ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIESANNUAL REPORT...

ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
ANNUAL REPORT 2006
ABN 99 009 076 233
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
COMPANY INFORMATION
Directors
Andrew Waller - Non Executive Chairman
Craig Willis - Non Executive Director
Trevor Gillard - Non Executive Director
Secretary
Neville J Bassett
Registered Office
Suite B
150 Hay Street
Subiaco WA 6008
Telephone: (08) 9388 8436
Facsimile: (08) 9388 8450
Email: [email protected]
ABN: 99 009 076 233
Auditors
HLB Mann Judd
15 Rheola Street
West Perth WA 6005
Bankers
Challenge Bank
109 St George’s Terrace
Perth WA 6000
Share Registry
Computershare Investor Services Pty Ltd
45 St George’s Terrace
Perth WA 6000
Telephone: (08) 9323 2059
Facsimile: (08) 9323 2096
Solicitors
Tottle Partners
181 St George’s Terrace
Perth WA 6000
Telephone:(08) 9217 6700
Facsimile: (08) 9217 6710
Stock Exchange Listing
Acclaim Exploration N.L. shares are listed
on the Australian Stock Exchange
ASX Code: Shares AEX
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
COMPANY REVIEW
Corporate Matters
During the year under review the following activities and significant events occurred:
• Completed capital raisings totalling $3,570,500.
• Acquired the Denny Dalton Uranium/Gold Project in South Africa.
• Commenced a diamond drill program on the Denny Dalton Uranium/Gold Project.
• Disposed of the group’s interest in the Wingellina and Claude Hills Projects.
Denny Dalton Uranium and Gold Project
During the year, Acclaim entered into an unconditional agreement to acquire the Denny Dalton Uranium / Gold Project in South Africa for a consideration of $6,000,000 with a royalty of 1% gross smelter return on gold derived from the project. Subsequent to year end the Company acquired the royalty interest to strengthen the company’s position in relation to potential future negotiations over the project area.
• The project area is approximately 4,000 hectares with significant uranium and gold drilling and mining previously undertaken.
• Independent legal and geological reviews were completed.
• Inferred JORC resource of 31.5m tonnes of U3O8 at 0.35 kg/t for 11,025 tonnes with associated gold mineralisation.
• Potential to increase orebody dimensions and extend existing resource with down dip investigation and additional farm areas currently under application.
Project Summary
The Denny Dalton Project is located approximately 70 km south south-west of the town of Vryheid in the north of the province of KwaZulu-Natal, Republic of South Africa. The project is centred on the Denny Dalton gold mine on the farm Tusschenby 411, for which gold was mined during the period 1894 to 1926. The project area is approximately 4,000 hectares and includes the following farms: Tusschenby 411, Vlakhoek 548, Malta 514 and Welvergund 405.
The area has established potential for significant gold and uranium mineralisation and the nearsurface stratigraphy and mode of mineralisation appears to be well understood.
Project History
Gold had been known to occur in KwaZulu-Natal since its discovery in 1836 by European settlers. By the mid-1990s over 50 gold occurrences were documented for the province (Figure 1).
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Figure 1: Gold occurrences in Natal. From Ward and Wilson, 1998.
In the late 1860’s gold was discovered near the White Umfolozi River in Conglomerates of the Mozaan Group. Because of their proposed time equivalence with the West and Central Rand groups of the Witwatersrand Supergroup (Beukes and Cairncross, 1991), these conglomerates were investigated and drilled during the late 1980’s and early 1990’s by Gold Fields of South Africa and the Anglo American Corporation. The auriferous conglomerates contain pockets of payable gold mineralization (Ward and Wilson, 1998) and Goldfields concluded that they were distal reefs to an auriferous hinterland. Of the reefs investigated, the Denny Dalton Mine, 38km northwest of Melmoth showed the most promise, and it is believed that some 100kg of gold was produced from this deposit (Ward and Wilson, 1998).
In 2002 Savanna Diamond (Pty) Ltd. contracted Mabex Consulting Geologists (MCG) to evaluate the gold potential of the old Denny Dalton Mine and surrounding area. MCG concluded that the Denny Dalton project was a medium to advanced stage exploration project, with a mineralisation style akin to that of the Witwatersrand conglomerates, hosting potentially significant gold and uranium mineralisation. In the MCG geological report on the Uranium and Gold potential of the Denny Dalton project, Martens (2005) noted the near surface stratigraphy and mode of mineralization must be reviewed and requires additional exploration drilling. Martens (2005) also recommended that all previous drilling and sampling be verified and better understood in order to increase the knowledge and confidence levels of the project. MCG were confident that historical data, coupled to additional infill and ore body definition drilling, would allow for the conversion of the Inferred Resources (Table 1) to the Indicated and Measured categories.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Tonnage
Grade
Width
U3O8
(tonnes)
(kg/t)
(m)
(t)
31,500,000
0.35
1.0
11.025
Tonnage
Grade
Width
Au
(tonnes)
(g/t)
(m)
(Moz)
31,500,000
2.5
1.0
2.5
Table 1: Inferred Mineral Resources – JORC (Martens, 2005).
Previous Exploration
The previous owner of the Project obtained significant historical data from prior owners and operators (Anglo American Corporation and Southern Sphere who were commissioned by the Atomic Energy Corporation in the 1970s) before commencing its own recent exploration activities.
Between 1976 and 1978 Southern Sphere drilled 241 bore holes in the Denny Dalton area with a total of 4,269 metres of diamond drilling and 8,501 metres of percussion drilling. 77 of the holes intersected mineralisation.
The drilling program was considered successful enough by Southern Sphere to justify engaging independent consultants to commission a mining study to test the cost of the project area to support a uranium mine producing 1,000 t of U3O8 annually over a ten year mine life. Due to the prevailing uranium price at the time, Southern Sphere decided not to proceed with commissioning the mine.
Summary of Previous Exploration
Denny Dalton & Paulson (1893-1908)
• Eleven (11) on-reef adits of which three (3) were partially stoped.
• Fluvial gravels, depth extension not more that 600m.
• Intermittent production equates to 100kg of gold.
Anglo American Corporation And General Mining
• Exploration drilling covering an area of 15km by 5km (gold and uranium potential).
• The Company’s consultants have access to JCI archives and could possibly obtain historical drilling data.
Atomic Energy Co-Corporation (1974 – 1978)
• Exploration company: Southern Sphere.
• 241 exploration holes (uranium potential).
• Radiometric counts and chemical analysis
• Average Uranium grade: 0.54 kg/t
• Value distribution curves for gold and uranium are parallel.
• Sampled adits up to 100m from the entrances.
• 1:10 000 photo geological map.
• Aerial radiometric survey.
• 4269m diamond core drilling; 8501m pre-core percussion drilling.
• 77 of the holes intersected mineralization (no data available on the remaining holes).
• Exploration activities concentrated on Nsuzi-Mozaan contact (8km).
• Potential higher grades eastwards, significant down-dip potential.
Savannah Diamonds (Pty) Ltd (2005)
• Geological Consulting Company: Mabex Consulting Geologists.
• 21 channel samples (Avmin Analytical Laboratory).
• 24 RC exploration holes (SGS laboratory).
• Avmin Analytical Laboratory – Uranium & gold mineralization.
• Channel sampling results.
• Inferred Mineral Resource statement.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Further Exploration and Development
The Board of Acclaim views the Denny Dalton project as a medium-advanced stage exploration program. The consulting geologist’s reported that the style of mineralisation that occurs at Denny Dalton is similar to that of the known Witwatersrand conglomerates, which host large tonnage medium to high grade deposits of gold and uranium. Further the area has established potential for significant gold and uranium mineralisation and the near surface stratigraphy and mode of mineralisation appears to be well understood, but warrants review and further exploration.
The Company’s objective is to verify historical data and increase the level of knowledge and confidence of the project area and to convert the resources to indicated and measured status. The work will include testing the limits of the orebody to the level of detail required for JORC indicated and measured resource categories by way of infill drilling on previous exploratory holes on the farms, perimeter drilling to establish orebody dimensions, hole logging, sampling and assaying.
Drill Programme
On 28 June 2006, a diamond drill programme commenced on the farm Tusschenby 411. Subsequent to year-end, the first 20 diamond drill holes on the Denny Dalton exploration project have been completed.
Acclaim and it’s geological consultants, Caracle Creek International Consulting Group (“CCIC”), are pleased with the progress of the drilling and the quality of the core recovered. At the date of this report samples of the core are being assayed by SGS Lakefield with cross checks to be conducted by Setpoint Laboratories to verify results for Quality Assurance and Quality Control.
The next phase of the exploration programme by CCIC will be full geological modelling of the area utilising the historical data combined with the new drilling data to create a basis for future resource calculations.
Work by company consultants is continuing on the conversion of the “old order” prospecting permits to “new order” prospecting rights. Meetings with the South African Department of Minerals and Energy have taken place to ensure a smooth conversion process.
Technical Director Appointment
During the year, the company strengthened the Board with the appointment of Mr Trevor Gillard.
Mr Gillard is a resident of South Africa and has in excess of 25 years experience in the mining industry. He has worked on numerous mining projects, as well as acting as a mining analyst for stockbrokers and funds managers. Mr Gillard has Uranium and Gold exploration experience and academic qualifications from Rhodes University, including a B Sc Honours – Geology and MBA – UNISA (MBL). Mr Gillard has previously contracted to Snowden‘s as an industry mining consultant.
The appointment of Mr Gillard brings considerable mining experience and technical expertise to the Board and will assist the company in the progression of the Denny Dalton Uranium/Gold Project.
Mr Gillard is also assisting with the company’s applications from “Old Order” to “New Order” prospecting rights.
The Information contained herein that relates to exploration results and a resource calculation is based on information compiled by Francois Martens of Mabex Consulting Geologists, who is a Member of the Geological Society of South Africa and the South African Council for Natural Scientific Professions (Recognised Overseas Professional Organisations). Mr Martens has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Francois Martens consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.
Sale of Wingellina and Claude Hills Exploration Projects
On 25 November 2005 the Company announced that they had reached agreement to sell to their joint venture partner, Metals Exploration Ltd (“Metals Ex”) their entire interests in Hinckley Range Pty Ltd and Austral Nickel Pty Ltd. The acquisition price was $5 million in cash and 4.5 million fully paid ordinary shares in Metals Ex. Acclaim had previously received an upfront payment of $1.25m for the acquisition of existing technical and geological information pursuant to joint venture arrangements.
The offer was subject to the approval of Acclaim shareholders, which was obtained on 16 February 2006.
Hinckley Range Pty Ltd is the holding company of the Wingellina Project, the subject of a farm-in JV between Metals Ex and Acclaim entered into in March 2005.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Austral Nickel Pty Ltd is the holding company of the Claude Hills Project, also the subject of a farm-in agreement between Metals Ex and Acclaim.
Metals Ex also agreed to advance the cash payment of $5 million to Acclaim in return for first ranking fixed and floating charges over the shares in and assets of Hinckley Range Pty Ltd and Austral Nickel Pty Ltd. The fixed and floating charge was discharged on final settlement on 27 March 2006.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Your Directors present their report on the Company and its controlled entities for the year ended 30 June 2006.
DIRECTORS
The names of the Directors of the Company in office during the financial year and up to the date of this report are as follows:
NAME
POSITION
EXPERTISE
A G Waller
Non-Executive Chairman
Finance and Company Management
C S Willis
Non-Executive Director
Finance and Company Management
T Gillard
(Appointed 18 May 2006)
Non-Executive Director
Operations and Geological
D J Head
(Resigned 27 March 2006)
Non-Executive Director
Operations and Metallurgical
INFORMATION ON DIRECTORS
Andrew G Waller - Non Executive Chairman
Mr Waller’s background is in technology development / manufacturing, property development and resources. He was the founder of the telecommunications division of the UDC Group Pty Ltd that formed Cable and Telecoms Limited. Mr Waller was an executive director of Cable and Telecoms Limited and is a director of Baycrest Pty Ltd. Mr Waller is also a director of Nuenco NL and Chrome Corporation Ltd.
Mr Waller has extensive public company experience, particularly in the area of capital raising and business development.
Director since 18 September 2003.
During the past 3 years, Mr Waller has also served as a director of the following listed companies:
• Nuenco NL (February 2004 – present)
• Chrome Corporation Ltd (November 2004 – present)
Craig S Willis - Non Executive Director
Mr Willis has considerable project management and technology development experience, having held a number of public and private company directorships. He has significant experience in dealing with government instrumentalities pertaining to contract negotiations between private and public entities. He has previously project managed a number of successful operational developments within Australia Post.
Director since 30 June 2003.
No other directorships in listed companies in the last 3 years.
Trevor Gillard B.Sc (Hons) – Non Executive Director
Mr Gillard is a resident of South Africa and has in excess of 25 years experience in the mining industry. He has worked on numerous mining projects, as well as acting as a mining analyst for stockbrokers and funds managers. Mr Gillard has Uranium and Gold exploration experience and academic qualifications from Rhodes University, including a B Sc Honours – Geology and MBA – UNISA (MBL). Mr Gillard has previously contracted to Snowden‘s as an industry mining consultant.
Director since 18 May 2006.
No other directorships in listed companies in the last 3 years.
Donald J Head (AWASOM) - Non Executive Director
Mr Head is a metallurgist with more than 30 years experience in the mining industry. He has held several senior management positions with WMC Ltd, including a number of years as the manager of the Kwinana Nickel Refinery. He is a member of the Australian Institute of Mining and Metallurgy and currently runs his own metallurgical consulting business providing services to several mining and construction groups. He was a non-executive director of Tectonic Resources NL and Abelle Ltd.
Director since 1 December 2003. Mr Head resigned as a director on 27 March 2006.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
COMPANY SECRETARY
Neville John Bassett B.Bus, CA – Mr Bassett was appointed company secretary on 13 July 2001. A chartered accountant with over 25 years experience, Mr Bassett has been involved with a diverse range of Australian public listed companies in directorial, company secretarial and financial roles.
PRINCIPAL ACTIVITY
The principal activity of the consolidated entity during the financial year was mineral exploration and investment.
There were no significant changes in the nature of the principal activities of the consolidated entity during the financial year.
OPERATING AND FINANCIAL REVIEW
Operating Results
The loss of the consolidated entity for the financial year after tax was $5,297,664.
Dividends Paid or Recommended
No dividends have been paid or recommended by the Directors for the year ended 30 June 2006.
Review of Operations
In the opinion of the Directors, the operations of the consolidated entity for the financial year, likely developments in the operations of the consolidated entity and the expected results of those operations as known at the date of this report have been covered generally herein and in the Company Review which is contained in this Annual Report.
Review of Financial Condition
Capital Structure
The group has a sound capital structure with net equity at 30 June 2006 of $12,618,275.
Treasury Policy
The Board has not considered it necessary to establish a separate treasury function because of the size and scope of the group’s activities.
Liquidity and Funding
The group has cash resources of $2,215,159 at 30 June 2006, together with available-for-sale investments with a fair value of $3,732,613. The Company has a further $800,000 in uncalled capital on partly paid shares. The Company has sufficient cash resources for the group to finance its current operations.
Risk Management
The group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that group’s objectives and activities are aligned with the risks and opportunities identified by the Board. The group believes that it is crucial for all Board members to be a part of this process, and as such the Board has not established a separate risk management committee.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
During the year, the Company:
(i) disposed of its entire interest in Hinckley Range Pty Ltd and Austral Nickel Pty Ltd, the holders of the Wingellina Project and Claude Hills Project respectively;
(ii) acquired Denny Dalton (Proprietary) Ltd, the holder of the Denny Dalton Project; and
(iii) raised further capital of $3,570,500.
Further particulars of these transactions are outlined in the Company Review which is contained in this Annual Report.
In the opinion of the directors, there were no other significant changes in the state of affairs of the consolidated entity that occurred during the financial year under review not otherwise disclosed in this report or in the consolidated accounts.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
AFTER BALANCE DATE EVENTS
No matters or circumstances have arisen, since the end of the financial year, which significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in subsequent financial years, other than as outlined in the Company Review which is contained in this Annual Report.
LIKELY DEVELOPMENTS AND RESULTS
Comments on likely developments and expected results have been covered generally herein and in the Company Review which is contained in this Annual Report.
Further information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.
DIRECTORS’ INTEREST IN SHARES AND OPTIONS
The particulars of shares and options in the Company, held by the Directors or an associate of the Directors of the Company as of the date of this report are as follows:
Name of Director
Shares
Options
A G Waller
-
-
C S Willis
-
-
T Gillard
-
-
DIRECTORS’ MEETINGS
During the financial year 16 meetings of the Company’s directors were held in respect of which each director of the Company attended the following number of meetings:
Directors Meetings
Audit Committee
Name of Director
Meetings eligible to attend
Number attended
Meetings eligible to attend
Number attended
A Waller
16
16
2
2
C Willis
16
16
2
2
T Gillard
2
2
-
-
D Head
12
12
-
-
REMUNERATION REPORT
This report details the nature and amount of remuneration for each director and executive of Acclaim Exploration NL. The information provided in the remuneration report includes remuneration disclosures that are required under Accounting Standard AASB 124 “Related Party Disclosures”. These disclosures have been transferred from the financial report and have been audited.
A. Remuneration policy (audited)
The board policy is to remunerate directors at market rates for time, commitment and responsibilities. The board determines payments to the directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of directors’ fees that can be paid is subject to approval by shareholders in general meeting, from time to time. Fees for non-executive directors are not linked to the performance of the consolidated entity. However, to align directors’ interests with shareholders interests, the directors are encouraged to hold shares in the company.
The company’s aim is to remunerate at a level that will attract and retain high-calibre directors and employees. Company officers and directors are remunerated to a level consistent with the size of the company.
The executive directors and full time executives receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
All remuneration paid to directors and executives is valued at the cost to the company and expensed.
Performance-based remuneration
The company does not pay any performance-based component of salaries.
The Company is an exploration entity, and therefore speculative in terms of performance. There is no relationship between the performance or the impact on shareholder wealth of the Company and either the remuneration of directors and executives or the issue of shares and options to directors. Remuneration is set at levels to reflect market conditions and encourage the continued services of directors and executives.
B. Details of remuneration for year ended 30 June 2006 (audited)
Details of the remuneration of each Director and named executive officer of the company, including their personally-related entities, during the year was as follows:
Directors
Year
Primary Benefits
Post Employment
Share Based
Other
Salary and fees
$
Cash Bonus
$
Superannuation
$
Options
$
$
Total
$
A G Waller
2006
2005
129,240
179,894
-
-
2,700
-
-
-
-
-
131,940
179,894
C S Willis
2006
2005
66,000
57,000
-
-
2,700
-
-
-
-
-
68,700
57,000
T Gillard
2006
2005
5,329
-
-
-
-
-
-
-
-
-
5,329
-
D J Head
Resigned 27/3/2006
2006
2005
13,650
27,300
-
-
2,025
-
-
-
-
-
15,675
27,300
The consolidated entity does not have any full time executive officers, other than directors as detailed above.
There were no performance related payments made during the year.
C. Employment contracts of directors and senior executives (audited)
Remuneration and other terms of employment for Mr Waller and Mr Willis are formalised in service agreements. Major provisions of these agreements are set out below:
A G Waller
• Term of agreement – 1 year commencing 1 December 2005, renewable at term by mutual agreement.
• Base fee to be reviewed annually.
• Annual service fee $90,000 plus directors fees of $30,000.
• The agreement does not contain any termination clauses.
C S Willis
• Term of agreement – 1 year commencing 1 April 2006, renewable at term by mutual agreement.
• Base retainer to be reviewed annually.
• Annual retainer - $36,000 plus directors fees of $30,000.
• Either party may terminate the engagement at any time by one months written notice. Fees are payable up until the termination takes effect.
DIRECTORS AND AUDITORS INDEMNIFICATION
The company has not, during or since the financial year, in respect of any person who is or has been an officer or auditor of the company or a related body corporate:
(a) indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs and expenses of successfully defending legal proceedings; or
(b) paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the costs or expenses to defend legal proceedings.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
SHARE OPTIONS
Unissued ordinary shares of the company under option at the date of this report are as follows:
Number
Exercise Price
Expiry Date
Listed Options
344,113,654
5 cents
30 June 2008
344,113,654 listed options expiring 30 June 2008, exercisable at 5 cents each were granted during the year.
8,000,000 unlisted options exercisable at 25 cents each expired on 8 October 2005.
None of the option holders have any right to participate by virtue of the options in any share issue of any other corporation.
No shares have been issued by virtue of the exercise of an option during the year or to the date of this report.
ENVIRONMENTAL ISSUES
The consolidated entity’s operations are subject to various environmental regulations. The directors have complied with these regulations and are not aware of any breaches of the legislation during the current financial year and up until the date of this report which are material in nature.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.
The company was not a party to any such proceedings during the year.
AUDITOR
HLB Mann Judd continues in office in accordance with Section 327 of the Corporations Act 2001.
Non-Audit Services
No non-audit services have been provided by the Auditor or by another person on the Auditor’s behalf during the year.
Auditor’s Declaration of Independence
The auditor’s independence declaration for the year ended 30 June 2006 has been received and can be found on page 13.
Signed in accordance with a resolution of the directors.
C S Willis
Non Executive Director
Perth, 29 September 2006
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Auditor’s Independence Declaration
As lead auditor for the audit of the financial report of Acclaim Exploration NL for
the year ended 30 June 2006, I declare that to the best of my knowledge and belief,
there have been:
a) no contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation
to the audit.
This declaration is in respect of Acclaim Exploration NL.
Perth, Western Australia NG Neill
29 September 2006 Partner, HLB Mann Judd
HLB Mann Judd (WA Partnership)
15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686.
Email: [email protected]. Website: http://www.hlb.com.au
Partners: Ian H Barsden, Terry M Blenkinsop, Litsa Christodulou, Wayne M Clark, Lucio Di Giallonardo, Colin D Emmott, Trevor G Hoddy, Norman G Neill, Peter J Speechley
HLB Mann Judd (WA Partnership) is a member of International and the HLB Mann Judd National Association of independent accounting firms
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Acclaim Exploration NL is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of Acclaim Exploration NL on behalf of the shareholders by whom they are elected and to whom they are accountable.
Acclaim Exploration NL’s Corporate Governance Statement is structured with reference to the Corporate Governance Council’s principles and recommendations, which are as follows:
Principle 1. Lay solid foundations for management and oversight
Principle 2. Structure the board to add value
Principle 3. Promote ethical and responsible decision making
Principle 4. Safeguard integrity in financial reporting
Principle 5. Make timely and balanced disclosure
Principle 6. Respect the rights of shareholders
Principle 7. Recognise and manage risk
Principle 8. Encourage enhanced performance
Principle 9. Remunerate fairly and responsibly
Principle 10. Recognise the legitimate interests of stakeholders
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation of separate or special committees at this time. The Board as a whole is able to address the governance aspects of the full scope of the Company’s activities and to ensure that it adheres to appropriate ethical standards.
The Board continues to review its current practices in light of the ASX Principles of Good Corporate Governance and Best Practice Guidelines 2004 with a view to making amendments where applicable after considering the Company’s size and resources it has available. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of any additional formal corporate governance committees will be given further consideration.
During the financial year the Company has complied with each of the 10 Essential Corporate Governance Principles and the corresponding Best Practice Recommendations, other than in relation to the matters specified below:
Principle
Ref
Recommendation
Ref
Notification of Departure
Explanation for Departure
2
2.4
The Company does not have a Nomination Committee
The role of the Nomination Committee has been assumed by the full Board. The size and scope of the Company’s activities does not justify the establishment of such a Committee.
4
4.2, 4.3 & 4.4
The Company does not have an Audit Committee
The role of the Audit Committee has been assumed by the full Board. The size and scope of the Company’s activities does not justify the establishment of such a Committee.
6
6.1
Formalisation of a communications strategy with shareholders
In line with adherence to continuous disclosure requirements of ASX all shareholders are kept informed of major developments affecting the company. This disclosure is through regular shareholder communications including the Annual Report, Half-Year Report, Quarterly Reports and the distribution of specific releases covering major transactions or events. The Company’s auditors attend all shareholders’ meetings.
7
7.1
The Board or appropriate board committee should establish policies of risk oversight and management
While the Company does not have formalised policies on risk management the Board recognises its responsibility for identifying areas of significant business risk and for ensuring that arrangements are in place for adequately managing these risks. This issue is regularly reviewed at Board meetings.
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ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Principle
Ref
Recommendation
Ref
Notification of Departure
Explanation for Departure
9
9.2
The Company does not have a Remuneration Committee
The role of the Remuneration Committee has been assumed by the full Board. The size and scope of the Company’s activities does not justify the establishment of such a Committee. No director participated in any deliberation regarding his own remuneration or related issues.
Structure of the Board
The skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report is included in the Directors’ Report. Directors of Acclaim Exploration NL are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgment.
In the context of director independence, 'materiality' is considered from both the company and individual director perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if it is equal to or less than 5% of the appropriate base amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered include whether a relationship is strategically important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other factors that point to the actual ability of the director in question to shape the direction of the company’s loyalty.
In accordance with the definition of independence above, and the materiality thresholds set, the following directors of Acclaim Exploration NL are considered to be independent:
Name Position
Andrew Waller Chairman, Non-Executive
Craig Willis Non-Executive Director
Trevor Gillard Non-Executive Director
There are procedures in place, agreed by the Board, to enable directors in the furtherance of their duties to seek independent professional advice at the company’s expense.
The term in office held by each director in office at the date of this report is as follows:
Name Term in Office
Andrew Waller Since 18 September 2003
Craig Willis Since 30 June 2003
Trevor Gillard Since 18 May 2006
Appointments to Other Boards
Directors are required to take into consideration any potential conflicts of interest when accepting appointments to other Boards.
Ethical Standards
All Directors and employees are expected to act with the utmost of integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.
Conflict of Interest
In accordance with the Corporations Act 2001 and the Company’s Constitution, Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists the Director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered.
Page 15
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Directors Dealings in Company Securities
The Constitution permits Directors to acquire securities in the Company. Company policy prohibits Directors from dealing in Company securities whilst in possession of price sensitive information. Directors must notify the Company Secretary once they have bought or sold shares in the Company or exercised options over ordinary shares. In accordance with the provisions of the Corporations Act 2001 and the Listing Rules of the Australian Stock Exchange, the Company on behalf of the Directors must advise the Australian Stock Exchange of any transactions conducted by them in shares and/or options in the Company.
Nomination Committee
The full Board carries out the functions of the Nomination Committee. The Board did not meet formally as the Nomination Committee during the financial year, however any relevant matters were discussed on as-required basis from time to time during regular meetings of the Board.
Audit Committee
The Company does not have an Audit Committee. The role of the Audit Committee has been assumed by the full Board. The Board as the Audit Committee meets at least bi-annually (in respect of the full year and half year reports).
Performance Evaluation of the Board and its Members
During the financial year an evaluation of the Board and its members was not formally carried out. To date, there has been no formal process in place for performance evaluation. During the reporting period an evaluation of the Board was informally carried out by the Chairman.
Company’s Remuneration Policies
Remuneration levels for executives are competitively set to attract the most qualified and experienced candidates, taking into account prevailing market conditions and individual’s experience and qualifications. Each of the non-executive directors receives a fixed fee for their services as directors. There is no direct link between remuneration paid to any of the directors and corporate performance such as bonus payments for achievement of certain key performance indicators.
For a full discussion on the company’s remuneration philosophy and framework and the remuneration received by directors and executives in the current period please refer to the remuneration report, which is contained within the Directors Report.
Existence and Terms of any Schemes for Retirement Benefits for Non-Executive Directors
There are no retirement benefits for non-executive directors.
Page 16
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2006
Consolidated
Parent Entity
Note
2006
$
2005
$
2006
$
2005
$
Revenue
2
89,271
68,392
89,271
68,392
Depreciation
(5,462)
(38,659)
(5,462)
(9,348)
Exploration expenditure
(31,203)
-
(31,203)
-
Administration expenditure
(1,006,006)
(559,494)
(1,006,006)
(588,805)
Loss before income tax expense
(953,400)
(529,761)
(953,400)
(529,761)
Income tax expense
3
-
-
-
-
Loss after tax from continuing operations
(953,400)
(529,761)
(953,400)
(529,761)
Loss from discontinued operations
4
(4,344,264)
-
(4,344,264)
-
Net loss attributable to members of Acclaim Exploration NL
(5,297,664)
(529,761)
(5,297,664)
(529,761)
Basic earnings per share - cents
5
- Continuing operations
(0.19)
(0.13)
- Discontinued operations
(0.85)
-
The accompanying notes form part of these financial statements.
Page 17
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
BALANCE SHEET
AS AT 30 JUNE 2006
Consolidated
Parent Entity
Note
2006
$
2005
$
2006
$
2005
$
ASSETS
Current Assets
Cash and cash equivalents
6
2,215,159
943,411
2,215,159
943,411
Trade and other receivables
7
121,572
67,034
121,572
67,033
Total Current Assets
2,336,731
1,010,445
2,336,731
1,010,444
Non-Current Assets
Trade and other receivables
7
-
-
318,470
5,583,000
Other financial assets
8
350,000
600,000
6,350,000
8,029,598
Available for sale investments
9
3,732,613
12,613
3,732,613
12,613
Property, plant and equipment
10
15,849
98,035
15,849
16,775
Mineral interests
11
6,318,470
12,977,125
-
31,203
Total Non-Current Assets
10,416,932
13,687,773
10,416,932
13,673,189
Total Assets
12,753,663
14,698,218
12,753,663
14,683,633
LIABILITIES
Current Liabilities
Trade and other payables
12
135,388
221,087
135,388
206,502
Provisions
13
-
1,667
-
1,667
Total Current Liabilities
135,388
222,754
135,388
208,169
Total Liabilities
135,388
222,754
135,388
208,169
Net Assets
12,618,275
14,475,464
12,618,275
14,475,464
EQUITY
Contributed equity
14
33,849,448
30,853,973
33,849,448
30,853,973
Reserves
15
707,809
262,809
707,809
262,809
Accumulated losses
15
(21,938,982)
(16,641,318)
(21,938,982)
(16,641,318)
Total Equity
12,618,275
14,475,464
12,618,275
14,475,464
The accompanying notes form part of these financial statements.
Page 18
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2006
Consolidated
Issued
Capital
$
Accumulated
Losses
$
Unrealised Gains Reserve
$
Option
Reserve
$
Total
Equity
$
Balance at 1 July 2004
30,853,973
(16,111,557)
-
262,809
15,005,225
Loss attributable to members of the parent entity
-
(529,761)
-
-
(529,761)
Balance at 30 June 2005
30,853,973
(16,641,318)
-
262,809
14,475,464
Securities issued during the year
3,170,500
-
-
400,000
3,570,500
Transaction costs
(175,025)
-
-
-
(175,025)
Fair value adjustment to available for sale investments
-
-
45,000
-
45,000
Loss attributable to members of the parent entity
-
(5,297,664)
-
-
(5,297,664)
Balance at 30 June 2006
33,849,448
(21,938,982)
45,000
662,809
12,618,275
Parent
Issued
Capital
$
Accumulated
Losses
$
Unrealised Gains Reserve
$
Option
Reserve
$
Total
Equity
$
Balance at 1 July 2004
30,853,973
(16,111,557)
-
262,809
15,005,225
Loss attributable to members of the parent entity
-
(529,761)
-
-
(529,761)
Balance at 30 June 2005
30,853,973
(16,641,318)
-
262,809
14,475,464
Securities issued during the year
3,170,500
-
-
400,000
3,570,500
Transaction costs
(175,025)
-
-
-
(175,025)
Fair value adjustment to available for sale investments
-
-
45,000
-
45,000
Loss attributable to members of the parent entity
-
(5,297,664)
-
-
(5,297,664)
Balance at 30 June 2006
33,849,448
(21,938,982)
45,000
662,809
12,618,275
The accompanying notes form part of these financial statements.
Page 19
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2006
Consolidated
Parent Entity
Note
2006
$
2005
$
2006
$
2005
$
Cash flows from operating activities
Payments to suppliers and employees
(936,074)
(670,919)
(936,074)
(700,230)
Interest received
65,822
53,781
65,822
53,781
Royalty received
6,213
14,611
6,213
14,611
Net cash used in operating activities
6 (i)
(864,039)
(602,527)
(864,039)
(631,838)
Cash flows from investing activities
Exploration expenditure
(318,470)
(1,236,768)
-
-
Proceeds on farm-in
-
1,250,000
-
-
Purchase of plant and equipment
(4,536)
(44,487)
(4,536)
(8,188)
Purchase of investments
(120,000)
(600,000)
(120,000)
(600,000)
Proceeds on sale of fixed assets
-
21,500
-
21,500
Advance to other entities
(66,682)
-
(66,682)
-
Loan to subsidiaries
-
-
(318,470)
(1,243,756)
Repayment of loan to subsidiaries
-
-
1,250,000
Purchase of controlled entity
(5,750,000)
-
(5,750,000)
-
Disposal of controlled entity
5,000,000
-
5,000,000
-
Net cash used in investing activities
(1,259,688)
(609,755)
(1,259,688)
(580,444)
Cash flows from financing activities
Proceeds from share issues (net)
3,395,475
-
3,395,475
-
Proceeds of borrowings
5,000,000
-
5,000,000
-
Repayment of borrowings
(5,000,000)
-
(5,000,000)
-
Repayment of hire purchase
-
(25,666)
-
(25,666)
Net cash provided by financing activities
3,395,475
(25,666)
3,395,475
(25,666)
Net increase/(decrease) in cash held
1,271,748
(1,237,948)
1,271,748
(1,237,948)
Cash at beginning of year
943,411
2,181,359
943,411
2,181,359
Cash at end of year
2,215,159
943,411
2,215,159
943,411
The accompanying notes form part of these financial statements.
Page 20
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also been prepared in accordance with the historical costs convention. The following is a summary of the significant accounting policies adopted by the consolidated entity in the preparation of the financial report.
(b) Statement of Compliance
The financial report was authorised for issue on 29 September 2006.
The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).
This is the first financial report prepared based on AIFRS and comparatives for the year ended 30 June 2005 have been restated accordingly except for the adoption of AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement. The Company has adopted the exemption under AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards from having to apply AASB 132 and AASB 139 to the comparative period. Reconciliations of AIFRS equity and profit for 30 June 2005 to the balances reported in the 30 June 2005 financial report and at transition to AIFRS are detailed in Note 21.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Acclaim Exploration NL (“Company” or “Parent Entity”) and its subsidiaries as at 30 June each year (the Group).
The financial statements of the subsidiaries are prepared for the same period as the parent entity, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial statements include the results of subsidiaries for the period from their acquisition.
(d) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
(e) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as described above, net of outstanding bank overdrafts.
(f) Trade and other receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount was no longer probable. Bad debts are written off as incurred. Page 21
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(g) Impairment of financial assets
The Group assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.
(i) Financial assets carried at amortised cost
If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account.
The amount of the loss is recognised in profit or loss.
The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.
(ii) Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset.
(iii) Available-for-sale investments
If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the income statement. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument's fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.
(h) Foreign currency translation
Both the functional and presentation currency of Acclaim Exploration NL and its Australian subsidiaries is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.
Page 22
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(h) Foreign currency translation (Cont.)
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
As at the reporting date the assets and liabilities of these subsidiaries are translated into the presentation currency of Acclaim Exploration NL at the rate of exchange ruling at the balance sheet date and their income statements are translated at the weighted average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.
(i) Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
�� when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
�� when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
�� when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
�� when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Page 23
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(i) Income Tax (Cont.)
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
(j) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
�� when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
�� receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(k) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a diminishing value basis over the estimated useful life of the assets as follows:
Plant and equipment – over 3 to 5 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the income statement in the cost of sales line item.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
Page 24
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(l) Investments and other financial assets
The Group has elected to apply the option available under AASB 1 of adopting AASB 132 and AASB 139 from 1 July 2005. Outlined below are the relevant accounting policies for investments and other financial assets applicable for the years ending 30 June 2006 and 30 June 2005.
Accounting policies applicable for the year ending 30 June 2006
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.
(iii) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.
The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models.
Accounting policies applicable for the year ending 30 June 2005
Listed shares held for trading were carried at net market value. Changes in net market value were recognised as a revenue or expense in determining the net profit for the period.
All other non-current investments were carried at the lower of cost and recoverable amount.
Recoverable amount
Non-current financial assets measured using the cost basis were not carried at an amount above their recoverable amount, and when a carrying value exceeded this recoverable amount, the financial asset was written down to its recoverable amount.
Page 25
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(m) Exploration and evaluation expenditure
Exploration, evaluation, and relevant acquisition costs are accumulated separately for each area of interest. They comprise acquisition costs, direct exploration and evaluation costs, and an appropriate portion of related overhead expenditure. They do not include general overhead or administrative expenditure not having a specific nexus with a particular area of interest.
Revenue received from the sale or disposal of product, materials, or services during the exploration and evaluation phase of operations is not offset against expenditure in respect of the area of interest or mineral resource concerned but is taken into the financial statements as income.
Costs of this nature are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which:
(i) such costs are expected to be recouped through successful development and exploitation or from sale of the area; or
(ii) exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a reasonable assessment of the existence, or otherwise, of economically recoverable reserves and active operations in, or relating to, the area are continuing.
Exploration and evaluation expenditure which does not satisfy these criteria is written off.
Economically recoverable reserves are defined as the estimated quantity of product in an area of interest, which can be expected to be profitably extracted, processed, and sold under current and foreseeable economic conditions.
(n) Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(o) Trade and other payables
Trade payables and other payables are carried at costs which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity. Page 26
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(p) Employee leave benefits
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date, They are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
(q) Share-based payment transactions
Equity settled transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
When provided, the cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Acclaim Exploration NL (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see Note 5).
Page 27
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(r) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(s) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
�� costs of servicing equity (other than dividends) and preference share dividends;
�� the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
�� other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
(t) Significant Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.
Key Estimates – Impairment
The group assess impairment at each reporting date by evaluating conditions specific to the group that may to lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.
No impairment has been recognised in respect of costs carried forward as exploration assets. The ultimate recoupment of value is dependent on the successful development and commercial exploitation or sale of the respective areas.
Page 28
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
2 REVENUE AND EXPENSES
(a) Revenue
Interest received – other corporations
83,058
53,781
83,058
53,781
Royalty received
6,213
14,611
6,213
14,611
89,271
68,392
89,271
68,392
(b) Expenses
Depreciation of plant and equipment
5,462
38,659
5,462
9,348
Exploration expenditure written off
31,203
-
31,203
-
(c) Losses/(Gains)
Loss on sale of fixed assets
-
490
-
490
3 INCOME TAX
(a) Income tax expense
The income tax expense for the year differs from the prima facie tax as follows:
Loss from continuing operations
(953,400)
(529,761)
(953,400)
(529,761)
Prima facie income tax payable (benefit) at 30%
(286,020)
(158,928)
(286,020)
(158,928)
Tax effect of non-deductible items
1,323
-
1,323
-
Deferred tax assets not brought to account
284,697
158,928
284,697
158,928
Total income tax expense
-
-
-
-
(b) Deferred tax assets
Deferred tax assets not brought to account arising from tax losses, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(i) occur:
Revenue losses
1,781,915
3,373,792
1,781,915
1,497,218
Capital losses
1,557,646
254,367
1,557,646
254,367
Balance of Franking account at year end – Class C 214,784 214,784
Page 29
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
4 DISCONTINUED OPERATIONS
On 25 November 2005 the company announced its decision to dispose of all of its interests and rights in the Wingellina and Claude Hills exploration projects through the sale of the controlled entities, Hinckley Range Pty Ltd and Austral Nickel Pty Ltd. The sale was completed on 27 March 2006.
The results of the discontinued operation which have been included in the income statement are as follows:
Consolidated
2006
$
2005
$
Loss recognised on write down of available for sale financial asset to recoverable amount
(4,344,264)
-
Income tax expense
-
-
Loss for year from discontinued operations
(4,344,264)
-
During the year the Group had no operating commitments in respect of the discontinued operations as the Wingellina and Claude Hills projects were covered by farm-in arrangements under which the farm-in party was responsible for all expenditure commitments.
Net assets attributable to discontinued operations:
2006
$
Total consideration paid
8,555,000
Less: Net assets disposed of
(12,899,264)
(4,344,264)
Net cash inflow on disposal:
Cash and cash equivalents consideration received
5,000,000
Net cash and cash equivalents disposed of
-
Net cash inflow on disposal
5,000,000
5 EARNINGS PER SHARE (EPS)
2006
2005
Cents
Cents
Basic earnings per share:
- Continuing operations
- Discontinued operations
(0.19)
(0.85)
(0.13)
-
Total Basic EPS
(1.04)
(0.13)
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows:
$
$
Earnings
- Loss from continuing operations
(953,400)
(529,761)
- Loss from discontinued operations
(4,344,264)
-
Net loss for year used in total basic EPS
(5,297,664)
(529,761)
No.
No.
Weighted average number of ordinary shares used in the calculation of Basic EPS
509,847,003
417,757,699
There are no potential ordinary shares on issue that are considered to be dilutive, therefore basic earnings per share also represents diluted earnings per share.
Page 30
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
Consolidated
Parent Entity
2006
$
2005
$
$
2005
$
6 CASH AND CASH EQUIVALENTS
Cash at bank
2,215,159
2,215,159
943,411
(i) Reconciliation of loss for the year to net cash flows used in operating activities
Loss for the year
(529,761)
(5,297,664)
(529,761)
Non-Cash Items
Depreciation
5,462
38,659
2006
943,411
Cash at bank earns interest at floating rates based on daily bank deposit rates.
(5,297,664)
5,462
9,348
Loss on sale of fixed assets
-
490
-
490
Provision for employee benefits
(1,667)
(20,361)
(1,667)
(20,361)
Exploration expenditure written off
31,203
-
31,203
-
Loss on disposal of controlled entity
4,344,264
-
4,344,264
-
Changes in Assets and Liabilities
(Increase)/Decrease in accounts receivable
12,143
(58,876)
12,143
(58,876)
Increase/(Decrease) in accounts payable
42,220
(32,678)
42,220
(32,678)
Net cash flows (used in) operating activities
(864,039)
(602,527)
(864,039)
(631,838)
(ii) Non-cash financing and investing activities
During the year the company disposed of its entire interest in the controlled entities, Hinckley Range Pty Ltd and Austral Nickel Pty Ltd the holders of the Wingellina and Claude Hills Projects. The consideration was $5,000,000 cash and 4,500,000 shares in Metals Exploration Ltd at an agreed value of $3,555,000.
(iii) Acquisition of controlled entity
During the year the company acquired 100% of the issued capital of Denny Dalton (Proprietary) Limited. Details of the acquisition are as follows:
$
Net assets at date of acquisition
- Fair value of mining interests
6,000,000
Net cash effect
- Cash consideration paid 2006
5,750,000
- Cash deposit paid 2005
250,000
6,000,000
There were no acquisitions in 2005.
Page 31
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
6 CASH AND CASH EQUIVALENTS (Cont.)
(iv) Disposal of controlled entities
During the year the company disposed of its entire interest in the controlled entities, Hinckley Range Pty Ltd and Austral Nickel Pty Ltd. Details of the disposal are as follows:
$
Proceeds on disposal
- Cash and cash equivalents
5,000,000
- Shares
3,555,000
8,555,000
Book value of net assets disposed
- Property plant and equipment
68,183
- Deferred exploration expenditure
12,831,081
Net assets disposed
12,899,264
Loss on disposal
4,344,264
Net cash inflow on disposal
- Cash and cash equivalents consideration
5,000,000
- Less: cash and cash equivalents disposed
-
5,000,000
There were no disposals in 2005.
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
7 TRADE AND OTHER RECEIVABLES
Current
Other debtors
121,572
67,034
121,572
67,033
Non Current
Loan to subsidiaries
-
-
318,470
6,252,003
Provision for non-recoverability
-
-
-
(669,003)
-
-
318,470
5,583,000
Terms and conditions relating to the above financial instruments:
(i) Other debtors are non-interest bearing and generally repayable within 30 days.
(ii) Amounts receivable from controlled entities are non-interest bearing and only repayable from future cash flows.
Page 32
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
8 OTHER FINANCIAL ASSETS
Non Current
Shares
- in subsidiaries (Note 21)
-
-
6,000,000
7,429,598
Convertible Note
- in other listed corporations – at cost (i)
350,000
350,000
350,000
350,000
Deposit – Denny Dalton Uranium/Gold Project
-
250,000
-
250,000
350,000
600,000
6,350,000
8,029,598
(i) The Convertible Note is convertible into ordinary fully paid shares, at the discretion of the company, at any time on or before 28 February 2008. The Note has a coupon rate of 10% per annum, payable quarterly.
9 AVAILABLE FOR SALE INVESTMENTS
Non Current
Listed Shares – at fair value
3,722,613
2,613
3,722,613
2,613
Unlisted Shares – at fair value
10,000 10,000
10,000 10,000
3,732,613
12,613
3,732,613
12,613
Listed shares are readily saleable with no fixed terms. All shares held in listed companies are valued at their fair value. There would be no material capital gains tax payable if these assets were sold at the reporting date.
10 PROPERTY, PLANT AND EQUIPMENT
Plant and equipment - at cost
29,358
262,273
29,358
24,822
Less: Accumulated depreciation
(13,509)
(164,238)
(13,509)
(8,047)
Net carrying amount
15,849
98,035
15,849
16,775
Reconciliation
At 1 July 2005, net of accumulated depreciation and impairment
98,035
114,197
16,775
39,925
Additions
4,536
44,487
4,536
8,188
Disposals
-
(21,990)
-
(21,990)
Disposals – discontinued operation
(68,183)
-
-
-
Depreciation expense
(5,462)
(38,659)
(5,462)
(9,348)
Depreciation expense – discontinued operation
(13,077)
-
-
-
At 30 June 2006, net of accumulated depreciation and impairment
15,849
98,035
15,849
16,775
Page 33
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
11 MINERAL INTERESTS
Costs carried forward in respect of:
Exploration and evaluation phase - at cost
- Balance at beginning of year
12,977,125
13,135,742
31,203
30,717
- Tenements acquired on acquisition of controlled entity
6,000,000
- Expenditure incurred
318,470
1,091,383
-
486
- Proceeds on disposal of tenements
(8,486,817)
- Proceeds on farm-in
-
(1,250,000)
-
-
10,808,778
12,977,125
31,203 31,203
- Expenditure written off
(4,490,308)
-
(31,203)
-
6,318,470
12,977,125
-
31,203
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas.
12 TRADE AND OTHER PAYABLES
Current
Trade payables and accruals
135,388
24,887
135,388
10,302
Other creditors
-
196,200
-
196,200
135,388
221,087
135,388
206,502
Terms and conditions relating to the above financial instruments:
(i) Trade creditors are non-interest bearing and are normally settled on 30 day terms.
(ii) Other creditors are non-interest bearing and are normally settled within 30 days.
13 PROVISIONS
Current
Employee benefits
-
1,667
-
1,667
Number of employees
-
1
-
1
The aggregate employee benefits is comprised of annual leave.
Page 34
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
14 CONTRIBUTED EQUITY
(a) Issued and paid up capital
Ordinary shares fully paid
30,649,448
27,653,973
30,649,448
27,653,973
Ordinary shares of 10 cents paid to 8 cents
3,200,000
3,200,000
3,200,000
3,200,000
33,849,448
30,853,973
33,849,448
30,853,973
2006
2005
Shares
$
Shares
$
(b) Movement in ordinary shares on issue
(i) Ordinary shares fully paid
Balance at beginning of year
385,757,699
27,653,973
385,757,699
27,653,973
Issue on 21 July 2005 as placement of shares for cash
57,863,654
1,273,000
-
-
Issue on 9 December 2005 as placement of shares for cash
17,136,346
377,000
-
-
Issue on 2 February 2006 as placement of shares for cash
69,113,654
1,520,500
-
-
Less transaction costs
-
(175,025)
-
-
Balance at end of year
529,871,353
30,649,448
385,757,699
27,653,973
(ii) Ordinary shares partly paid
Balance at beginning of year
- Shares of 10 cents paid to 8 cents
40,000,000
3,200,000
40,000,000
3,200,000
Balance at end of year
- Shares of 10 cents paid to 8 cents
40,000,000
3,200,000
40,000,000
3,200,000
Total issued and paid up shares
569,871,353
33,849,448
425,757,699
30,853,973
(c) Uncalled Capital
Shares of 10 cents paid to 8 cents
40,000,000
800,000
40,000,000
800,000
(d) Share Options at 30 June 2006
Number
Exercise Price
Expiry Date
Listed Options
344,113,654
5 cents
30 June 2008
344,113,654 listed options expiring 30 June 2008, exercisable at 5 cents each were granted during the year.
8,000,000 unlisted options exercisable at 25 cents each expired on 8 October 2005.
(e) Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
Page 35
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
15 RESERVES AND ACCUMULATED LOSSES
(a) Reserves
Share option reserve (i)
662,809
262,809
662,809
262,809
Net unrealised gains reserve (ii)
45,000
-
45,000
-
707,809
262,809
707,809
262,809
(i) Share option reserve
Nature and purpose of reserve
The share option reserve is used to accumulate proceeds received from the issue of options and records items recognised as expenses on valuation of employee share options.
Movements in reserve
Opening balance 1 July
262,809
262,809
262,809
262,809
Proceeds from option issue
400,000
-
400,000
-
Closing balance 30 June
662,809
262,809
662,809
262,809
(ii) Net unrealised gains reserve
Nature and purpose of reserve
The net unrealised gains reserve records fair value changes on available-for-sale investments.
Movements in reserve
Opening balance 1 July
-
-
-
-
Fair value change
45,000
-
45,000
-
Closing balance 30 June
45,000
-
45,000
-
(b) Accumulated losses
Balance at beginning of year
(16,641,318)
(16,111,557)
(16,641,318)
(16,111,557)
Net loss for year
(5,297,664)
(529,761)
(5,297,664)
(529,761)
Balance at end of year
(21,938,982)
(16,641,318)
(21,938,982)
(16,641,318)
16 JOINT VENTURES
The consolidated entity has interests in the following unincorporated joint ventures.
Gold Exploration Joint Venture % Interest Carrying Value
Bowriver Joint Venture 70 $Nil
The carrying value of the consolidated entity’s interest in these joint ventures is included in Note 11. The contribution of these exploration joint ventures to the loss of the consolidated entity for the year was $ NIL. Page 36
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
17 SEGMENT REPORTING
The Company has one business segment, namely the acquisition and exploration of uranium/gold properties. The Company’s primary geographic segment is the Republic of South Africa.
In the previous year, the Company’s only business segment was nickel exploration in Australia.
18 CONTINGENT LIABILITIES
It is possible that native title, as defined in the Native Title Act 1993, might exist over land in which the Company has an interest. It is impossible at this stage to quantify the impact (if any) that the existence of native title may have on the operations of the Company. However, at the date of these accounts, the Directors are aware that applications for native title claims have been accepted by the Native Title Tribunal over tenements held by the Company.
19 COMMITMENTS FOR EXPENDITURE
Mineral Tenement Expenditure - Australia
In accordance with the Department of Mineral and Petroleum Resources the consolidated entity has obligations to pay tenement rentals and to perform minimum work on mineral tenements held. These obligations vary from time to time in accordance with the tenements held and are expected to be fulfilled in the normal course of operations of the consolidated entity so as to avoid forfeiture of any tenement.
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
Minimum expenditure requirements
Not later than one year
-
459,367
-
-
Later than 1 year but not later than 2 years
-
459,367
-
-
Later than 2 years but not later than 5 years
-
1,378,101
-
-
-
2,296,835
-
-
Prospecting work programmes – Republic of South Africa
The company will, from the date of grant of Prospecting Rights, have the following minimum expenditure commitments in respect to its exploration properties:
Consolidated
Parent Entity
2006
Rand
2005
Rand
2006
Rand
2005
Rand
Minimum expenditure requirements
Not later than one year
533,760
-
-
-
Later than 1 year but not later than 2 years
3,060,520
-
-
-
Later than 2 years but not later than 5 years
11,225,220
-
-
-
14,819,500
-
-
-
Page 37
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
Consolidated
Parent Entity
2006
$
2005
$
2006
$
2005
$
20 REMUNERATION OF AUDITORS
Amount received or due and receivable by the auditors of the consolidated entity for:
Auditing or reviewing the financial statements
13,500
12,075
13,500
12,075
Other services
-
-
-
13,500
12,075
13,500
12,075
21 INVESTMENT IN SUBSIDIARIES
Name of entity
Percentage
Owned
Class of share
Cost of Company’s Investments
Contribution to Consolidated Loss from Ordinary Activities after Income Tax Expense
2006
%
2005
%
2006
$
2005
$
2006
$
2005
$
Parent
Acclaim Exploration NL
(5,297,664)
(529,761)
Controlled Entities
Denny Dalton (Pty) Ltd
100
-
Ordinary
6,000,000
-
-
Austral Nickel Pty Ltd
-
100
Ordinary
-
1,405,802
-
-
Hinckley Range Pty Ltd
100
Ordinary
-
6,023,796
-
-
6,000,000
7,429,598
(5,297,664)
(529,761)
Denny Dalton (Pty) Ltd was incorporated in the Republic of South Africa. Denny Dalton (Pty) Ltd is the holder of the Denny Dalton Project.
The principal activity of the controlled entities during the year was mineral exploration.
22 DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Key Management Personnel
Directors
A Waller Chairman (non-executive)
C S Willis Director (non-executive)
T Gillard Director (non-executive) – appointed 18 May 2006
D J Head Director (non-executive) – resigned 27 March 2006
(b) Compensation of Key Management Personnel
(i) Compensation Policy
The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group must attract, motivate and retain highly skilled directors and executives.
Page 38
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
22 DIRECTOR AND EXECUTIVE DISCLOSURES (Cont.)
(A) Remuneration Committee
The Remuneration Committee of the Board of Directors of the Parent is responsible for determining and reviewing compensation arrangements for the directors and all other key management personnel.
The Remuneration Committee assesses the appropriateness of the nature and amount of compensation of key management personnel on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team.
(B) Compensation Structure
In accordance with best practice corporate governance, the structure of non-executive director and executive compensation is separate and distinct.
(C) Non-executive Director Compensation
Objective
The Board seeks to set aggregate compensation at a level that provides the company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the directors as agreed. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the annual general meeting (currently $250,000). Fees for non-executive directors are not linked to the performance of the consolidated entity. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the company.
The amount of aggregate compensation sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external consultants as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.
(D) Executive Compensation
Objective
The entity aims to reward executives with a level and mix of compensation commensurate with their position and responsibilities within the entity so as to:
• reward executives for company and individual performance against targets set by to appropriate benchmarks;
• align the interests of executives with those of shareholders;
• link rewards with the strategic goals and performance of the company; and
• ensure total compensation is competitive by market standards.
Structure
All executives receive a base salary and may salary sacrifice part of their salary in fringe benefits. The remuneration committee reviews executive packages at least annually by reference to company performance, executive performance, comparable information from industry sectors and other listed companies and independent advice. All remuneration paid to executives is valued at the cost to the company and expensed. Any options that are issued will be valued using a binomial model.
The Board expects that the remuneration structure implemented will result in the company being able to attract and retain the best executives to run the Group. It will also provide executives with the necessary incentives to work to grow long-term shareholder value.
Compensation may consist of the following key elements:
• Fixed Compensation;
• Variable Compensation;
• Short Term Incentive (STI); and
• Long Term Incentive (LTI).
Page 39
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
22 DIRECTOR AND EXECUTIVE DISCLOSURES (Cont.)
(ii) Compensation of Key Management Personnel
Directors
Year
Primary Benefits
Post Employment
Share Based
Other
Salary and fees
$
Cash Bonus
$
Superannuation
$
Options
$
$
Total
$
A G Waller
2006
2005
129,240
179,894
-
-
2,700
-
-
-
-
-
131,940
179,894
C S Willis
2006
2005
66,000
57,000
-
-
2,700
-
-
-
-
-
68,700
57,000
T Gillard
2006
2005
5,329
-
-
-
-
-
-
-
-
-
5,329
-
D J Head
Resigned 27/3/2006
2006
2005
13,650
27,300
-
-
2,025
-
-
-
-
-
15,675
27,300
(iii) Compensation by category: Key Management Personnel
Consolidated
Parent Entity
2006
2005
2006
2005
$
$
$
$
Short-Term
214,219
264,194
214,219
264,194
Post Employment
7,425
-
7,425
-
Other Long-Term
-
-
-
-
Termination Benefits
-
-
-
-
Share-based Payment
-
-
-
-
221,644
264,194
221,644
264,194
(c) Option holdings of Key Management Personnel
No options were held by key management personnel during the year.
(d) Shareholdings of Key Management Personnel
Balance
01/07/05
Received as Remuneration
Options Exercised
Net Change Other
Balance
30/06/06
A G Waller
-
-
-
-
-
C S Willis
-
-
-
-
-
T Gillard
-
-
-
-
-
D J Head
1,000,000
-
-
(1,000,000)(1)
-
(2) Mr Head resigned as a director on 27 March 2006. Mr Head held 1,000,000 shares at the date of his resignation.
All equity transactions with key management personnel have been entered into under terms and conditions no more favourable that those the Group would have adopted if dealing at arm’s length.
(e) Loans with Key Management Personnel
There were no loans to key management personnel or their related entities during the financial year.
Page 40
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
23 FINANCIAL INSTRUMENTS
(i) Financial risk management
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable and loans to and from subsidiaries. The Group does not speculate in the trading of derivative instruments. The main risks the Group is exposed to through its financial instruments are interest rate risk and liquidity risk.
Interest Rate and Liquidity Risk
The Group manages interest rate and liquidity risk by monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company measures credit risk on a fair value basis. The Company does not have any significant credit risk exposure to a single counterparty or any group of counterparties having similar characteristics.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the Company’s maximum exposure to credit risk without taking account of the fair value of any collateral or other security obtained.
(ii) Interest rate risk
The following table details the Company’s exposure to interest rate risk as at the reporting date.
2006 Fixed interest rate maturing
Weighted Average
Effective Interest Rate
%
Floating Interest
Rate
$
1 Year
or less
$
1 to 5
years
$
Non-interest
Bearing
$
Total
$
Financial Assets
Cash
5.28
2,215,159
-
-
-
2,215,159
Receivables
-
-
-
121,572
121,572
Available for sale assets
-
-
-
3,732,613
3,732,613
Total Financial Assets
2,215,159
-
-
3,854,185
6,069,344
Financial Liabilities
Accounts Payable
-
-
-
135,388
135,388
Total Financial Liabilities
-
-
-
135,388
135,388
2005 Fixed interest rate maturing
Weighted Average
Effective Interest Rate
%
Floating Interest
Rate
$
1 Year
or less
$
1 to 5
years
$
Non-interest
Bearing
$
Total
$
Financial Assets
Cash
4.5
943,411
-
-
-
943,411
Receivables
-
-
-
67,034
67,034
Available for sale assets
-
-
-
12,613
12,613
Total Financial Assets
943,411
-
-
79,647
1,023,058
Financial Liabilities
Accounts Payable
-
-
-
221,087
221,087
Total Financial Liabilities
-
-
-
221,087
221,087
Page 41
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
23 FINANCIAL INSTRUMENTS (Cont.)
(iii) Net fair value
The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities approximates their carrying value.
The net fair value of financial assets and financial liabilities is based on upon market prices where a market exists or be discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles.
24 EVENTS SUBSEQUENT TO BALANCE DATE
There are no matters or circumstances that have arisen since 30 June 2006 that have or may significantly affect the operations, results, or state of affairs of the Group in future financial years.
25 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO IFRS
For periods up to and including the year ended 30 June 2005, the Group prepared its financial statements in accordance with Australian generally accepted accounting practice (AGAAP). These financial statements for the year ended 30 June 2006 are the first the Group is required to prepare in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS).
Accordingly, the Group has prepared financial statements that comply with AIFRS applicable for periods beginning on or after 1 January 2005. In preparing these financial statements, the Group has started from an opening balance sheet as at 1 July 2004, the Group’s date of transition to AIFRS, and made those changes in accounting policies and other restatements required by AASB 1 First-time adoption of AIFRS.
This note explains the principal adjustments made by the Group in restating its AGAAP balance sheet as at 1 July 2004 and its previously published AGAAP financial statements for the year ended 30 June 2005.
Effect of AIFRS on the balance sheet as at 1 July 2004 and 30 June 2005
No impact. There are no material differences between the balance sheet presented under AIFRS and the balance sheet presented under previous AGAAP as at 1 July 2004 and 30 June 2005.
Effect of AIFRS on the income statement for the financial year ended 30 June 2005
No impact. There are no material differences between the income statement presented under AIFRS and the income statement presented under previous AGAAP for the financial year ended 30 June 2005.
Effect of AIFRS on cash flow statement for the financial year ended 30 June 2005
No impact. There are no material differences between the cash flow statement presented under AIFRS and the cash flow statement presented under previous AGAAP for the financial year ended 30 June 2005.
26 CHANGE IN ACCOUNTING POLICY
(a) The company has adopted the following Accounting Standards for application on or after 1 January 2005:
�� AASB 132: Financial Instruments: Disclosure and Presentation
�� AASB 139: Financial Instruments: Recognition and Measurement
The changes resulting from the adoption of AASB 132 relate primarily to increased disclosures required under the standard and do not affect the value of amounts reported in the financial statements.
The adoption of AASB 139 has resulted in no material differences in the recognition and measurement of the company’s financial statements.
(b) The following Australian Accounting Standards which have been issued or amended and which are applicable to the company are not yet effective and have not been adopted in preparation of the financial statements at reporting date.
Page 42
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006 (Cont.)
26 CHANGE IN ACCOUNTING POLICY (Cont.)
AASB Amendment
AASB Standard affected
Nature of change in Accounting Policy and Impact
Application Date of the Standard
Application Date for the Company
2004-3
AASB 1: First-time adoption of AIFRS
No change, no impact
1 January 2006
1 July 2006
AASB 101: Presentation of Financial Statements
No change, no impact
1 January 2006
1 July 2006
AASB 124: Related Party Disclosures
No change, no impact
1 January 2006
1 July 2006
2005-1
AASB 139: Financial Instruments: Recognition and Measurement
No change, no impact
1 January 2006
1 July 2006
2005-5
AASB 1: First-time adoption of AIFRS
No change, no impact
1 January 2006
1 July 2006
AASB 139: Financial Instruments: Recognition and Measurement
No change, no impact
1 January 2006
1 July 2006
2005-06
AASB 3: Business Combinations
No change, no impact
1 January 2006
1 July 2006
2005-9
AASB 132: Financial Instruments: Disclosure and Presentation
No change, no impact
1 January 2006
1 July 2006
AASB 139: Financial Instruments: Recognition and Measurement
No change, no impact
1 January 2006
1 July 2006
2005-10
AASB 139: Financial Instruments: Recognition and Measurement
No change, no impact
1 January 2007
1 July 2007
AASB 101: Presentation of Financial Statements
No change, no impact
1 January 2007
1 July 2007
AASB 114: Segment Reporting
No change, no impact
1 January 2007
1 July 2007
AASB 117: Leases
No change, no impact
1 January 2007
1 July 2007
AASB 133: Earnings per Share
No change, no impact
1 January 2007
1 July 2007
AASB 1: First-time adoption of AIFRS
No change, no impact
1 January 2007
1 July 2007
New Standard
AASB 7: Financial Instruments: Disclosure
No change, no impact
1 January 2007
1 July 2007
New Standard
AASB 119: Employee Benefits (December 2004)
No change, no impact
1 January 2006
1 July 2006
All other pending Standards issued between the previous financial report and the current reporting date have no application to the company.
AASB Amendment
AASB Standard affected
2005-2
AASB 1023: General Insurance Contracts
2005-4
AASB 132: Financial Instruments: Disclosure and Presentation
AASB 139: Financial Instruments: Recognition and Measurement
2005-9
AASB 4: Insurance Contracts
AASB 1023 General Insurance Contracts
2006-1
AASB 121: The Effects of Changes in Foreign Exchange Rates
Page 43
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
1. In the opinion of the directors:
a) The financial statements and notes of the Company and of the consolidated entity are in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2006 and of their performance for the year then ended; and
ii) complying with Accounting Standards 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.
2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2006.
This declaration is signed in accordance with a resolution of the Board of Directors.
C S Willis
DIRECTOR
Perth, 29 September 2006
Page 44
HLB Mann Judd (WA Partnership)
INDEPENDENT AUDIT REPORT
To the members of
ACCLAIM EXPLORATION NL
Scope
The Financial Report and Directors’ Responsibility
The financial report comprises the balance sheet as at 30 June 2006, and the income statement,
statement of changes in equity, cash flow statement, accompanying notes to the financial
statements and the directors’ declaration for the year then ended for both Acclaim
Exploration NL (‘the company’) and the consolidated entity. 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 designed to prevent and detect fraud and error, for the accounting policies and for
the accounting estimates within 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 that the financial report is free of material
misstatement. The nature of an audit is influenced by several factors including the use of
professional judgement, selective testing, the inherent limitations of internal control and the
availability of audit evidence which may be persuasive rather than conclusive. Accordingly,
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, including compliance with
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, changes in equity 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.
When determining the nature and extent of our procedures we considered the effectiveness
of management’s internal controls over financial reporting. Our audit was not designed to
provide assurance in relation to internal controls.
15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686.
Email: [email protected]. Website: http://www.hlb.com.au
Partners: Ian H Barsden, Terry M Blenkinsop, Litsa Christodulou, Wayne M Clark, Lucio Di Giallonardo, Colin D Emmott, Peter M Forbes, Trevor G Hoddy, Norman G Neill, Peter J Speechley
HLB Mann Judd (WA Partnership) is a member of International and the HLB Mann Judd National Association of independent accounting firms
Page 45
Independent Audit Report
Independence
In conducting our audit, we followed applicable independence requirements of Australian
professional ethical pronouncements and the Corporations Act 2001.
The Directors’ Report attached to the financial statements includes a copy of the
Independence Declaration given to the Directors by the lead auditor for the audit. That
Declaration would be on the same terms if it had been given to the Directors at the time this
audit report was made.
Audit Opinion
In our opinion, the financial report of Acclaim Exploration NL is in accordance with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and consolidated entity’s financial
position as at 30 June 2006 and of their performance for the year then ended;
and
(ii) complying with Accounting Standards in Australia and the Corporations
Regulations 2001; and
(b) other mandatory financial reporting requirements in Australia.
HLB MANN JUDD
Chartered Accountants
Perth, Western Australia N G NEILL
29 September 2006 Partner
Page 46
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Information Relating to Shareholders and Optionholders at 25 September 2006
Ordinary Shares
Fully Paid
Ordinary Shares
Partly Paid
Options
30 June 2008
1
Number of shareholders and option holders
3,706
64
363
2
Distribution of shareholders/option holders:
Category 1 - 1,000
78
-
-
1,001 - 5,000
349
-
-
5,001 - 10,000
400
1
-
10,001 - 100,000
2,029
36
93
100,001 and over
850
27
270
3,706
64
363
Total on issue
529,871,353
40,000,000
344,113,654
Shareholders with unmarketable parcel
956
3
Percentage of the 20 largest holders
23.70%
97.04%
53.73%
4
Substantial Shareholders
Fair Ever Inc
45,000,000
5
20 Largest Ordinary Fully Paid Shareholders
Number
%
1
Fair Ever Inc
45,000,000
8.49
2
Yandal Investments Pty Ltd
8,000,000
1.51
3
Reynolds (Nominees) Pty Ltd
7,316,274
1.38
4
ANZ Nominees Limited
7,117,638
1.34
5
Comsec Nominees Pty Ltd
5,247,475
0.99
6
GEB Capital Limited
5,000,000
0.94
7
Mammoth Nominees Pty Ltd
5,000,000
0.94
8
Slade Technologies Pty Ltd
5,000,000
0.94
9
Forbar Custodians Limited
4,657,860
0.88
10
Barrios Pty Ltd
4,315,000
0.81
11
Nefco Nominees Pty Ltd
3,664,347
0.69
12
Citicorp Nominees Pty Ltd
3,579,905
0.68
13
National Nominees Pty Ltd
3,310,000
0.62
14
Sabstern Pty Ltd
3,300,000
0.62
15
Daniel James Byrne & Koula Kyriaki Pratsis
2,832,007
0.53
16
Ann Embrey
2,500,000
0.47
17
E P Lawrence Nominees Pty Ltd
2,500,000
0.47
18
John Jeremie White
2,500,000
0.47
19
J P Morgan Nominees Australia Limited
2,498,804
0.47
20
Godwell Investments Pty Ltd
2,463,500
0.46
125,802,810
23.70
Page 47
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
6
20 Largest Ordinary Partly Paid Shareholders
Number
%
1
Corridor Nominees Pty Ltd
18,609,900
46.52
2
Geb Capital Limited
5,000,000
12.50
3
Tina Bazzo
3,510,000
8.78
4
Jade Asset Pty Ltd
2,010,000
5.02
5
Watershore Holdings Pty Ltd
1,480,000
3.70
6
Ruby Net Pty Ltd
1,400,000
3.50
7
Melissa Anne Vorlicek
1,200,000
3.00
8
Dagmar Blochlova
900,000
2.25
9
Margaret Downes
590,000
1.48
10
Cleveland Pty Ltd
500,000
1.25
11
Kelanco Pty Ltd
500,000
1.25
12
Adam James Lienart
490,000
1.23
13
Jeremy Robert Pockley
460,000
1.15
14
Scott James Duncan
450,000
1.12
15
Summerset Investments Pty Ltd
400,000
1.00
16
John Charles Geary
350,000
0.88
17
Josephine Kathleen Patoir
310,000
0.77
18
Dacin Nominees Pty Ltd
255,000
0.64
19
David Sundance Vanzyl
250,000
0.63
20
Edenkey Nominees Pty Ltd
150,000
0.37
38,814,900
97.04
7
20 Largest Optionholders (30 June 2008; 5 cents)
Number
%
1
Meadsvale Limited
62,000,000
18.02
2
Bell Potter Nominees Ltd
30,321,000
8.81
3
Holtwood Pty Ltd
12,500,000
3.63
4
Alimold Pty Ltd
10,588,000
3.08
5
Slade Technologies Pty Ltd
9,855,000
2.86
6
Sabstern Pty Ltd
9,400,000
2.73
7
Kazek & Halina Wlodarczyk
5,604,600
1.63
8
Ann Embrey
5,200,000
1.51
9
Thoughtful Nominees Pty Ltd
4,705,195
1.37
10
Pre-emptive Trading Pty Ltd
4,694,500
1.36
11
Godwell Investments Pty Ltd
4,000,500
1.16
12
Kylie Maree Walsh
3,795,000
1.10
13
Mandevilla Pty Ltd
3,500,000
1.02
14
First NZ Capital Custodians Limited
3,095,907
0.90
15
Peter Cook
3,000,000
0.87
16
Chris Paul Lawrence
3,000,000
0.87
17
Bellset Nominees Pty Ltd
2,679,000
0.78
18
Balgownie Securities Pty Ltd
2,371,242
0.69
19
Matthew Paul Simpson
2,331,409
0.68
20
Forbar Custodians Limited
2,285,970
0.66
184,927,323
53.73
8 Voting rights
* Ordinary fully paid shares - upon show of hands one vote for every registered shareholder and upon a poll, one vote for each share held.
* Contributing shares - upon a poll proportional to the called up capital.
9 Quotation
The Company is listed on the Australian Stock Exchange Limited (“ASX”) and the home exchange is Perth. The ASX code is AEX for the listed fully paid shares, AEXCA for contributing shares and AEXO for options.
Page 48
ACCLAIM EXPLORATION N.L. AND CONTROLLED ENTITIES
Summary of Mining Interests as at 30 June 2006
DENNY DALTON PROJECT, SOUTH AFRICA
Project Areas
1. Portion 6 and the Remaining Extent of the farm Tusschenby 411, in the District of Vryheid, Kwa Zulu Natal (as depicted on sketch plan annexed to Prospecting Permit number 105/03)
2. Portion 1 of the farm Vlakhoek 847, in the District of Vryheid, Kwa Zulu Natal (as depicted on sketch plan annexed to Prospecting Permit number 105/03).
3. Various portions of the farm Nobamba 16505, in the District of Vryheid, Kwa Zulu Natal (as depicted on sketch plan annexed to Prospecting Permit number 123/03).
NORSEMAN, WESTERN AUATRALIA
Acclaim Exploration NL 100%
ELA63/839
ELA63/840
ELA63/841
MAROOCHYDORE, WESTERN AUSTRALIA
Acclaim Exploration NL 100%
ELA45/2475
Page 49