REDCASTLE RESOURCES LIMITED — Annual Report 2005

Sep 12, 2005

Appendix 4E

PRELIMINARY FINAL REPORT GIVEN TO THE ASX UNDER LISTING RULE 4.3A

Name of entity

Great Pacific Capital Limited
ABN or equivalent reference $#$
	57 096 781 716
Reporting periodPrevious corresponding period
Financial year ended 30 June 2005	Financial year ended 30 June 2004

Contents	Page No.
Results for announcement to the market	1.
Commentary on results	1.
Net tangible assets per ordinary share	2.
Other information regarding this Appendix 4E	2.
Segment report	2.
Subsidiaries acquired and disposed during the year	$\overline{2}$ .
Statement of Financial Performance	3.
Statement of Financial Position	4.
Statement of Cash Flows	5.
Significant accounting policies and notes to the financial statements	6.

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Revenue from ordinary activities	down	$9.72%$10	$14,430,260
Profit from ordinary activities after incometax attributable to members	down	$30.42%$ to	$ 3,559,250
Net profit for the year attributable tomembers	down	$30.42%$ to	$3,559,250
Dividends per share	Amount per share		Franked amount per share at$30%$ tax

Final	0cents	0cents
Interim	cents0	0cents

No dividend was declared in respect of the year ended 30 June 2005.

Commentary on results

1. Results

The net result of the consolidated entity after applicable income tax for the year ended 30 June 2005 was a profit of $3,559,250, a decrease of 30.4% from $5,115,468 in 2004.

The loan provided by GPC No.1 (City Quarter) to finance the redevelopment project at the former Camperdown Children's Hospital has experienced further delay in repayment due to the slow down of the property market. The Company is now in discussions with various financiers involved in this project with a view of setting up a proper repayment schedule.

In view of the slow down in the property market and the uncertainty surrounding the final repayment, the Board considered it is prudent to make a provision of $2 million for this receivable.

The slow down in the property market also means that the number of projects that suit our selection criteria is smaller as compared to previous year. As such, the Company has taken the opportunity to consolidate the Company's position in its existing projects.

One example is the rearrangement of the loan facility provided to the owner of the land at the Bellambi West Colliery site. This will enable the Company to share the upside in the longer term equity return of the joint venture development project entered into by the borrower.

2. Shareholder returns

Basic earnings per share for the year was 29.95 cents per share, a decrease of 30.4% from 43.04 cents per share in 2004 mainly due to the provision against the receivables. Net assets of the group increased to $19.7 million as compared to $17.14 million in 2004. This reflected the continuous growth in strength of the Company.

In term of shareholders' wealth, the net tangible asset backing per ordinary share increased to $1.66 as compared to $1.44 in 2004. This, when compared to the original listing price of $1.00 per share represented a gain in value of about 66%.

	Current Year	Previous correspondingvear
Net tangible assets per ordinary share(NTA backing in cents per shares)	166	144

Other information

The information contained in this preliminary final report is based on the attached financial statements and relevant notes for the year ended 30 June 2005, which are in the process of being audited.

Segment information

The consolidated entity operates in one geographical segment, being Australia and in one business segment, being the provision of subordinated debt facilities in funding residential and commercial property development.

Subsidiaries acquired and disposed during the year

There are no subsidiaries acquired or disposed of during the financial year.

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005

		Consolidated	Consolidated
	Notes	2005	2004
		$	S
Interest income	2	12,531,156	12,649,099
Interest expense	$\overline{2}$	(4,861,616)	(5,442,584)
Net interest income		7,669,540	7,206,515
Fee and commission income	3	1,832,497	3,016,599
Fee and commission expense	3	(149, 550)	(302, 357)
Net fee and commission income		1,682,947	2,714,242
Other income		66,607	317,765
Deferred expense written off		(6,250)	(75,000)
Depreciation and amortisation
expense	4	(17, 876)	(382, 895)
Employee expense		(578, 232)	(490, 110)
Lease and rental expense		(262,700)	(315,229)
Legal and professional fees		(1,214,971)	(912,098)
Fixed assets written off			(99,291)
Provision for receivables		(2,000,000)
Other expenses fromordinary
activities		(240,710)	(461, 479)
Profit from ordinary activitiesbefore income tax		5,098,355	7,502,420
Income tax (expense) / benefit
relating to ordinary activities		(1, 539, 105)	(2,386,952)
Netprofitattributabletomembers of the parent entity		3,559,250	5,115,468
(Decrease) $/$ increase in assetrevaluation reserve		(1,000,000)	2,240,527
Total changes in equity other thatthose resulting from transaction
with owners as owners		2,559,250	7,355,995
			Cents pershare
Basic earnings per share	5	29.95	43.04
Diluted earnings per share	5	29.95	43.04

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2005

		Consolidated	Consolidated
	Notes	2005	2004
		$	$
Assets
Cash and liquid assets		141,031	1,248,758
Receivables		25,877,806	19,862,643
Loans		11,498,967	18,226,959
Deferred tax assets		800,966	1,162,587
Investments		2,260,000
Other assets		3,943	19,109
Property, plant and equipment	6	3,338,287	5,814,039
Total assets		43,921,000	46,334,095
Liabilities
Overdraft		775,999
Payables		2,191,559	2,927,368
Current tax liabilities		850,033	2,861,917
Provision - annual leave		39,526	28,265
Borrowings	7	16,760,000	20,141,911
Deferred tax liabilities		3,602,076	3,232,077
Total liabilities		24,219,193	29,191,538
Net assets		19,701,807	17,142,557
Equity
Contributed equity	8	4,735,500	4,735,500
Reserves		1,898,508	2,898,508
Retained profits	9	13,067,799	9,508,549
Total equity		19,701,807	17,142,557

STATEMENT OF CASH FLOWS OR THE YEAR ENDED 30 JUNE 2005

	Notes	Consolidated2005$	Consolidated2004$
Cash flows from operating activities
Interest received		3,712,057	12,878,273
Interest paid		(5,204,747)	(5,905,307)
Fee received		2,807,530	2,000,625
Fee paid		(149, 550)	(272, 490)
Operating receipts		125,000	415,014
Operating payments		(5, 724, 938)	(2,672,455)
Net cash (used in) / provided byoperating activities	10(a)	(4, 434, 648)	6,443,660
Cash flows from investing activities
Payment for investments		(2,260,000)
Proceeds from sale of investment		1,500,000
Proceeds from repayment of loans		15,147,939	23,483,237
Loans to developers and borrowers		(8,419,947)	(20, 243, 750)
Payments for property, plant andequipment		(33,207)	(845,009)
Net cash provided by investingactivities		5,934,785	2,394,478
Cash flows from financing activities
Payment for dividends		(1,952)	(574,082)
Proceeds from borrowings		10,490,000	7,969,864
Repayments of borrowings		(6,846,911)	(3,100,000)
Proceeds from issue of debenture		955,596	5,860,000
Redemption of debenture / promissorynotes		(7,980,596)	(22,998,844)
Net cash used in financing activities		(3,383,863)	(12, 843, 062)
Net decrease in cash held		(1,883,726)	(4,004,924)
Cash at the beginning of the financialyear		1,248,758	5,253,682
Cash at the end of the financial year	10(b)	(634,968)	1,248,758

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

1. Summary of significant accounting policies

Basis of preparation of financial report

This general purpose financial report for the year ended 30 June 2005 has been prepared in accordance with Australian Accounting Standards, in particular AASB1032: Specific Disclosure by Financial Institutions, other authoritative pronouncements of the Australia Accounting Standard Board, Urgent Issues Group Consensus Views and the Corporations Act 2001.

The financial report covers the economic entity of Great Pacific Capital Limited and controlled entities, and Great Pacific Capital Limited as an individual parent entity. Great Pacific Capital Limited is a listed public company. incorporated and domiciled in Australia.

The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values, or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

Accounting policies adopted has been consistently applied with those of previous year, unless otherwise specified. The following is a summary of the significant accounting policies adopted by the consolidated entity in the preparation of the financial report.

(a) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Great Pacific Capital Limited ("the Company or Parent entity") as at 30 June 2005 and the results of all controlled entities for the financial year then ended.

Control exists where Great Pacific Capital Limited has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Great Pacific Capital Limited to achieve the objectives of Great Pacific Capital Limited

Great Pacific Capital Limited and its controlled entities together are referred to in this financial report as the consolidated entity. The effects of all transactions between entities in the consolidated entity are eliminated in full.

(b) Revenue

Fees, commissions and interest income from the provision of financial services are recognised on an accrual basis.

(c) Taxation

(i) Income tax

Tax effect accounting procedures are followed. Income tax expense is calculated on the operating profit adjusted for permanent differences between taxable and accounting income. Any future income tax benefit relating to tax losses is not carried forward as an asset unless the benefit can be regarded as being virtually certain of realisation. Income tax on net cumulative timing differences is set aside to the deferred income tax and future income tax benefit accounts at the tax rates which are expected to apply when those timing differences reverse.

Future income tax benefits arising as a result of timing differences are only bought to account when realisation of the asset is assured beyond reasonable doubt. Benefits arising as a result of tax losses are bought to account, as realisation of this asset is virtually certain in the coming years.

(ii) Tax Consolidation Regime

Great Pacific Capital Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the Tax Consolidation Regime. Great Pacific Capital Limited will recognise the current and deferred tax assets and liabilities for the tax consolidated group. Each company in the Group will contribute to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

1. Summary of significant accounting policies (continued)

(ii) Tax Consolidation Regime (continued)

Under this arrangement, the head entity recognises all the current and deferred tax assets and liabilities for the tax consolidation group in its own accounts.

(iii) Goods and services tax

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 Taxation 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 expense. Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from. or payable to, the ATO is included as part of current receivables and payables in the statement of financial position.

(d) Investments

Interests in unlisted securities in the consolidated financial statements, are brought to account at cost.

Controlled entities are brought to account at cost in the consolidated financial statements.

(e) Land and buildings

Land and buildings are measured on the fair value basis, being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction. They will be revalued by an independent third party registered property valuer on a as required basis but at least once every three years.

(f) Depreciation

$\sim 20$

Depreciation on property, plant and equipment is calculated on a straight line basis. The depreciation rate used is based on the expected useful life of the assets. The expected useful lives are as follows:

Office fittings	13 years
Computer equipment	4 years
Communication equipment	7 years
Furniture and fixtures	13 years

(g) Recoverable amount of non current assets

Non-current assets are recorded at cost. The carrying amounts of all non-current assets are reviewed to ensure they are not in excess of their recoverable amounts. If the carrying amount of a non-current asset exceeds the recoverable amount, the asset is written down to the lower value. The relevant cash flows have not been discounted to their present value in assessing their recoverable amount.

(h) Deferred expenses

The deemed value of shares issued to the Directors and the underwriter for the initial public offer are classified as deferred expenses and are written off over three years. Should the carrying value of the deferred expenses be assessed to be in excess of their recoverable amounts, the deferred expenses will be written down to the recoverable amount immediately.

(i) Employee benefits

(i) Wages and salaries and annual leave

Liabilities for wages and salaries and annual leave are recognised, and are measured as the amount unpaid at the reporting date at current pay rates in respect of employee's services up to that date.

(ii) Superannuation

The amount charged to the statement of financial performance in respect of superannuation represents the contributions made by the consolidated entity to various superannuation funds nominated by the employees.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

1. Summary of significant accounting policies (continued)

(i) Borrowing costs

Borrowing costs are recognised as expenses in the period in which they are incurred, except where they are included as part of the costs of acquiring land and building for redevelopment. Borrowing costs carried forward are amortised over the life of the loan or 5 years, whichever is earlier.

(k) Comparatives

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current year.

(I) Adoption of Australian Equivalents to International Financial Reporting Standards

The introduction of the Australian Equivalents to International Financial Reporting Standards (AIFRS) effective for financial years commencing 1 January 2005, requires the production of accounting data for future comparative purposes at the beginning of the next financial year. The adoption of AIFRS will be reflected in the economic entity's and the parent entity's financial statements for the year ending 30 June 2006. On first time adoption of AIFRS, comparatives for the financial year ended 30 June 2005 are required to be restated. The majority of the AIFRS transitional adjustments will be made retrospectively against retained earnings at 1 July 2004.

The economic entity's management are assessing the significance of these changes and preparing for their implementation.

The directors are of the opinion that the key differences in the economic entity's accounting policies, which will arise from the adoption of IFRS are:

$(i)$ Income Tax

Currently, the economic entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the accounting profit adjusted for any permanent differences. Timing differences are currently brought to account as either a provision for deferred income tax or future income tax benefit. Under the AASB 112: Income Taxes, the economic entity will be required to adopt a balance sheet approach under which temporary differences are identified for each asset and liability rather than the effects of the timing and permanent differences between taxable income and accounting profit.

The Directors have assessed that there will be no material impact on transition to AASB 112. Hence on adoption of AASB 112 the impact will be $NIL (parent: $NIL) at 30 June 2005.

$(ii)$ Impairment of assets

Under AASB 136: Impairment of Assets, the recoverable amount of an asset is determined as the higher of fair value less costs to sell, and value in use. In determining value in use, projected future cash flows are discounted using a risk adjusted pre-tax discount rate and impairment is assessed for the individual asset or at the 'cash generating unit' level. A 'cash generating unit' is determined as the smallest group of assets that generates cash flows that are largely independent of the cash inflows from other assets or groups of assets. The current policy is to determine the recoverable amount of an asset on the basis of undiscounted net cash flows that will be received from the asset's use and subsequent disposal. It is likely that this change in accounting policy will lead to impairments being recognised more often.

The Directors have assessed that there will be no material impact on transition.

$(iii)$ Disclosures in the Financial Statements of Financial Institutions

AASB130: Disclosures in the Financial Statements of Banks and Similar Financial Institutions, prescribes the presentation and disclosure requirements of banks and similar financial institutions in the financial report.

The entity has prepared this financial report in accordance with AASB 1032. The Directors have reviewed its' AIFRS equivalent AASB130 and have determined that there are no significant differences.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

		Consolidated	Consolidated
		2005	2004
		$	$
2.	Interest income and expenseInterest income
	Loans and advances	12,489,549	12,542,768
	Other	41,607	106,331
	Total interest income	12,531,156	12,649,099
	Interest expense
	Borrowings	4,743,413	5,434,154
	Other	118,203	8,430
	Total interest expense	4,861,616	5,442,584
3.	Fee and commission income and expense
	Fee and commission income
	Arranger fee		151,125
	Establishment fee		350,000
	Management fee		49,500
	Success fee		525,000
	Other	1,832,497	1,940,974
	Total fee and commission income	1,832,497	3,016,599
	The management fee charged by GreatPacific Capital Limited to its controlledentities represents the fee for managingthe loan portfolio of the controlledentities and is based on a fixed rate of12% on the value of the loan portfolio.
	Fee and commission expense
	Application fee	149,550	119,821
	Arranger fee		10,000
	Commission		122,490
	Management fee		50,046
	Total fee and commission expense	149,550	302,357
4.	Depreciation and amortisation
	Depreciation	8,960	10,924
	Amortisation - borrowing costs	8,916	5,305
	Amortisation - goodwill		366,666
		17,876	382,895

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

	Consolidated	Consolidated
	2005	2004
Earnings per share5.
	Cents per share
Basic earnings per share	29.95	43.04
Diluted earnings per share	29.95	43.04
(a) Reconciliation of earnings to net profit	S	S
Net profit	3,559,250	5,115,468
Earnings used in the calculation of basic earnings per share	3,559,250	5,115,468
Earnings used in the calculation of diluted earnings per share	3,559.250	5,115,468
	Number of share
(b) Weight average number of shares
Weighted average number of shares used in the calculations of basic
earnings per share	11,885,500	11,885,500
Weighted average number of shares used in the calculations of diluted
earnings per share	11,885,500	11,885,500
Classification of Securities(c)

There are no options outstanding on 30 June 2005.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Property, plant and equipment6.	Consolidated2005$	Consolidated2004$
Land and buildings
At independent valuation	3,300,000	5,800,000
	3,300,000	5,800,000
Furniture, fixtures and fittings	34,712	1,752
Accumulated depreciation	(1,300)	(326)
Written down value	33,412	1,426
Computer and other equipment	30.584	30,337
Accumulated depreciation	(25,709)	(17, 724)
Written down value	4,875	12,613
	3,338,287	5,814,039

Valuations

The independent valuations on land and buildings owned by the consolidated entity were carried out between 15 July and 29 July 2004 by TC Wetherall (JP, API, RAPI, AIBS) of TCW Consulting Pty Ltd, Wollongong.

The valuations were performed on the basis of market value as at balance date.

The net increment arising from the valuations has been transferred to the asset revaluation reserve.

During the year, there was a disposal of land resulting in the devaluation of the value of the land to its selling price. The net devaluation arising from sale of land had been transferred to the asset revaluation reserve.

Reconciliations

	(a) Land and buildings
--	------------------------	--	--	--

Balance at the beginning of the year	5,800,000	2,650,000
(Disposal) / Additions	(1,500,000)	909,473
(Devaluation) / Revaluations during theyear	(1,000,000)	2,240,527
Balance as at the end of the year	3,300,000	5,800,000
Furniture, fixtures and fittings(b)
Balance at the beginning of the year	1,426	96,788
Additions	32,961	1,600
Depreciation expense	(975)	(3,084)
Write off		(93,878)
Balance as at the end of the year	33,412	1,426
Computer and other equipment(c)
Balance at the beginning of the year	12,613	20,807
Additions	247	5,060
Depreciation expense	(7,985)	(7, 840)
Write off		(5, 414)
Balance as at the end of the year	4,875	12,613

		Consolidated	Consolidated2004
		2005
		$	$
7.	Borrowings
	Bank Ioan - secured		2,401,747
	Promissory and debenture notes	5,510,000	12,535,000
	Other short term borrowings	11,250,000	5,205,164
		16,760,000	20,141,911
	Maturity analysis
	Not longer than 3 months	4,250,000	5,205,164
	Longer than 3 and not longer than 12
	months	9.900,000	7,794,995
	Longer than 1 and not longer than 5 years	2,610,000	7,141,752
		19,517,316	20,141,911

NOTES TO THE EINANCIAL STATEMENTS FOR THE VEAR ENDED 30 HINE 2005

The bank loan is secured by first mortgage over the consolidated entity's land and buildings and fixed and floating charges over the assets of the controlled entities acquiring the land and buildings.

During the year, the bank loan is replaced by a commercial overdraft facility of $3,000,000 secured by first mortgage over the same properties.

The promissory and debenture notes are repayable at various maturity dates and secured by floating charges over assets of the controlled entities issuing these notes. Interest is payable monthly in arrears with rates ranging from 5% per annum to 9% per annum.

Bonus payments with rates ranging from 8% to 15% are payable upon maturity of the promissory and debenture notes.

During the year, all promissory notes issued in previous years had been repaid upon their maturity.

8. Contributed equity

11,885,500 ordinary shares (2004: 11,885,500)

Ordinary shares entitle the holder to participate in the dividends and the proceeds on winding up in proportion to the number of and amounts paid on the shares held.

4,735,500

4,735,500

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.

9. Retained profits

Balance at the end of the year	13,067,799	9,508,549
Dividends paid	$\pmb{\mu}$	(594.276)
Net profit attributable to the members ofGreat Pacific Capital Limited	3,559.250	5,115,468
Balance at the beginning of the year	9.508.549	4,987,357

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

	Consolidated2005	Consolidated2004
10. Notes to the statement of cash flows	$	$
(a) Reconciliation of net cashprovided by / (used in) operatingactivities to profit from ordinaryactivities after income tax
Net cash provided by $/$ (used in)
operating activities	(4,434,648)	6,443,660
Depreciation	(8,960)	(10, 924)
Amortisation - borrowing cost	(8,916)	(5,305)
Amortisation - goodwill		(366, 666)
Write off of deferred expenses	(6,250)	(75,000)
Establishment fee capitalisedFixed assets written off		350,000
Other		(99, 281)
Increase / (decrease) in operatingassets		8,698
Interest receivable	5,324,619	1,803,751
Other receivables	692,110	(1, 197, 037)
Other	(361, 621)	(522, 179)
(Increase) / decrease in operatingliabilities
Interest payable	343,131	2,194,118
Payables	389,161	(1, 541, 313)
Provisions for tax	2,011,884	(1,988,505)
Provisions	(381,260)	121,451
Profit from ordinary activitiesafter income tax	3,559,250	5,115,468
(b) Reconciliation of cash
For the purpose of the Statement ofCash Flows, cash at the end of thefinancial year is reconciled to thefollowing items in the Statement ofFinancial Position:
Cash and cash at bank	41,031	1,148,758
Overdraft	(775, 999)
Term deposits	100,000	100,000
	(634,968)	1,248,758

Commercial overdraft facility of $3,000,000 was established during the year. This facility was secured by first mortgage over land and building of the consolidated entities.