for personal use only 29-september-2011 - asx · 2011-09-29 · south kalimantan. pt. trimitra...
TRANSCRIPT
ASX RELEASE
2011 Annual Report and AGM
Sylvie Dimarco
Company Secretary
Adavale Resources Limited
Please find attached the Adavale Resources Limited 2011 Annual Report.
It is anticipated that the hard copy version of the Annual Report, along with the Notice of Meeting, will be
distributed to shareholders mid October 2011.
Adavale Resources Limited will hold its 2011 Annual General Meeting on Friday 25 November 2011 at 10am
(Sydney time) at the offices of Arthur Phillip Pty Ltd, Colonial Centre, Level 33, 52 Martin Place, Sydney,
NSW.A2114
29-September-2011
For
per
sona
l use
onl
y
ADAVALE RESOURCES LIMITED
ACN 008 719 015
ANNUAL FINANCIAL REPORTFOR THE YEAR ENDED
30 June 2011
2
For
per
sona
l use
onl
y
CORPORATE DIRECTORY 4
REVIEW OF OPERATIONS 5
CORPORATE GOVERNANCE STATEMENT 8
DIRECTORS’ REPORT 15
AUDITOR’S INDEPENDENCE DECLARATION 22
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011 23
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011 24
CASH FLOW STATEMENTAS AT 30 JUNE 2011 25
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011 26
NOTES TO THE FINANCIAL STATEMENTS 27
DIRECTORS’ DECLARATION 60
INDEPENDENT AUDIT REPORT FOR THE YEAR ENDED 30 JUNE 2011 61
ADDITIONAL INFORMATION 63
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
CONTENTS
FOR THE YEAR ENDED 30 JUNE 2011
3
For
per
sona
l use
onl
y
Directors
Richard Poole
Roger Steinepreis
Philip Suriano
John Risinger
Mark Stevenson
Seiki Takahashi (resigned on 3 December 2010)
Secretary
Sylvie Dimarco
Registered Office
Level 33, Colonial Centre
52 Martin Place
SYDNEY NSW 2000
Telephone +(612) 9227 8900
Facsimile +(612) 9227 8901
Share Registry
Computershare Investor Services Pty Limited
Level 3, 60 Carrington Street
Sydney NSW 2000
Auditor
Robert Nielson Partners
Stock Exchange
Australian Securities Exchange Limited
20 Bridge Street
SYDNEY NSW 2000
ASX Code
ADD (fully paid ordinary shares)
CORPORATE DIRECTORY
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
4
For
per
sona
l use
onl
y
INDONESIA
core group of projects as part of its exploration portfolio. The ongoing process of project review is essential to
maintaining a structured and valid portfolio in Indonesia where understanding complex ownership, forestry and legal
issues is essential to success.
The Company has recognised the importance of establishing sound business relationships with prominent Indonesian
partners and has entered into a joint venture with Mr Haryono Eddyarto, a well known businessman with over
34 years experience in the mining and coal industries. ANR and Mr Haryono have established Adavale Harner
Resources (AHR) - 60% ANR and 40% Mr Haryono - to explore and develop coal assets in Indonesia.
ANR has appointed Mr Marshall Cooper as the Chief Executive Officer of its Indonesian coal interests. Mr Cooper is
an Australian citizen who has living in the region for the past 22 years. Since 1997 he has been employed by Lippo
Group and for the last 4 years has held the position of Chief Executive Advisor to the Chairman of Lippo Group Mining. During
that time his role included acquisitions of projects, establishment of exploration programs, mergers and acquisitions, development
and funding plans and positioning the mining business unit as the future leader of the Lippo Group.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Adavale Resources Limited (ARL) continues with its focus on exploration and development of coal projects in Indonesia and retains
its interest in the Lake Surprise Uranium project in South Australia.
During the year Adavale continued with its mandate to research and identify quality coal projects across Indonesia.
Offices have been established in Jakarta, Balikpapan and Samarinda with full time technical and legal staff, together with an
established network of contacts and professionals.
The company has generated an extensive list of projects over the past year and continues to maintain and upgrade a
5
For
per
sona
l use
onl
y
SUMATRA – TAPAN
EAST KALIMANTAN
The projects lie in an area that hosts a number of world class coal deposits. AHR geologists and legal staff are finalising due
diligence on forestry, legal and technical matters prior to commitment to drilling programs and formal documentations. During
the year ARL carried out a short drilling program on a concession in the Samboja area held by PT. Mitra Energy Agung. Results
front the program were inconclusive and ANR is waiting for the concession owner to carry out further reconnaissance drilling.
SOUTH KALIMANTAN
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
ARL has completed a JORC exploration program on the Tapan Project in Sumatra. The project lies 120 km south of the capital of
Padang. ADA Strategic, a Jakarta based consulting group, carried out the program and prepared a thorough report consistent with
JORC code requirements.
Following the program an initial JORC compliant Inventory Coal Resource of 9.05Mt has been estimated within an 800ha portion of
the concession area. The resource estimate is made up of 2.15Mt Measured, 1.5Mt Indicated and 5.4Mt Inferred. Studies on mine
planning, haulage, processing, port and transhipment facilities have been carried out together with preliminary cash flow forecasts and
capital costs to reach production. Adavale is completing the acquisition of PPA, the company that holds the exploration and
exploitation IUP’s.
Adavale has researched numerous projects in East Kalimantan during the year and reviewed a number of offers. Proposals included
schemes of work and joint ventures on concessions in the areas of Samarinda, Sebulu, Sepaku, Penajam and Grogot.
Preliminary agreements were reached on projects near Sangatta with the owners of PT. Gunung Mas Wisesa, PT Agroindo Bumi
Perkasa and PT. Anugrah Rizki Gunung.
During the year AHR entered into a preliminary agreement to assume mining contracts on three concessions in the Batulicin area of
South Kalimantan. PT. Trimitra Sembada, PT. Cahaya Alam Sejahtera and CV. Rahma. Batulicin is located 152 km north of the
capital Banjarmasin. The three projects are located within 27km of Batulicin and are surrounded by world class coal mines. Due
diligence and negotiations with the vendor continues
6
For
per
sona
l use
onl
y
LAKE SURPRISE - SOUTH AUSTRALIA (100% Adavale)
Competent Persons Statements
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information
compiled by Steven MacMillan who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Steven MacMillan is a full-time employee of the company. Steven MacMillan has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person
as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Steven MacMillan consents to the inclusion in the report of the matters based on his information in the form and context in which it
appears.
Adavale’s sedimentary uranium project at Lake Surprise in South Australia comprises EL 3622 and EL 3620 over an area of
1,836km2. Two prospect areas – Clayton Basin and Mumpie - have been the focus of exploration to date.Adavale is continuing to
explore the project. Program’s during the year explored deeper targets in the Eyre Formation within the Mumpie prospect in order to
test for uranium mineralisation similar to the Beverly and Beverly Four Mile deposits. Results were encouraging and extensions to
testing the mineralization are planned
Adavale is in the process of compiling all exploration and data gathered to date and to complete a detailed report on the project. The
Company will then consider whether to look for joint venture partners to continue the exploration program
7
For
per
sona
l use
onl
y
CORPORATE GOVERNANCE STATEMENT
• the Board should comprise at least three directors;
• the Chairman of the Board should be an independent non-executive director;
• the Board should comprise a majority of non-executive directors, with at least 50 percent of the Board being
independent non-executive directors;
• the Board should comprise directors with a broad range of expertise both nationally and internationally;
• directors appointed by the Board are subject to election by shareholders at the following annual general meeting and
and thereafter directors (other than executive directors) are subject to re-election at least every three years. The tenure
for executive director is linked to his holding of executive office.
The names of the directors of the company in office at the date of this Statement are set out in the directors’ report of this
financial report.
The composition of the Board is reviewed on an annual basis to ensure that the Board has the appropriate mix of expertise and
experience. When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the
services of a new director with particular skills, potential candidates are identified by the Board with advice from external
consultants if necessary. The Board then appoints the most suitable candidate who must stand for election at the next general
meeting of shareholders.
direction, establishing goals for management and monitoring the achievement of these goals.
Board Processes
The Board currently holds at least four scheduled meetings each year, plus strategy meetings and any extraordinary meetings at
such other times as may be necessary to address any specific significant matters that may arise.
Composition of the Board
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
This statement outlines the main Corporate Governance practices in place throughout the financial year, which comply with the
Australian Stock Exchange (ASX) Corporate Governance Council recommendations, unless otherwise stated.
Role of the Board
The Board’s primary role is the protection and enhancement of long-term shareholder value.
To fulfil this role, the Board is responsible for the overall Corporate Governance of the consolidated entity including its strategic
8
For
per
sona
l use
onl
y
• The date after 1 January that the Designated Officer or Employee receives a written preliminary Half Year Report
and the time of release of the Appendix 4D Half Year Report to ASX;
• The date after 1 July that the Designated Officer or Employee receives a written preliminary Full Year Report
and the time of release of the Appendix 4E Full Year Report to the ASX; and
• whilst in possession of price sensitive information.
Directors must obtain the approval of the Chairman of the Board and notify the Company Secretary once they sell or buy shares in
the Company. In accordance with the provisions of the Corporations Act 2001 and the Listing Rules of the ASX, directors
advise the Exchange of any transactions conducted by them in shares in the Company.
Director Dealings in Company Shares
The Constitution permits directors and employees to acquire shares in the Company. Company policy prohibits directors and
senior management from dealing in Company shares or exercising options;
and of the Company, the directors are of the opinion that such a review is not efficient nor practicable.
Conflict of Interest
In accordance with the Corporations Act, 2001 and the Company’s constitution, directors must keep the Board advised, on an
ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a
significant conflict exists, the director concerned does not receive the relevant board papers and is not present at the meeting
whilst the item is considered.
CORPORATE GOVERNANCE STATEMENT (CONT)
Nomination Committee
Given the small size of the Board and of the Company, a nomination committee has not been established.
Evaluation of Board Performance
No performance evaluation for the Board and its members took place in the reporting period. Given the small size of the Board
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
9
For
per
sona
l use
onl
y
Ordinarily the Committee meets at least twice during the year.
The responsibilities of the Audit Committee include:
• reviewing the financial report and other financial information distributed externally;
• reviewing any new accounting policies to ensure compliance with Australian Accounting Standards and generally
accepted accounting principles;
consultation with the Chairman, may seek independent professional advice at the consolidated entity’s expense. A copy of advice
received by the director is made available to all other members of the Board.
CORPORATE GOVERNANCE STATEMENT (CONT)
Remuneration of Executives
Due to the small size of the Board and of the Company, a Remuneration Committee has not been established, but the Board
establishes and monitors remuneration packages and policies applicable to the Chief Executive Officer, based on the performance in
job and comparative remuneration packages in the market and financial position of the Company.
The remuneration levels for the Chairman and non-executive directors were established in February 2000, and have not changed
since that time.
The external auditors and the Chief Executive Officer are invited to Audit Committee meetings at the discretion of the Committee.
Audit Committee
All members of the Committee must be non-executive directors. The role of the Committee is to advise on the establishment and
maintenance of a framework of internal control and appropriate ethical standards for the management of the consolidated entity.
It also gives the Board of Directors additional assurance regarding the quality and reliability of financial information prepared for
use by the Board in determining policies or for inclusion in the financial report.
and industry surveys and having regard for the overall performance of the Company.
Independent Professional Advice and Access to Company Information
Each director has the right of access to all relevant company information and to the Company’s executives and, subject to prior
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
Remuneration levels are competitively set to attract and retain qualified and experienced directors, executives and staff. Where
necessary, independent advice is sought on the appropriateness of remuneration packages, given trends in comparative companies
10
For
per
sona
l use
onl
y
The Audit Committee reviews the performance of the external auditors on an annual basis and normally meets with them during the
year as follows:
Audit Planning
• To discuss the external audit plan;
• To discuss any significant issues that may be foreseen;
• improving the quality of the accounting function.
• considering whether non-audit services provided by the external auditor are consistent with maintaining the external auditor’s
independence;
• liaising with the external auditors and ensuring that the annual and half-year statutory audits are conducted in an effective
• monitoring the establishment of an appropriate internal control framework and considering enhancements;
• monitoring the establishment of appropriate ethical standards;
• To discuss the impact of any proposed changes in accounting policies on the financial statements;
• To review the nature and impact of any changes in accounting policies adopted by the consolidated entity during the year;
• To review the fees proposed for the audit work to be performed.
identified appropriate and prompt remedial action is taken by management;
• reviewing the nomination and performance of the auditor. The current external auditors were appointed in 2006;
• monitoring the procedures in place to ensure compliance with the Corporations Act, 2001 and ASX Listing Rules and all other
regulatory requirements;
• addressing any matters outstanding with auditors, Australian Taxation Office, Australian Securities and Investments
ASX and financial institutions; and
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONT)
• reviewing the Company’s policies and procedures for convergence with International Financial Reporting Standards;
• reviewing external audit reports to ensure that where major deficiencies or breakdowns in controls or procedures have been
11
For
per
sona
l use
onl
y
• Internal Audit - the company does not have an internal audit function but utilises its financial resources as needed to assist the
Board in ensuring compliance with internal controls.
accordance with the continuous disclosure requirements of the Corporations Law and ASX Listing Rules.
• Quality and integrity of personnel – formal appraisals are conducted at least annually for all employees.
• Investment appraisal – the consolidated entity has clearly defined guidelines for capital expenditure. These include annual
budgets, detailed appraisal and review procedures, and levels of approval authority.
The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective
internal control system will preclude all errors and irregularities. To assist in discharging this responsibility, the Board has
instigated an internal control framework that can be described under the following headings:
• Financial reporting - there is a comprehensive monthly reporting system with monthly results being prepared and presented to the
the Board within three weeks of the month end. The consolidated entity reports to shareholders half-yearly. The Chief
Executive Officer states in writing to the Board that the Company’s financial reports present a true and fair view, in all
material respects of the Company’s financial condition and operational results and are in accordance with relevant accounting
standards.
To organise, review and report on any special reviews or investigations deemed necessary by the Board.
Internal Control Framework
and any significant adjustments required as a result of the audit;
• To make the necessary recommendation to the Board for the approval of these documents.
Half-year and annual reporting
• To review the results and findings of the auditor, the adequacy of accounting and financial controls, and to monitor the
implementation of any recommendations made;
• Continuous disclosure – the consolidated entity has a policy that all shareholders and investors have equal access to the
Company’s information and has procedures to ensure that all price sensitive information is disclosed to the ASX in
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONT)
Prior to announcement of results
• To review the pro forma half-yearly and pro forma preliminary final report prior to lodgement of those documents with the ASX,
• To review the draft financial report and the audit report and to make the necessary recommendation to the Board for the
of the financial report.
As required
12
For
per
sona
l use
onl
y
www.adavaleresources.com.au
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and
identification with the consolidated entity’s strategy and goals. Important issues are presented to the shareholders as single
resolutions.
The shareholders are requested to vote on the appointment and aggregate remuneration of directors, the granting of options and
shares to directors and changes to the Constitution. Copies of the Constitution are available to any shareholder who requests it.
ASX. The financial report is sent to any shareholder who requests it;
• proposed major changes in the consolidated entity which may impact on share ownership rights are submitted to a vote of
shareholders;
• notices of all meetings of shareholders.
Documents that are released publicly are made available on the consolidated entity’s internet web site at
The Role of Shareholders
The Board of Directors aims to ensure that the shareholders are informed of all major developments affecting the consolidated
entity’s state of affairs. Information is communicated to shareholders as follows:
• The full annual financial report is available to all shareholders;
• the half-yearly report contains summarised financial information and a review of the operations of the consolidated entity during
the period. The half-year reviewed financial report is prepared in accordance with the requirements of applicable Accounting
• Business transactions are properly authorised and executed.
Ethical Standards
All directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance
the reputation and performance of the consolidated entity.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONT)
Business Risk Management
Comprehensive practices are established such that:
• Capital expenditure and revenue commitments above a certain size require prior Board approval;
Standards and the Corporations Act 2001 and is lodged with the Australian Securities and Investments Commission and the
• Occupational health and safety standards and management systems are monitored and reviewed to achieve high standards of
performance and compliance with regulations; and
13
For
per
sona
l use
onl
y
Diversity
The board is committed to having an appropriate blend of diversity on the board and in the Group's senior executive positions.
It recognises the benefits arising from board diversity and has established a policy regarding diversity.
The policy outlines requirements for the Board to develop measureable objectives for achieving diversity and annually
assess both objectives and the progress in achieving those objectives. According, the Board has developed objects regarding
gender diversity and aims to achieve these objectives over the next few years as director and senior executive positions
become available.
No. % No. %
Board representation 0 0% 0 0%
Key management personal representation 0 0% 0 0%
Group Representation 1 16% 1 14%
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONT)
2011 2010
14
For
per
sona
l use
onl
y
Interests in Shares and
Richard Poole,
Non-Executive Director,
Chairman LLB, B Juris, B Comm
ASIA 27,004,435 options
Appointed 12 July 2004
Roger Steinepreis
Non- Executive Director
LLB, B Juris
Appointed 26 May 2006 2,500,000 options
Philip Suriano
Non-Executive Director
Appointed 26 May 2006 20,000,000 options
John Risinger 8,626,293 fully paid Mr Risinger has over 35 years experience in the drilling
Executive Director industry and in managing drilling and operations in mineral
Appointed 16 April 2007 exploration. He has had many years experience at board
20,000,000 options level in a number of listed and unlisted public companies.
Mark Stevenson 21,254,314 fully paid Mr Stevenson is President and CEO of Holloman Holdings
Non-Executive Director paid ordinary shares Corporation and has had over 30 years experience in
Appointed 16 April 2007 management, engineering and operations in the upstream Oil
and Gas Industry. He holds a B.S. in Constructional
Engineering from Texas Tech University, Lubbock Texas.
B Bus, Bkg & Fin, Monash wide knowledge and experience in finance, operations and
sales Director of Laserbond Limited, Resources & Energy
Group Limited and BBX Holdings Limited.
ordinary shares
lawyer in excess of 24 years.
Current Directorships include Imugene Limited, Avonlea
Minerals Limited, Firestrike Resources Limited and Apollo
Consolidated Limited.
2,666,667 fully paid Mr Suriano’s career stretches over both corporate banking
ordinary shares and the Australian television industry where he has gained
Limited, Tiaro Coal Limited, Stirling Resources Limited
and Strathfield Group Limited.
17,320,172 fully paid Mr Steinepreis graduated from the University of Western
ordinary shares Australia where he completed his law degree. He was
admitted as a barrister and solicitor of the Supreme Court of
Western Australia in 1987 and has been practicing as a
ordinary shares and acquisitions. He is a principal of Arthur Phillip Pty
Limited and has been involved in a range of fund raising and
advisory projects for public and private clients. He is
currently a director of Australian Power and Gas Limited and
Resources & Energy Group Limited.
Former Directorships Hudson Resources Limited,
Merchant House International Limited, BBX Holdings
The directors present their report on the Company and its controlled entities for the financial year ended 30 June 2011.
Directors
The directors of the Company at any time during or since the end of the financial year are:
Name and Qualifications Experience and Special Responsibilities
Options
50,796,085 fully paid Mr Poole is a qualified lawyer who specialises in mergers
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
15
For
per
sona
l use
onl
y
Sylvie Dimarco The Company Secretary at the date of this report is Ms
Company Secretary, Sylvie Dimarco. Ms Dimarco holds a Bachelor of Laws from
LLB the University of Sydney and has practiced as commercial
Appointed 20 March 2009
commercial, property and corporations law. Ms Dimarco is
also a Company Secretary of Resources & Energy Group
For the past four years Ms Dimarco has been working as
the Compliance Officer of Arthur Phillip, an investment
house and corporate advisor.
Directors’ Meetings
Director
Eligible Attended
R Poole 13 12
R Steinepreis 13 13
P Suriano 13 13
J Risinger 13 13
M Stevenson 13 13
S Takahashi * 5 4
* S Takahashi resigned on 3 December 2010.
lawyer for eleven years. Ms Dimarco has experience in
Limited and BBX Holdings Limited. Ms Dimarco is a
The number of directors’ meetings (including meetings of committees of directors and approvals by circular resolution) and number
of meetings attended by each of the directors of the Company during the financial year were:
Board Meetings
All other business of the board was dealt with by circular resolutions. There were 11 circular resolutions during the year.
DIRECTORS’ REPORT (CONT)
Company Secretary
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
Certificated member of the Chartered Secretaries of Australia.
16
For
per
sona
l use
onl
y
Adavale Resources Ltd has established itself in the coal industry in Indonesia and will continue to research and identify quality
coal projects across Indonesia.
2011 2010
$ $
126,266 161,533
(1,391,184) (2,231,270)
(1,264,918) (2,069,737)
(1,264,918) (2,069,737)
During the 2011 year, Adavale Resources Ltd entered into a Joint Venture in Indonesia to explore and mine coal in Indonesia.
The effective start date of the Joint Venture will commence on 1 August 2011.
On 20 September 2011, Options were issued to Marshall Cooper (CEO of PT Adavale Nusantara Resources, subsidiary of Adavale
Resources Limited) as part of his remuneration package.
On 28 September 2011, the board announced the appointment of Mr Haryono Eddyarto as a Non-Executive Director.
With the exception of the above, no matters or circumstances have arisen since the end of the year which significantly affected or
may significant affect the operations of the Company, the results of those operations, or the state of affairs of the Company
in future financial years.
Except for the matters discussed above or disclosed elsewhere in the attached financial statements, there were no significant changes
to the state of affairs of the group during the year.
Events Subsequent to Balance Date
Loss from continuing operations
Profit/(loss) from ordinary activities
Dividends
No dividends were paid during the financial year and the directors recommend that no dividend be paid in respect of the year ended
30 June 2011.
Significant Changes in the State of Affairs
The company is also continuing exploration on its uranium project at Lake Surprise in South Australia as well as evaluating
other uranium and coal exploration opportunities.
Review and Results of Operations
The consolidated loss of the company was $1,264,918 which compared with a net loss for the prior year of $2,069,737.
The loss from ordinary activities before income tax expense includes the following revenues and expenses disclosure is relevant in
explaining the financial performance of the entity:
Revenue from continuing operations
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONT)
Principal Activities
The principal activities of the consolidated entity are mining explorations and development in Australia and Indonesia.
Expenses from continuing operations
17
For
per
sona
l use
onl
y
The Company will continue to establish itself in the coal industry in Indonesia. The Company recognises the importance of
establishing sound business relationships with prominent Indonesian partners.
Directors
The emoluments of each director of the Company are as follows:
Salary Expatriate Share-Based
& Fees Benefit & Super- Payment Total
Remunerat'n annuation Shares & Options
$ $ $ $ $
(a) Company Directors’ remuneration
2011
Richard Poole i 24,000 - - - 24,000
Roger Steinepreis ii 24,000 - - - 24,000
Philip Suriano iii 144,000 - - 26,000 170,000
John Risinger iv 194,092 - 9,908 26,000 230,000
Mark Stevenson 24,000 - - - 24,000
Seiki Takahashi v 125 125
410,217 0 9,908 52,000 472,125
2010
Richard Poole i 24,000 - - - 24,000
Roger Steinepreis ii 24,000 - - - 24,000
Philip Suriano iii 24,000 - - - 24,000
John Risinger iv 134,092 - 9,908 - 144,000
Mark Stevenson 24,000 - - - 24,000
Seiki Takahashi v 24,000 - - - 24,000
254,092 - 9,908 - 264,000
i Fees payable to Mr Poole were paid to Arthur Phillip Pty Limited, a company controlled by him.
ii Fees payable to Mr Steinepreis were paid to Steinepreis Paganin, a firm of which he is a partner.
iii Fees payable to Mr Suriano were paid to Entertainment Marketing Enterprise Pty Ltd, a company controlled by him.
iv Fees payable to Mr Risinger were paid directly or paid to Larca Pty Limited, a company controlled by him.
v Seiki Takashahi resigned on 3 December 2010.
Future Developments
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONT)
Remuneration Report
18
For
per
sona
l use
onl
y
Exercise
Directors Type Number Price
John Risinger Class A 5,000,000 $0.04
Class B 5,000,000 $0.04
Class C 5,000,000 $0.045
Class D 5,000,000 $0.05
Phillip Suriano Class A 5,000,000 $0.04
Class B 5,000,000 $0.04
Class C 5,000,000 $0.045
Class D 5,000,000 $0.05
Date of Grant Date of Expiry
8 December 2010
8 December 2010
8 December 2010
8 December 2010
31 July 2014
31 July 2014
31 July 2015
31 July 2016
8 December 2010 31 July 2014
8 December 2010 31 July 2014
8 December 2010 31 July 2015
8 December 2010 31 July 2016
The Company also indemnifies executive officers of the Company and its controlled entities for all liabilities to another person (other
than the Company or a related body corporate) that may arise from their position in the Company and its controlled entities, except
where the liability arises out of conduct involving a lack of good faith.
directors and company secretary, against all liabilities to another person (other than the Company or a related body corporate) that
may arise from their position as directors or company secretary of the Company and its controlled entities, except where the liability
arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any
such liabilities, including costs and expenses.
The Company also indemnifies the current directors and company secretary of its controlled entities for all liabilities to another
person (other than the Company or a related body corporate) that may arise from their position, except where the liability arises
out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such
liabilities, including costs and expenses.
(c) Share Options Issued as Remuneration
Indemnification of Officers and Auditors
The Company indemnifies, to the extent permitted by law, all directors and the company secretary of the Company and all former
Key Management PersonnelIndemnification of Officers and Auditors
The Group had no other key management personnel during the year.
(b) Remuneration Policies
The Board establishes and monitors the remuneration of the Chief Executive Officer. Currently no Chief Executive Officer has been
appointed.
Remuneration levels are competitively set to attract and retain qualified and experienced directors, executives and staff, and having
regard for the overall performance of the Company. Where necessary the Board obtains independent advice on the appropriateness of
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONT)
remuneration packages, given trends in comparative companies and industry surveys.
19
For
per
sona
l use
onl
y
The Company does not indemnify its auditors.
Options
Exercise
Type Number Price
Series 3 1,428,571 $0.21
Series 4 1,547,619 $0.21
Unlisted 65,697,879 $0.04
Class A 10,000,000 $0.04
Class B 10,000,000 $0.04
Class C 10,000,000 $0.045
Class D 10,000,000 $0.05
10,000,000 $0.04
MOA 10,000,000 $0.10
MOB 10,000,000 $0.10
MOC 10,000,000 $0.10
Environmental Issues
$
Valuation of options 870.00
870.00
8 December 2010 31 July 2014
The Board of directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the nature of the services
disclosed below did not compromise the external auditor’s independence.
The following fees were paid or payable to Robert Nielson Partners for non-audit services provided during the year ended
8 December 2010 31 July 2015
8 December 2010 31 July 2016
The Company’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a
State or Territory.
Non-Audit Services
21 February 2008 30 November 2011
21 February 2008 1 December 2011
8 December 2010 31 July 2014
8 December 2010 31 July 2014
8 December 2010 31 July 2014
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2011 has been received and can be found on page 22.
30 June 2011:
20 September 2011 31 March 2014
20 September 2011 31 March 2014
20 September 2011 31 March 2014
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONT)
At the date of this report the unissued ordinary shares of Adavale Resources Limited under option are as follows:-
Date of Grant Date of Expiry
20
For
per
sona
l use
onl
y
Proceedings on Behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company, or intervene in any proceedings to which the
Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Signed in accordance with a resolution of the directors:
Richard Poole
Chairman
Sydney, 29 September 2011
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONT)
21
For
per
sona
l use
onl
y
robertnielsonpartners rnnnnpABN 65 141 087 768 Level 7 280 George Street
chartered accountant Sydney NSW 2000 Australia
business advisors Box R176 Royal Exchange
NSW 1225 Australia
T 61 2 9235 0299
F 61 2 9222 1065
1.
2.
Robert Nielson
Date 29 September 2011
Liability limited by a scheme approved under Professional Standards Legislation
I declare that to the best of my knowledge and belief, during the year ended 30 June 2011, there have been:
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Robert Nielson Partners
AUDITORS INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF ADAVALE RESOURCES LIMITED
22
For
per
sona
l use
onl
y
Notes 2011 2010
$ $
4 126,266 161,533
126,266 161,533
(313,970) (126,193)
Audit Fee (23,000) (18,200)
(32,559) (12,000)
(353,959) (527,689)
(90,770) (51,443)
(21,886) -
(134,339) (68,627)
(15,000) (15,000)
(120,125) (144,000)
(32,259) (739,574)
- (449,940)
Exchange rate difference (71,403) -
Share based expenses (52,000) -
(129,914) (78,604)
(1,391,184) (2,231,270)
- -
(1,264,918) (2,069,737)
- -
(1,264,918) (2,069,737)
7 (0.48) (1.13)
7 (0.48) (1.13)
7 (0.48) (1.13)
7 (0.48) (1.13)
Total comprehensive income/(loss)
Earnings per Share attributable to the ordinary
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2011
Consolidated
Other expenses from ordinary activities
Profit / (Loss) from ordinary activities before
income tax expense
Income tax expense relating to ordinary activities
Profit / (Net Loss) from ordinary activities after
income tax expense
Insurance
Revenue from ordinary activities
Other Revenue
Total revenue
shareholder of the company
Share registry fees
Management and administration
Directors fees
Write-off of exploration expenditure
Impairment of exploration licence
Employee expenses
Premises expenses
Contractor and consultants expenses
Legal expenses
Other comprehensive income for the year
Basic (loss)/earnings per share – cents
Earnings per Share from continuing operations:
Basic (loss)/earnings per share – cents
Diluted (loss)/earnings per share – cents
Diluted (loss)/earnings per share – cents
The accompanying notes form part of these financial statements
23
For
per
sona
l use
onl
y
Notes 2011 2010
$ $
CURRENT ASSETS
Cash assets 8 2,908,011 2,556,280
Receivables 9 105,136 29,894
Other 3,731 8,832
TOTAL CURRENT ASSETS 3,016,878 2,595,006
NON-CURRENT ASSETS
Receivables 9 16,360 15,000
Property, plant and equipment 10 7,259 4,486
Other 11 4,368,197 3,576,108
TOTAL NON-CURRENT ASSETS 4,391,816 3,595,594
TOTAL ASSETS 7,408,694 6,190,600
CURRENT LIABILITIES
Payables 12 174,151 266,978
Provisions 13 15,754 6,193
TOTAL CURRENT LIABILITIES 189,905 273,171
TOTAL LIABILITIES 189,905 273,171
NET ASSETS 7,218,789 5,917,429
EQUITY
Contributed equity 15 37,326,273 34,771,995
Reserves 43,433 31,433
Accumulated losses (30,150,917) (28,885,999)
TOTAL EQUITY 7,218,789 5,917,429
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2011
The accompanying notes form part of these financial statements.
Consolidated
24
For
per
sona
l use
onl
y
Notes 2011 2010
$ $
Cash flows from operating activities
Cash receipts in the course of operations 15,207 14,542
Cash payments in the course of operations (1,464,720) (903,860)
Interest received 115,596 157,451
Net cash provided by/(used in) operating activities 22(b) (1,333,917) (731,867)
Cash flows from investing activities
Purchase of property, plant and equipment (4,282) -
(824,348) (1,532,994)
Net cash (used in) investing activities (828,630) (1,532,994)
Cash flows from financing activities
Issue of shares 2,627,921 -
Costs of issue shares (113,643) -
Net cash provided by (used in) financing activities 2,514,278 -
Net increase/(decrease) in cash held 351,731 (2,264,861)
Cash at beginning of financial year 2,556,280 4,821,141
Cash at end of financial year 22(a) 2,908,011 2,556,280
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2011
Development,exploration & evaluation expenses
capitalised
Consolidated
The accompanying notes form part of these financial statements.
25
For
per
sona
l use
onl
y
Note Share Accumulated Option
ECONOMIC ENTITY Capital Losses Revaluation Total
Reserves
$ $ $ $
Balance at 1 July 2009 34,771,995 (26,816,262) 31,433 7,987,166
Total comprehensive loss for the year - (2,069,737) - (2,069,737)
Balance at 30 June 2010 34,771,995 (28,885,999) 31,433 5,917,429
Balance at 1 July 2010 34,771,995 (28,885,999) 31,433 5,917,429
Total comprehensive loss for the year - (1,264,918) - (1,264,918)
Issue of shares 2,627,921 - - 2,627,921
Costs of shares (113,643) - - (113,643)
Share based 40,000 - 12,000 52,000
Balance at 30 June 2011 37,326,273 (30,150,917) 43,433 7,218,789
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011
The accompanying notes form part of these financial statements.
26
For
per
sona
l use
onl
y
1. REPORTING ENTITY
2.
(a)
The financial statements were authorised for issue on 29 September 2011 by the directors of the company.
(b)
Accounting Standards Board (IASB).
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. All significant
areas of estimation uncertainty and critical judgements in applying accounting policies have been disclosed in the following notes to
Adavale Resources Limited
Level 33 Colonial Centre
52 Martin Place
SYDNEY NSW 2000
The principal place of business is:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Adavale Resources Limited (the “Company”) is a company domiciled in Australia. The consolidated financial statements of the
Company as at and for the year ended 30 June 2011 comprise the Company and its subsidiaries (together referred to as the “Group”)
Unit 8 & 9
88 Forrest Street
COTTESLOE WA 6011
current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data,
obtained both externally and within the group.
BASIS OF PREPARATION
Statement of Compliance
The registered office of the Company is:
and the Group’s interest in associates and jointly controlled entities. The Group is primarily involved in mining exploration.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting
Standards including Accounting Standards interpretations, adopted by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial report of the Group and the financial report of the Company comply with all
Australian equivalents to International Financial Reporting Standards (IFRSs) and interpretations adopted by the International
Use of estimates and Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that effect the
application of accounting polices and the reported amounts of assets, liabilities, income and expenses.
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available
the financial statements.
27
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Material accounting policies adopted in the preparation of this financial report are presented below. The financial report has been
prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of
selected non-current assets, financial assets and financial liabilities.
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements, and have been applied consistently by all entities in the Group unless otherwise stated.
(a) Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Adavale Resources Limited
(the parent entity) as at 30 June 2011 and the results of all controlled entities for the year then ended. Adavale Resources Limited
and its controlled entities together are referred to in this financial report as the consolidated entity.
Controlled Entities
A controlled entity is any entity controlled by Adavale Resources Limited. Control exists where Adavale Resources Limited has the
power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,
potential voting rights that are currently exercisable are taken into account.
In the Company’s financial statements, investments in controlled entities are carried at cost. A list of controlled entities is contained
in Note 21 of the accounts.
Where controlled entities have entered or left the economic entity during the year, their financial statements have been included from
the date control was obtained or until the date control ceased.
Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the Consolidated
financial report.
Transactions Eliminated on Consolidation
Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entities are eliminated on
consolidation.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
28
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
(b) Revenue Recognition
(c) Goods and Services Tax
(d) Foreign Currency Transactions and Balances
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the
ATO is included as a current asset or liability in the statement of financial position.
The gross proceeds of non-current asset sales are included as revenue at the date control of the asset passes to the buyer, usually
when an unconditional contract of sale is signed.
The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net
proceeds on disposal.
Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST). Exchanges of
goods or services of the same nature and value without any cash consideration are not recognised as revenues.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
Functional and Presentation Currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which
that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional
and presentation currency.
Interest Revenue
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
Sale of Non-Current Assets
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing
and financing activities, which are recoverable from, or payable to, the ATO are classified as operating cash flows.
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
29
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
(d) Foreign Currency Transactions and Balances (cont)
exchange rate for reporting purposes. The non-monetary items are translated into AUD, using the year end exchange rate for
reporting purposes.
• Income and expenses are translated at average exchange rates for the period; and
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
The transactions are translated to Australian Dollars which is the Company's functional currency.
(e) Taxation
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there
is no effect on accounting or taxable profit or loss.
The Company subsidiary, PT Adavale Nusantara transacts in USD. The monetary items are translated into AUD, using the average
Foreign currency monetary items are translated at the year end exchange rate. Non-monetary items measured at historical cost
continued to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at their fair value are
reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit and loss, except where deferred in
equity as a qualifying cash flow or net investment hedge.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well
unused tax losses.
currency are translated as follows:
• Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
Exchange differences arising on translation of foreign operations with functional curerncies other than Australian dollars are
recognised in the comprehensive income.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured
at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or
loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.
Foreign Operations
The financial results and position of foreign operations whose functional currency is different from the Group’s presentational
Transaction and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction.
30
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred
tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled
and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement
or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are
offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where
it is intended that in future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
(f) Financial Instruments
Financial instruments are initially measured at cost on trade date basis, which includes transaction costs, when the related contractual
Recognition
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market
and are stated at cost using the effective interest rate method.
Held-to-Maturity Investments
Deferred tax assets and liabilities are calculted at the tax rates that are expected to apply to the period when the asset is realised
or the liability is settled adn their measurement also reflects the manner in which management expects to recover or settle the
carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and usused tax losses are recongised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
the period in which they arise.
Loans and Receivables
designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments.
Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in
rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.
Financial Assets at Fair Value Through Profit and Loss
A financial instrument is classified in this category if acquired principally for the purpose of selling in the short term, or if so
These investments have fixed maturities and it is the company’s intention to hold these investments to maturity. Any
held-to-maturity investments held by the company are stated at amortised cost using the effective interest rate method.
Available-for-sale financial instruments include any financial assets not included in the above categories. Available-for-sale financial
Available-for-Sale Financial Instruments
31
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
Fair Value
(g) Impairment of Assets
(h) Receivables
(i) Investments
(j) Depreciation and amortisation
Useful Lives
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Controlled Entities
Investments in controlled entities are carried in the Company’s financial statements at the lower of cost and recoverable amount.
All assets, including intangibles, have limited useful lives and are depreciated/amortised using the diminishing value method, with the
case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether
an impairment has arisen. Impairment losses are recognised in the comprhensive income statement.
At each reporting date the group reviews the carrying values of its tangible and intangible assets to determine whether there is any
indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of
exception of finance lease assets which are amortised over the term of the relevant lease, or where it is likely the consolidated entity
will obtain ownership of the asset, the life of the asset.
Assets are depreciated or amortised from the date of acquisition or, in respect of internally constructed assets, from the time an asset
is completed and held ready for use. Goodwill balances are reviewed annually and any balance representing future benefits for which
the realization is considered to be no longer probable are written off.
the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying
value over its recoverable amount is expensed to the compehensive income statement.
The collectability of debts is assessed at balance date and specific provision is made for any doubtful accounts.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the
value of all unlisted securities, including recent arms length transactions, reference to similar instruments and option pricing models.
Impairment
At each reporting date, the company assesses whether there is objective evidence that a financial instrument has been impaired. In the
Financial Liabilities
Non-derivative financial instruments are recognised at amortised cost, comprising original debt less principal payments and
amortisation.
Depreciation and amortisation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments
are reflected prospectively in current and future periods only. Depreciation and amortisation are expensed.
The depreciation/amortisation rates used for each class of asset during the current and prior year are as follows:
32
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
2011 2010
Plant and Equipment 3-5 years 3-5 years
Field Equipment 3-5 years 3-5 years
(k) Payables
(l) Employee Benefits
(m) Provisions
(n) Cash
(o) Earnings per Share
(i) Basic earnings per share:
Basic earnings per share is determined by dividing net profit after income tax attributable to members of the
Company by the weighted average number of ordinary shares outstanding during the financial year.
(ii) Diluted earnings per share:
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after 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.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
investments with short periods to maturity which are readily convertible to cash on hand and are subject to an insignificant risk of
changes in value, net of outstanding bank overdrafts.
Liabilities are recognised for amounts to be paid in the future for goods or services received.
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to balance date.
A provision is recognised when a legal or constructive obligation exists as a result of a past event and it is probable that an outflow of
economic benefits will be required to settle the obligation.
For the purposes of the statement of cash flows, cash includes deposits at call with financial institutions and other highly liquid
33
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
(p) Exploration Expenses Capitalised
(i) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
(a) 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; or
(b) exploration and evaluation activities in the area have not, at the reporting date, reached a stage which
permits a reasonable assessment of the existence, or otherwise, of economically recoverable reserves and active
and significant operations in, or relating to, the area of interest are continuing.
(p) Exploration Expenses Capitalised (cont)
(q) Intangible assets
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
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.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory
drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in
exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an
exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset
(for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to
Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation
asset in the year in which they are incurred where the following conditions are satisfied:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and
evaluation asset is tested for impairment and the balance is then reclassified to development.
The intangible assets of the Company are exploration licenses acquired during the year ended 30 June 2007. The licenses are
measured at cost less accumulated impairment losses. A review of the exploration licences occur each year
34
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
(r) Segment Reporting
Comparative segment information has been re-presented in conformity with the transitional requirements of the standard. Since the
change in accounting policy only impacts presentation and disclosure aspects there is no impact on earnings per share.
An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur
expenses, including revenues and expenses that relate to transaction with any of the Company’s other components.
Unallocated items comprising mainly of head office assets, expenses and liabilities.
(s) Share Based Payments
It is measured by fair value of the equity at the grant date. Fair value is meansured by the use of a Black Scholes model.
The purpose of performance securities are to provide cost effective consideration to directors for their ongoing commitment and
contribution to the Company in their respective roles as Directors.
(t) Critical Accounting Estimates and Judgements
Impairment Testing
The directors evaluate estimates and judgements incorporated into the financial report based on historial and best available
current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic
data, obtained both externally and within the Group. Critical estimates and judgements relating to the impairment testing of
assets of the Group are as follows:
Exploration and Evaluation Expenditure:
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where
the activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
The Group assess impairment at the end of each reporting period by evaluating conditions and events specific to the Group. As a
result of their testing, they have exploration and evaluation assets valued at $4,368,197 (2010: $3,576,108).
Adavale Resources Limited has written off $32,259 of costs for 4 Indonesian projects in the 2011 year (2010: $739,574 of costs
were written off for Australian projects).
(u) Parent Entity Financial Information
The financial information for the parent entity, Adavale Resources Lmited, disclosed in note 26 has been parepared on the same
basis as the basis of the consolidated fianncial staetments of the Group.
FOR THE YEAR ENDED 30 JUNE 2011
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
As of 1 July 2009 the company presents operating segments based on information reported internally. Due to the adoption of IFRS 8
Operating segments, the accounting policy was changed in respect of segment operating disclosures.
The performance securities issued to the Directors is recognised as a share-based payment expense, with a corresponding increase in
equity.
35
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
-
-
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011).
This Standard removes the requirement for government-related entities to disclose details of all transactions with the government and
other government-related entities and clarifies the definition of a “related party” to remove inconsistencies and simplify the structure
of the Standard. No changes are expected to materially affect the Group.
AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to Australian Accounting
Standards arising from Reduced Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119,
121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052]
(applicable for annual reporting periods commencing on or after 1 July 2013).
AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of financial reporting requirements
for those entities preparing general purpose financial statements:
Tier 1: Australian Accounting Standards; and
Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.
Tier 2 of the framework comprises the recognition, measurement and presentation requirements of Tier 1, but contains significantly
fewer disclosure requirements.
The following entities are required to apply Tier 1 reporting requirements (ie full IFRS):
- for-profit private sector entities that have public accountability; and
- the Australian Government and state, territory and local governments.
Since the Group is a for-profit private sector entity that has public accountability, it does not qualify for the reduced disclosure
requirements for Tier 2 entities.
AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations to give effect to the reduced disclosure
requirements for Tier 2 entities. It achieves this by specifying the disclosure paragraphs that a Tier 2 entity need not comply with as
well as adding specific “RDR” disclosures.
This Standard is applicable retrospectively and includes revised requirements for the classification and measurement of financial
instruments, as well as recognition and derecognition requirements for financial instruments. The Group has not yet determined any
potential impact on the financial statements.
AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations to give effect to the reduced disclosure
requirements for Tier 2 entities. It achieves this by specifying the disclosure paragraphs that a Tier 2 entity need not comply with as
well as adding specific “RDR” disclosures.
AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and
Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011).
AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on or after 1 January 2013).
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future
reporting periods and which the Group has decided not to early adopt. A discussion of those future requirements and their impact on
the Group is as follows:
36
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
This Standard is not expected to impact the Group.
This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including
amendments to reflect changes made to the text of IFRSs by the IASB. However, these editorial amendments have no major impact on
the requirements of the respective amended pronouncements.
AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7]
(applicable for annual reporting periods beginning on or after 1 July 2011).
This Standard adds and amends disclosure requirements about transfers of financial assets, especially those in respect of the nature of
the financial assets involved and the risks associated with them. Accordingly, this Standard makes amendments to AASB 1: First-time
Adoption of Australian Accounting Standards, and AASB 7: Financial Instruments: Disclosures, establishing additional disclosure
requirements in relation to transfers of financial assets.
This Standard is not expected to impact the Group.
This Standard is not expected to impact the Group.
AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101,
102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (applies to
periods beginning on or after 1 January 2013).
adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context of the quantitative disclosures to
better enable users to evaluate an entity’s exposure to risks arising from financial instruments;
amending AASB 101 to the effect that disaggregation of changes in each component of equity arising from transactions recognised in
other comprehensive income is required to be presented, but is permitted to be presented in the statement of changes in equity or in
the notes;
adding a number of examples to the list of events or transactions that require disclosure under AASB 134; and
making sundry editorial amendments to various Standards and Interpretations.
AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137,
139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (applicable for annual reporting periods beginning on or after
1 January 2011).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
AASB 2009–14: Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement [AASB Interpretation
14] (applicable for annual reporting periods commencing on or after 1 January 2011).
This Standard amends Interpretation 14 to address unintended consequences that can arise from the previous accounting requirements
when an entity prepays future contributions into a defined benefit pension plan.
AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1,
AASB 7, AASB 101 & AASB 134 and Interpretation 13] (applicable for annual reporting periods commencing on or after 1 January
2011).
This Standard details numerous non-urgent but necessary changes to Accounting Standards arising from the IASB’s annual
improvements project. Key changes include:
clarifying the application of AASB 108 prior to an entity’s first Australian-Accounting-Standards financial statements;
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
37
For
per
sona
l use
onl
y
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).
This Standard is not expected to impact the Group.
AASB 2010–10: Further Amendments to Australian Accounting Standards – Removal of Fixed Dates for First-time Adopters [AASB
2009–11 & AASB 2010–7] (applies to periods beginning on or after 1 January 2013).
This Standard makes amendments to AASB 2009–11: Amendments to Australian Accounting Standards arising from AASB 9, and
AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).
The amendments brought in by this Standard ultimately affect AASB 1: First-time Adoption of Australian Accounting Standards and
provide relief for first-time adopters from having to reconstruct transactions that occurred before their transition date.
[The amendments to AASB 2009–11 will only affect early adopters of AASB 2009–11 (and AASB 9: Financial Instruments that was
issued in December 2009) as it has been superseded by AASB 2010–7.]
This Standard is not expected to impact the Group.
This Standard makes amendments to AASB 112: Income Taxes.
The amendments brought in by this Standard introduce a more practical approach for measuring deferred tax liabilities and deferred
tax assets when investment property is measured using the fair value model under AASB 140: Investment Property.
Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax assets depends on whether an entity expects
to recover an asset by using it or by selling it. The amendments introduce a presumption that an investment property is recovered
entirely through sale. This presumption is rebutted if the investment property is held within a business model whose objective is to
consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale.
The amendments brought in by this Standard also incorporate Interpretation 121 into AASB 112.
The amendments are not expected to impact the Group.
AASB 2010–9: Amendments to Australian Accounting Standards – Severe Hyperinflation and Removal of Fixed Dates for First-time
Adopters [AASB 1] (applies to periods beginning on or after 1 July 2011).
This Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting Standards.
The amendments brought in by this Standard provide relief for first-time adopters of Australian Accounting Standards from having to
reconstruct transactions that occurred before their date of transition to Australian Accounting Standards.
Furthermore, the amendments brought in by this Standard also provide guidance for entities emerging from severe hyperinflation
either to resume presenting Australian-Accounting-Standards financial statements or to present Australian-Accounting-Standards
financial statements for the first time.
This Standard makes amendments to a range of Australian Accounting Standards and Interpretations as a consequence of the issuance
of AASB 9: Financial Instruments in December 2010. Accordingly, these amendments will only apply when the entity adopts AASB 9.
As noted above, the Group has not yet determined any potential impact on the financial statements from adopting AASB 9.
AASB 2010–8: Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112]
(applies to periods beginning on or after 1 January 2012).
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
38
For
per
sona
l use
onl
y
4. REVENUE FROM ORDINARY ACTIVITIES
2011 2010
$ $
Revenue from outside the operating activities
Interest 111,059 146,991
Other Revenue 15,207 14,542
126,266 161,533
5. AUDITORS’ REMUNERATION
2011 2010
$ $
Remuneration of the auditor of the parent entity for:
- auditing or reviewing the financial statements 23,000 18,200
- valuation of options 870 -
23,870 18,200
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Consolidated
Consolidated
39
For
per
sona
l use
onl
y
6. TAXATION
2011 2010
$ $
The prima facie tax on loss from ordinary activities before
income tax is reconciled to income tax as follows:
a. Prima facie tax receivable on loss from ordinary activities at (379,475) (620,922)
30% (2010: 30%)
Tax effect of deferred tax assets not brought to account 379,475 620,922
Income tax expense attributable to entity - -
The directors have not recognised any tax assets in respect of losses, as they do not believe that the conditions for recognition set out
in Note 1(e) have been met.
7. ASSET BACKING AND EARNINGS PER SHARE
2011 2010
$ $
Continuing Operations
Net tangible asset backing – cents per share 1.08 2.03
Earnings per share
- Basic – cents (0.48) (1.13)
- Diluted – cents (0.48) (1.13)
Earnings/(loss) used in the calculation of basic and diluted EPS (1,264,918) (2,069,739)
Weighted average number of ordinary shares used in the calculation of basic and
diluted EPS
- in the calculation of basic EPS 263,615,155 183,593,979
- in the calculation of diluted EPS 263,615,155 183,593,979
Number of options not considered dilutive 118,674,069 2,976,190
As the company reported a loss for the year ended 30 June 2011, options on issue were not included in the calculation of diluted
earnings per share.
FOR THE YEAR ENDED 30 JUNE 2011
Consolidated
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
Consolidated
40
For
per
sona
l use
onl
y
8. CASH ASSETS
2011 2010
$ $
Cash at bank 2,908,011 2,556,280
9. RECEIVABLES
2011 2010
$ $
Current
Other receivables 105,136 29,894
105,136 29,894
Non-current
Other receivables 16,360 15,000
16,360 15,000
10. PROPERTY, PLANT AND EQUIPMENT
2011 2010
$ $
Field equipment
At cost 8,322 8,322
Accumulated depreciation (5,949) (5,194)
2,373 3,128
Office equipment
At cost 10,165 5,887
Accumulated depreciation (5,279) (4,529)
4,886 1,358
Total property, plant and equipment – Net book value 7,259 4,486
Movement in Carrying Values Field Office Total
Equipment Equipment
$ $ $
Carrying value as at 1 July 2010 3,128 1,358 4,486
Additions - 4,278 4,278
Disposals - - -
Depreciation (755) (750) (1,505)
Carrying value as at 30 June 2011 2,373 4,886 7,259
Consolidated
Consolidated
Consolidated
FOR THE YEAR ENDED 30 JUNE 2011
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
41
For
per
sona
l use
onl
y
11. OTHER NON-CURRENT ASSETS
2011 2010
$ $
Exploration Licences 1,050,160 1,049,960
Exploration expenditure capitalised
- Development phase 2,013,797 1,391,531
- Exploration and evaluation phase 1,304,240 1,134,617
4,368,197 3,576,108
Exploration Licences are carried at cost of acquisition less impairment losses.
Recoverability of the carrying amount of exploration assets is dependent on the successful production and sale of uranium ore and coal.
Capitalised costs amounting to $824,348 (2010:$1,532,944) have been included in cash flows from investing activities in the
cash flow statement. In the 2011 year, 4 Indonesian projects were relinquished, which included Lumpo, Lampung, Dimori and Rizki.
The total costs written off for the 4 Indonesian projects totalled $32,259 in the 2011 year.
Adavale Resources Limited relinquished all its holdings in Springvale, Queensland and had written off $622,125,exploration costs
in the 2010 year. Mt Flint in South Australia had also been relinquished and $117,449 of costs were written off in the 2010 year.
12. PAYABLES
2011 2010
$ $
Trade creditors 36,894 89,656
Trade creditors to related parties 26,694 142,924
Other creditors and accruals 110,563 34,398
174,151 266,978
Further information relating to trade creditors to related parties is set out in note 24.
The terms and conditions of the transactions with directors and related parties are no more favourable than those available, or
which might reasonably be expected to be available, on similar transactions to non-Director related entities on an arm's
length basis.
Consolidated
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Consolidated
42
For
per
sona
l use
onl
y
13. PROVISIONS
2011 2010
Current $ $
Employee benefits 15,754 6,193
15,754 6,193
(a) Movement in provisions Employee
benefits
$
Consolidated
Opening balance as at 1 July 2010 6,193
Additional provision 9,561
Amount used -
Balance as at 30 June 2011 15,754
14. LOAN AND BORROWINGS
A converting loan agreement with Arthur Phillip Pty Ltd (a related party of Mr Richard Poole), was approved at the
Annual General Meeting on 26 November 2010.
The terms of the loan are as follows:
(a) Loan has a Face Value of $1,000,000;
(b) The Company may make multiple draw downs under the Loan;
(c ) Interest shall accrue on the Loan at 8%;
(d) If the Loan has not been repaid or converted, the Company will repay any or all of the Loan 24 months after the execution date:
(e ) Where an event of default occurs, Arthur Phillip may require the Company to repay any or all of the Loan plus any interest.
(f) The Loan is convertible into Shares at a conversion price of 5 cents per Share;
(g) The conversion of the Loan into Shares is subject to and conditional upon the company obtaining Shareholder approval
(h) The Loan is an unsecured debt instrument ranking alongside general secured creditors.
In consideration for Arthur Phillip Pty Ltd to provide the Loan to the Company, the Company has agreed to issue to Arthur
Phillip Pty Ltd 10,000,000 Options. The terms and conditions are as follows:
Exercise Price $0.04
Expiry Date 31-Jul-14
As at the date of this report the Converting loan agreement has not been executed nor the associated options granted.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Consolidated
43
For
per
sona
l use
onl
y
15. CONTRIBUTED EQUITY
2011 2011 2010 2010
No $ No $
Issued and Paid-up Share Capital
(a) Ordinary shares, fully paid 316,990,019 34,771,995 183,593,979 34,771,995
316,990,019 34,771,995 183,593,979 34,771,995
Number No $ No $
Ordinary Shares
Balance as at 1 July 183,593,979 34,771,995 183,593,979 34,771,995
Non-recounceable Entitlement issue as at 22 Nov 2010 (i) 18,337,116 366,742 - -
Performance shares issued on 26 Nov 2010 (iii) 2,000,000 40,000 - -
Shortfall placement on 3 Dec 2010 (i) 104,058,870 2,081,176 - -
Additional shares issued on 3 Dec 2010 (ii) 9,000,000 180,000 - -
Options exercised in 2010 (iv) 54 2 - -
Less: transactions costs of issue - (113,643) - -
Closing balance at 30 June 316,990,019 37,326,273 183,593,979 34,771,995
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share when
a poll is called else one vote each on a show of hands.
In the event of a winding up of the Company, ordinary shareholders rank after all creditors and are fully entitled to any proceeds of
liquidation.
(i) On 19 October 2010, the company announced a pro-rata non-renounceable entitlement issue offer of 2 cents per share.
A total of 18,337,116 new ordinary shares were applied from a total offer of 122,395,986 shares on 22 Nov 2010. A shortfall
of 104,058,870 ordinary shares resulted and the shortfall shares were allocated pursuant to the underwriting agreement. On
3 Dec 2010 it was announced the shortfall were placed.
(ii) An additional 9,000,000 shares were placed to raise a further $180,000, on the same terms as the entitlement issue. The
additional placements were made to sophiscated investors pursuant to ASX Listing rule 7.1.
(iii) On 26 October 2010, 2,000,000 performance shares were approved at the AGM for 2 director of Adavale Resources Ltd.
These being 1,000,000 ordinary shares to John Risinger and 1,000,000 ordinary shares to Philip Suriano.
(v) On 26 November 2010, the performance securities were approved at the AGM for 2 directors of Adavale Resources Ltd.
The primary purpose of granting the performance options to Messrs John Risinger and Philip Suriano is to provide cost
effective consideration for their ongoing commitment and contribution to the Company in their roles as Directors and to
provide an incentive to them to deliver a mining project in Indonesia.
(iv) 54 options were exercised from shareholders during 2011, resulting in 54 ordinary shares issued at 4 cents.
Consolidated Consolidated
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
44
For
per
sona
l use
onl
y
15. CONTRIBUTED EQUITY (continued)
(b) Options
2011 2010
No No
Options - exercisable at 0.21, expiring date 30 Nov 2011
Opening balance 1,428,571 1,428,571
Issued - -
Closing balance 1,428,571 1,428,571
Options - exercisable at 0.21, expiring date 01 Dec 2011
Opening balance 1,547,619 1,547,619
Issued - -
Closing balance 1,547,619 1,547,619
Options - exercisable at 0.04, expiring date 31 Jul 2014
Opening balance - -
Issued 65,697,879 -
Closing balance 65,697,879 -
Class A Options - exercisable at 0.04, expiring date 31 Jul 2014
Opening balance - -
Issued 10,000,000 -
Closing balance 10,000,000 -
Class B Options - exercisable at 0.04, expiring date 31 Jul 2014
Opening balance - -
Issued 10,000,000 -
Closing balance 10,000,000 -
Class C Options - exercisable at 0.045, expiring date 31 Jul 2015
Opening balance - -
Issued 10,000,000 -
Closing balance 10,000,000 -
Class D Options - exercisable at 0.05, expiring date 31 Jul 2016
Opening balance - -
Issued 10,000,000 -
Closing balance 10,000,000 -
Options - exercisable at 0.04, expiring date 31 Jul 2014
Opening balance - -
Issued 10,000,000 -
Closing balance 10,000,000 -
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Consolidated
45
For
per
sona
l use
onl
y
There is no externally imposed capital requirements for the Company.
16. RESERVES
The option reserve records items recognised as expenses on valuation of Directors share options
17. DIVIDENDS
The Directors do not recommend a dividend for the year ended 30 June 2011. No dividend was paid for the year ended 30 June
2011
18. FINANCIAL INSTRUMENTS
Financial Risk Management
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
(c) Capital Risk Management
The Company's activities expose it to a variety of financial risks; market risk (including fair value interest rate risk and price risk),
credit risk, liquidity risk and cash flow interest rate risk. The Company's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company.
The company’s objective when managing capital is to safeguard its ability to continue as a going concern. In order to maintain or
adjust the capital structure, the company may issue new shares or return capital to shareholders.
The company’s strategy, which is unchanged from the prior year, was to maintain a sufficient level of cash to meet its obligations,
when the debt is due and its investment commitment.
financial risks and provides principles for overall risk management.
Risk management is carried out by the board of directors under policies approved by the Board. The board identifies and evaluates
46
For
per
sona
l use
onl
y
(a) Interest Rate Risk
Interest Rate Risk Exposures
Weighted Floating Non-
Average Interest 1 year or 1 to 5 years more than 5 Interest Total
Note Interest rate less years Bearing
rate
$ $ $ $ $ $
2011
Financial assets
Cash assets 8 4.66% 1,872,774 1,035,238 - - - 2,908,012
Receivables 9 - - - - 105,136 105,136
Other current assets - - - - 3,731 3,731
1,872,774 1,035,238 - - 108,867 3,016,879
Financial liabilities
Payables 13 - - - - 174,151 174,151
- - - - 174,151 174,151
2010
Financial assets
Cash assets 8 2.55% 563,719 1,992,561 - - - 2,556,280
Receivables 9 - - - - 29,894 29,894
Other current assets - - - - 8,832 8,832
563,719 1,992,561 - - 38,726 2,595,006
Financial liabilities
Payables 13 - - - - 266,977 266,977
- - - - 266,977 266,977
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
The consolidated entity is exposed to interest rate fluctuations.
The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets
and financial liabilities is set out below:
Fixed interest maturing in:
47
For
per
sona
l use
onl
y
18. FINANCIAL INSTRUMENTS DISCLOSURE (CONTINUED)
Financial Risk Management (continued)
Interest Rate Sensitivity Analysis
At 30 June 2011, the effect on profit and equity as a result of changes in the interest rate, with all other variables
Economic Economic
Entity Entity
30 June 2011 30 June 2010
$ $
Change in profit
- Increase in interest rate by 2% 2,462 3,279
- Decrease in interest rate by 2% (2,462) (3,279)
Change in equity
- Increase in interest rate by 2% 2,462 3,279
- Decrease in interest rate by 2% (2,462) (3,279)
(b) Net Fair Values of Financial Assets and Liabilities
Valuation Approach
The balances of financial assets and liabilities approximate their net fair value.
remaining constant would be as follows:
Net fair values of financial assets and liabilities are determined by the consolidated entity on the following basis:
Monetary financial assets and financial liabilities not readily traded in an organised financial market are determined by valuing them
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
A sensitivity analysis was performed relating to the exposure to interest rate risk at balance date. This sensitivity analysis
demonstrates the effect on the current year results and equity which should result from a change in these risks.
of the cash flows. The carrying amounts of bank term deposits, trade debtors, other debtors, accounts payable, bank loans and lease
liabilities approximate net fair value.
The net fair value of investments in unlisted shares in other corporations is determined by reference to the underlying net assets and
an assessment of future maintainable earnings and cash flows of the respective corporations.
at the present value of contractual future cash flows on amounts due from customers (reduced for expected credit losses) or due to
suppliers. Cash flows are discounted using standard valuation techniques at the applicable market yield having regard to the timing
48
For
per
sona
l use
onl
y
(c) Unrecognised Financial Instruments
The Company and controlled entities do not have any unrecognised financial instruments.
(d) Foreign Currency Risk
The Group's exposure to foreign currency risk was as follows based on notional amounts:
AUD USD AUD USD
Other Debtors 38,277 71,800 29,894 -
Other Creditors (172,352) (1,932) (266,978) -
The following significant exchange rates applied during the year:
2011 2010 2011 2010
AUD
USD 1.0333 0.0894 1.0739 0.8523
Sensitivity analysis
A strengthening of the AUD, as indicated below, against the AUD at 30 June would have increase/(decreased) equity and
profit or loss by the amounts shown below. The analysis is based on foreign currency exchange rate variances that the
Group considered reasonably possible at the end of the rpeorting period. The analysis assumes that all other variables, in particular
interest rates remain constant.
Equity Profit or loss Equity Profit or loss
30-Jun-11
AUD (10% strenthening) (48,250) 48,638 58,972 (20,832)
30-Jun-10
AUD (10% strenthening) - - - -
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
18. FINANCIAL INSTRUMENTS DISCLOSURE (CONTINUED)
Average Rate Reporting date-Spot Rate
Strengthening Weakening
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
2011 2010
49
For
per
sona
l use
onl
y
(e) Credit Risk Exposures
(f) Liquidity Risk
periods.
(g) Capital Management Risk
returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets.
The Company monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total capital. Net debt is
calculated as total borrowing less cash and cash equivalents. Total capital is calculated as equity shown in the balance sheet plus net
debt. As the company is in a transitionary stage the gearing ratio has been maintained throughout the year at 0%.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through
credit facilities or other fund raising initiatives, to meet commitments as and when they fall due
Management monitors rolling forecasts of the Group’s liquidity on the basis of expected cash flow. Consolidated Economic Entity
cash reserves of $2,908,011 (2010: $2,556,280) as at 30 June 2011 will ensure liquidity risk is minimised for future financial
The Company’s objective when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
18. FINANCIAL INSTRUMENTS DISCLOSURE (CONTINUED)
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The Company measures
credit risk on a fair value basis. The credit risk on financial assets, excluding investments, of the consolidated entity, which have
been recognised on the statement of financial position, is the carrying amount, net of any provision for doubtful debts.
The Company has no significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics.
50
For
per
sona
l use
onl
y
2011 2010
$ $
Exploration lease commitments
Minimum expenditure commitments on exploration
licences
Committed but not provided for and
payable:
Within one year 235,000 245,269
One year or later and no later than for five years - -
235,000 245,269
2011 2010
Operating lease commitment $ $
Minimum expenditure commitments on rental
lease
Committed but not provided for and
payable:
Within one year 33,488 -
One year or later and no later than for five years 33,488 -
66,976 -
Estimated amount payable for the share of property lease of office premises in Indonesia.
Consolidated
FOR THE YEAR ENDED 30 JUNE 2011
19. COMMITMENTS
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
Consolidated
NOTES TO THE FINANCIAL STATEMENTS
51
For
per
sona
l use
onl
y
20. SEGMENT INFORMATION
(a) Primary Reporting – Business Segments Mining and Mining and Other Total
Year ended 30 June 2011 exploration exploration
$ $ $ $
Australia Indonesia
Revenue
Sales - - - -
Interest 572 - 110,487 111,059
Other - - 15,207 15,207
Total Segment Revenue 572 - 125,694 126,266
Segment Result
(127,695) (333,454) (803,769) (1,264,918)
- - - -
(127,695) (333,454) (803,769) (1,264,918)
2,354,400 2,013,797 - 4,368,197
4,075 68,219 4,829,164 4,901,458
- Others 24,264 133,327 2,757,680 2,915,271
2,382,739 2,215,343 7,586,844 12,184,926
- Loans 2,759,986 2,016,246 - 4,776,232
- Others 21,345 1,800 166,759 189,904
2,781,331 2,018,046 166,759 4,966,136
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2011
Total segment assets
- Exploration expenditure
Profit/(loss) from ordinary activities before income tax
Income tax expense
Net Profit/(loss)
The Company has identified its operating segments based on internal reports that are reviewed by the Board and management. The
Company operated in one business segment during the year, being mining and in two geographical areas, being Australia and
Indonesia.
The segment reporting is detailed below:
- Receivables
Total segment liabilities
52
For
per
sona
l use
onl
y
20. SEGMENT INFORMATION (CONT)
(b) Primary Reporting – Business Segments Mining and Mining and Other Total
Year ended 30 June 2010 exploration exploration
$ $ $ $
Australia Indonesia
Revenue
Sales - - - -
Interest 145 - 146,846 146,991
Other - - 14,542 14,542
Total Segment Revenue 145 - 161,388 161,533
Segment Result
(938,374) - (1,131,363) (2,069,737)
- - - -
(938,374) - (1,131,363) (2,069,737)
2,202,098 1,391,631 - 3,593,729
33,665 - 2,423,769 2,457,434
- Others 4,486 - 2,543,620 2,548,106
2,240,249 1,391,631 4,967,389 8,599,269
- Loans 2,408,669 - - 2,408,669
- Others 98,288 - 174,881 273,169
2,506,957 - 174,881 2,681,838
Consolidated Consolidated
30 June 2011 30 June 2010
12,184,926 8,599,269
(4,776,231) (2,408,669)
7,408,695 6,190,600
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Profit/(loss) from ordinary activities before income tax
Income tax expense
Net Profit/(loss)
Total segment assets
- Exploration expenditure
- Receivables
Total segment liabilities
All segment assets are located in Australia and Indonesia.
c) Segment assets:
Reportable segments’ assets reconciled to total assets as follow:
Segment Assets
Intersegment Eliminations
Total assets as per balance sheet
53
For
per
sona
l use
onl
y
20. SEGMENT INFORMATION (CONT)
Consolidated Consolidated
30 June 2011 30 June 2010
4,966,136 2,681,838
(4,776,231) (2,408,668)
189,905 273,170
21. CONTROLLED ENTITIES
Particulars in relation to controlled entities
2011 2010
% %
Company:
Adavale Resources Limited
Controlled entities:
Adavale Minerals Pty Ltd 100 100
Adavale Queensland Pty Ltd 100 100
Adavale Indonesia Pty Ltd 100 100
The above entities were incorporated in Australia.
PT Adavale Nusantara 100 -
Adavale Harner Resources 60 -
Incorporated in Indonesia
FOR THE YEAR ENDED 30 JUNE 2011
d) Segment liabilities:
Reportable segments’ liabilities reconciled to total liabilities as follow:
Segment Liabilities
Intersegment Eliminations
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
Total liabilities as per balance sheet
Ordinary Shares
Consolidated Entity Interest
NOTES TO THE FINANCIAL STATEMENTS
54
For
per
sona
l use
onl
y
22. NOTES TO THE STATEMENTS OF CASH FLOWS
2011 2010
Notes $ $
Cash at bank 8 2,908,011 2,556,280
(1,264,918) (2,069,737)
1,509 1,855
4,537 10,460
- 1,189,514
32,259 -
52,000 (100)
(1,174,613) (868,008)
(76,038) (11,017)
(92,827) 140,965
9,561 6,193
(1,333,917) (731,867)
Shares granted to key management personnel as share-based payments are as follows:
Grant Date No.
John Risinger 26-Nov-10 1,000,000
Philip Suriano 26-Nov-10 1,000,000
On 26 November 2010, the performance securities were approved at the AGM for 2 directors of Adavale Resources Ltd.
The primary purpose of granting the performance options to Messrs John Risinger and Philip Suriano is to provide cost effective
consideration for their ongoing commitment and contribution to the Company in their roles as Directors and to provide an
incentive to them to deliver a mining project in Indonesia.
- Depreciation of non-current assets
- Accrued interest
(b) Reconciliation of the operating loss after
tax to the net cash flow from operations
Profit/(loss) from ordinary activities after
income tax
Add/(less) non cash items:
term deposits at call, net of outstanding bank
overdrafts. Cash as at the end of the financial year
as shown in the statements of cash flows is
reconciled to the related items in the statement of
financial position as follows:
cash includes cash on hand and at bank and short
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
Consolidated
FOR THE YEAR ENDED 30 JUNE 2011
(a) Reconciliation of Cash
For the purposes of the statements of cash flows,
- Impairment losses
- Write-off of exploration costs
- Other
Changes in assets and liabilities:
- (Increase)/decrease in receivables
- Increase/(decrease) in trade creditors and accruals
- Increase/(decrease) in provisions
Net cash provided by/(used in) operating activities
23. SHARE BASED PAYMENTS
55
For
per
sona
l use
onl
y
Options granted to key management personnel as share-based payments are as follows:
Exercise
Directors Type Number Price
John Risinger Class A 5,000,000 $0.04
Class B 5,000,000 $0.04
Class C 5,000,000 $0.045
Class D 5,000,000 $0.05
Philip Suriano Class A 5,000,000 $0.04
Class B 5,000,000 $0.04
Class C 5,000,000 $0.045
Class D 5,000,000 $0.05
estimated using the Black-Scholes option pricing model applying the following inputs:
At the weighted average exercise price: $0.045
Weighted average life of the options: 3.75 years
Expected share price violatility: 15%
Risk-free interest rate: 4.96%
The terms and conditions of the grants of the options are as follows:
(a) Class A - give the optionholder the right to subscribe to one share;
(b) Class B - shall only vest and be exercisable upon the Company selling and shipping its first load of coal;
(c ) Class C - shall on vest and be exercisable upon the Company selling and shipping 500,000th tonne of coal; and
(d) Class D - shall on best and be exerciable upon the Company selling and shipping its 1,000,000th tonne of coal.
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
8 December 2010 31 July 2016
31 July 20158 December 2010
23. SHARE BASED PAYMENTS (CONTINUED)
Date of Grant Date of Expiry
8 December 2010 31 July 2014
8 December 2010 31 July 2014
8 December 2010 31 July 2015
8 December 2010 31 July 2016
8 December 2010 31 July 2014
8 December 2010 31 July 2014
The grant date fair value of the share based payments were measured using the Black-Scholes formula. Expected volatility is
56
For
per
sona
l use
onl
y
2011 2010
$ $
Short-term employee benefits 300,000 120,000
Directors fees 120,125 144,000
Share based payments 52,000 -
Total 472,125 264,000
Directors’ transactions with the Company or its controlled entities
2011 2010
$ $
137,266 252,000
65,956 14,888
26,982 120,000
by Mr John Risinger for provision of management
and advisory services during the year 91,196 40,000
Fees paid to Drill Logic Pty Limited, a company controlled
by Mr Mark Stevenson and Mr John Risinger for the
provision of exploration services during the year - 17,380
available, or which might reasonably be expected to be available, on similar transactions to non-Director-related entities on an arm’s
company secretarial, administration, management and
advisory services during the year
(a) The key management personnel compensation comprised:
Consolidated
Apart from the details disclosed in this note and elsewhere in the financial report, no director or other related party has entered into a
contracts involving directors’ interests existing at year-end.
24. RELATED PARTIES
material contract with the Company or the consolidated entity since the end of the previous financial year and there were no material
Directors’ and Key Management Personnel
The directors of Adavale Resources Limited are considered the key management personnel of the consolidated economic entity.
The directors’ remuneration and equity holdings have been disclosed in the directors report attached to the financial statements.
Consolidated
Fees paid to Arthur Phillip Pty Limited, a company
controlled by Mr Richard Poole for provision of
length basis.
Fees paid to Steinepreis Paganin, a firm of which Mr
Roger Steinepreis is a partner, for the provision of legal
services during the year
Fees paid to Entertainment Marketing Enterprise Pty
The terms and conditions of the transactions with directors and their director-related entities were no more favourable than those
Fees paid to Larca Pty Ltd, a company controlled
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Ltd, a company controlled by Mr Philip Suriano for
the provision of management and advisory services
during the year
57
For
per
sona
l use
onl
y
2011 2010
$ $
15,950 2,000
6,695 4,000
4,049 2,049
- 55,000
- 79,875
26,694 142,924
A converting loan agreement with Arthur Phillip Pty Ltd (a related party of Mr Richard Poole), was approved at the
Annual General Meeting on 26 November 2010. The loan is for $1,000,000 and the financial benefit to be granted to Arthur
Phillip is the entry into the loan and the payment of interest under the loan. The funds of the Loan is to be used primarily to
assist in the construction and establishment of mining operations and available working capital. (see note 14)
As at the date of this report the converting loan agreement has not been executed or the associated option granted.
During the 2011 year, Adavale Resources Ltd entered into a Joint Venture in Indonesia to explore and mine coal in Indonesia.
The effective start date of the Joint Venture will commence on 1 August 2011.
On 20 September 2011, options were issued to Marshall Cooper (CEO of PT Adavale Nusantara Resources, subsidiary of Adavale
Resources Limited) as part of his remuneration package.
On 28 September 2011, the board announced the appointment of Mr Haryono Eddyarto as a Non-Executive Director.
With the exception of the above, no matters or circumstances have arisen since the end of the year which significantly affected or may
significantly affect the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.
Transactions with associated company
For the purpose of administering a number of associated companies, an administration company Norfolk Management Pty Ltd was
formed, with Adavale Resources Limited holding one share being 50% of the issued capital. The company operates solely as an
administrative function and recharges as an administrative fee for the share of administrative expenses incurred on behalf of Adavale
Resources Limited. During the year $144,960 (2010 - $99,468) was paid to Norfolk Management Pty Ltd as administrative fees. The
company made neither profits nor losses for the year ended 30 June 2011, hence there is no proportional share of results bought to
account to the company or Group financial statements.
Other related parties transactions
Steinepreis Paganin
Larca Consulting Pty Limited
Entertainment Marketing Enterprise Pty Ltd
Seiki Takahashi
Directors’ balances with the Company or its controlled entities
Consolidated
Payables (see note 12)
Arthur Phillip Pty Limited
25. EVENTS SUBSEQUENT TO REPORTING DATE
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
24. RELATED PARTIES (CONTINUED)
58
For
per
sona
l use
onl
y
26. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
2011 2010
$ $
Balance Sheet
Current Assets 2,795,612 2,548,206
Total Assets 9,167,956 7,413,566
Current Liabilities 166,762 174,882
Total Liabilities 166,762 174,882
Shareholders' contributed equity 37,326,274 34,771,995
Reserves 43,433 31,433
Accumulated Losses (28,368,513) (27,564,744)
9,001,194 7,238,684
2011 2010
$ $
Statement of Comprehensive Income
Total profit/(loss) (803,768) (1,131,363)
Total comprehensive income/(loss) (803,768) (1,131,363)
(b) Contingent Liabilities of the Parent
The parent entity did not have any contingent liabilities as at 30 June 2011.
(c ) Commitments
The parent entity did not have any contractual commitment as at 30 June 2011.
FOR THE YEAR ENDED 30 JUNE 2011
ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
59
For
per
sona
l use
onl
y
On behalf of the Directors
Mr R Poole
Chairman
Sydney, 29 September 2011
This declaration is made in accordance with a resolution of the Board of Directors.
ADAVALE RESOURCES LIMITED
DIRECTORS' DECLARATION
The directors of the Company declare that:
1. the financial statements and notes, as set out on pages 23 to 59 are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the financial position as at 30 June 2011 and of the performance for the year ended on
that date of the company;
2. the Chief Executive Officer has declared that:
(a) The financial records of the Company for the financial year have been properly maintained in accordance with
Section 286 of the Corporations Act 2001;
(b) The financial statements and notes for the financial year comply with the Accounting Standards, and;
(c ) The financial statements and notes for the financial year give a true and fair view;
3. in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
60
For
per
sona
l use
onl
y
robertnielsonpartners rnnnnpABN 65 141 087 768 Level 7 280 George Street
chartered accountant Sydney NSW 2000 Australia
business advisors Box R176 Royal Exchange
NSW 1225 Australia
T 61 2 9235 0299
F 61 2 9222 1065
Scope
Report on the Financial Report
The financial report and the directors’ responsibility
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 and error; selecting and applying appropriate accounting polices;
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 equivalent to International
Financial Reporting Standards(IFRS) ensures that the financial report, comprising the financial statements and notes, complies with IFRS.
Audit Approach
We have audited the accompanying financial report of Adavale Resources Limited ("the company") and Adavale Resources Limited and
Controlled Entities ("the consolidated entity") comprising the statement of financial position as at 30 June 2011, the statement of
comprehensive income, statement of changes in equity, statement of cash flows for the year ended at that date, a summary of significant
accounting policies and other explanatory notes 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.
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
Our responsibility is to express an opinion on the financial report based on our audit. We have 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 judgment, 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 evaluation
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as
INDEPENDENT AUDIT REPORT
TO THE MEMBERS OF ADAVALE RESOURCES LIMITED
evaluating the overall presentation of the financial report.
We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Liability limited by a scheme approved under Professional Standards Legislation
61
For
per
sona
l use
onl
y
In our opinion,
(a) the financial report of Adavale Resources Limited and its controlled entities is in accordance with the Corporation Act 2001 ,
including:
(i)
(ii)
Robert Nielson Date 29 September 2011
Corporations Regulations 2001; and
(b) the financial report also compiles with International Financial Reporting Standards as disclosed in Note 1.
Corporations Act.
Robert Nielson Partners
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .
Audit Opinion
giving a true and fair view of the company’s and the consolidated entity’s financial position as at 30 June 2011
and of its performance for the year ended on that date; and
complying with Accounting Standards in Australia (including Australian Accounting interpretations) and with the
Independence
In our opinion the Remuneration Report of Adavale Resources Limited for the year ended 30 June 2011, complies with s 300A of the
of the Corporations Act 2001. Our responsibility is to express an opionion on the Remuneration Report, based on our audit conducted
in accordance with the Australian Auditing Standards
Report on Remuneration Report
The Directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with s300A
We have audited the Remuneration Report included in pages 18 to 19 of the report of the directors for the year ended 30 June 2011
62
For
per
sona
l use
onl
y
Additional information included in accordance with the Listing Rules of the Australian Securities Exchange Limited.
1. SHAREHOLDER INFORMATION
(a) Distribution of holders at 21 September 2011
Number of Holders
Distribution is:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and Over
parcel
(b) Voting rights
There are no restrictions on voting rights attached to the ordinary shares. On a show of hands every member present
in person shall have one vote and upon a poll, every member present or by proxy shall have one vote every share held.
(c ) Substantial shareholders (as at 21 September 2011)
The Company’s register of substantial shareholders shows the following:
Shareholder Number of shares
(d) Shareholders
Mark Stevenson 21,254,314 6.70%
The twenty largest shareholders hold 62.53% of the total issued ordinary shares in the Company as at 21 September 2011.
ADAVALE RESOURCES LIMITED
ADDITIONAL INFORMATION
Fully paid
ordinary shares
216
67
42
545
265
Holding less than a marketable 416
%
Richard Poole 48,440,203 15.28%
Haryono Eddyarto 31,441,033 9.92%
63
For
per
sona
l use
onl
y
(e) Restricted Securities
There are no securities subject to escrow restrictions.
(f) Unquoted Equity Securities (as at 21 September 2011)
Options
Expiry 30 November 2011 and exercisable at $0.21
Crosby Special Situations Fund Ltd
Expiry 1 December 2011 and exercisable at $0.21
Crosby Special Situations Fund Ltd
Expiry 31 July 2014 and exercisable at $0.04
Expiry 31 July 2014 and exercisable at $0.04
Expiry 31 July 2014 and exercisable at $0.04
Expiry 31 July 2015 and exercisable at $0.045
Expiry 31 July 2016 and exercisable at $0.05
Expiry 31 July 2014 and exercisable at $0.04
Expiry 31 Mar 2014 and exercisable at $0.10
Expiry 31 Mar 2014 and exercisable at $0.10
Expiry 31 Mar 2014 and exercisable at $0.10
2. QUOTATION
Listed securities in Adavale Resources Limited are quoted on the Australian Securities Exchanges
3. AUDIT COMMITTEE
As at the date of the Directors’ Report, the Company did not have an audit committee of the board of directors. The company
is not of a size, nor are the affairs of a complexity, sufficient to warrant the existence of a separate audit committee.
All matters which could be delegated to such a committee are dealt with by the full Board.
100%
1,547,619 100%
10,000,000 100%
10,000,000 100%
10,000,000 100%
10,000,000 100%
10,000,000 100%
10,000,000
65,697,879 100%
10,000,000 100%
10,000,000 100%
ADAVALE RESOURCES LIMITED
ADDITIONAL INFORMATION
Number on issue % held
1,428,571 100%
64
For
per
sona
l use
onl
y
1. FONTELINA PTY LTD
2. ARTHUR PHILLIP NOMINEES PTY LTD
3. ARTHUR PHILLIP NOMINEES PTY LTD
4. HOLLOMAN VALUE HOLDINGS LLC
5. EAGLE RESOURCES PTY LTD
6. ARTHUR PHILLIP NOMINEES PTY LTD
7. ARTHUR PHILLIP NOMINEES PTY LTD
8. BLUEKNIGHT CORPORATION PTY LTD
9. LARCA PTY LTD <THE RISINGER FAMILY A/C>
10. BYRON DEVESON SUPERANNUATION FUND PTY LTD <THE BYRON DEVESON S/F A/C>
11. LIPPO SECURITIES NOMINEES (BVI) LTD <CLIENT A/C>
12. HUDSON CORPORATE LTD
13. MR DAVID ARTHUR PAGANIN <DA PAGANIN FAMILY NO 2 A/C>
14. RANCHLAND HOLDINGS PTYLTD
15. ZERO NOMINEES PTY LTD
16. PHEAKES PTY LTD <SENATE A/C>
17. MR ROGER STEINEPREIS <RC STEINEPREIS FT NO 2 A/C>
18. GANRA PTY LTD <THE FLANNERY FAMILY A/C>
19. MRS SONJA LOUISE NEWMAN HEATH + MR JAMES PETER GUEST THOMPSON <T H CAPITAL SUPER FUND A/C>
20. MR ANDREW MUIRHEAD SKIDMORE
19,852,193 6.26
19,333,333 6.10
16,500,000 5.21
11,051,073 3.49
10,157,094
198,214,897 62.54
6,916,241 2.18
5,728,845 1.81
5,000,000 1.58
3,355,864 1.06
2,500,000 0.79
2,393,105 0.75
2,222,223 0.70
2,000,000 0.63
2,000,000 0.63
3.20
9,943,733 3.14
7,706,000 2.43
7,628,333 2.41
7,150,906 2.26
Top Twenty Shareholders at 20 September 2011
NameNumber % of Issued
of Shares Shares
34,008,870 10.73
22,767,084 7.18
65
For
per
sona
l use
onl
y