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TIVAN LIMITED Annual Report 2003
65967_rns_2003-10-09_324d40d2-2694-41f1-87b4-20f897e35729.pdf
Annual Report
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Anna Fearain
RALLMARK CONSOLIDATED LIMITED
MCORPORATE PARTICULARS
DIRECTORS
John W Barr (Chairman) Neil Biddle Adrian Corp
COMPANY SECRETARY
Christopher Bath
REGISTERED OFFICE
Level 3, 30 Richardson Street West Perth Western Australia 6005
PO Box 1176 West Perth Western Australia 6872
| Telephone: | (08) 9327 0960 |
|---|---|
| Facsimile: I | (08) 9327 0901 |
| Wehsite: | www.bailmarkconsolidated.com |
| Fmail: | [email protected] |
SHARE REGISTRY
Compatershare Investor Services Pty Limited Level 2, Reserve Bank Building 45 St George's Terrace Perth Western Australia 6000
$(08)$ 9323 2000 Telephone: facsimile: (08) 9323 2033
AUDITORS
KPMG
AUSTRALIAN STOCK EXCHANGE
ASX Code: Shares EUM
88 REVIEW OF OPERATIONS AND ACTIVITIES
CORPORATE
Hallmark reports a consolidated net profit after tax of \$1,233,570 (2002: loss of \$922,231).
The principal activities during the course of the 2003 financial year were completing the sale of Chemist Club, reviewing business opportunities and management of the interest in the Cawse Extended Project.
The review of new business opportunities led directly to the involvement in Batavia Mining Limited (BTV), and the recent capital return via in specie distribution of Batavia shares to all Hallmark shareholders.
Hallmark has been advised that mining at the Cawse Extended Project has commenced. As a result Hallmark will receive royalty payments.
Hallmark is in a strong financial position with liquid assets totalling in excess of \$6 million, comprising cash, loans that have been repaid since year end and investments in listed companies with a market value as at the date of this report of \$2.9 million.
BATAVIA MINING LIMITED
During the last eight months Hallmark sponsored the reconstruction of Batavia, including assistance with a Deed of Company Arrangement and a shareholder's meeting. Hallmark also provided funds by way of loans and capital and sold a number of tenements to Batavia. Hallmark was issued shares for the capital provided and the tenements sold and was issued a convertible note with a face value of \$1.06 million in satisfaction of other amounts owed.
At a meeting of Hallmark shareholders in June 2003 approval was given for a reduction of capital, satisfied by a one for one pro-rata distribution of the majority of the shares in Batavia that Hallmark had received.
In September 2003, Halfmark lodged a notice of conversion to convert its 10.6 million convertible notes into Batavia shares. The notes were converted at a conversion price of five (5) cents. The financial effect of this transaction has not been brought to account in the financial statements for the year ended 30 June 2003.
In order to continue effective exploration and exploitation of its mining tenements Batavia raised additional funds by way of a 1 for 3 rights issue, with a free attached option, at an issue price of 10 cents per share. Hallmark now holds approximately 27 million Batavia shares.
Following the recommencement of trading of its shares Batavia is now vigorously continuing exploration of its many tenements, particularly the Deffector Project and has recently announced a resource upgrade to 170,000 oz (gold equivalent basis).
Shareholders are encouraged to visit the Batavia web page, which is located at www.bataviamining.com.ae for further and ongoing information.
CHEMIST CLUB
During the year Hallmark sold its interest in Chemist Club for a consideration of \$2.0 million which included repayment of the loan made by Hallmark to Chemist Club of \$653,075.
88 REVIEW OF OPERATIONS AND ACTIVITIES
EXPLORATION PROJECTS
Hallmark is involved in several exploration projects. A summary of the exploration projects follows:
CAWSE EXTENDED PROJECT
The OM Group Inc. ("OMG") owns and manages the Cawse Nickel-Cobalt Operation. OMG and Hallmark jointly own the Cawse Extended Project, which is located adjacent to the Cawse Nickel-Cobalt Operation.
The Cawse Extended Project covers 39km2 and is located along strike immediately to the north west of the main development at the Cawse Nickel-Cobalt Operation. Hallmark's interest in the Cawse Extended Project is 20% free-carried to production, convertible at Hallmark's election to a 2% net snelter return.
During the year OMG completed sufficient exploration at the Unicom Pit on Cawse Extended to allow them to make a decision to mine. To further encourage OMG to mine the Unicorn Pit ore Hallmark has agreed to a wet tonne rate rather than the 20% free-carried interest or 2% net smelter return options. This agreement applies only to ore mined from the Unicorn Pit. It is believed that the resources at the Unicorn Pit represent a relatively small proportion of the total mineable resource on Cawse Extended.
The base case payment is AU\$0.70/wt and the Agreement has been structured to allow for variations in the nickel price and the AUD/USD exchange rate with a minimum and maximum payment of AU\$0.50/wt and AU\$0.90/wt respectively.
Using AU\$0.70 per wet tonne and the presently forecast mining production of 735,000 tonnes Hallmark expects to receive a gross royalty income of \$514,000 from the December 2003 quarter through to the March 2005 quarter.
OMG have further advised that, subject to infill drilling of Jedbob and Yowie Pits, there is potential to mine up to a further 2.7 million tonnes over 4 years from Cawse Extended.
OTHER EXPLORATION PROJECTS
Hallmark holds an interest in three other tenement groups in Western Australia. In each case Hallmark is not contributing towards exploration expenditure, the projects being subject to joint venture, or options for safe.
During the year Hallmark owned and acquired and explored tenements at Deflector and Paynes Find. These tenements have now been sold to Batavia Mining Limited.
KINTORE EAST
Hallmark holds tenements covering an area of 789 hectares north west of Kalgoorlie. Joint Venture partner, Mines and Resources Australia Pty Ltd (MBA) manage the project. MBA are not currently undertaking any significant exploration on this project. Hallmark's interest in the tenements is 23.75%, dilating to 20%, at which stage it reverts to a 2% gold return interest calculated on production.
MCTAVISH
Hallmark holds tenements covering an area of 664 hectares located west of Kookynie. The tenements are joint ventured with Barminco Pty Ltd and its subsidiary Kookynie Resources NL. Barminco is manager of the joint venture. Barminco and Kookynie Resources have earned an 89.9% interest in the project. Hallmark's interest in the tenements is 10.1%, diluting to a 3% gross royalty, with 25% of Hallmark's interest held in trust for another party.
DUPLEX HILL SOUTH
Hallmark previously entered into an agreement in relation to one exploration licence, and two prospecting licence applications. The purchaser withdrew from the exploration ficence but retains the right to purchase the PLA's for \$60,000.
Hallmark has granted an option to purchase the exploration licence for \$50,000, plus a further royalty of \$100,000 to another party.
88 CORPORATE GOVERNANCE STATEMENT
This statement outlines the main Corporate Governance practices that were in place throughout the financial year, unless otherwise stated.
BOARD OF DIRECTORS
The Board is elected by shareholders to represent all shareholders. It is a Director's responsibility, in all decisions he or she is called upon to make concerning the Company's affairs, to conscientiously weigh the interests of shareholders in light of the circumstances and to consider the effects of such decisions on the interests of all shareholders.
Role of the Board
The Board's primary role is the protection and enhancement of medium to long-term shareholder value.
To fulfil this role, the Board is responsible for the overall Corporate Governance of the consolidated entity including its strategic direction, establishing goals for management and monitoring the achievement of these goals.
Composition of the Board
The names of the directors of the Company at the date of this statement are set out in the Directors Report. The Board will review its composition on an annual basis to ensure that the Board has the appropriate mix of expertise and experience. Where a vacancy exists, for whatever reason, or where it is considered that the Board would benefit from the services of a new director with particular skills, the Board will select appropriate candidates with relevant qualifications, skills and experience.
Relationship of Board with Management
Management of the day to day business of the Company is to be condected by or under the supervision of the Board, and by those other officers and employees to whom the management function is properly delegated by the Board.
The Board will adopt appropriate structures and procedures to ensure that the Board functions independently of management. Appropriate procedures may involve the Board meeting on a regular basis without management present or may involve expressly assigning the responsibility for administering the Board's relationship to management to a Committee of the Board.
Information is formally presented to the Board at monthly board meetings by way of board reports and review of performance to date.
Independent Advice to Directors
Subject to the approval of the Chairman, an individual Director may engage an outside adviser at the expense of the Company for the purposes of seeking independent advice in appropriate circumstances.
Constitution of Hallmark Consolidated Limited
The Directors must adhere to, and the Board must conduct itself in accordance with, the Constitution of the Company.
Fair Dealings and Related Party Transactions
Directors and senior management will convey to all stakeholders the message that integrity and effective control cannot be compromised when dealing with any supplier, particularly if a supplier is a related party.
A Director, or an entity over which a Director has control or significant influence, who enters into a transaction with the Company must make full disclosure of all material elements of the transaction to the Chairman or, if the Director involved is the Chairman, to the Board.
... CORPORATE GOVERNANCE STATEMENT
In particular, the following contracts with Directors, or entities over which Directors have control or significant influence, must be approved by the Board in advance of committing the Company:
- contracts for the supply of goods and/or services which extend beyond one year, or where the total value of goods and/or services supplied ø ander the contract may, in any one year, exceed \$10,000;
- agreements for the lease of property, and $\pmb{\phi}$
- agreements for the acquisition or disposal of property.
Disclosure of Information
The Company has an objective of honest and open disclosure of information in dealing with stakeholders, subject to appropriate commercial considerations associated with competitive and sensitive information. Such disclosure may, in appropriate circumstances, exceed statutory requirements.
Confidentiality
All Directors must ensure that they abide by requirements of the Company's Constitution regarding secrecy and confidentiality of information.
Share Dealings
The Board has adopted a policy on dealings in securities of the Company by Directors and employees.
The policy on dealings in securities will be reviewed from time to time to ensure the policy's effectiveness.
INTERNAL CONTROL FRAMEWORK
The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities. To assist in discharging this responsibility, the Board has instigated an internal control framework that can be described under three headings:
- Financial reporting there is a comprehensive budgeting system with an annual budget approved by the Directors. Monthly actual results are reported against budget and revised forecasts for the year are prepared regularly. The consolidated entity reports to shareholders half-yearly.
- Continuous disclosure the consolidated entity has a policy that all shareholders and investors have equal access to the Company's information and has procedures to ensure that all price sensitive information is disclosed to the ASX in accordance with the continuous disclosure requirements of the Corporations Act 2001 and ASX Listings Rules. All information provided to the ASX is immediately posted to the Company's web site:
- a comprehensive process is in place to identify matters that may have a material effect on the price of the Company's securities
- the Company Secretary is responsible for interpreting the Company's policy and where necessary informing the Board
- the Company Secretary is responsible for all communication with the ASX.
- -Quality and integrity of personnel formal appraisals are conducted at least annually for all employees.
SECORPORATE GOVERNANCE STATEMENT
ETHICAL STANDARDS
The Board's policy for the Directors and management is to conduct themselves with the highest ethical standards. All Directors and employees will be expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the consolidated entity.
THE ROLE OF SHAREHOLDERS
The Board of Directors aims to ensure that the shareholders are informed of all major developments affecting the consolidated entity's state of affairs. information is communicated to shareholders as follows:
- The annual report is distributed to all shareholders. The Board ensures that the annual report includes relevant information about the $\ddot{\Phi}$ operations of the consolidated entity during the year, changes in the state of affairs of the consolidated entity and details of future developments, in addition to the other disclosures required by the Corporations Act 2001.
- The half-yearly report contains summarised financial information and a review of the operations of the consolidated entity during the period. The half-year audited financial report is prepared in accordance with the requirements of applicable Accounting Standards and the Corporations Act 2001 and is lodged with the ASX. The half-yearly report is sent to any shareholder who requests it.
- The quarterly report contains summarised cash flow financial information and details about the consolidated entity's activities during the quarter. The quarterly report is sent to any shareholder who requests it.
- . Proposed major changes in the consolidated entity which may impact on share ownership rights are submitted to a vote of shareholders.
All decuments that are released publicly are made available on the consolidated entity's internet web site at www.hallmarkconsolidated.com.
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the consolidated entity's strategy and goals. Important issues are presented to the shareholders as single resolutions.
The shareholders are requested to vote on the appointment and aggregate remuneration of directors, the granting of options and shares to directors and changes to the Constitution. Copies of the Constitution are available to any shareholder who requests it.
AUDIT COMMITTEE
Due to the consolidated entity's size and structure it is not considered appropriate to have a formal audit committee.
BORECTORS' REPORT
The Directors present their report together with the financial report of Hallmark Consolidated Limited ("the Company") and of the consolidated entity, being the Company and its controlled entities, for the year ended 30 June 2003 and the auditor's report thereon.
DIRECTORS
The Directors of the Company at any time during or since the end of financial year are:
John W Barr CA, FAICD - Chairman
Mr John W Barr is a Chartered Accountant and Fellow of the Australian Institute of Company Directors. He has extensive Australian and international experience with exposure to manufacturing, mining and mineral exploration and development in respect to several commodities including gold, platinum, nickel and copper.
Mr Barr has managed his own consultancy business since 1987 which specialises in the management of public companies including advice on capital raisings, mergers and acquisitions, negotiating onshore and offshore acquisitions and joint ventures, negotiating commodity based funding, and compliance with corporate and stock exchange requirements.
Mr Barr is also Chairman of Batavia Mining Limited and Cavendish Corporation Limited.
Appointed December 1998.
Neil Biddle B.App.Sc(Geology), M.Aus.IMM
Mr Neil 6 Biddle is a geologist and company director with over 16 years professional and management experience in listed public companies involved in mining and exploration and was formerly managing director of Border Gold Ltd (1995-1999) and Consolidated Victorian Mines NL ${1991 - 1995}$
Mr Biddle is also a director of Batavia Mining Limited.
Appointed December 1998.
Adrian Corp B.Sc, B.Com
Mr S Adrian Corp holds degrees' in science and commerce and qualified as a Chartered Accountant. He has acted as a Director of listed companies since 1985.
From 1985 to 1999 Mr Corp was a director of a management consultancy business, which specialised in the management of ASX listed companies. including advice on capital raisings, mergers and acquisitions, negotiating joint ventures, and compliance with corporate and stock exchange requirements. Through the management consultancy business, Mr Corp was also involved in a number of successful IPO's.
Mr Corp is also a director of Kanowna Eights Limited.
Appointed October 2001
Gary Snow
Mr Gary Show is a Pharmacist with extensive retail experience having owned his own pharmacies for the past 25 years. Following the sale of Chemist Club Pty Ltd in July 2002 he did not seek re-election at the Company's annual general meeting in September 2002.
B DIRECTORS' REPORT
DIRECTORS' MEETINGS
The number of Directors' meetings and number of meetings attended by each of the Directors of the Company during the financial year are:
| Number of meetings held during | Number of meetings | ||
|---|---|---|---|
| Director | the time the Director held office | attended | |
| J W Barn | 16 | 16. | |
| N 6 Biodie | 16 | 14 | |
| S A Corp | 16 | 16 | |
| 6 A Snow | -2. | -2 |
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the course of the financial year were completing the sale of Chemist Club; the management of its exploration properties; management of the Company's interest in the Cawse Extended Project and reviewing business opportunities.
Other than the sale of Chemist Club and the involvement in BTV, there were no other significant changes in the nature of the activities of the consolidated entity during the year.
REVIEW AND RESULTS OF OPERATIONS
The operating profit of the consolidated entity after income tax for the year was \$1,233,570 (2002: loss of \$922,231).
A review of the operations during the financial year is set out on pages 2 to 3.
DIVIDENDS
The Directors do not recommend that a dividend be paid. Since the end of the previous financial year, no dividend has been paid.
STATE OF AFFAIRS
Significant changes in the state of affairs of the consolidated entity during the financial year were as follows:
- The Company completed the sale of its interest in Chemist Club for a consideration of \$2 million which included repayment of the loan made by Hallmark to Chemist Clab of \$653,075.
- During the year the Company incorporated a new wholly owned subsidiary called South Murchison Mines Pty Ltd (SMM). SMM acquired various exploration assets during the year. In June 2003 the Company's interest in SMM and other mining tenements were sold to Batavia Mining Limited.
- In June 2003 the shareholders approved a return of capital to be satisfied by the in specie distribution of shares in Batavia Mining Limited on a 1 for 1 basis.
ENVIRONMENTAL REGULATIONS
The consolidated entity's operations are not subject to any significant environmental regulations under either Commonwealth or State legislation. However, the Board believes that the consolidated entity has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the consolidated entity.
MDRECTORS REPORT
EVENTS SUBSEQUENT TO REPORTING DATE
On 5 September 2003 the Company lodged a notice of conversion to convert its 10.6 million convertible notes to 21.2 million BTV shares. The notes were converted at a conversion price of five (5) cents. The financial effect of this transaction has not been brought to account in the financial statements for the year ended 30 June 2003.
LIKELY DEVELOPMENTS
The consolidated entity will continue to pursue a policy of selective exploration. The consolidated entity will also consider suitable investment propositions to achieve an acceptable return on liquid resources.
Additional comments on likely developments of the consolidated entity are included under the review of operations and activities on pages 2 to 3.
DIRECTORS' AND SENIOR EXECUTIVES' EMOLUMENTS
The Board will review the remuneration packages and policies applicable to the executive directors, senior executives and non-executive directors on an annual basis. Remuneration levels will be competitively set to attract qualified, experienced Directors and senior executives. Where necessary the Board will obtain independent advice on the appropriateness of remuneration packages.
The following table discloses the remuneration of the directors and officers of the Company and the consolidated entity:
| Directors Consulting Fees Fees |
Base | Super | Options | ||||
|---|---|---|---|---|---|---|---|
| Emolument | Contributions | issued | Total | ||||
| S | s | \$ | S | S | s | ||
| Director | |||||||
| J W Barr | 20,000 | 93,500 | 1,800 | 115,300 | |||
| N G Biddle | 20.000 | 102,245 | 1,800 | Service | 124,045 | ||
| S A Corp | 20.000 | 44,500 | 1,800 | 40.000 | 106.300 | ||
| G A Snow | 4.728 | 426 | 5,154 | ||||
| Executive Officer | |||||||
| C J Bath | 100.000 | 26,314 | 4.000 | 130,314 | |||
The options issued during the year were valued using the Black-Scholes methodology.
All options issued expire on 30 June 2004 and each option entities the holder to purchase one ordinary share in the Company.
OPTIONS
During or since the end of financial year, the Company granted options over unissued ordinary shares to the following Director and Officer as part of their remuneration:
| Number of options granted | Exercise price | Expiry date | |
|---|---|---|---|
| Director | |||
| S A Corp | 1.000.000 | \$0.25 | -30 Jane 2004 |
| Executive Officer | |||
| C J Bath | 4.000 | \$0.20 | 30 June 2004 |
Shareholders approved the issue of options in September 2002. All options were granted during the financial year. No options have been granted since the end of the financial year. As noted below, following the capital reduction the exercise price of these options was reduced to \$0.19 and \$0.14 respectively.
BOIRECTORS REPORT
OPTIONS
At the date of this report unissued ordinary shares of the Company under option are:
| Expiry Date | Exercise Price | Number of options |
|---|---|---|
| -30 Jane 2004 - | \$0.19 | 4.280.000 |
| 30 Jane 2004 - | -\$0.14 | 180,000 |
In June 2003 shareholders approved a capital reduction, which resulted in a reduction in the exercise price of options previously issued of \$0.06 per opiion.
No shares were issued on the exercise of options during the year.
The options do not entitle the holder to participate in any share issue of the Company or any other body corporate.
DIRECTORS' INTEREST
The relevant interest of each Director in the shares, debentures, interests in registered schemes and rights or options over such instruments issued by the companies within the consolidated entity and other related body corporates, as notified by the Directors to the ASX in accordance with S2056(1) of the Corporations Act 2001, at the date of this report is as follows:
| Director | Ordinary Shares | Options over Ordinary Shares |
|---|---|---|
| U W Barri | 8.700.000 | 1.000.000 |
| N G Biadle | 5.643.372 | 1.000.000 |
| S A Corp | 8.000.000 | 1.000.000 |
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company has previously agreed to indemnify the following current directors and officers, J W Barr, N Biddle, S Corp and C Bath and former directors A Van Noort and G Snow against all liabilities to another person (other than the Company or a related body corporate), including legal expenses that may arise from their position as directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith or for a pecuniary penalty under section 1317G or a compensation order under section 1317H of the Corporations Act 2001.
INSURANCE PREMIUMS
Since the end of the previous financial year the Company has not paid any insurance premiums (2002; Nil) in respect of Directors' and Officers' liability insurance for current directors and officers.
Signed in accordance with a resolution of the Directors.
John W Barr Chairman 12 September 2003
STATEMENTS OF FINANCIAL PERFORMANCE
For the Year Ended 30 June 2003
| Consolidated | Parent Entity | ||||
|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||
| Note | S | ŝ. | S | ||
| Revenue from sale of goods and services | .552.749 | ||||
| Other revenues from ordinary activities | 3 | 4,619,506 | 298,181 | 4,066,161 | 329,015 |
| -fotal revenuel | 4,619,506 | ,850,930 | 4,066,161 | 329,015 | |
| Marketing costs | 199,469 | ||||
| Borrowing costs | 4(b) | -4,818 | |||
| Qccupancy costs. | 91.454 | 70,608 | 91.454 | :29,726 | |
| Administrative costs - Chemist Club | 1,002,085 | ||||
| Administrative costs -- other | 294.783 | 273,895 | 276.961 | 246.737 | |
| Corporate costs | 416,434 | 700,225 | 379,042 | 560,301 | |
| Other - --- | |||||
| Goodwill amortisation | 4(b) | 417,420 | |||
| Write down in value of investment | |||||
| in controlled entity | 4(a) | 572,257 | |||
| Provision for dimination in listed investments Carrying arousnt of controlled |
4(8) | 78,134 | 78.134 | ||
| entities/investments disposed | 1,857,642 | 2,096,927 | |||
| Carrying amount of non-current assets disposed | 500,452 | 635 | |||
| Other expenses from ordinary activities | 147,637 | 104,641 | 45,429 | 114,304 | |
| Profit/(loss) from ordinary activities | |||||
| before related income tax expense. | 1,233,570 | (922, 231) | 1.097.579 | (1, 194, 310) | |
| Income tax expense relating to ordinary activities | |||||
| Profit/(loss) from ordinary activities after | |||||
| related income tax expense. | 1,233,570 | (922, 231) | 1,097,579 | (1, 194, 310) | |
| Net Profit/(loss) attributable to members | |||||
| of the parent entity | 23 | 1,233,570 | (922, 231) | 1,097,579 | (1, 194, 310) |
| Basic earnings per share | \$0.023 | ( \$0.017) | |||
| Diluted earnings per share | \$0.023 | (\$0.017) |
The statements of financial performance are to be read in conjunction with the notes to the financial statements set out on pages 14 to 43.
$\mathbf{1}$ .
STATEMENTS OF FINANCIAL POSITION
As at 30 June 2003 -
$\gamma_{\rm s}$ $\zeta_{\rm max}$
| Consolidated | Parent Entity | ||||
|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||
| Note. | S. | \$ | S | Ŝ | |
| Current Assets | |||||
| Cash assets: | g | 2,303,422 | 4,393,214 | 2,299,759 | 4,299,860 |
| Beceivables, | 10 | 988,755 | 208,148 | 988,057 | -61,669 |
| inventories. | 162,824 | ||||
| Other Fire | 13. | 5,824 | 19,584 | 5.824 | 8,661 |
| Total Current Assets | 3,298,001 | 4,783,770 | 3,293,640 | 4,370,190 | |
| Non-Current Assets | |||||
| Receivables. | -10 | 653,075 | |||
| Other financial assets | -12. | 1.242,025 | 1.88,930 | 1,642,025 | 1,935,856 |
| Plant and equipment | 14 | 69,050 | :327,161 | 67.841 | 61,644 |
| Exploration expenditure | 15. | 5,088,187 | 5,302,103 | 70,000 | 70,000 |
| Intangible assets | 16 | 1,252,259 | |||
| Total Non-Current Assets | 6,399,262 | 7,070,453 | 1,779,866 | 2,720,575 | |
| Total Assets | 9,697,263 | 11,854,223 | 5,073,506 | 7,090,765 | |
| Current Liabilities | |||||
| Payables. | 47. | 116,433 | 195,835 | 116,393 | 79,720 |
| Interest-bearing liabilities | 18 | 25,668 | |||
| Current tax liabilities | 6(b) | 37,999 | 37,999 | ||
| Provisions - Total Current Liabilities |
20 | 23,734 140,167 |
36,411 295,913 |
23,734 | 20,676 138,395 |
| 140,127 | |||||
| Non-Current Liabilities | |||||
| Non-interest bearing liabilities | 19. | 476,066 | 357,852 | ||
| Total Non-Current Liabilities | 476,066 | 357,852 | |||
| Total Liabilities | 140,167 | 295,913 | 616,193 | 496,247 | |
| NET ASSETS | 9,557,096 | 11,558,310 | 4,457,313 | 6,594,518 | |
| Equity | |||||
| -Contributed equity | 21 | 3.471.866 | 6,706,650 | 3,471,866 | 6,706,650 |
| Reserves | 22 | 4,653,656 | 4,653,656 | 70,000 | $-70,000$ |
| Retained profits/(losses) | 23. | 1,431,574 | 198,004 | 915,447 | (182, 132) |
| TOTAL EQUITY | 9,557,096 | 11,558,310 | 4,457,313 | 6,594,518 |
The statements of financial position are to be read in conjunction with the notes to the financial statements set out on pages 14 to 43.
$\footnotesize{\textcircled{\small{12}}}$
STATEMENTS OF CASH FLOWS
.
For the Year Ended 30 June 2003.
| Consolidated | Parent Entity | ||||
|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||
| Note | S | 3 | |||
| Cash flows from operating activities | |||||
| Cash receipts in the course of operations | 1,503,321 | 54,930 | |||
| Cash payments in the course of operations | (757, 912) | (1,969,603) | (699,536) | (829, 381) | |
| Interest received. | 264,340 | 238,725 | 222,801 | 237,529 | |
| Borrowing costs paid | (4,748) | ||||
| Income taxes paid. | -6(b) | (37,999) | (37, 992) | (37,999) | (37, 992) |
| Net cash used in operating activities | 29(อ) | (531,571) | (270, 297) | (514, 734) | (574, 914) |
| Cash flows from investing activities | |||||
| Proceeds on disposal of non-current assets | 300 | 78,800 | 300 | 69,028 | |
| Proceeds on disposal of controlled entities | |||||
| (net of cash disposed) << | 28(ัb) | 1.297.712 | 1,346,925 | ||
| Loan.to.controlled entities. | (2,196,069) | 237,512 | |||
| Loans repaid to controlled entities | (240,592) | ||||
| Advances to other parties. | (2,090,860) | (914, 110) | |||
| Advances from other parties. | 286,643 | ||||
| Repayment of advances to other parties, | 753,075 | 653,075 | |||
| Payments for plant and equipment | (27,513) | (60, 398) | (26,096) | (12,605) | |
| Payments for investments | (348, 140) | $- (6,000)$ | (348, 140) | (6,000) | |
| Payments for exploration expenditure | (1,429,438) | (192, 901) | (1,252) | (200) | |
| Net cash used in investing activities | (1,558,221) | (180, 499) | (1,485,367) | 47,143 | |
| Cash flows from financing activities | |||||
| Share buy-back | (63, 793) | (63,793) | |||
| Finance lease payments | (133, 120) | ||||
| Net cash used in financing activities | ${196,913}$ | (63,793) | |||
| Net decrease in cash held- | (2,089,792) | (647, 709) | (2,000,101) | (591, 563) | |
| Cash at the beginning of the financial year | 4,393,214 | 5,040,923 | 4,299,860 | 4,891,423 | |
| Cash at the end of the financial year. | 29(a) | 2,303,422 | 4,393,214 | 2,299,759 | 4,299,860 |
The statements of cash flows are to be read in conjunction with the notes to the financial statements set out on pages 14 to 43.
For the Year Ended 30 June 2003
Statement of significant accounting policies
The significant accounting policies which have been adopted in the preparation of this financial report are:
(a) Basis of preparation
$\frac{1}{2}$
The financial report is a general purpose financial report which has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. It has been prepared on the basis of historical costs and except where stated, does not take into account changing money values or fair values of non-current assets.
These accounting policies have been consistently applied by each entity in the consolidated entity and, except where there is a change in accounting policy as set out in Note 2, are consistent with those of the previous year.
(b) Principles of consolidation
Controlled entities.
The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases...
Transactions eliminated on consolidation
Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entities are eliminated in full on consolidation.
Unrealised gains resulting from transactions with associates and joint ventures are eliminated to the extent of the consolidated entity's interest. Unrealised gains relating to associates and joint venture entities are eliminated against the carrying amount of the investment. Unrealised losses are eliminated in the same way as unrealised gains, unless they evidence a recoverable amount impairment.
Revenue recognition ${\mathbf{c}}$ .
Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST) payable to the taxation authority. Exchanges of goods or services of the same nature and value without any cash consideration are not recognised as revenues. Sale of goods and services
Revenue from the sale of goods is recognised (net of returns, discounts and allowances) when control of the goods passes to the customer. Revenue from services is recognised at the time the service is provided.
Interest revenue :
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset,
Sale of non-current assets
The gross proceeds of non-current asset sales are included as revenue at the date control of the asset passes to the buyer, usually when an unconditional contract of sale is signed.
The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net. proceeds on disposal.
Dividends .
Revenue from dividends from controlled entities is recognised by the parent entity when they are declared by the controlled entities.
(d) Goods and services tax.
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 Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
Beceivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or ligbility in the statements of financial position.
Cash flows are included in the statements of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
$^{\rm 14}$
For the Year Ended 30 June 2003.
(e) Borrowing costs
冊
Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of anciffary costs incurred in connection with arrangement of borrowings and lease finance charges.
Ancillary costs incurred in connection with the arrangement of borrowings are capitalised and amortised over the life of the borrowings. Taxation
The consolidated enrity adopts the income statement liability method of tax effect accounting.
Income tax expense is calculated on operating profit adjusted for permanent differences between taxable and accounting income. The tax effect of timing differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is carried forward in the statement of financial position as a future income tax benefit or a provision for deferred income tax.
Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain. The tax effects of capital losses are not recorded unless realisation is virtually certain.
(g) Acquisition of assets
All assets acquired including plant and equipment and intangibles other than goodwill are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition. When equity instruments are issued as consideration, their market price at the date of acquisition is used as fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity subject to the extent of proceeds received, otherwise expensed.
Where settlement of any part of cash consideration is deferred, the amounts payable are recorded at their present value, discounted at the rate applicable to the Company if a similar borrowing were obtained from an independent financier under comparable terms and conditions. Subsequent additional costs
Costs incurred on assets subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the consolidated entity in future years. Costs that do not meet the criteria for capitalisation are expensed as incurred.
(h) Receivables
The collectibility of debts is assessed at balance date and specific provision is made for any doubtful accounts, Trade debtors.
Trade debtors to be settled within 60 days are carried at amounts due.
(自二 inventories Inventories are carried at the lower of cost and net realisable value.
Costs include direct materials, direct labour and other direct variable costs riccessary to bring inventories to their present location and condition.
Net realisable value
Net realisable value is determined on the basis of each inventory line's normal selling pattern. Expenses of marketing, selling and distribution to customers are estimated and are deducted to establish net realisable value.
(i) Investments
Controlled entities.
Investments in controlled entities are carried in the Company's financial statements at the lower of cost and recoverable amount. Other entities.
loyestments in other listed and unlisted entities are carried at lower of cost and recoverable amount.
抽一 Leased assets
Leases under which the Company or its controlled entities assume substantially all the risks and benefits of ownership are classified as finance leases. Other leases are classified as operating leases.
Operating leases
Payments made under operating leases are expensed on a straight line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased property.
For the Year Ended 30 June 2003
${I}$ Exploration expenditure
Exploration costs are accumulated in respect of each separate area of interest. J
Exploration costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest, or, where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the financial period the decision is made.
${m}$ . Recoverable amount of non-current assets valued on cost basis
The carrying amounts of non-current assets valued on the cost basis, other than exploration expenditure carried forward (refer note 1(I)), are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is expansed in the reporting period in which it occurs. Where a group of assets working together supports the generation of cash inflows, recoverable amount is assessed in relation to that group tragonista
Galeria of assets... $\phi_{\alpha}+\phi_{\beta\alpha}+\phi_{\beta\alpha}$ , i.e., i.e.
In assessing recoverable amounts of non-current assets the relevant cash flows have not been discounted to their present value, except where specifically stated.
Goodwill (n)
Goodwill represents the excess of the purchase consideration plus incidental costs over the fair value of the identifiable net assets acquired.
Depreciation and amortisation $(0)$ Useful lives.
All assets, including intangibles, have limited useful lives and are depreciated/amortised using the straight line method over their estimated useful lives, with the exception of carried forward exploration costs and finance lease assets which are amortised over the term of the relevant lease or where it is likely the consolidated entity will obtain ownership of the asset, the life of the asset.
Assets are depreciated or amortised from the date of acquisition.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until commercial production commences.
Depreciation and amortisation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments are reflected prospectively in current and future periods only. Depreciation and amortisation are expensed, except to the extent that they are included in the carrying amount of another asset as an allocation of production overheads.
The depreciation/amortisation rates for each class of assets are as follows: ha-
| 2002 2003 |
|
|---|---|
| Property, plant and equipment | |
| Leasehold improvements 33-50% -33-50% |
|
| Plant and equipment. 20-40% 20–40% |
|
| Leased assets : | |
| - 25–33% - plant and equipment. |
|
| ∵Intangibles, | |
| Goodwill -5 years 5 years |
|
| Payables | |
| Liabilities are recognised for amounts to be paid in the future for goods or services received. Trade accounts payable are normally settled. |
within 60 days.
${p}$
For the Year Ended 30 June 2003.
(q) Employee entitlements
Wages, salaries, annual leave and sick leave.
Liabilities for employee benefits for wages, salaries, annual leave and sick leave expected to be settled within 12 months of the year-end represent present obligations resulting from employees' services provided to reporting date, calculated at undiscounted amounts based on . remuneration wage and salary rates that the consolidated entity expects to pay as at reporting date including related on costs.
Non-accumulating non-monetary benefits, such as interest free loans, are expensed based on the net marginal cost to the consolidated entity as the benefits are taken by the employees.
Employee share and option plans
Where shares or options are issued to employees as remuneration for past services, the difference between fair value of the shares or options issued and the consideration received, if any, from the employee is expensed. The fair value of the shares or options issued is recorded in contributed equity. The first process and left
Other shares or options issued to employees are recorded in contributed equity at the fair value of consideration received, if any
Transactional costs associated with issuing shares and options are recognised in equity subject to the extent of the proceeds received, otherwise expensed. Other administrative costs are expensed.
Superannuation plans
The Company and controlled entities contribute to several defined contribution superannuation plans. Contributions are recognised as an expense as they are made.
(r) Joint ventures
The consolidated entity's interest in an unincorporated joint venture is brought to account by including its interest in the following amounts in the appropriate categories in the statements of financial position and statements of financial performance:
- $\bullet$ gach of the individual assets employed in the joint venture. $\Box$
- · liabilities incurred by the consolidated entity in relation to the joint venture and the liabilities for which it is jointly and/or severally liable
- . expenses incurred in relation to the joint venture.
- . revenue from sale of output.
$\left( s\right)$ Earnings per share
Basic earning per share (EPS) is calculated by dividing the net profit attributable to members of the parent entity for the reporting period, after. excluding any costs of servicing equity (other than ordinary shares and converting preference shares classified as ordinary shares for EPS. calculation purposes), by the weighted average number of ordinary shares of the Company, adjusted for any bonus issue...
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs associated with dilutive -potential ordinary shares and the effect on revenues and expenses of conversion to ordinary shares associated with dilutive potential ordinary shares, by the weighted average number of ordinary shares and dilutive potential ordinary shares adjusted for any bonus issue.
Change in Accounting Policy
{a} Employee benefits
2.
The consolidated entity has applied the revised AASB 1028 "Employee Benefits" for the first time from 1 July 2002.
The liability for wages and salaries, annual leave and sick leave is now calculated using the remuneration rates the Company expects to pay as at each reporting date, not wage and salary rates current at reporting date. I
The initial adjustments to the consolidated financial report as at 1 July 2002 as a result of this change are nil.
As a result of this change in accounting policy, employee benefits expense increased by \$1,609 (the Company: \$1,609) for the current year to 30 June 2003.
For the Year Ended 30 June 2003
Provisions and contingent liabilities ${b}$ .
The consolidated entity has applied AASB 1044 "Provision, Contingent Liabilities and Contingent Assets" for the first time from 1 July 2002. .
Dividends are now recognised at the time they are declared, determined or publicly recommended. Previously, final dividends were recognised. in the financial year to which they related, even though the dividends were announced after the end of that financial year, The adjustments to the consolidated and Company financial reports as at 1 July 2002 as a result of this change are nil.
There was no impact on net profit for the current financial year to 30 June 2003. The Time
| Consolidated | Parent Entity | ||||
|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||
| Revenue from ordinary activities | S. | ||||
| Sale of goods and services revenue | |||||
| from operating activities - | ,552,749 | ||||
| Other revenues: | |||||
| From operating activities | |||||
| Interest -- other parties | 260.475 | 209,004 | 218,936 | 207,897 | |
| From outside operating activities . | |||||
| Gross proceeds from sale of non-current assets | 4.347.225 | -78.800 | 3,847,225 | -69,028 | |
| Other . | 11.806 | 10,377 | 52,180 | ||
| Total other revenues. Total revenue from ordinary activities |
4,619,506 4,619,506 |
298,181 1,850,930 |
4,066,161 4,066,161 |
329,015 329,015 |
|
| 4. | Profit/(Loss) from ordinary activities | ||||
| before income tax expense | |||||
| ${a}$ | individually significant items included in profit/(loss) | ||||
| from ordinary activities before income tax expense | |||||
| Proceeds from sale of controlled entities/investments | (3,846,925) | (3,846,925) | |||
| Carrying amount of controlled entities/investments sold | 1,857,642 | 2,096,927 | |||
| Ngt gain. | (1,989,283) | (1,749,998) | |||
| Proceeds from sale of mineral assets | (500,000) | ||||
| Carrying amount of mineral assets sold | 499,817 | ||||
| Net gain | (183) | ||||
| Exploration expenditure written-off | 6.840 | 10.797 | 1,251 | 200 | |
| Provision for diminution in listed investments | 78.134 | 12.324 | 78.134 | 12,324 | |
| Write down in yake of investments in controlled entity | 572,257 |
BALLMARK CONSOLIDATED LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2003
| Consolidated | Parent Entity | |||||
|---|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |||
| S | ||||||
| 4 | Profit/(loss) from ordinary activities | |||||
| before income tax expense (continued) | ||||||
| ${b}$ . | Profit/(Loss) from ordinary activities. | |||||
| before income tax expense has been | ||||||
| arrived at after charging/(crediting) | ||||||
| the following items: | ||||||
| Depreciation of: | ||||||
| Plant and equipment | 23,653 | 201,561 | 23,482 | 28,199 | ||
| Amortisation of: William | ||||||
| - Leased plant and equipment | $-91,201$ | |||||
| Goodwill Allen | 417,420 | |||||
| Leaschoid improvements. | 2.027 | 33,295 | 2.027 | 5,746 | ||
| Total depreciation and amortisation | 25,680 | 743,477 | 25,509 | 25,945 | ||
| Berrowing Costs: : | ||||||
| Other parties [1]. | ||||||
| Finance charges on capitalised leases | 4.748 | |||||
| Bank overdraft. | 70 | |||||
| 4,818 | ||||||
| Net expense/(benefit) from movements in provision for: | ||||||
| Employee entitlements | (3,059) | 21,388 | (3,059) | 12,896 | ||
| Operating lease rental experise: | ||||||
| Minimum lease payments | 92,456 | 117,583 | 92,456 | 78,378 | ||
| Net (gain)/loss on disposal of non-current assets; | ||||||
| Plant and equipment | 335 | 3,586 | 335 | -82 | ||
| Mineral assets | ${133}$ | |||||
| Controlled entities/investments | (1,989,283) | (9, 416) | (1,749,998) | (9,416) | ||
| (1,989,131) | (5,830) | (1,749,663) | (9, 334) | |||
| 5. | Auditors' remuneration |
| . . -Audit |
1.1111 interest and a state of the state of the state of the The contract of the Contract of the Contract of the Contract of the Contract of the Contract of the Contract of the Contract of the Contract of the Contract of The Contract of The Contract of The Contract of The Contract |
in the contract of the contract of . |
The contract of the contract of the | |
|---|---|---|---|---|
| Auditors of the Company -- KPMG- | التالي متعادلات والمتعاد | つけい | . فاحتسبته فممله |
owu |
s, f $\bar{\mathcal{A}}$
Ę,
For the Year Ended 30 June 2003
| 2003 2003 2002 S S S Taxation Income tax expense ${a}$ Prima facie income tax expense/(benefit) calculated at 30% (2002:30%) on the. profit/loss from ordinary activities 370,071 (276,669) 329,274 Increase in income tax expertse due to: Amortisation of goodwill 125,226 2,579 Entertainment 2579 13.888 Legal costs 10,596 29,255 10,596 Write down in investment in controlled entity Provision for diminution in listed investments, 3,697 23,440 23,440 1,055 Other 7.437 7,812 |
2002 Ŝ. |
|---|---|
| (358, 293) | |
| 3,079 | |
| 29,062 | |
| 171,677 | |
| 3,697 | |
| 1,055 | |
| Decrease in income tax expense due to: | |
| Non assessable profit on disposal of controlled entity (596, 785) (524, 999) |
|
| Income tax benefit not brought to account 182,662 113,548 151,298 |
149,723 |
| Income tax expense benefit attributable to | |
| operating profit/{loss) | |
| Current tax liabilities 锄 |
|
| Provision for current income tax | |
| Movements during the year; | |
| Balance at beginning of year 37,999 75,991 37.999 |
75,991 |
| Income tax paid (37, 992) (37, 999) (37, 999) |
(37, 992) |
| 37,999 | 37,999 |
| Current year's income tax expense on operating profit | |
| 37,999 | 37,999 |
| (c) Future income tax benefit not taken to account | |
| The potential future income tax benefit arising from $\sim$ | |
| tax losses has not been recognised as an asset because | |
| recovery of tax losses is not virtually certain 299,655 210,267 237,266 |
125,369 |
$20\,$ $^{\circ}$ ANNUAL REPORT 2003
For the Year Ended 30 June 2003
Taxation (continued)
6
$\overline{I}$ .
The potential future income tax benefit will only be obtained if:
- (i) the relevant company derives future assessable income of a nature and an amount sufficient to enable the benefit to be realised, or the benefit can be utilised by another company in the consolidated entity in accordance with Division 170 of the Income Tax Assessment Act a titulo da antito.
Anglia ang anggot $1997.$ - (ii) the relevant company and/or the consolidated entity continues to comply with the conditions for deductibility imposed by the law; and
- (iii) no changes in tax legislation advarsely affect the relevant company and/or the consolidated entity in realising the benefit.
Earnings per share
Classification of securities as ordinary shares.
The consolidated entity has only one category of ordinary shares included in basic earnings per share.
- Classification of securities as potential ordinary shares
- Options outstanding under the Executive Share Option Plan-
The Executive Share Options have not been included in the calculation of diluted earnings per share as they are not dilutive. Refer note 21(b),
| , катарынын сект | ||
|---|---|---|
| 2003. | 2002 | |
| Earnings reconciliation | ||
| The net profit/(loss) is equal to basic earnings. | ||
| Basic earnings | 1,233,570 | (922, 231) |
| Diluted carnings | 1,233,570 | (922, 231) |
| Number. | Number | |
| Weighted average number of shares used as the denominator | ||
| Number for basic earnings per share | ||
| Ordinary shares | 53,478,270 | 53,604,738 |
| Number for diluted carnings per share | ||
| Ordinary shares | 53,478,270 | 53,604,738 |
For the Year Ended 30 June 2003 -
Segment Reporting
ß.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise income-earning assets and revenue, interest-bearing loans, borrowings and expenses, and corporate. rassets and experises... Automobile Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.
Business Segments
The consolidated entity comprises the following main business segments, based on the consolidated entity's management reporting system. Exploration Exploration and development of nickel and gold.
Investments
In 2002 the consolidated entity had the following business segment, which was disposed of in 2003;
Chemist Club [1] Loyalty programme and marketing for independent pharmacies.
Geographical sequients
| Exploration | Investments | Eliminations | Total | |
|---|---|---|---|---|
| Primary Reporting Business Segments | Ś. | |||
| 2003 | ||||
| Revenue | ||||
| External segment revenue | 500,000 | 500.000 | ||
| Inter-segment revenue- | ||||
| Total segment revenue | 500.000 | 500,000 | ||
| Other unallocated revenue | 4,119,506 | |||
| Total Revenue | 4,619,506 | |||
| Result | ||||
| Segment result. | (106, 657) | (102, 474) | (209, 131) | |
| Unallocated corporate revenues/(expenses) | 1,442,701 | |||
| Profit from ordinary activities before income tax | 1,233,570 | |||
| Income tax expense | ||||
| Net profit | 1,233,570 | |||
| Individually significant items | ||||
| Exploration expenditure written off | 106.840 | 106,840 | ||
| Provision for diminution in listed investments Assets – |
78.134 | 78,134 | ||
| :Segment assets : | 5,088,187 | 182,025 | 5,270,212 | |
| Unallocated.corporate.assets | 4,427,051 | |||
| Consolidated total assets | 9,697,263 | |||
| Liabilities | ||||
| Segment fiabilities | ||||
| Unallocated corporate liabilities | 140,167 | |||
| Consolidated total liabilities | 140,167 | |||
NOTES TO THE FINANCIAL STATEMENTS
For the Year-Ended 30 June 2003
$\mathbf{3}$
| Primary Reporting Business Segments |
Chemist Club | Exploration | investments | Eliminations | Total |
|---|---|---|---|---|---|
| \$ | Ť, | ||||
| 2002 | |||||
| Revenue. | |||||
| External segment revenue | 1,552,749 | 63,416 | 1,616,165 | ||
| Total segment revenue | 1,552,749 | -63,416 | 1,616,165 | ||
| Other unallocated revenue | 234,765 | ||||
| Total revenue. | 1,850,930 | ||||
| Result | |||||
| Segment result | (532, 754) | (10,797) | 9,416 | (534, 136) | |
| (388,095) | |||||
| Unalfocated corporate expenses | |||||
| Loss from ordinary activities, | (922, 231) | ||||
| before income tax - | |||||
| Income tax expense Net loss |
(922, 231) | ||||
| Depreciation and amortisation - | 717,529 | 717,529 | |||
| Individually significant items | |||||
| Exploration expenditure written off | 10.797 | $-10,797$ | |||
| . Provision for dimination in . |
|||||
| listed investments - | 12,324 | 12,324 | |||
| Net gain on sale of investments | (9,416) | (9,416) | |||
| Assets . | |||||
| Segment assets [11] | 1,877,508 | 5,302,103 | 188,930 | 7,368,541 | |
| Unaliocated corporate assets | 4,485,682 | ||||
| Consolidated total assets | 11,854,223 | ||||
| Liabilities. | |||||
| Segment liabilities. | 653,075 | (653, 075) | |||
| Unallocated corporate liabilities | 295,913 | ||||
| Consolidated total liabilities | 295,913 | ||||
| Cash assets | |||||
| Cash , | 7.889 | 137,188 | 3,42. | 52,124 | |
| Bank short term deposits, maturing within 90 days | |||||
| and paying interest at a weighted average interest | |||||
| rate of 4.73% (2002-4.74%) at 30 June 2003 | 2,296,333 | 4,256,026 | 2,296,333 | 4,247,736 | |
| 2,303,422 | 4,393,214 | 2,299,759 | 4,299,860 |
For the Year Ended 30 June 2003.
| Consolidated | Parent Entity | |||||
|---|---|---|---|---|---|---|
| Note | 2003 S |
2002 | 2003 | 2002 Ŝ. |
||
| 10 | Receivables | |||||
| Current | ||||||
| Trade debtors | 9,157 | 3,29,391 | 9,157 | 5,181 | ||
| Other debtors | 979,598 | 78,757 | 978,900 | 56,488 | ||
| 988,755 | 208,148 | 988,057 | 61,669 | |||
| Non current | ||||||
| Loans to controlled entities | 1,753,236 | 2,402,030 | ||||
| Less: Provision for doubtful debts | (1,753,236) | (1,748,955) | ||||
| 653,075 | ||||||
| 11 | Inventories | |||||
| Current | ||||||
| Stock held for resale -- at cost | 162,824 | |||||
| 12 | Other financial assets | |||||
| Non Current | ||||||
| Investments in controlled entities, | 28 | |||||
| Unlisted shares at cost Less: Provision for diminution |
1,235,938 (335,938) |
3,155,121 (1,408,195) |
||||
| 400,000 | 1,746,926 | |||||
| Investments in other entities | ||||||
| Listed shares/options at cost | 543,204 | 477,987 | 543,204 | 477,987 | ||
| Less: Provision for diminution | (361, 179) | (306, 846) | (361, 179) | (306, 846) | ||
| Unlisted shares at cost | 17,789 | 17,789 | ||||
| 182,025 | 188,930 | 182,025 | 189,930 | |||
| Convertible note | 1,060,000 | 1,060,000 | ||||
| 1,242,025 | 188,930 | 1,642,025 | 1,935,856 | |||
The market value of listed shares as at 30 June 2003 was \$182,025, this includes 6.5 million shares in Batavia Mining Limited at a cost of \$65,217. The market value of listed shares as at 10 September 2003 was \$2,921,587. The increase since year end is a result of the re-listing of Batavia
Mining Limited, which has a market value of \$0.105 at 10 September 2003 and the conversion of convertible notes. -
The convertible notes, comprising of 10.6 million convertible notes at a face value of \$0.10 each are non interest bearing and may be converted to Batavia shares at any time in whole or part prior to 31 July 2004 at the election of the Company. Provided the BTV shares are trading, the conversion price is 80% of the average weighted price of the Batavia shares traded on the ASX on the five business days prior to the conversion date otherwise. there is a minimum conversion price of five (5) cents. Failing conversion, the face value of the convertible notes is repayable on 30 September 2004. On 5 September 2003 the Company lodged a notice of conversion at the minimum conversion price of five (5) cents.
For the Year Ended 30 June 2003
òч,
| Consolidated | Parent Entity | |||||
|---|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |||
| S. | S | \$. | S | |||
| 13 | Other current assets | |||||
| Prepayments | 5,824 | 19,584 | 5,824 | 8,661 | ||
| 14 | Plant & equipment | |||||
| Leasahoid improvements | ||||||
| At cost | 16,525 | 79,207 | 16,525 | 16,525 | ||
| Accumulated amortisation | (16,525) | (77, 180) | (16,525) | (14, 498) | ||
| 2,027 | 2,027 | |||||
| Plant & equipment. | ||||||
| "At cost | 177,694 | .698,589 | 176,314 | 146,436 | ||
| Accumulated depreciation | (108, 644) | (409, 459) | (108, 473) | (86, 819) | ||
| 69,050 | 289,130 | 67,841 | 59,617 | |||
| Leased plant & equipment | ||||||
| At capitalised cost | 296,134 | |||||
| Accumulated amortisation | (260, 130) | |||||
| 36,004 327,161 |
61,644 | |||||
| Total plant and equipment net book value Reconciliations |
69,050 | 67,841 | ||||
| Reconciliations of the carrying amounts for each | ||||||
| class of plant and equipment are set out below. | ||||||
| Leaschold improvements | ||||||
| Carrying amount at beginning of year | 2,027 | 34,478 | 2.027 | 6,929 | ||
| Additions | -844 | 844 | ||||
| Amortisation . | (2,027) | (33, 295) | (2,027) | (5,746) | ||
| Carrying amount at end of year. | 2,027 | 2,027 | ||||
| Plant & equipment | ||||||
| Carrying amount at beginning of year | 289,130 | 452,512 | 59,617 | 73,747 | ||
| Additions | 33,723 | 57,179 | 32,341 | 11,761 | ||
| Disposals | (635) | (19,000) | (635) | $\cdot$ {5,692} | ||
| Depreciation. | (23, 653) | (201, 561) | (23, 482) | (20, 199) | ||
| Disposal of eatity $\mathbb{R} \to \mathbb{R}$ , | (229, 515) | |||||
| Carrying amount at end of year | 69,050 | 289,130 | 67,841 | 59,617 | ||
| Leased plant & equipment | ||||||
| Carrying amount at beginning of year | 36,004 | 127,205 | ||||
| Acquisition through entity acquired- | ||||||
| Amortisation Disposal of entity |
(36,004) | (91,201 | ||||
| Carrying amount at end of year [14]. | 36,004 | aus- |
For the Year Ended 30 June 2003.
| Consolidated | Parent Entity | |||
|---|---|---|---|---|
| 2002 | 2003 | |||
| 15 Exploration expenditure | ||||
| Costs carried forward in respect of areas of interest in: | ||||
| Exploration | 5,088,187 | 5,302,103 | 70,000 | 70,000. |
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas.
Valuation
An independent valuation was carried out in January 2000 by Continental Resource Management Pty Ltd (CRM) and used the Prospectivity Enhancement Multiplier method, which is based on previous exploration expenditure and, in the case of Cawse Extended, the yardstick, or comparative deal method. The Cawse Extended valuation was also cross checked against the discounted insitu contained metal value of the tenement. The Directors are of the opinion that this basis provides a reasonable estimate of recoverable amount........................
In June 2002 CRM provided an updated valuation of Cawse Extended. CRM concluded that the value of Cawse Extended falls within the range of \$4,800,000 to \$8,600,000, with a preferred value of \$7,200,000. [[[[[[[[[[[[[[ .
Serika
The commencement of mining at the Unicorn Pit at Cawse Extended represents a very positive step forward for this project. The Directors, believe this further supports the carrying value of this asset. New NEW CONC.
| 2003 2002 2003 Note S ä |
2002 |
|---|---|
| 16 Intangibles | |
| Goodwill - at cost 1,252,259 2,087,099 |
|
| Accumulated amortisation. (1,252,259) (834, 840) |
|
| 1,252,259 ra w |
|
| Payables 17 |
|
| Current | |
| 39,636 Trade greditors 43,181 43,181 |
25,541 |
| 73,252 Other creditors and accruals 156,199 73,212 |
54,179 |
| 116,433 195,835 116,393 |
79,720 |
| $18$ $\pm$ Interest bearing liabilities | |
| Current | |
| 25 25,668 Lease liabilities |
34
Non-interest bearing liabilities . II. Non-Current Other loans - controlled entities
| . | and a group of the MALL |
a de concerte conservador de la partida de la proposición de la proposición de la proposición de la proposició . |
. 11111 |
New area was a warmer | The Contract . |
|
|---|---|---|---|---|---|---|
| ALC | . . | and the support Charles Co. |
fifted a display a display a display a proportional and a . |
| Consolidated | Parent Entity | ||||||
|---|---|---|---|---|---|---|---|
| 2003 | $2002\,$ | 2003 | 2002 | ||||
| Note | Ś | S. | S | ||||
| 20 | Provisions | ||||||
| Current. | |||||||
| Employee entitlements | 23,734 | 36,411 | 23,734 | 28,676 | |||
| Number of employees | |||||||
| Number of employees at year end | 11 | 5 | |||||
| 21 | Contributed equity | ||||||
| Issued and paid-up share capital | |||||||
| 53,478,270 (2002:53,478,270) | |||||||
| ordinary shares, fully paid | 3,471,866 | 6,706,650 | 3,471,866 | 6,706,650 | |||
| (ä) | Ordinary shares | ||||||
| Balance at the beginning of year | 6,706,650 | 6,770,443 | 6,706,650 | -6,770,443 | |||
| Shares bought back < | |||||||
| Nil (2002:449,312) shares | (63,793) | (63, 793) | |||||
| Capital Reduction | |||||||
| In specie distribution | (3,234,784) | (3,234,784) | |||||
| Balance at end of year Distribution of capital. |
In June 2003 shareholders approved a capital reduction pursuant to section 256B and 256C of the Corporations Act 2001. The capital reduction was effected and satisfied by the Company distributing in specie 53,478,270 shares in Batavia Mining Limited on a 1 for 1 basis at the cost to the Company of these shares. |
3,471,866 | 6,706,650 | 3,471,866 | 6,706,650 | ||
| Terrns and conditions shareholders' meetings. |
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at | ||||||
| proceeds from liquidation. | In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any | ||||||
| ${0}$ . | Options | ||||||
| Movements in issued options of the Company during the last two years were as follows: | |||||||
| Date | Details | Number of options | |||||
| 39.06.01 | Opening Balance | 3,280,000 | |||||
| 11.10.02 30.6.03 |
Options issued Closing Balance |
1,180,000 4,460,800 |
27.
For the Year Ended 30 June 2003
| Consolidated | Parent Entity | ||||
|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||
| 22 | Reserves | ||||
| Asset revaluation | 4,653,656 | 4,653,656 | 70.000 | 70,080 | |
There was no movement in the asset revaluation reserve during the year.
Nature and purpose of reserves
Asset Revaluation
$\mathbb{Z}^3$
The asset revaluation reserve includes the net revaluation increments and decrements ansing from the revaluation of non-current assets in accordance with AASB 1041. An amount of \$4,653,656 (the Company: \$70,000) is not available for future asset write-downs as a result of using the deemed cost election for exploration expenditure when adopting AASB.1041.
| 2002 2003 2002 2003 |
|
|---|---|
| Retained profits/(losses) | |
| Retained profits/(losses) at beginning of year - (182, 132) 1,012,178 .120.235 198.004 |
|
| - Profit/(loss) attributable to members of the parent entity (922.231) (1,194,310) 1,233,576 1,097.579 |
|
| Retained profits/(losses) at the end of the year 1.431.574 915.447 198.004 |
(182,132) |
For the Year Ended 30 June 2003 -
24 Additional financial instruments disclosure
(a) Interest rate risk
Interest rate risk exposures
The consolidated estity's exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities is set out below.
| argigueg | — гознац | ||||
|---|---|---|---|---|---|
| average | interest rate | Non interest | |||
| Note | interest rate | 1 year or less | bearing | Total | |
| %. | Ŝ | - \$ | |||
| 2003 - | |||||
| Financial assets | |||||
| Cash at bank | $-0.01$ | 6,789 | 300 | $-7,009$ | |
| Interest bearing deposits | 9 | 4.73 | 2,296,333 | 2,296,333 | 2,296,333 |
| Receivables - | 40 | 988,755 | 988,755 | ||
| Other financial assets | 12 | 1,242,025 | 1,242,025 | ||
| 2,303,122 | 2,231,080 | 4,534,202 | |||
| Financial liabilities | |||||
| Payables, | 116.433 | 116,433 | |||
| Employee entitlements | 20 | 23,734 | 23,734 | ||
| 140,167 | 140,167 | ||||
| 2002 | |||||
| Financial assets | |||||
| ∙Çash at bank u | -9 | 1.GS | 98,505 | 38,683 | -137,188 |
| Interest bearing deposits | 4.74 | 4,247,736 | $-8,290$ | 4,256,026 | |
| Other financial assets | 188,930 | 188.930 | |||
| Receivables. | 208,148 | 208,148 | |||
| 4,346,241 | 444,051 | 4,798,292 | |||
| Financial liabilities | |||||
| Payables | 17 | 195,835 | 195,835 | ||
| Lease tiabilities | 18 | 7.98 | 25.688 | 25,668 | |
| Employee entitlements | 20 | 36,411 | 36,411 | ||
| 25 BS8 | 232.246 | 257.914 |
For the Year Ended 30 June 2003
| Consolidated | |||||
|---|---|---|---|---|---|
| 2003 | 2002 | ||||
| Carrying | Net fair | Carrying | Net fair | ||
| amount | value | amount | value | ||
| S | S | ||||
| Additional financial instruments disclosure (continued) | |||||
| Net fair values of financial assets and liabilities | |||||
| Net fair values - | |||||
| Recognised financial instruments | |||||
| The carrying amounts and net fair values of financial | |||||
| assets and liabilities as at the reporting date are as follows: | |||||
| Financial assets | |||||
| :Cash_assets - | 7.089 | 7,089. | 137,188 | 137,188 | |
| Interest bearing deposits | 2,296,333 | 2,296,333 | -4,256,026 | -4,256,026 | |
| Receivables | 988,755 | .988,755 | 208,148 | 208,148 | |
| Investments: | |||||
| Other entities – listed | -182,025 | 182,025 | 188.930 | 177,081 | |
| Other entities -- unlisted. | 17,789 | 17,789 | |||
| Financial liabilities | |||||
| Payables | -116,433 | 116.433 | 195,835 | 195,835 | |
| Lease liabilities | .25,668 | 25,668 | |||
| -Employee entitlements. | 23,734 | 23,734 | 36,410 | 36,410 |
.
Cash assets and listed shares in other corporations are readily traded on organised markets in a standardised form. All other financial assets and liabilities are not readily traded on organised markets in a standardised form.
25 Commitments
$\mathbf{24}$
Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Company and the consolidated entity are required to perform. minimum exploration work to meet the minimum expenditure requirements specified by various State governments. These obligations are subject to repegetiation when application for a mining lease is made and at other times. All the problem
| Consolidated | Parent Entity | |||
|---|---|---|---|---|
| 2002 | 相關人 | |||
| . Exploration commitments not provided for: | ||||
| - in the financial report payable: | ||||
| . Not later than one year. | 71.800 | 294,800 | 31,680. |
For the Year Ended 30 June 2003
| Consolidated | Parent Entity | |||
|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |
| Commitments (continued) | ||||
| Non-cancellable operating lease expense commitments | ||||
| -firiure operating lease commitments not provided for in the financial statements and payable: |
||||
| Within one year - | 98,504 | 137,563 | 98,504 | 93,838 |
| One year or later and no fater than five years. | 22.642 | 60,126 | 22.642 | 23,689 |
| 121.146 | 197,689 | 121.146 | 117,527 | |
The consolidated entity leases property under non-cancellable operating leases expiring within two years. Leases generally provide the -consolidated entity with a right of renewal at which time all terms are renegotiated. .
| . Lonsonaateu | катепт спита | |||
|---|---|---|---|---|
| 2003 | 2002. | 2003. | 2002 | |
| Note | ||||
| Finance lease payment commitments | ||||
| . Finance lease commitments are payable: | ||||
| : Within one year. The process | ||||
| One year or later and no fater than five years | ||||
| 27,240 | ||||
| Less: Future lease finance charges | 1,572 | |||
| 25,668 | ||||
| Lease liabilities provided for in the | ||||
| financial statements: | ||||
| Carrent . -18 |
?5.668 | |||
| . Non-carrent . | ||||
| : Total lease liability. | 25,668 | |||
The consolidated entity leases plant and equipment under finance leases expiring from one to three years. At the end of the lease term the consolidated entity has the option to purchase the equipment.
HALLMARK CONSOLIDATED LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year, Ended 30 June 2003.
| Consolidated | Parent Entity | |||||
|---|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |||
| 25 | Contingent liabilities | |||||
| The details and estimated maximum amounts of contingent. liabilities that may become payable are set out below. The Directors are not aware of any circumstance or information which could lead them to believe that these liabilities will crystallise and consequently no provisions are included in the financial statements in respect of these matters. |
||||||
| Tenement acquisition | ||||||
| The consolidated entity has entered into option agreements. to acquire certain mining tenements Litigation |
610.000 | |||||
| Constructive trust claim over the Kanowna Securities. | ||||||
| Refer below. Indemnities Indemnities have been provided to Directors and certain - executive officers of the Company in respect of liabilities. to third parties arising from their positions, except where the liability arises out of conduct involving a lack of good. faith. No monetary fimit applies to these agreements and there are no known obligations still outstanding at .30 June 2003. [1 |
277.000 | 277.600 | ||||
| Total estimated contingent liabilities | 277,000 | 610,000 | 277,000 | |||
Resolution of matters arising from 1998
In the period September to December 1998 management control of Hallmark was held by interests associated with Davis Samuel Pty Ltd . (Davis Samuel). The Davis Samuel nominee directors committed Hallmark to a series of transactions involving expenditure totalling ~ \$1,526,000. The Australian Stock Exchange (ASX) ruled that the transactions required shareholder approval. Shareholders subsequently voted. against approving the transactions. The figure an
Lamba In December 1998, Hallmark entered into a settlement agreement with Davis Samuel and its directors which effectively provided for the repayment of the funds expended, and Hallmark would in turn transfer its shares and options in Kanowna Lights Limited (the Kanowna Securities) to Davis Samuel. na Sangaran.
Tanahiran San
The Commonwealth of Australia (the Commonwealth) in proceedings in the Supreme Court of the Australian Capital Territory claimed that it was entitled to a constructive trust over the Kanowna Securities and obtained an injunction preventing Hallmark from selling or otherwise disposing of them. The Commonwealth has claimed that as constructive trustee, Hallmark is liable to account for the market value of the shares at the time they were acquired. The Commonwealth gave an undertaking as to damages.
Subsequently, in September 1999, Davis Samuel purported to rescind the December 1998 Settlement Agreement. The Commonwealth is on notice that if Hallmark suffers damages as a result of the Commonwealth's infunction, and the Commonwealth ultimately fails to prove its constructive trust claim. Hallmark will claim the damages from the Commonwealth.
For the Year Ended 30 June 2003.
26 Contingent liabilities (continued)
Legal action against Davis Samuel
Hallmark, as a party to the proceedings instituted by the Commonwealth, has now issued cross-claims against Davis Samuel and seyeral other parties including Messrs Allan Endresz, Peter Cain, William Forge, David Muir and Peter Clark. .
In July 2001 Messrs William Forge, David Muir and Peter Clark were charged in relation to offences under the Corporations Law of Western Australia relating to the October 1998 transactions, pursuant to which Hallmark expended \$1,526,000.
If successful prosecutions are achieved, Halimark will seek an order making the above parties personally liable for the recovery of the Halimark losses.
Deed of cross quarantee $271$
Pursuant to ASIC Class Order 98/1418 dated 13 August 1998 the wholly owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports. [111] [111] [111] [111] [111]
It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of the Deed is that the Company quarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Law, the Company will only be liable in . the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up. Company
The subsidiaries subject to the Deed are Connaught Mining NL and Hallmark Mining Limited.
In accordance with the terms of the Class Order, consolidated statements of financial performance and consolidated statements of financial position comprising the entities that are party to the Deed should be disclosed. The $\zeta$
Consolidated statements of financial performance and consolidated statements of financial position, comprising the Company and subsidiaries. which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, at 30 June 2003 is set out. on the following page.
HALLMARK CONSOLIDATED LIMITED
IN OTES TO THE FINANCIAL STATEMENTS
| Consolidated | ||
|---|---|---|
| 2003 | 2002 | |
| Ŝ | ||
| 27 Deed of cross guarantee (continued) | ||
| Statement of financial performance | ||
| Profit/(loss) from ordinary activities before income tax | 953,560 | (1, 199, 900) |
| Income tax benefit relating to ordinary activities - | ||
| Profit/(loss) from ordinary activities after related income tax expense | 953,560 | (1, 199, 908) |
| Net profit/(loss) | 953,560 | (1, 199, 900) |
| Retained profits at beginning of year- | 478,014 | 1,677,914 |
| Retained profits at end of year | 1,431,574 | 478,014 |
| Statement of financial position | ||
| Cash assets | 2,303,422 | 4,346,541 |
| Receivables | 988,755 | 68,836 |
| Other | 5,824 | 8,661 |
| Total current assets | 3,298,001 | 4,424,038 |
| Receivables Other financial assets |
1,242,025 | 653,075 1,535,855 |
| . Plant & equipment | 69.050 | $-61,643$ |
| Exploration expenditure | 5,088,187 | 5,302,103 |
| Total non-current assets | 6,399,262 | 7,552,676 |
| Total assets | 9,697,263 | 11,976,714 |
| Payables | 116,433 | $-79,721$ |
| Current tax liabilities | 37,939 | |
| $\mathsf{Provisions} \in \mathbb{R}$ . | 23,734 | 20,675 |
| Total current liabilities | 140,167 | 139,395 |
| Total non-current liabilities | ||
| Total liabilities | 140,167 | 138,395 |
| Not assets | 9,557,096 | 11,838,319 |
| Contributed equity | 3,471,866 | $-6,706,649$ |
| Reserves | 4,653,656 | 4,653,656 |
| Retained profits | 1,431,574 | 478,014 |
| Total equity | 9,557,096 | 11,838,319 |
$3\,$ ANNUAL REPORT 2003
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2003
| 2003 | 2002 | ||
|---|---|---|---|
| Country of | % of | % of | |
| incorporation | equity interest | equity interest | |
| Controlled entities 28. |
|||
| Particulars in relation to controlled entities (a) |
|||
| Controlled entities | |||
| Connaught Mining NL | Australia. | 1B) | 100. |
| Hallmark Mining Limited | Australia. | 100 | 100. |
| Chemist Club Pty Limited | Australia | 100. | |
| Consolidated | Parent Entity | ||
| 2003 2002 |
2003 | 2002 | |
| Ŝ 鸷 |
.S | Ŝ | |
| Acquisition/disposal of controlled entities (b) |
|||
| The following controlled entities were acquired or disposed of during the financial year. |
|||
| Acquisition of entities | |||
| On 10 December 2002, South Marchison Mines Pty Ltd | |||
| was incorporated as a wholly owned subsidiary. | |||
| Disposals of entities | |||
| During the financial year, the consolidated entity disposed | |||
| of all the ordinary shares of South Murchison Mines Pty | |||
| Ltd and Chemist Club Pty Ltd. Details of the disposals are | |||
| as follows (in aggregate): Consideration (cash) - |
|||
| Consideration (non cash). | 1,346,925 2,500,000 |
1,346,925 2,500,000 |
|
| Less carrying amount of disposal | 1,857,642 | 2,096,927 | |
| Profit on disposal. | 1,989,283 | 1,749,998 | |
| Net assets of entities disposed of acquired; | |||
| .Cash | 49,213 | 49,213 | |
| Plant and equipment | 265.519 | 265.519 | |
| Receivables | 177,444 | 177,444 | |
| Inventories. | 162,824 | 162,824 | |
| Mineral exploration | 1,036,698 | 1,036,698 | |
| Other assets | 10,920 | 10,929 | |
| Loans | (286, 643) | (286, 643) | |
| Trade creditors | (810,592) | (810,592) | |
| 605.383 | 605.383 |
.
BALEMARK CONSOLIDATED LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2003
| Consolidated | Parent Entity | ||||
|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||
| Note | S | Š | S | ||
| 29. | Notes to the statements of cash flows | ||||
| .{ล} | Reconciliation of cash | ||||
| For the purposes of the statements of cash flows, | |||||
| cash includes cash on hand and at bank and short | |||||
| term deposits at call, net of outstanding bank | |||||
| overdrafts. Cash as at the end of the financial year as shown in the statements of cash flows is |
|||||
| reconciled to the related items in the statements | |||||
| of financial positions as follows: | |||||
| Cash assets | 2,303,422 | 4,393,214 | 2,299,759 | 4,299,869 | |
| {ħ} | Reconciliation of loss from ordinary | ||||
| activities after income tax to net cash | |||||
| provided by operating activities | |||||
| Profit/(loss) from ordinary activities after income tax. | 1,233,570 | (922, 231) | 1,097,579 | (1, 194, 310) | |
| Add/(less) items classified as investing/financing activities: | |||||
| Profit on sale of controlled entities/investments Lossion sale of non-current assets. |
(1,989,283) 152. |
(5,830) | (1,749,998) 335 |
(9,334) | |
| Add/(less) non-cash items: [10] | |||||
| Amounts set aside to provisions | ~14 | ||||
| Depreciation/amortisation | 25,680 | 743,477 | 25,509 | 25,945 | |
| Diminution in value of investments. | 78,134 | 78,134 | 42,274 | ||
| Write-down in value of investments | 24,340 | 24.340 | |||
| Provision for non-recovery of loan- | 4.282 | ||||
| Dividend received | 12,324 | 584,581 | |||
| Exploration expenditure written off- | 106,840 | 10,797 | 1,251 | 200 | |
| Net cash used by operating activities before change in assets and fiabilities |
(520, 567) | (161, 463) | (518,568) | (550, 630) | |
| Change in assets and liabilities adjusted for | |||||
| effects of purchase of controlled entity during | |||||
| the financial year. | |||||
| Increase in inventories | (14,219) | ||||
| Decrease in prepayments it. | 2,838 | 18,203 | 2,838 | 12,089 | |
| Decrease/{increase) in debtors | 30,470 | 102,558 | 35,353 | (5,647) | |
| Decrease in provision for income tax. | (37,999) | (37, 992) | (37,999) | (37, 992) | |
| -{Decrease}/increase in accounts payable Increase in provisions |
(9,372) 3,059 |
(189,534) 12,150 |
583 3,059 |
(5,630) 12,896 |
|
| Net cash used in operating activities. | (531,571) | (270,297) | (514, 734) | (574,914) | |
For the Year Ended 30 June 2003.
(c) Non-cash financing and investing activities
During the year, the Company loaned King Solomon Mines Pty Ltd (a wholly owned subsidiary of Batavia Mining Limited, formally Menzies Gold Limited) an amount of \$1,060,000. On 26 June 2003, Batavia satisfied the amount owing by issuing the Company with 10,600,000. convertible notes each at an issue price of ten (10) cents.
On 27 June 2003, the Company sold its interest in South Murchison Mines and the Paynes Find Project to Batavia Mining Limited for consideration of 30 million ordinary shares in Batavia at 10 cents per share.
A return of capital was undertaken during the year. Shareholders approved this transaction on 24 June 2003. The paid up share capital of the Company was reduced by \$3.2 million. The reduction was satisfied by the Company distributing in specie 53,478,270 BTV shares to shareholders on the basis of one BTV share each valued at \$0.055 for every Hallmark share.
$30 -$ Dividends
No dividends have been declared or paid during the year.
Dividend franking account
30% franking credits available to shareholders of
Halfmark Consolidated Limited for subsequent financial years. 1,037,062 2,331,163 The above available amounts are based on the balance of the dividend franking account at year-end adjusted for
a) franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.
Change in measurement of dividend franking account
In accordance with the New Business Tax System (Imputation) Act 2002, the measurement basis of the dividend franking account changed on .1 July 2002 from an after-tax profits basis to an income tax paid basis.
The amount of franking credits available to shareholders disclosed as at 30 June 2003 has been measured under the new legislation and represents income tax paid amounts available to frank distributions. The balance disclosed as at 30 June 2002 has been measured under the legislation existing at 30 June 2002 and represents after tax profits able to be distributed fully franked at the current tax rate.
The change in the basis of measurement does not change the underlying value of franking credits or tax offsets available to shareholders from the dividend franking account. I
Comparative information has not been restated for this change in measurement. Had the comparative information been calculated on the new basis, the "franking credits available" balance as at 30 June 2002 would have been \$999,070.
For the Year Ended 30 June 2003.
| Consolidated | Parent Entity | |||
|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |
| -Note - Employee Benefits |
||||
| Aggregate liability for employee benefits, | ||||
| $\frac{1}{2}$ including on-costs . | ||||
| — Current | ||||
| - Employee benefits provision. | 23,734 | 36,411 | 23,734 | 20,676 |
| 23,734 | 36,411 | 23,734 | 20,676 |
Equity-based plans
31
Employee Share Option Plan
The Company has a Hallmark incentive Option Scheme plan approved by shareholders at a general meeting held on 30 June 2000.
Each option is convertible to one ordinary share. The exercise price of the options, determined in accordance with the rules of the plan, are based on the weighted avarage price of the Company's shares traded during the five business days preceding the date of granting the option. .
All options expire on the earlier of their expiry date or termination of the employee's or Director's relationship with the Company or a subsidiary, other than by reason of death, retirement or retrenchment of that participant.
Summary of options over unissued ordinary shares
Consolidated and Company
2003
| Number of | Number of | ||||
|---|---|---|---|---|---|
| Exercise options at |
options at | ||||
| the beginning arico. |
Options | Options | Options | end of year | |
| Grant date Expíry date |
of the year. | uranted | lapsed | exercised | on issue : |
| 130 June 2000 - $\sim$ 30 June 2004 $\pm$ 7 |
3,280,000 $0.19 -$ |
3,280,000 | |||
| 11 October 2002, 1,30 June 2004. | 0.14 | $4{,}180{,}000$ , | 180,000 | ||
| 3.280.000 | 4,460,000 | ||||
Consolidated and Company
| 2002 | ||
|---|---|---|
| 1.30 June 2004 - Pr 130 June 2000 - J.GGO. 353 |
'RG ANI. | :280.000 |
| 363 | 3.280.080 | |
For the Year Ended 30 June 2003
| Parent Entity | ||||
|---|---|---|---|---|
| 2003 | 2002 | |||
| Directors Remuneration 32 |
||||
| Directors' income | ||||
| The number of Directors of the Company whose income from | ||||
| the Company or any related party falls within the following bands; | ||||
| $$1,000 - $10,999$ | ||||
| $$50,000 - $50,999$ | ||||
| $$60,000 - $80.999$ | ||||
| $$80,000 - $89,999$ | ||||
| $$90,000 - $0.99,999$ | ||||
| $$110,000 - $119,999$ | ||||
| $$120,000 - $129,999$ | ||||
| \$140,000 - \$149,999 | ||||
| Consolidated | Parent Entity | |||
| 2003 | 2002 | 2003 | 2002 | |
| s | ||||
| Total income paid or payable, or otherwise. made available, to all Directors of the Company, |
||||
| from the Company or any related party -- | 310.799 | 441,922 | 245.704 | 317,426 |
The remuneration bands are not consistent with the emoluments disclosed in the Directors' Report as the basis of calculation differs due to the differing requirements of the Corporations Act 2001 and the Accounting Standards.
For the Year Ended 30 June 2003
| Consolidated | Parent Entity | |||
|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |
| Executives' remuneration | ||||
| The number of executive officers of the Company and of | ||||
| controlled entities, including executive Directors, whose | ||||
| remuneration from the Company or related parties, and from- | ||||
| entities in the consolidated entity, fails within the following. | ||||
| bands: | ||||
| $$120,000 - $129,999$ | ||||
| $$140,000 - $149,999$ | ||||
| fotal income in respect of the financial year received, or | ||||
| due and receivable, from the Company, entities in the [ consolidated entity or related parties by executive officers |
||||
| of the Company and of controlled entities whose income- | ||||
| lis \$100,000 or more. | 126.314 | 268.925 | 126.314 | 144.429 |
| Executive officers are those officers involved in the strategic direction, general management or control of business at a company or operati |
division level. Executives' remuneration includes amounts paid by the Company during the year to indemnify executives, and an allocation of insurance. premiums paid by the Company or related parties in respect of directors' and officers' liabilities and legal expenses' insurance contracts, inaccordance with common commercial practice. a na portuguesa e portuguesa.
Lista de tempo e este na contra na altr The remuneration bands are not consistent with the empluments disclosed in the Director's Report as the basis of calculation differs due to
the differing requirements of the Corporations Act 2001 and the Accounting Standards.
For the Year Ended 30 June 2003
34 Related parties
Directors
The names of each person holding the position of Director of Hallmark Consolidated Limited during the financial year are Messrs J.W Barr, N. $\mathfrak{G}$ Biddle, $\mathfrak{F}$ A Corp, $\mathfrak{G}$ A Snaw $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\mathbb{Z}$ , $\math$ n Chambridge
Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the consolidated entity since the end of the previous financial year and there were no material contracts involving Directors' interests subsisting at year end.
The interests of Directors' of the reporting entities and their director related entities in shares and share options of the Company at year end are set out below:
| -2303 | ZUIS 2002 2002 |
|---|---|
| Number held | Number held Mumber held Number held |
| -Ordinary shares | Ordinary shares Options Ontions |
| J W Barr 8,700,000 |
1,000,000 8.700.000 1,000,000 - |
| N G Biddle - 5.643.372 |
.1.000.000 .5,659,602 1,000,000. |
| S A Corp 8,000,000 |
1.000.000 759,330 ^ |
Directors' transactions in shares and share options.
During the year the Company granted 1,000,000 options (2002: Nil) over unissued shares under the Share Option Plan. During the year 1,214,440 (2002: 6,416,500) shares were purchased and 1,000,000 (2002: 3,664,971) shares were sold in aggregate by Directors and their director related entities. .........
Transactions with Directors' and director related entities
The following transactions are based on commercial terms and conditions and were no more favourable than similar transactions to nondirector related entities on an arm's length basis. [11] [11] [11] a na sa
A Director of the Company, Mr J.W. Barr, has an interest as a director in Kensington Consulting Pty Ltd, which provides management. consulting services to the Company. The Consulting services
A Director of the Company, Mr N G Biddie, has an interest as a related party in Biddle Partners Pty Ltd, which provides geological and management consulting services to the Company. [111111111]
A Director of the Company, Mr S A Corp, has an interest as a director in Flea Pty Ltd, which provides management consulting services to the ∙Company. .
The value of the transactions (also included in note 32) during the year with Directors and their director related entities were as follows:
| Consolidated Parent Entity |
|
|---|---|
| 2002 2003 2003 2002 |
|
| Kensington Consulting Pty Ltd i J W Barni |
74,800 93.500 -74,800 -70,400 |
| N.G.Biddle Biddie Partners Pty Ltd ~ |
68,060 .66,000 102.245 74.250 |
| S A Corp Flea Pty Ltd. |
35,000 30,500 35,000 44,500 |
Amounts payable to Directors and their director related entities at balance date arising from these transactions total \$8,250 (2002; Nil). The Company invoiced Hillcrest Resources Limited Nil (2002: \$126,213) for the reimbursement of office and administration costs. Mr Barr was. a director of Hillcrest Resources Limited.
For the Year Ended 30 June 2003
Related parties (continued)
34
The Company invoiced Vincorp Wineries Limited Nil (2002: \$79,347) for the reimbursement of office and administration costs. Messrs Barr and i Maria II
Kabupatèn Kalumaran Biddle were directors of Vincorp Wineries Limited. [1] .
The Company invoiced Renewable Investments Limited Nil (2002: \$5,504) for the reimbursement of office and administration costs. Mr Biddle, was a director of Renewable Investments Limited. The control
The Company invoiced Kanowna Lights Limited \$66,343 (2002: \$17,199) for the reimbursement of office and administration costs. Messrs Barr and Biddle were directors of Kanowna Lights Limited. . . . . . . . . . . . . . .
The Company invoiced Cavendish Corporation Limited \$2,250 (2002: Nit) for the reimbursement of office and administration costs. Mr Barr is a director of Cavendish Corporation Limited. an di kacamatan Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumara
Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumaran Sumara
The Company invoiced Biddle Partners Pty Limited \$2,250 (2002: Nil) for the reimbursement of office and administration costs. Mr Biddle is a related party of Biddle Partners Pty Limited. No
The Company paid \$4,950 to Hannan Street Corporate Charters for corporate functions. Mr Biddle is a related party of Hannan Street Corporate Charters.
Messis Bari & Biddle are directors of Batavia Mining Limited.
Batavia acquired a wholly owned subsidiary of Hallmark called South Murchison Mines Pty Ltd (SMM) as well as various other mineral assets, comprising a mining lease, applications for prospecting licences and an option to acquire mining leases owned by another Hallmark subsidiary. The consideration for this acquisition was the issue of 30 million shares to Hallmark. Entities within the Batavia group owed Hallmark \$1.06 million. This debt has been replaced by the issue of 10.6 million convertible notes at a face value of \$0.10 each, secured by the issue of a new charge over the assets of Batavia.
The Company has provided a short term unsecured loan of \$760,049 to Batavia as part of the Deed of Company Arrangement sponsored by Hallmark. The loan was repaid on 4 September 2003.
Wholly owned group
Details of interest in wholly owned controlled entities are set out in note 28. Details of these dealings are set out below.
Loans
Loans between entities in the wholly owned group are non-interest bearing, unsecured and are repayable upon reasonable notice having regard to the financial stability of the Company.
Transactions
Alf transactions with controlled entities are on normal terms and conditions.
The Company received management fees totalling nil during the financial year (2002; \$45,000), $\gamma$
| Parent Entity | ||
|---|---|---|
| 2003 | 2002 | |
| Balances with entities in the wholly-owned group | ||
| Receivables - non current 1,753,236 |
(2,402,030) | |
| (1,753,236) Provision for non-recovery ( |
(1,748,955) | |
| 653,075 | ||
| Payables – non current - 476.066 |
357,852 | |
For the Year Ended 30 June 2003
Interests in joint ventures
Consolidated
36
| interest | Exploration expenditure |
|||||
|---|---|---|---|---|---|---|
| Joint | Principal | 2003 | 2002 | 2003 | 2002 | |
| Joint venture party | venture. | activities | $\partial_{10}$ | ₩п. | S., | |
| OMG Group Inc. 1 | Cawse Extended | Wickel/Cobalt | $20.00 -$ | $-20.00$ . | 12,695 | $-65,183$ |
| Mines and Resources Australia Pty Ltd | Kintore East | .Gold J | 123.75. | 23.75 . | 1,200. | 200 |
| Kookynia Resources NL | McTavish. | ≅Gold. | .10.10. | $\sim$ 40.10 $^{\circ}$ | 1,623 | 2,340 |
Exploration expenditure represents direct expenditure incurred by the consolidated entity.
37 Events subsequent to balance date
On 5 September 2003 the Company lodged a notice of conversion to convert its 10.6 million convertible notes to 21.2 million BTV shares. The notes were converted at a conversion price of five (5) cents. The financial effect of this transaction has not been brought to account in the financial statements for the year ended 30 June 2003,
DIRECTORS' DECLARATION
.
In the opinion of the Directors of Hallmark Consolidated Limited:
- (a) the financial statements and notes, set out on pages 11 to 43, are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the financial position of the Company and consolidated entity as at 30 June 2003 and of their performance, as represented by the results of their operations and their cash flows, for the year ended on that date; and
- (ii), complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
- (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
-
- There are reasonable grounds to believe that the Company and the subsidiaries identified in note 27 will be able to meet any obligations or Habilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those subsidiaries pursuant to ASIC Class Order 98/1418.
Signed in accordance with a resolution of the Directors:
John W Barr Chairman 12 September 2003
WINDEPENDENT AUDIT REPORT
To the Members of Hallmark Consolidated Limited.
Scope
The financial report and directors' responsibility
The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both Hallmark Consolidated Limited (the "Company") and the Hallmark Consolidated Group (the "Consolidated Entity"), for the year ended 30 June 2003. The Consolidated Entity comprises both the Company and the entities it controlled during that year.
The directors of the Company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.
Audit approach -
We conducted an independent audit in order to express an opinion to the members of the Company. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.
We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Australian Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the Company's and the Consolidated Entity's financial position, and of their performance as represented by the results of their operations and cash flows.
We formed our audit opinion on the basis of these procedures, which included:
examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.
While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.
Independence
In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.
INDEPENDENT AUDIT REPORT
To the Members of Hallmark Consolidated Limited,
Audit opinion
In our opinion, the financial report of Hallmark Consolidated Limited is in accordance with:
(a) The Corporations Act 2001, including:
.
[1] [igiving a true and fair view of the Company's and Consolidated Entity's financial position as at 30 June 2003 and of their performance for the financial year, ended on that date; and
ii. Ecomplying with Accounting Standards in Australia and the Corporations Regulations 2001; and
b) other mandatory professional reporting requirements in Australia.
Keng
Din Clement
D P McCOMISH Partner
Perth 12 September 2003
NE ASX ADDITIONAL INFORMATION
.
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below.
Shareholdings (as at 9 September 2003)
Substantial shareholders
Substantial holders in the Company are set out below:
| . Shareholder |
Number | Percentage |
|---|---|---|
| "J W Barri | $-8,700,000$ | $16.27\%$ . |
| ∵S A Corp I | 8,000,000 | ${\sim}14.96\%$ : |
| "Neil Biddie & Biddle Partners". I | $-5,643,372$ | 10.55% |
| ≅G A Snow i | 3,000,000 | 15.61% |
Class of shares and voting rights
(a) cat meetings of members or classes of members each member entitied to vote may vote in person or by proxy or attorney, and
(b) on a show of hands every person present who is a member has one vote, and on a poll every person present in person or by proxy or attorney has one vote for each ordinary share held.
On-market buy-back
There is no current on-market buy-back.
| $\blacksquare$ Distribution of equity securities $\blacksquare$ | |||
|---|---|---|---|
| Category | Ordinary Shares | ||
| $\sim$ 1 $-$ 1,000 | -48 | ||
| $\sim$ 1,001 $\pm$ 5,000 $\,$ | -162 | ||
| $-5,001 - 10,000$ | 135. | ||
| $\cdots$ 10,001 – 100,000. | 230 | ||
| 1300,001 and over | 65 | ||
| 640 | |||
The number of shareholders holding less than a marketable parcel is 179.
47.
ASX ADDITIONAL INFORMATION
Twenty largest shareholders
| Name | Number of shares held | Percentage of shares held |
|---|---|---|
| Cavendish Corporation | 5,880,000 | 11.00- |
| Biddie Partners Pty Ltd. | 4,989,372 | 9.33 |
| Claw Pty Ltd | 4,309,950 | .8.06. |
| Flea Pty Ltd | 3,690,050 | -6.90 |
| :Mr Gary Alan Snow | 3,008,000 | 15.61 |
| Kensington Consulting Pty Ltd | 2,800,000 | 5.24 |
| Exchange Finance Pty Ltd | 1,859,073 | .3.48 |
| Lomp Pty Ltd | 1,652,387 | 3.09 |
| Hillcrest Resources Ltd | 1,305,000 | 2.44 |
| Willyest Pty Ltd | 989,000 | 1.85 |
| Baifes (QLD) Pty Ltd. | -500,000 | 0.93 |
| Lanzerac Nominees Pty Ltd. | 500,000 | 0.93 |
| Seabrooke Pty Ltd [1999] Seabrooke | 455,000 | 0.85 |
| -Colbern Fiduciary Nominees | 450,666 | .0.84 |
| HSBC Custody Nominees (Australia) Ltd | 408,500 | 0.76 |
| Mr Neil Gregory Biddle | :400,000 | 0.75 |
| Ms Robin Lyn Rimes | 480,800 | 0.75 |
| Dilkara Nominees Pty Ltd | 390,000 | -0.73 |
| Mr Bernard Stang | 363,200 | 0.68 |
| Aranbay Nominees Pty Ltd | 350,000 | 0.65 |
| 34,692,198 | 64.87 |
The consolidated entity holds an interest in the following tenements at 30 June 2003:
| Prospect | Tenements | Eauitv |
|---|---|---|
| Cawse Extended 200000 £24/71, M24/547-548, MLA24/549-550 - | -20% free-carried to production or can be converted to a 2% net smelter retern on ore mined. |
|
| ~~`~~£26/64. DE PLA26/2899-2901 |
$\gamma \sim \gamma$ , and the contract of the Miagara Mining Ltd has an option to acquire £26/64 by May 2004, and $\,$ AngloGold Australia Limited (formally Acacia Resources Ltd) has $\,$ $\,$ an option to acquire the tenements |
|
| Kintore East | P16/1416-1420, MLA16/281-282 | Difuting from 49% to 20% and a 2% gold return royalty on production |
| McTavish | [M40/77, M40/119, M40/157, P40/1001-1002, MEA40/194 |
Diluting from 40% to a 3% gross royalty . |