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LAKE RESOURCES N.L. Annual Report 2009
65240_rns_2009-09-27_0b8345ee-e12a-4858-828d-9a1154054641.pdf
Annual Report
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ABN 49 079 471 980
FINANCIAL REPORT FOR THE YEAR ENDED
30 JUNE 2009
ABN 49 079 471 980 DIRECTORS' REPORT
Your directors present their report of the company for the year ended 30 June 2009.
Directors
The directors of the company at any time during or since the end of the year are:
| Meetings | Meetings | |
|---|---|---|
| Attended | Eligible to | |
| Attend | ||
| R Johnston - Chairman (Independent Director) | 4 | 4 |
| J.C. Clavarino - Exploration Director | 3 | 4 |
| P.J. Gilchrist - Managing Director | 4 | 4 |
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Because of the small size of the company, the board of directors has not formed an audit committee as all board members take an active role in all audit matters.
Company Secretary
The company secretary of the company during the year has been PJ Gilchrist.
Principal Activities
The principal activity of the company in the course of the year was mineral exploration in Pakistan.
There were no significant changes to the nature of the principal activities of the company during the financial year.
Operating Results
The operating loss after applicable income tax was \$266,588 (2008: loss \$85,657).
Dividends
No dividend has been proposed or paid during the financial year.
Review of Operations
During the year the company concentrated on further geological evaluation of its tenements in Pakistan. The results of recent exploration activity are considered highly encouraging given the early stage of drilling activity. Please refer to ASX anouncements during the financial year for more detailed discussion of exploration activity.
Significant Changes in State of Affairs
During the year the company issued 9,552,718 ordinary shares for \$1,1198,523. There were no other significant changes in the state of affairs of the company, that have not mentioned elsewhere in the financial report.
ABN 49 079 471 980 DIRECTORS' REPORT
Future Developments, Prospects and Business Strategies
The company will continue to concentrate on the next phase of its current mineral exploration programme in Pakistan. The Pakistan tenements of the company, which expired on 19 March 2009, have been subsequently replaced with new exploration licences granted for a further three years, commencing on 10 September 2009.
Granting the new exploration licences is conditional upon the company signing an agreement with the Government of Balochistan within a period of two months from date of grant. Under Clause 12 of the Licence documents provides that the grantee "…will also sign an agreement with the Government of Balochistan within a period of two months regarding participation/entry of the Government of Balochistan in the said licence/project with 12.5% share on 100% discount i.e. without any investment or 25% share with investment in accordance with the Latest Policy of the Government". Negotiations will be
Financial Position
The company has \$0.33m in cash assets. The next phase of the exploration strategy in Pakistan will require additional funds. We expect that this future funding will be sourced from either a share placement or joint venture capital before December 2009.
Share Options
At the date of this report, there were no share options over unissued ordinary shares of the company.
Non-Audit Services
The auditors did not provide non-audit services to the company during the financial year.
ll di i i d d d b h d i h d d l ff h All non-audit services are reviewed and approved by the Board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor or general principles relating to auditor independence.
Officers and Auditors Indemnification
During the financial period the company paid an insurance premium in respect of a contract insuring the directors of the company, the company secretary and all executive officers of the company against a liability incurred as such by a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The amount of the premium was \$9,250 (2008: \$9,250) for all directors and officers.
The company has not otherwise, during or since the financial year, indemnified or agreed to indemnify any officer or auditor of the company against a liability incurred as an officer or auditor.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors support and have adhered to the principles of Corporate Governance. The company's Corporate Governance Statement is included in the Annual Report.
Subsequent Events
The Pakistan tenements of the company, which expired on 19 March 2009, have been subsequently replaced with new exploration licences granted for a further three years, commencing on 10 September 2009.
No other matters or circumstances have arisen since the end of the financial 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.
Environmental Regulations
The company's operations are not regulated by any significant environmental regulation under the law of the Commonwealth or of a State or Territory. y
ABN 49 079 471 980 DIRECTORS' REPORT
Information on Directors
The Company's Directors have a strong background in mineral exploration, mining engineering, mine management, finance and accounting, with considerable international experience including Australia, USA, Canada, Philippines, Indonesia, Papua New Guinea, Pakistan, Myanmar and Sweden.
| NAME | QUALIFICATIONS | APPOINTED |
|---|---|---|
| Ross Johnston | B.Com, FCA | 08/08/97 |
| Peter J. Gilchrist | B.Eng(Civil), M.Eng Sc, MBA. | 08/08/97 |
| James G. Clavarino | FRMIT (Geology) MAIMM, MMICA. | 08/08/97 |
Ross Johnston (Independent Director) - Over 30 years experience as an accountant in public practice, having founded one of the larger independently-owned accountancy practices in Queensland. Has long experience in commercial and financial matters on various boards.
Jim Clavarino (Executive Director) - Has worked as a mineral geologist for over 35 years in Australia and many parts of the world, with considerable experience as a director of mineral exploration companies.
Peter Gilchrist (Executive Director) - Over 30 years experience as an engineer in mining, construction and manufacturing in Australia and USA. He is Executive Chairman of the Aquatec Group, which manufacture and install water treatment equipment for a wide range of customers in the municipal, power and mining industries.
Details of Company Secretary - Peter Gilchrist (Executive Director) has been company secretary since the formation of the company, and has experience as secretary with a number of companies.
Relevant direct interests of the Directors in the shares or options of the Company and related bodies corporate are:-
| Balance | Balance | ||
|---|---|---|---|
| 1-7-08 | Change | 30-6-09 | |
| Ord Shares | Ord Shares | ||
| Ross Johnston | - | - | - |
| Peter J. Gilchrist | - | - | - |
| James G. Clavarino | - | - | - |
Messrs Gilchrist and Johnston have an interest in 3,841,920 ordinary shares held by Kemkay Pty Ltd, a subsidiary of 202 Ltd, of which they are both Directors and Mr Johnston is a shareholder.
Mr Gilchrist is a substantial shareholder in Trenlin Pty Ltd a company which holds 1,692,222 shares in the company.
Mr Gilchrist is a Director of Queensland Energy Pty Ltd a company which holds 1,268,508 shares in the company.
Mr Ross Johnston is a Director and substantial shareholder of Bushfly Air Charter Pty Ltd, a company which holds 2,490,020 shares in the company.
Mr Clavarino is a director and shareholder of JG Clavarino Super Fund Pty Ltd, a company which holds 1,149,400 shares in the company.
Mr Clavarino is a director and shareholder of Lake Gold Pty Ltd, a company which holds 400,000 shares in the company.
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.
ABN 49 079 471 980 DIRECTORS' REPORT
Continued Operations and Future Funding
The financial report has been prepared on a going concern basis that contemplates the continuity of normal operating activities and the realisation of assets and settlement of liabilities in the normal course of business.
At 30 June 2009, the company's balance sheet shows total assets of \$5,409,181, total liabilities of \$29,121, and net assets of \$5,380,060. Current assets total \$354,986 and include cash assets of \$330,138. Current liabilities total \$29,121.
As outlined in previous financial reports and disclosures by the company, the ongoing activities will concentrate on the exploration program in Pakistan. Historically the company has financed these activities through equity.
The company's ability to continue with its planned exploration activities is dependent on having finance available. Current cash forecasts for the forthcoming twelve months show that all existing sources of funds will be substantially utilised, including drawing down on all the existing finance facilities. The next phase of exploration activities will necessitate the sourcing of additional working capital to undertake these planned activities.
The Directors are reviewing exploration activity and corporate expenditures, with a view to obtaining future funding through a share placement or joint venture capital. Directors are confident that funding initiatives will be successful, however there can be no assurance that such funding will in fact be raised and sources of additional funding have not yet been confirmed.
The Directors have formed the view that it is appropriate to prepare the financial report on a going concern basis.
Remuneration Report
This report details the nature and amount of remuneration for each director of Lake Resources NL, and for the executives receiving the highest remuneration remuneration.
A. Remuneration policy and practices
The board policy is to remunerate directors at market rates for time, commitment and responsibilities. The board determines payments to the directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of directors' fees that can be paid is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the economic entity. However, to align directors' interests with shareholder interests, the directors are encouraged to hold shares in the company.
The directors and executives receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation.
As the company has no full-time employees, contract services are engaged and these contract employees are remunerated with cash consideration.
All remuneration paid to directors and executives is valued at the cost to the company and expensed.
B. Performance-based Remuneration
The company does not pay any performance-based component of remuneration.
C. Company performance, shareholder wealth and director and executive remuneration
As discussed in Part A of the Remuneration Report, the maximum aggregate amount of directors' fees that can be paid to directors is subject to approval by shareholders at the Annual General Meeting and is not linked to the performance of the company. Fees for non-executive directors are not linked to company performance. To align directors' and shareholder interests, the directors are encouraged to hold shares in the company. The company has no full-time employees but engages contactors as necessary.
The current remuneration policy seeks to align director and executive objectives with those of shareholders by recognising the early development stage of the company and the criticality of funds being utilised to achieve development objectives.
ABN 49 079 471 980 DIRECTORS' REPORT
C. Company performance, shareholder wealth and director and executive remuneration (Cont'd)
The following table shows some key performance data of the company for the last four years, together with the share price at the end of each respective year.
| 2006 | 2007 | 2008 | 2009 | |
|---|---|---|---|---|
| \$ | \$ | \$ | \$ | |
| Revenue | 255,660 | 129,663 | 94,947 | 17,641 |
| Net Loss | 118,646 | 216,244 | 85,657 | 266,588 |
| Net Assets | 4,750,026 | 4,533,782 | 4,448,125 | 5,380,060 |
| Capitalised Exploration Expenditure | 2,403,937 | 2,692,417 | 3,769,847 | 4,947,581 |
| Share Price at Year-end | 0.125 | 0.155 | 0.325 | 0.09 |
| Dividends Paid | nil | nil | nil | nil |
D. Key Management Personnel Remuneration for Year Ended 30 June 2009
The remuneration received and receivable for each director and each of the executive officers of the company receiving the highest remuneration during the year was as follows:
| 2009 | Short-term Benefits | ||||
|---|---|---|---|---|---|
| Key Management Personnel | Cash, salary & commissions \$ |
Contract Service Fees \$ |
Superannuation Contribution \$ |
Total \$ |
Performance Related % |
| Ross Johnston | 18,349 | - | 1,651 | 20,000 | - |
| Jim Clavarino i l i |
18,349 | 103,362# | 1,651 | 123,362 | - |
| Peter Gilchrist | 18,349 | 34,500* | 1,651 | 54,500 | - |
| 55,047 | 137,862 | 4,953 | 197,862 | - |
| 2008 | Short-term Benefits | Post employment Benefits |
|||
|---|---|---|---|---|---|
| Key Management Personnel | Cash, salary & commissions \$ |
Contract Service Fees \$ |
Superannuation Contribution \$ |
Total \$ |
Performance Related % |
| Ross Johnston | 18,349 | - | 1,651 | 20,000 | - |
| Jim Clavarino | 18,349 | 140,576# | 1,651 | 160,576 | |
| Peter Gilchrist | 18,349 | 45,091* | 1,651 | 65,091 | - |
| 55,047 | 185,667 | 4,953 | 245,667 | - |
Specified Executives
The company has no specified executives.
* The company has engaged Trenlin Pty Ltd, a company which Mr PJ Gilchrist is a shareholder to provide professional services to the company.
The company has engaged Argent Resources Pty Ltd, a company which Mr JC Clavarino is a director, to provide exploration services to the company.
These services are provided on normal commercial terms and conditions, no more favourable than those provided by other parties.
E. Employment contracts of directors and specified executives
The employment conditions of the managing director, Mr Peter Gilchrist, and the exploration director, Mr Jim Clavarino are not formalised in contracts of employment.
The company does not have any employment contracts.
ABN 49 079 471 980 DIRECTORS' REPORT
Auditor's Independence Declaration
The auditor's independence declaration for the year ended 30 June 2009 has been received and is attached to the directors' report.
This Directors' Report incorporating the Remuneration Report is signed in accordance with a resolution of the Board of Directors.
P.J. Gilchrist R Johnston Director Director
Brisbane, Queensland 28th September 2009
LAKE RESOURCES N.L. ABN 49 079 471 980 DIRECTORS' DECLARATION
The directors of the company declare that:
- 1 The attached financial statements and notes are in accordance with the Corporations Act 2001 and:
- (a) comply with Accounting Standards; and
- (b) give a true and fair view of the company's financial position as at 30 June 2009 and its performance for the year ended on that date.
- 2 The Chief Executive Officer and Chief Financial Officer have each 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; and
- (b) and the financial statements and notes for the financial year comply with the Accounting Standards;
- (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.
This declaration is made in accordance with a resolution of the Board of Directors.
Director Director
R Johnston PJ Gilchrist
28th September 2009
ABN 49 079 471 980
INCOME STATEMENT
for the year ended 30 June 2009
| Note | 2009 | 2008 | |
|---|---|---|---|
| \$ | \$ | ||
| Revenue | 2 | 17,641 | 94,947 |
| Classification of Expenses by Function: | |||
| Current year exploration & evaluation expenditure | (4,037) | - | |
| Write-off of deferred exploration costs | - | (16,866) | |
| Administrative expenses | (84,224) | (92,193) | |
| Corporate expenses | (171,968) | (43,698) | |
| Occupancy expenses | (24,000) | (27,847) | |
| Loss before income tax expense | 3 | (266,588) | (85,657) |
| Income tax expense | 4 | - | - |
| Loss for the year attributable to members of the company | (266,588) | (85,657) | |
| Basic earnings per share (cents per share) | 7 | (0.009) | (0.003) |
| Diluted earnings per share (cents per share) Diluted (cents |
7 7 |
(0.009) | (0.003) |
| Dividends per share (cents per share) | - | - |
ABN 49 079 471 980
BALANCE SHEET
as at 30 June 2009
| Note | 2009 \$ |
2008 \$ |
|
|---|---|---|---|
| ASSETS | |||
| CURRENT ASSETS | |||
| Cash and cash equivalents | 8 | 330,138 | 936,929 |
| Trade and other receivables | 9 | 23,514 | 50,140 |
| Other current assets | 10 | 1,334 | 12,378 |
| Total Current Assets | 354,986 | 999,447 | |
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 11 | 106,604 | 126,177 |
| Exploration and evaluation expenditure | 12 | 4,947,581 | 3,769,847 |
| Financial assets | 16 | 10 | 10 |
| Total Non-Current Assets | 5,054,195 | 3,896,034 | |
| TOTAL ASSETS | 5,409,181 | 4,895,481 | |
| LIABILITIES | |||
| CURRENT LIABILITIES | |||
| Trade and other payables | 13 | 29,121 | 447,356 |
| Total Current Liabilities | 29,121 | 447,356 | |
| NON-CURRENT LIABILITIES | |||
| Total Non-current Liabilities | - | - | |
| TOTAL LIABILITIES | 29,121 | 447,356 | |
| NET ASSETS | 5,380,060 | 4,448,125 | |
| EQUITY | |||
| Issued capital | 14 | 6,939,873 | 5,741,350 |
| Reserves | 15 | 1,051,609 | 1,051,609 |
| Accumulated losses | (2,611,422) | (2,344,834) | |
| TOTAL EQUITY | 5,380,060 | 4,448,125 |
LAKE RESOURCES NL ABN 49 079 471 980
STATEMENT OF CHANGES IN EQUITY For The Year Ended 30 June 2009
| Issued Capital |
Capital Profits Reserve |
Asset Revaluation Reserve |
Retained Earnings |
Total | |
|---|---|---|---|---|---|
| \$ | \$ | \$ | \$ | \$ | |
| Balance 1 July 2007 | 5,741,350 | 4,997 | 1,046,612 | (2,259,177) | 4,533,782 |
| Net profit/(loss) for period | - | - | (85,657) | (85,657) | |
| Subtotal | 5,741,350 | 4,997 | 1,046,612 | (2,344,834) | 4,448,125 |
| Dividends paid or provided for | - | - | - | - | - |
| Balance 30 June 2008 | 5,741,350 | 4,997 | 1,046,612 | (2,344,834) | 4,448,125 |
| Balance 1 July 2008 | 5,741,350 | 4,997 | 1,046,612 | (2,344,834) | 4,448,125 |
| Shares issued during the period | 1,204,497 | - | - | - | 1,204,497 |
| Transactions costs | (5,974) | - | - | - | (5,974) |
| Net profit/(loss) for period | - | - | - | (266,588) | (266,588) |
| Subtotal | 6,939,873 | 4,997 | 1,046,612 | (2,611,422) | 5,380,060 |
| Dividends paid or provided for | - | - | - | - | - |
| Balance 30 June 2009 | 6,939,873 | 4,997 | 1,046,612 | (2,611,422) | 5,380,060 |
ABN 49 079 471 980
CASH FLOW STATEMENT
for the year ended 30 June 2009
| Note | 2009 | 2008 | |
|---|---|---|---|
| \$ | \$ | ||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Payments to suppliers | (624,177) | 218,926 | |
| Interest received | 17,641 | 94,947 | |
| Net cash provided by/ (used in) operating activities | 17 | (606,536) | 313,873 |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Capitalised exploration and evaluation expenditure | (762,357) | (1,094,296) | |
| Purchase of property, plant and equipment | (21,044) | (111,112) | |
| Net cash provided by/ (used in) investing activities | (783,401) | (1,205,408) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from share issue | 789,122 | - | |
| Share issue costs | (5,974) | - | |
| Net cash provided by/ (used in) financing activities | 783,148 | - | |
| Net increase/(decrease) in cash held | (606,789) | (891,535) | |
| Cash at beginning of year | 936,929 | 1,828,464 | |
| Cash at end of year | 8 | 330,140 | 936,929 |
ABN 49 079 471 980
Notes to the Financial Statements For the year ended 30 June 2009
Note 1: Statement of Significant Accounting Policies
The financial report covers Lake Resources NL. Lake Resources NL is a listed public company, incorporated and domiciled in Australia.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 .
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.
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 company has a wholly owned subsidiary, incorporated in Argentina, which is dormant. The company was incorporated to allow Lake Resources NL to open a bank account to support exploration activities in Argentina. The company has no asset or liabilities. Consequently, consolidated financial statements have not been prepared.
Continued Operations and Future Funding
The financial report has been prepared on a going concern basis that contemplates the continuity of normal operating activities and the realisation of assets and settlement of liabilities in the normal course of business.
At 30 June 2009, the company's balance sheet shows total assets of \$5,409,181, total liabilities of \$29,121, and net assets of \$5,380,060. Current assets total \$354,986 and include cash assets of \$330,138. Current liabilities total \$29,121.
As outlined in previous financial reports and disclosures by the company, the ongoing activities will concentrate on the exploration program in Pakistan. Historically the company has financed these activities through equity.
The company's ability to continue with its planned exploration activities is dependent on having finance available. Current cash forecasts for the forthcoming twelve months show that all existing sources of funds will be substantially utilised, including drawing down on all the existing finance facilities. The next phase of exploration activities will necessitate the sourcing of additional working capital to undertake these planned activities.
The Directors are reviewing exploration activity and corporate expenditures, with a view to obtaining future funding through a share placement or joint venture capital. Directors are confident that funding initiatives will be successful, however there can be no assurance that such funding will in fact be raised and sources of additional funding have not yet been confirmed.
The Directors have formed the view that it is appropriate to prepare the financial report on a going concern basis.
ABN 49 079 471 980
Notes to the Financial Statements For the year ended 30 June 2009
Note 1: Statement of Significant Accounting Policies (Cont'd)
Accounting Policies
a. Income Tax
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 the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. 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 unused tax losses are recognised 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.
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 legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
b. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.
ABN 49 079 471 980
Notes to the Financial Statements For the year ended 30 June 2009
Note 1: Statement of Significant Accounting Policies (Cont'd)
b. Property, Plant and Equipment (Cont'd)
Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the company commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are:
| Class of Fixed Asset | Depreciation Rate |
|---|---|
| Motor Vehicles | 20% |
| Plant and equipment | 20% |
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalue assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.
c. Exploration and Development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are written off as incurred except that they may be carried forward, provided that rights to tenure of an area of interest are current and that the costs are expected to be recouped through the successful development of the area, or sale, or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit i h i hi h h d i i b d h i d in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.
Restoration Costs
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.
The company has no obligations for any restoration costs in relation to discontinued operations, nor is it liable for any future restoration costs in relation to current areas of interest, as the evaluation activity undertaken results in minimal disturbance to the areas of interest in question.
Consequently, no provision for restoration has been deemed necessary.
ABN 49 079 471 980
Notes to the Financial Statements For the year ended 30 June 2009
Note 1: Statement of Significant Accounting Policies (Cont'd)
d. Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.
Impairment
At each reporting date, the company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire.
e. Impairment of Assets
At each reporting date, the company 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 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 income statement.
Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
f. Foreign Currency Transactions and Balances
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange 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.
ABN 49 079 471 980
Notes to the Financial Statements For the year ended 30 June 2009
Note 1: Statement of Significant Accounting Policies (Cont'd)
g. Provisions
Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
h. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.
i. Revenue and other income
Revenue is measured at the fair value of the consideration received or receivable.
Interest revenue is recognised using the effective interest method, which, for floating rate financial assets is the rate inherent in the instrument.
All revenue is stated net of the amount of goods and services tax (GST).
j. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
k. Employee Benefits
Provision is made for the company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows.
l. Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to the company, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments to operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.
m Equity Settled Payments
The company makes equity settled share based payments to consultants for services provided. The fair value of the equity is measured at grant date and recognised as expenditure , with a corresponding increase to equity.
n. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
ABN 49 079 471 980
Notes to the Financial Statements For the year ended 30 June 2009
Note 1: Statement of Significant Accounting Policies (Continued)
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company.
Key Estimates — Impairment
The company assesses impairment at each reporting date by evaluating conditions specific to the company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.
No impairment of assets has been identified for the year ended 30 June 2009.
Key Judgments — Carry- forward of Exploration and Development Expenditure
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.
The company assesses impairment at each reporting date by evaluating conditions specific to the company that may lead to impairment of exploration and development assets. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.
New Accounting Standards for Application in Future Periods
The following standards, amendments to standards and interpretations have been identified as those which may impact the entity g , p y p yin the period of initial application. They are available for early adoption at 30 June 2008, but have not been applied in preparing this financial report:
· Revised AASB 101 Presentation of Financial Statements (2007) introduces the tem total comprehensive income, which represents changes in equity during a period other than those changes resulting from transactions with owners in their capacity as owners. Total comprehensive income may be presented in either a single statement of comprehensive income (effectively combining both the income statement and all non-owner changes in equity in a single statement) or, in an income statement and a separate statement of comprehensive income. Revised AASB 101, which becomes mandatory for 30 June 2010 financial statements, is expected to have an impact on the presentation of the financial statements. The company plans to provide total comprehensive income in a statement of comprehensive income for its 2010 financial report.
· AASB 2008-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Process and AASB 2008-6 Further amendments to Australian Accounting Standards arising from the Annual Improvements Process affect various AASBs resulting in minor changes for presentation, disclosure, recognition and measurement purposes. The amendments, which become mandatory for 30 June 2010 financial statements, are not expected to have any impact on the financial statements.
· AASB 8 Operating Segments introduces the "management approach" to segment reporting. AASB 8, which becomes mandatory for the 30 June 2010 financial statements, will require the disclosure of segment information based on internal reports regularly reviewed by the Board/ Management in order to assess each segment's performance and allocate resources to them. Currently segment information is prepared on the basis of business and geographical segments. Under the management approach, there will be no change to the disclosure.
· AASB 2008-1 Amendments to Australian Accounting Standard – Share Based Payment: Vesting Conditions and Cancellations clarifies the definition of vesting conditions, introduces the concept on non-vesting conditions, requires nonvesting conditions to be reflected in grant-date fair value and provides accounting treatment for non-vesting conditions and cancellation. The amendments to AASB 2 will be mandatory for 30 June 2010 financial statements, with retrospective application. The potential effect of the amendment has not yet been determined.
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 \$ |
2008 \$ |
||
|---|---|---|---|
| NOTE 2: REVENUE | |||
| Revenue | |||
| Interest revenue from other persons | 17,641 | 94,947 | |
| Total revenue | 17,641 | 94,947 | |
| NOTE 3: PROFIT/(LOSS) FOR THE YEAR | |||
| (a) | Expenses | ||
| Exploration & evaluation expenditure written-off | 4,037 | - | |
| Foreign currency translation losses on cash assets | 10,146 | 1,636 | |
| Rental expense on operating leases | - | 42,670 | |
| Depreciation | 40,617 | 25,239 | |
| (b) | Significant Revenue and Expenses | ||
| Write-off of capitalised exploration expenditure | - | 16,866 | |
| NOTE 4: INCOME TAX EXPENSE/(BENEFIT) | |||
| (a) | The components of tax expense comprise: | ||
| Current tax | - | - | |
| Deferred tax | - | - | |
| - | - | ||
| (b) | Prima facie tax payable/(benefit) on profit/(loss) from | ||
| ordinary activities before tax income tax at 30% (2008: 30%). | (79,976) | (25,697) | |
| Add tax effect of: | |||
| Non-assessable items | - | (1,546) | |
| Non-allowable items | - | (6,550) | |
| Write-off of exploration expenditure | 3,044 | 5,060 | |
| Future income tax benefit of tax losses not brought to account | 305,640 | 351,962 | |
| Less tax effect of: | |||
| Temporary differences between income tax and accounting | |||
| treatment of exploration and other expenditure | (228,708) | (323,229) | |
| Income tax expense | - | - | |
| The weighted average effective tax rate is | -% | -% |
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 | 2008 |
|---|---|
| \$ | \$ |
NOTE 4: INCOME TAX EXPENSE/(BENEFIT) (continued)
The company has unrecouped, unconfirmed carry forward tax losses of approximately \$5.9 million (2008: \$5.6 million).
- A deferred income tax asset arising from carry forward tax losses will only be recognised to the extent that:
- (a) it is probable that the company will derive future assessable income of a nature and of an amount sufficient to enable the benefits from the deductions for the losses to be realised;
- (b) the company continues to comply with the conditions for deductibility imposed by the law; and
- (c) no changes in tax legislation adversely affect the company in realising the benefit from the losses.
NOTE 5: KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Names and positions held of company key management personnel in office at any time during the financial year are:
| Peter Gilchrist | Managing Director |
|---|---|
| James Clavarino | Exploration Director |
| Ross Johnston | Non-Executive Director |
(b) Key Management Personnel Compensation
The company has no employees. The two working directors operate under contracts to provide services, based on commercial rates. Amounts paid during the year are set out in note 18 and in the directors report.
| Short term employee benefits* | 192,909 | 240,714 |
|---|---|---|
| Post-employment benefits | 4,953 | 4,953 |
| 197,862 | 245,667 |
* Includes fees paid for contract services provided
(c) Shareholdings
Number of shares held by Key Management Personnel
| Received as | |||||
|---|---|---|---|---|---|
| Key Management Personnel | Balance 1/7/08 compensation |
Purchases/(sales) | Balance 30/6/09 | ||
| No. | No. | No. | No. | ||
| Peter Gilchrist | - | - | - | - | |
| James Clavarino | - | - | - | - | |
| Ross Johnston | - | - | - | - |
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 | 2008 |
|---|---|
| \$ | \$ |
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION
(c) Shareholdings (cont'd)
Messrs Gilchrist and Johnston have an interest in 3,841,920 (2008: 1,920,960) ordinary shares held by Kemkay Pty Ltd, a subsidiary of 202 Ltd, of which they are both Directors and Mr Johnston is a shareholder.
Mr Gilchrist is a substantial shareholder in Trenlin Pty Ltd a company which holds 1,692,222 (2008: 846,111) shares in the company.
Mr Gilchrist is a Director of Queensland Energy Pty Ltd a company which holds 1,268,508 ( 2008: 395,004) shares in the company.
Mr Ross Johnston is a Director and substantial shareholder of Bushfly Air Charter Pty Ltd, a company which holds 2,490,020 (2008: 1,245,010) shares in the company.
Mr Clavarino is a director and shareholder of JG Clavarino Super Fund Pty Ltd, a company which holds 1,149,400 (2008: 1,149,400 ) shares in the company.
Mr Clavarino is a director and shareholder of Lake Gold Pty Ltd, a company which holds 400,000 (2008: 400,000) shares in the company.
NOTE 6: AUDITORS' REMUNERATION
Remuneration of the auditor of the company for:
| - auditing or reviewing the financial report | 23,600 | 14,750 | |
|---|---|---|---|
| - other services | - | - | |
| 23,600 | 14,750 | ||
| NOTE 7: EARNINGS PER SHARE | |||
| (a) | The earnings figure used in the calculation of both the basic EPS and the diluted EPS are the same. |
(266,588) | (85,657) |
| (b) | Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS |
31,143,637 | 25,608,795 |
| Weighted average number of options outstanding | - | - | |
| Weighted average number of ordinary shares outstanding during the year used in the calculation of dilutive EPS |
31,143,637 | 25,608,795 | |
| (c) | Classification of Securities |
Only ordinary shares existed during the 2009 year.
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 | 2008 | |
|---|---|---|
| \$ | \$ | |
| NOTE 8: CASH AND CASH EQUIVALENTS | ||
| Cash at bank and in hand | 21,191 | 16,924 |
| Short term bank deposit | 308,947 | 920,005 |
| 330,138 | 936,929 | |
| The effective interest rates on short term bank deposits was 3.13% (2008: 6.89%); these deposits have an average maturity of less than 90 days. |
||
| Reconciliation of cash | ||
| Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: |
||
| Cash and cash equivalents | 330,138 | 936,929 |
| NOTE 9: TRADE AND OTHER RECEIVABLES | ||
| Current: | ||
| Other receivables | 23,514 | 50,140 |
| 23,514 | 50,140 | |
| There are no balances within trade and other receivables that contain assets that are impaired and are past due. It is expected these balances will be received when due. Impaired assets are provided for in full. |
||
| NOTE 10: OTHER ASSETS | ||
| Current: | ||
| Prepayments | 1,334 | 12,378 |
| NOTE 11: PROPERTY, PLANT AND EQUIPMENT | ||
| Plant and equipment | ||
| At cost | 57,578 | 69,916 |
| Accumulated depreciation | (39,837) | (44,672) |
| Total Plant and Equipment | 17,741 | 25,244 |
| Vehicles | ||
| At cost | 167,815 | 146,771 |
| Accumulated depreciation | (78,952) | (45,838) |
| Total Vehicles | 88,863 | 100,933 |
| Total Property, Plant and Equipment | 106,604 | 126,177 |
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 | 2008 |
|---|---|
| \$ | \$ |
NOTE 11: PROPERTY, PLANT AND EQUIPMENT (continued)
Movement in carrying amount
Movement in the carrying amounts for each class of property, plant and equipment are set out below:
| 40,304 |
|---|
| 111,112 |
| - |
| (25,239) |
| 126,177 |
| 2009 | ||||
|---|---|---|---|---|
| Vehicles | Plant & Equip. \$ |
Total | ||
| Balance at 1 July 2008 | 100,933 | 25,244 | 126,177 | |
| Additions | 21,044 , |
- | 21,044 , |
|
| Disposals | - | - | - | |
| Depreciation expense | (33,114) | (7,503) | (40,617) | |
| Carrying amount at 30 June 2009 | 88,863 | 17,741 | 106,604 | |
NOTE 12: EXPLORATION AND EVALUATION EXPENDITURE
| Exploration and evaluation costs carried forward in respect of areas of interest are: | ||||
|---|---|---|---|---|
| - at cost | 4,947,581 | 3,769,847 | ||
| Movement during the year in exploration and evaluation expenditure: | ||||
| At cost: | ||||
| Carrying amount at beginning of year | 3,769,847 | 2,692,417 | ||
| Capitalised exploration and evaluation expenditure | 1,177,734 | 1,094,296 | ||
| Write down of discontinued exploration tenements | - | (16,866) | ||
| Carrying amount at the end of year | 4,947,581 | 3,769,847 | ||
Recoverability of the carrying amount of exploration assets is dependent on the successful exploration of minerals. Capitalised costs amounting to \$762,357 (2008: \$1,094,296) have been included in cash flows from investing activities in the cash flow statement.
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 | 2008 | ||
|---|---|---|---|
| \$ | \$ | ||
| NOTE 13: TRADE AND OTHER PAYABLES | |||
| Current: Unsecured creditors: |
|||
| Sundry creditors and accrued expenses | 29,121 | 447,356 | |
| 29,121 | 447,356 | ||
| NOTE 14: ISSUED CAPITAL | |||
| 35,161,513 (2008: 25,608,795) fully paid ordinary shares | 6,939,873 | 5,741,350 | |
| (a) Fully paid ordinary shares |
|||
| Balance at the beginning of the reporting period | 5,741,350 | 5,741,350 | |
| Shares issued during the year | 1,204,497 | - | |
| Share issue costs | (5,974) | - | |
| Balance at reporting date | 6,939,873 | 5,741,350 | |
| No. | No. | ||
| Balance at the beginning of the reporting period | 25,608,795 | 25,608,795 | |
| Shares issued during the year: | |||
| 23 July 2008 | (a) | 1,661,500 | |
| 29 Decem D b 2008 er |
(b) | 7 891 218 7,891,218 | - |
| Balance at reporting date | 35,161,513 | 25,608,795 | |
(a) On 23 July 2008 the company issued 1,661,510 shares at \$\$0.25 each as consideration for services rendered and exploration costs incurred.
(b) On 29 December 2008 the company issued 7,891,218 shares at \$0.10 each pursuant to a one-for-one non-renounceable rights issue.
Ordinary shares participate in dividends and the proceeds on winding up of the entity in proportion to the number of shares held.
At shareholders' meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
The company does not have any authorised capital.
(c) Options
There are no options over shares.
(d) Capital Management
Exploration companies such as Lake Resources NL are funded exclusively by share capital. The company has no debt. The company's capital comprises share capital supported by financial assets. Management controls the capital of the company to ensure it can fund its operations and continue as a going concern. Capital management policy is to fund exploration activities by way of equity. No dividend will be paid whilst the company is in its exploration stage. There are no externally imposed capital requirements. There have been no changes in capital management policies since the prior year.
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 \$ |
2008 \$ |
|||
|---|---|---|---|---|
| NOTE 15: RESERVES | ||||
| (a) | Capital Profits Reserve The capital profits reserve records non-taxable profits on sale of investments |
4,997 | 4,997 | |
| (b) | Asset Revaluation Reserve The asset revaluation reserve records revaluations of non current assets. Under certain circumstances dividends can be declared from this reserve |
1,046,612 | 1,046,612 | |
| 1,051,609 | 1,051,609 | |||
| NOTE 16: CONTROLLED ENTITY | ||||
| Name of Entity | % owned | Carrying value of Investment |
||
| Lake Resources Argentina SA (Incorp. in Argentina) | 100% | 10 | 10 | |
| This company was incorporated to allow Lake Resources NL to open a bank account to support exploration activities in Argentina. It does not operate. |
||||
| NOTE | NOTE 17: CASH FLOW INFORMATION CASH FLOW |
|||
| Reconciliation of Cash Flow from Operations with Profit/(loss) after Income Tax: |
||||
| Profit/(loss) after income tax | (266,588) | (85,657) | ||
| Non-cash flows in profit: | ||||
| Depreciation & amortisation | 40,617 | 25,239 | ||
| Write-down of capitalised exploration & evaluation expenditure | - | 16,866 | ||
| Changes in operating assets and liabilities: | ||||
| Decrease/(Increase) in receivables | 26,626 | 13,196 | ||
| Decrease/(Increase) in prepayments | 11,044 | 308 | ||
| (Decrease)/Increase in trade creditors and accruals | (418,235) | 374,821 | ||
| (Decrease)/Increase in provisions | - | (30,900) | ||
| Cash flows from operations | (606,536) | 313,873 | ||
| Non-cash financing and investing activities | ||||
| Share issue |
On 23 July 2008 the company issued 1,661,510 shares at \$\$0.25 each as consideration for services rendered and exploration costs incurred.
ABN 49 079 471 980
Notes to the Financial Statements
for the year ended 30 June 2009
| 2009 \$ |
2008 \$ |
|
|---|---|---|
| NOTE 18: RELATED PARTY TRANSACTIONS | ||
| Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. |
||
| Directors' transactions with the Company | ||
| Directors' remuneration is detailed Note 5 (b) and in the remuneration section (Part D) of the directors report. |
||
| The company paid Argent Resources Pty Ltd, a company of which Mr J.C. Clavarino is a director, fees for professional services in relation to exploration work undertaken on behalf of the company. |
103,362 | 140,576 |
| The company paid Trenlin Pty Ltd, a company of which Mr P.J. Gilchrist is a shareholder, fees for professional services undertaken on behalf of the company and for rent of premises on a monthly tenancy. |
58,500 | 45,091 |
| During the 2008 year the entity rented office space to 202 Ltd, a company of which Mr R Johnston and Mr PJ Gilchrist, directors of the company during the year, are also directors. |
- | 6,045 |
Directors' holding of shares and options ( see also Note 5(c))
Directors and director-related entities hold directly, indirectly or beneficially as at the reporting date, the following equity interests in the company:
| No. | ||
|---|---|---|
| Ordinary shares | 10,842,070 | 5,956,485 |
| Options over ordinary shares | nil | nil |
| No shares were issued to directors during the year on terms more favourable than those which it is reasonable to expect | ||
| the entity would have adopted if dealing in an arm's length transaction with an unrelated party. |
No options were issued to director related entities during the year (2008: nil), and no options are held by directors or director-related entities.
NOTE 19: CAPITAL AND LEASING COMMITMENTS
Exploration Commitments
In the 2009 financial year the company's obligations in relation to its exploration tenements terminated with the expiry of the tenements on 19th March 2009. These expired tenements have been replaced with new exploration licences commencing on 10 September 2009. Under the terms of the new licences the company has to meet annual rent and undertake exploration over the next three years. This commitment is estimated as follows:
| 2009 | |||
|---|---|---|---|
| Rent | Exploration | Total | |
| \$ | \$ | \$ | |
| Not later than one year | 24,000 | 150,000 | 174,000 |
| Later than 1 year but not later than 5 years | 48,000 | 300,000 | 348,000 |
| Total commitment | 72,000 | 450,000 | 522,000 |
ABN 49 079 471 980
Notes to the Financial Statements for the year ended 30 June 2009
NOTE 20: CONTINGENT LIABILITIES
Granting the new exploration licences is conditional upon the company signing an agreement with the Government of Balochistan within a period of two months from date of grant. Under the terms of the new licences (which are in accordance with the latest policy of the Government) , the company must elect to grant the Government a 12.5% share without any investment or a 25% investment in the venture. No decision has been made by the Board in relation to this election at the date of this report.
NOTE 21: FINANCIAL RISK MANAGEMENT
a. Financial Risk Management Policies
The company's financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, as shown in the balance sheet.
i. Treasury Risk Management
The directors of the company meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.
The director's overall risk management strategy seeks to assist the company in meeting its financial targets, whilst minimising potential adverse effects on financial performance.
Risk management policies are approved and reviewed by the Board on a regular basis These include future cash flow policies are reviewed the Board basis. cash flow requirements.
ii. Financial Risk Exposures and Management
The main risks the company is exposed to through its financial instruments are interest rate risk, foreign currency risk and liquidity risk.
Interest rate risk
The company does not have any material exposure to any interest rate risk as the company has no debt. The company's only interest rate risk exposure is in relation to cash on deposit, The company manages interest rate risk as a result of changes in market interest rates through the use of variable term deposits.
Foreign currency risk
The company is exposed to fluctuations in foreign currencies arising from the purchase of goods and services in currencies other than the company's measurement currency.
Liquidity risk
The company manages liquidity risk by monitoring forecast cash flows.
Credit risk
The company does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the company.
Price risk
The company is not exposed to any commodity price risk.
ABN 49 079 471 980
Notes to the Financial Statements for the year ended 30 June 2009
NOTE 21: FINANCIAL RISK MANAGEMENT (Cont'd)
b. Financial Instruments
i. Financial instrument composition and maturity analysis
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management's expectations of the settlement period for all other financial instruments. As such, the amounts may not reconcile to the balance sheet.
| Weighted Average | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Effective Interest Rate |
Floating Interest Rate | Non-Interest Bearing | Total | ||||||
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||
| % | % | \$ | \$ | \$ | \$ | \$ | \$ | ||
| Financial Assets: | |||||||||
| Cash | 6.89 | 6.89 | 330,138 | 936,929 | - | - | 330,138 | 936,929 | |
| Other receivables | - | - | - | - | 23,514 | 50,140 | 23,514 | 50,140 | |
| Total Financial Assets | 330,138 | 936,929 | 23,514 | 50,140 | 353,652 | 987,069 | |||
| Financial Liabilities: | |||||||||
| Trade and sundry creditors | - | - | - | - | 29,121 | 447,356 | 29,121 | 447,356 | |
| Total Financial Liabilities | - | - | 29,121 | 447,356 | 29,121 | 447,356 |
| 2009 | 2008 | |
|---|---|---|
| Settlement Period: | \$ | \$ |
| Less than 6 months : | ||
| Financial Assets - | ||
| Cash & cash equivalents | 330,138 | 936,929 |
| Sundry receivables | 23,514 | 50,140 |
| 353,652 | 987,069 | |
| Financial Liabilities - | ||
| Sundry payables & accruals | 29,121 | 447,356 |
| 29,121 | 447,356 | |
ii. Net Fair Values
The net fair value of the company's financial assets and liabilities approximate their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form.
Fair values are materially in line with carrying values.
iii. Sensitivity Analysis
Interest Rate Risk and Foreign Currency Risk
The company has performed a sensitivity analysis relating to its exposure to interest rate risk and foreign currency risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.
ABN 49 079 471 980
Notes to the Financial Statements for the year ended 30 June 2009
NOTE 21: FINANCIAL INSTRUMENTS (Cont'd)
Interest Rate Sensitivity Analysis
The company has performed sensitivity analysis relating to its exposure to interest rate risk. At year end, the effect on profit and equity as a result of a 2% (2008: 2%) change in the interest rate, with all other variables remaining constant would be +/- \$12,290 (2008; \$26,383).
Foreign Currency Risk Sensitivity Analysis
The company has performed sensitivity analysis relating to its exposure to foreign exchange risk. At year end, the effect on profit and equity as a result of a 10% (2008: 10%) change in the Pakistan Rupee, with all other variables remaining constant would be +/- \$1,840 (2008; \$843).
This exposure arises from the Pakistan Rupee bank accounts. Net exposure is PKR 1,227,243 (2008: PKR 561,734). The company's exposure is minimal.
The company has performed sensitivity analysis relating to its exposure to foreign exchange risk. At year end, the effect on profit and equity as a result of a 5% (2008: 5%) change in the United States Dollar, with all other variables remaining constant would be +/- \$nil (2008: \$24,052).
This exposure arises from the payment of creditors in United States Dollars. Net exposure is USD \$ nil (2008: USD \$403,295). The company's exposure is minimal.
The above interest rate and foreign exchange rate sensitivity analysis were performed on the assumption that all other variables remain unchanged.
NOTE 22: SHARE BASED PAYMENTS
1,661,500 shares were issued during the year as share based payments for services acquired and exploration costs incurred (refer Note 14). The weighted average value of these shares, determined by reference to market price was \$0.25.
An amount of \$415,375 (2008: \$nil) has been included in capitalised exploration expenditure.
NOTE 23: COMPANY DETAILS
The registered office and principal place of business of the company is:
Lake Resources NL 5 Maud Street NEWSTEAD QLD 4006
NOTE 24: EVENTS AFTER THE BALANCE SHEET DATE
The Pakistan tenements of the company, which expired on 19 March 2009, have been subsequently replaced with new exploration licences granted for a further three years, commencing on 10 September 2009.
The financial report was authorised for issue on 30 September 2009.
NOTE 25: ECONOMIC DEPENDENCY
The company is dependent on the Government of Pakistan continuing to allow exploration on tenements which have been granted to the company.
LAKE RESOURCES NL ABN 49 079 471 980
Notes to the Financial Statements for the year ended 30 June 2009
NOTE 26: SEGMENT REPORTING
Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and property, plant and equipment, net of allowances and accumulated depreciation and amortisation. While most such assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated to the segments on a reasonable basis. Segment liabilities consist principally of payables, and accrued expenses. Segment assets and liabilities do not include deferred income taxes.
Intersegment Transfers
Segment revenues, expenses and results may include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the company at an arm's length.
Business and Geographical Segments
Business segments
The company has only one business segment - mineral exploration
Geographical segments
The company's business segments are located in Australia with mineral exploration operations in Argentina and Pakistan.
Primary Reporting: Geographical Segments
| 2009 2008 2009 2008 2009 2008 2009 2008 \$ \$ \$ \$ \$ \$ \$ \$ REVENUE 17,641 94,947 - - - - 17,641 Interest Total revenue from ordinary 17,641 94,947 - - - - 17,641 activities RESULT Profit/(Loss) from ordinary Profit/(Loss) ordinary activities before income tax (262,551) (68,791) (4,037) (16,866) - - (266,588) expense Income tax expense - - - - - - - Profit/(Loss) from ordinary activities after income tax (262,551) (68,791) (4,037) (16,866) - - (266,588) expense ASSETS 461,590 1,125,634 - - 4,947,591 3,769,847 5,409,181 4,895,481 Segment assets LIABILITIES Segment liabilities 29,121 447,356 - - - - 29,121 OTHER (Acquisition)/Disposal of non current Segment assets - - - 16,866 (1,198,776) (1,205,408) (1,198,776) (1,188,542) Depreciation and amortisation of segment 7,502 6,590 - 10,282 33,115 8,367 40,617 assets Other non-cash segment |
Australia | Argentina | Pakistan | Economic Entity | |||||
|---|---|---|---|---|---|---|---|---|---|
| 94,947 | |||||||||
| 94,947 | |||||||||
| (85,657) | |||||||||
| - | |||||||||
| (85,657) | |||||||||
| 447,356 | |||||||||
| 25,239 | |||||||||
| expenses | - | - | - | - | - | - | - | - |
There were no transfers between segments reflected in the revenues, expenses or result above.
Secondary Reporting: Business Segments
| Business Segments | Segment Revenues from | Carrying Amount of | Acquisition of non-current | |||
|---|---|---|---|---|---|---|
| External Customers | Segment Assets | segment assets | ||||
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |
| \$ | \$ | \$ | \$ | \$ | \$ | |
| Mineral Exploration | 17,641 | 94,947 | 5,409,181 | 4,895,481 | (1,198,776) | (1,188,542) |
ABN 49 079 471 980
Additional Information for Listed Public Companies
The shareholder information set out below was applicable as at 24 August 2009.
1. Twenty Largest Shareholders
The names of the twenty largest holders of each class of listed securities are listed below:
Ordinary Shares
| Name | No. of Ordinary Investors Shares Held |
Percentage of Issued Shares |
||
|---|---|---|---|---|
| 1 | KEMKAY PTY LTD | 3,841,920 | 10.9% | |
| 2 | BUSHFLY AIR CHARTER PTY LTD | 2,490,020 | 7.1% | |
| 3 | TRENLIN PTY LIMITED | 1,692,222 | 4.8% | |
| 4 | QLD ENERGY PTY LTD (QEM SUPERANNUATION FUND) | 1,268,508 | 3.6% | |
| 5 | JG CLAVARINO SUPER FUND PTY LTD | 1,149,400 | 3.3% | |
| 6 | LAWNBET PTY LTD | 1,061,827 | 3.0% | |
| 7 | JAN MUHAMMED | 1,000,000 | 2.8% | |
| 8 | ALEXANDRA MARIE CLAVARINO | 750,000 | 2.1% | |
| 9 | RONSON INVESTMENTS PTY LTD | 690,000 | 2.0% | |
| 10 | BENSONS OF BRISBANE PTY LTD | 510,000 | 1.5% | |
| 11 | MOHAMMED ASHFAQ | 500,000 | 1.4% | |
| 12 | ASSET CUSTODIAN NOMINEES (AUST) PTY LTD | 450,000 | 1.3% | |
| 13 | BATEL PTY LTD | 412,500 | 1.2% | |
| 14 | PERPETUAL TRUSTEE COMPANY LIMITED | 408,000 | 1.2% | |
| 15 | LAKE GOLD PTY LTD | 400,000 | 1.1% | |
| 16 | INVIA CUSTODIAN PTY LIMITED INVIA CUSTODIAN PTY |
346,705 | 1.0% | |
| 17 | BRETTON PTY LTD | 339,500 | 1.0% | |
| 18 | OCTOLAKE PTY LIMITED | 326,000 | 0.9% | |
| 19 | JAMES CLEMENT WHITING | 325,657 | 0.9% | |
| 20 | BEDEL & SOWA PTY LTD | 300,000 | 0.9% | |
| TOTAL FOR TOP 20 SHAREHOLDERS: | 18,262,259 20 |
51.9% | ||
| TOTAL OTHER INVESTORS SHAREHOLDINGS | 16,899,254 616 |
48.1% | ||
| TOTAL ORDINARY SHARES ON ISSUE | 35,161,513 636 |
100.0% |
2. Distribution of equity securities
(a) Analysis of security by size of holding -number of security holders
| Ranges | Investors | Securities | % Issued Capital |
|---|---|---|---|
| 1 to 1000 | 8 | 3,576 | 0.01% |
| 1001 to 5000 | 87 | 272,118 | 0.77% |
| 5001 to 10000 | 166 | 1,437,390 | 4.09% |
| 10001 to 100000 | 295 | 9,227,874 | 26.24% |
| 100001 and Over | 52 | 24,220,555 | 68.88% |
| Total | 608 | 35,161,513 | 100.00% |
(b) The number of security investors holding less than a marketable parcel of 5,556 (\$0.09 on 17.7.2009) securities is 98 and they hold 291,736 securities.
ABN 49 079 471 980
Additional Information for Listed Public Companies
3. Substantial Shareholders
The following details of substantial shareholders listed in the company's register at 24 August 2009 are:
| Shareholder | Number of Shares | |
|---|---|---|
| Kemkay Pty Ltd | 3,841,920 | |
| Bushfly Air Charter Pty Ltd | 2,490,020 |
4. Voting Rights
Each ordinary shareholder is entitled to one vote when a poll is called, otherwise each member present at a meeting has one vote on a show of hands.
5. The name of the Company Secretary is Mr. Peter Gilchrist.
6. The address of the principal registered office in Australia is 5 Maud Street, Newstead Qld 4006.
7. Register of securities are held at the following address:
| Link Market Services Ltd | ||
|---|---|---|
| Level 19 | or | Locked Bag A14 |
| 324 Queen Street | SYDNEY SOUTH NSW 1235 | |
| BRISBANE QLD 400 | Telephone No. 1300 554 474 | |
| Telephone No. (07) 3320-2232 | (02) 820 7454 |
8. Stock Exchange Listing
Quotation has been granted for all of the ordinary shares of the company on all Members Exchanges of the Australian Stock Exchange Limited
9. Restricted Securities
There are no restricted securities.
10 Schedule of Tenements as at 30 June 2009
The Pakistan tenements of the company, which expired on 19 March 2009, have been subsequently replaced with new exploration licences granted for a further three years, commencing on 10 September 2009. The new licence details are outined below:
Table 1: Balochistan Tenements
| Tenement | Amalaf | Dasht-i-Gauran | Koh-i-Sultan |
|---|---|---|---|
| EL Number | (71)/5468-78 | (72)/5492-5503 | (73)/5479-91 |
| Area (sq km) | 94.42 | 58.76 | 171.4 |
| Lake Interest | (see Note 1) | (see Note 1) | (see Note 1) |
| Grant Date | 10/09/09 | 10/09/09 | 10/09/09 |
| Expiry Date | 09/09/12 | 09/09/12 | 09/09/12 |
Note 1. Clause 12 of the Licence documents provides that the grantee "…will also sign an agreement with the Government of Balochistan within a period of two months regarding participation/entry of the Government of Balochistan in the said licence/project with 12.5% share on 100% discount i.e. without any investment or 25% share with investment in accordance with the Latest Policy of the Government ". Negotiations will be undertaken with Government of Balochistan to meet the provisions of this clause Government of Balochistan to meet the provisions of this clause.