.
Auditor's Opinion
In our opinion:
(a) the financial report of Leyshon Resources Limited is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity's financial position
as at 30 June 2010 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting
Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in page 8 to 13 of the
directors' report for the year ended 30 June 2010. The directors of the company
are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor's Opinion
In our opinion the Remuneration Report of Leyshon Resources Limited for the year
ended 30 June 2010, complies with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
Leanne Karamfiles
Partner
Chartered Accountants
Perth, 10 September 2010
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LMMBTMBIBBIM
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