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1 Annual Report and its Controlled Entities ABN For the financial period 10 March 2011, date of incorporation, to 30 June 2012

2 Contents Corporate Information... 1 Letter to Shareholders... 2 Directors Report... 3 Auditor s Independence Declaration Independent Auditor s Report Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity Notes to the Consolidated Financial Statements...22 Directors Declaration Corporate Governance Statement ASX Additional Information... 68

3 Corporate Information This financial report includes the consolidated financial statements and notes of and Controlled entities ( the Group ). The Group s functional presentation currency is AUD (). A description of the Group s operations and of its principal activities is included in the review of operations and activities in the Director s report. The Director s report is not part of the financial report. Directors Michael (Mike) Young Non Executive Chairman Richard Bevan Managing Director Philip Warren Non Executive Director Greg Miles Non Executive Director David Johnson Executive Director Exploration Company Secretary Steven Wood Registered Office 945 Wellington Street West Perth WA 6005 Notice of annual general meeting Auditors BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Bankers Westpac Banking Corporation Level 13, 109 St Georges Tce Perth WA 6000 Solicitors Steinepreis Paganin Level 4, Next Building 16 Milligan Street Perth WA 6000 Stock Exchange Australian Securities Exchange Limited Exchange Plaza 2 The Esplanade Perth WA 6000 ASX Code: CZI The annual general meeting of Cassini Resources Limited will be held at the Boulevard Centre, 99 The Boulevard, Floreat, WA 6014 at 3pm (WST) on 22 November Share Registry Computershare Investor Services Level 2, 45 St Georges Terrace Perth WA 6000 T: Website Page 1

4 Letter to Shareholders Dear Shareholder (Cassini or Company) is an Australian gold and base metals exploration company. The Company successfully listed on the Australian Stock Exchange in January 2012 with a package of early stage exploration projects in Western Australia. In May 2012, through the acquisition of Search Resources Ltd, the Company acquired the Joint Venture (JV) interests in a number of gold exploration projects based in the world class mining district of Nevada. This acquisition has brought with it significant in country technical expertise through our JV partner Renaissance Gold Inc. and our US based Director, Exploration David Johnson. Nevada has long been one of the world s premier gold districts and continues to produce new multi million ounce discoveries despite 150 years of mining and exploration. It is a safe, mining friendly jurisdiction has excellent exploration and mining expertise. One can think of Nevada as the USA s version of Kalgoorlie, Bendigo and Ballarat all rolled into one. It is an excellent neighborhood to be looking for gold projects! The Company is undertaking a review of its current assets and will focus on those key projects that we believe have the potential to add shareholder value going forwards. The Company is also actively looking to add to a more advanced exploration asset to its current project portfolio. The Board s experience includes the expertise of the rapid development of exploration assets into operating mines something we are keen to repeat at Cassini. On behalf of the Board of Directors of, I would like to thank you for your support as a shareholder of the Company, and we look forward to a successful future for the Company. Yours faithfully Michael Young Non Executive Chairman Page 2

5 Directors Report Your Directors present the following report on and its controlled entities (referred to hereafter as the Group ) for the period ended 30 June Directors The names of the Directors in office during the financial period and until the date of this report are as follows. All Directors were in office for the entire period unless otherwise stated: Mr Mike Young (Non Executive Chairman) Mr Richard Bevan (Managing Director) Mr Philip Warren (Non Executive Director) Mr Greg Miles (Non Executive Director) 1 Mr David Johnson (Executive Director Exploration) 2 Note: 1 Mr Miles was appointed as Non Executive Director effective 18 August Mr Johnson was appointed as Executive Director Exploration effective 8 June 2012 Principal Activities During the period the principal activities of the Group consisted of: a) Identification and assessment of commercially attractive resources exploration projects; b) Acquisition of commercially attractive resources exploration projects; and c) Exploration of Cassini s tenements and projects. There were no significant changes in the nature of the activities of the Group during the period. Dividends There were no dividends paid during the period. Review of Operations Information on the operations and financial position of the Group and its business strategies and prospects is set out in the review of operations and principal activities of this annual report. The consolidated statement of comprehensive income shows a new loss attributable to members of 750,592 for the financial period ended 30 June Significant changes in the state of affairs Significant changes in the state of affairs of the Group during the period were as follows: Seed capital was raised between incorporation and listing increasing equity by 400,501 (from Nil to 400,501) Contributed equity increased by 3,350,000 (from 400,501 to 3,750,501) as the result of an IPO on 9 January 2012, as part of which it acquired Wirraway Metals and Mining Pty Ltd and a portfolio of exploration projects in Western Australia. Page 3

6 Directors Report (cont d) Significant changes in the state of affairs (cont d) On 31 May 2012 the Company acquired Search Resources Limited and the interest in three joint venture projects in Nevada, USA. Contributed equity increased by 1,760,000 (from 3,750,501 to 5,510,501) as the result of this acquisition. Details of the changes in contributed equity are disclosed in note 13 to the financial statements. Matters subsequent to the end of the period Since 30 June 2012 no matter or circumstance has arisen that has significantly affected, or may significantly affect: a. the Group s operations in future financial years; or b. the results of those operations in future financial years; or c. the Group s state of affairs in future financial years. Likely developments and expected results of operations The Group will continue its mineral exploration activity at and around its exploration projects with the object of identifying commercial resources. The Group will also continue to identify and assess potential acquisitions suitable for the Group. Environmental Regulation The Group is subject to significant environmental regulation in respect of mineral exploration activities. The Group operates within the resources sector and conducts its business activities with respect for the environment while continuing to meet the expectations of the shareholders, employees and suppliers. The company s exploration activities are currently regulated by significant environmental regulation under laws of the Commonwealth and states and territories of Australia. The Group aims to ensure that the highest standard of environmental care is achieved, and that it complies with all relevant environmental legislation. The directors have considered the recently enacted National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduces a single national reporting framework for the reporting and dissemination of information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current stage of development, the directors have determined that the NGER Act will have no effect on the Group for the current, or subsequent financial year. The directors will reassess this position as and when the need arises. The directors are mindful of the regulatory regime in relation to the impact of the organisational activities on the environment. There have been no known breaches by the Group during the period. Page 4

7 Directors Report (cont d) Information on Directors Michael Young Non Executive Chairman Qualifications BSC (Hon), MAusIMM, MAIG, MSEG Appointed Non executive director since Incorporation on 10 March 11. Chairman since ASX IPO listing on 9 January 2012 Experience Mr Young is a geologist and graduate of Queens University, Canada. He worked as a resource development geologist and consulting geologist before becoming the managing director of ASX listed BC Iron Ltd, a position which he still holds. During his tenure, BC Iron Limited (ASX Code: BCI) has successfully made the transition from listing an iron ore exploration company to now being the most recently established iron ore producer in WA s Pilbara region. Mr Young is a member of the Australasian Institute of Mining and Metallurgy (CP Geo), a member of the Australian Institute of Geoscientists, and a member of the Institute of Company Directors. He is also the Co patron of the St Bartholomew s House Foundation. Interest in Shares and Options <The MJE Young a/c> 1,666,667 ordinary shares (escrowed until 9 January 2014) 1,666,667 options (0.20, 30 June 2015) <M & J Young Super Fund a/c> 27,000 ordinary fully paid shares Current directorships Managing Director BC Iron Limited (ASX: BCI) Vice President Council for the Association of Mining & Exploration Companies Co Patron Foundation for St Bartholomew s House Former directorships Waratah Resources Limited held in past three years Richard Bevan Managing Director Qualifications BAppSc Appointed Non executive director since incorporation on 10 March 2011, Managing Director since ASX IPO listing on 9 January 2012 Experience Mr Bevan has experience as a Managing Director/Chief Executive Officer and Non Executive Director for listed and unlisted companies. He is a member of the Australian Institute of Company Directors. Interest in Shares and Options 2,001,667 ordinary fully paid shares (1,666,666 escrowed until 9 January 2014) 1,666,666 options (0.20, 30 June 2015) Current directorships Non Executive Chairman Cool Clear Water Group Ltd (unlisted public) Non Executive Director Empired Ltd (ASX: EPD) Chairman Intework Incorporated (Not for Profit charity) Executive Director Metals of Africa Limited (Unlisted public) Former directorships None held in past three years Page 5

8 Directors Report (cont d) Information on Directors (cont d) Phil Warren Non Executive Director Qualifications B. Com., CA Appointed 10 March 2011 Experience Mr Warren is a chartered accountant and a Director of corporate advisory firm Grange Consulting Group, and has over 15 years of experience in finance, accounting and corporate roles in Australia and Europe. He has been responsible for a number of private and seed capital raisings as well as successful ASX listings and has acted as a Director and Company Secretary of a number of ASX listed companies, including being an Executive Director of Uranio Limited (now Manhattan Corporation Ltd). Interest in Shares and Options Philuchna <Warren Family a/c> 450,000 ordinary fully paid shares (escrowed until 9 January 2014) 700,000 options (0.20, 30 June 2015) Philuchna <Warren Superfund a/c> 116,157 ordinary fully paid shares Current directorships Non Executive Director SAS Global Baldivis Limited (unlisted public) Former directorships held in past three years None Greg Miles Non Executive Director Qualifications BSc, Grad Dip (Geol) Appointed 18 August 2011 Experience Mr Miles has had a successful career in mineral exploration and development for over 16 years in numerous commodities and mineral provinces. Broad technical expertise as a Geologist and Exploration Manager, directing a small, dynamic team as well as Board level experience as a Non Executive Director. Highlights include the discovery and development of the 40Mt Mount Caudan Iron Ore Deposit, Parker Range Project (Cazaly) and exploration and development of gold resources at West Kalgoorlie (now owned by Phoenix). Interest in Shares and Options 1,000,000 unlisted options (0.20, 30 June 2015) Current directorships Executive Director Geologist Blackham Resources Limited (ASX:BLK) Non Executive Director Cove Resources Limited (ASX: CVE) Former directorships held in past three years None Page 6

9 Directors Report (cont d) Information on Directors (cont d) David Johnson Executive Director Exploration Qualifications MSc, GDipAppFin, MAIG Appointed 8 June 2012 Experience David is a geophysicist with over 20 years experience in mineral exploration, covering a wide range of commodities and project locations in Australia, Asia, North America, Africa and Scandinavia. Prior to joining Cassini Resources, David was a founding principal of Revelation Geoscience, a mineral exploration consultancy based in Vancouver BC. As Chief Geophysicist at Independence Group, David played a leading role in the discovery of the Moran nickel orebody at Kambalda and the Rosie nickel deposit in the Duketon greenstone belt. Interest in Shares and Options 533,333 Ordinary Fully Paid Shares (*266,667 subject to voluntary escrow for 6 months from 29 May 2012, 266,666 subject to voluntary escrow for 12 months from 29 May 2012) Current directorships N/A 1,000,000 Unlisted Options (0.25, 30 June 2015) Former directorships held in past three years None Director Meetings The number of directors meetings and number of meetings attended by each of the directors of the Company during the period are: Number of Meetings Eligible to Attend Number of Meetings directors attended Number of Meetings Held 4 4 Number of Meetings Attended Director Mr Mike Young 4 4 Mr Richard Bevan 4 4 Mr Philip Warren 4 4 Mr Greg Miles 3 3 Mr David Johnson 1 1 Retirement, election and continuation in office of directors In accordance with the Constitution, Mr Warren and Mr Young retire as directors at the annual general meeting and, being eligible, offer themselves for re election. Page 7

10 Directors Report (cont d) Company Secretary Mr Steven Wood, BCom., CA was appointed to the position of Company Secretary on 8 June Mr Wood is an employee of Grange Consulting Group Pty Ltd which provides a unique range of corporate services to listed and unlisted companies. Financial Position The net assets of the consolidated Group have increased from Nil on incorporation on 10 March 2011 to 4,769,110 on 30 June The Group s working capital, being current asset less current liabilities, has improved from Nil as at incorporation on 10 March 2011 to 1,735,220 on 30 June Shares under Option Unissued ordinary shares of under option at the date of this report are as follows: Date Options Granted Expiry Date Issue Price of Shares Number Under Option Various 30 June ,000, May June ,000,000 Shares Issued on the Exercise of Options There were no options exercised during the financial period. Insurance of Officers During the financial period, paid a premium of 7,803 to insure the directors and secretaries of the Group. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for them or someone else or to cause detriment to the Group. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. Proceedings on Behalf of the Group No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the Corporations Act Page 8

11 Directors Report (cont d) Non Audit Services The Group may decide to employ its auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Group is important. During the period the following fees were paid or payable for services provided by the auditor of the Group: 2012 Audit services Amounts received or due and receivable by BDO Audit (WA) Pty Ltd An audit or review of the financial reports of the entity 34,823 Non Audit services Amounts received by BDO Income Tax Return 1,530 Investigating Accountants Report 8,670 Total remuneration for non audit services 10,200 Auditor s Independence Declaration A copy of the auditors independence declaration as required under section 307C of the Corporations Act 2001 has been included as part of the financial report. Page 9

12 Directors Report (cont d) Remuneration report The remuneration report is set out under the following main headings: A B C D E A Principles used to determine the nature and amount of remuneration. Details of remuneration. Service agreements. Share based compensation. Additional information. Principles used to determine the nature and amount of remuneration The Board has elected not to establish a remuneration committee based on the size of the organisation and has instead agreed to meet as deemed necessary and allocate the appropriate time at its board meetings. The following items are considered and discussed as deemed necessary at the board meetings: make specific recommendations to the board on remuneration of directors and senior officers; recommend the terms and conditions of employment for the Executive Director; undertake a review of the Executive Director s performance, at least annually, including setting with the Executive Director goals for the coming year and reviewing progress in achieving those goals; consider and report to the Board on the recommendations of the Executive Director on the remuneration of all direct reports; and develop and facilitate a process for Board and Director evaluation. Non Executive Directors Fees and payments to non executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non executive directors fees and payments are reviewed annually by the board. The Chair s fees are determined independently to the fees of non executive directors based on comparative roles in the external market. Non executive directors do not receive performance based pay. Directors Fees The current base fees were last reviewed with effect from the listing of the Company on the ASX, being 9 January Non executive directors fees are determined within an aggregate directors fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at 300,000 per annum and was approved by shareholders at a general meeting of shareholders on 6 October Page 10

13 Directors Report (cont d) Remuneration report (cont d) A Principles used to determine the nature and amount of remuneration (cont d) The following fees have applied: Base Fees From 12 August 2011 to ASX listing (9 January 2012) From ASX listing (9 January 2012) to 30 June 2012 From 29 May 2012 to 30 June 2012 Non executive Chair 50,000 Other non executive directors 40,000 40,000 Managing Director 50, ,000 1 Executive Director Exploration 200,000 1 exclusive of superannuation Additional fees A Director may also be paid fees or other amounts as the Directors determines if a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties. Retirement allowances for directors Superannuation contributions required under the Australian Superannuation Guarantee Legislation continue to be made and are deducted from the directors overall fee entitlements where applicable. Executive pay In determining executive remuneration, the board aims to ensure that remuneration practices are: competitive and reasonable, enabling the company to attract and retain key talent; aligned to the company s strategic and business objectives and the creation of shareholder value; transparent; and acceptable to shareholders. The executive remuneration framework has three components: Base pay and benefits, including superannuation; Short term performance incentives; and Long term incentives through participation in the Cassini Employee Share Option Plan. Base pay Executives receive their base pay and benefits structured as a total employment cost (TEC) package which may be delivered as a combination of cash and prescribed non financial benefits at the executives discretion. Page 11

14 Directors Report (cont d) Remuneration report (cont d) A Principles used to determine the nature and amount of remuneration (cont d) Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Independent remuneration consultants provide analysis and advice to ensure base pay is set to reflect the market for a comparable role. Base pay for executives is reviewed annually to ensure the executive s pay is competitive with the market. An executive s pay is also reviewed on promotion. There are no guaranteed base pay increases included in any executives contracts. Benefits No benefits other than noted above are paid to Directors or Management except as incurred in normal operations of the business. Long term incentives Options are issued at the Board s discretion. Other than options disclosed in section D of the remuneration report there have been no options issued to employees at the date of this financial report. Remuneration consultants Remuneration consultants have not been used in determining the remuneration paid. B Details of remuneration Amounts of remuneration Details of the remuneration of the directors and the key management personnel of the Group are found below: Mr Richard Bevan Mr Mike Young Mr Greg Miles Mr David Johnson Mr Philip Warren Page 12

15 Directors Report (cont d) Remuneration report (cont d) B Details of remuneration (cont d) Key Management personnel and other executives of the Company and the Group 30 June 2012 Cash salary & Fees Short term employee benefits Other Non Monetary Benefits Post employment benefits Superannuation Pensions Retirement Benefits Options Total Sharebased payments Total Remuneration Represented by Options Directors % Non executive directors Mike Young 36,102 36,102 Greg Miles 36,274 48,466 84, Philip Warren 35,376 31,860 67, Sub total Non executive directors 107,752 80, , Executive directors Richard Bevan 105,225 7, ,846 David Johnson 16,667 4,718 21, Total key management personnel compensation (Group) 229,644 7,621 85, , The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: Name Fixed Remuneration Performance Based Remuneration Executive Directors Richard Bevan 100% 0% David Johnson 78% 22% C Service agreements Executive Directors Name Term of Agreement Base Salary including Superannuation Termination Benefit Executive Richard Bevan Open 190,750 Relevant notice periods apply, being 1 months notice with reason or 3 months without reason. David Johnson 2 years 200,000 Relevant notice periods apply, being 1 months notice with reason or 3 months without reason Page 13

16 Directors Report (cont d) Remuneration report (cont d) C Service agreements (cont d) Non executive Directors On appointment to the Board, all non executive directors enter into a service agreement with the Group in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the director. D Share based compensation Options Options over shares in the Company are granted at the Directors discretion. The terms and conditions of each grant of options affecting remuneration Date Options Date options vest Expiry Date Exercise Value per option at % vested Granted Price grant date 15 December December June % 6 October October June % 31 May May June May May June May May June Options granted carry no dividend or voting rights. E Additional Information Voting and comments made at the Company s 2011 Annual General Meeting Under section 323(D) of the Corporations Act, the first financial year for a company starts on the day on which it is incorporated and lasts for 12 months or the period (not longer than 18 months) determined by the directors. The directors decided that the first financial year will be from the date of incorporation being 10 March 2011 to 30 June As such no financial statements were tabled at the 2011 AGM and no voting nor were any comments made in respect of any remuneration report, as there wasn t one. This report of Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of Directors. Richard Bevan Managing Director Perth, Western Australia, 28 September 2012 Page 14

17 Tel: Fax: Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia 28 September 2012 The Directors 945 Wellington Street, West Perth, WA, 6005 Dear Sirs, DECLARATION OF INDEPENDENCE BY PETER TOLL TO THE DIRECTORS OF CASSINI RESOURCES LIMITED As lead auditor of for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been no contraventions of: the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and any applicable code of professional conduct in relation to the audit. This declaration is in respect of and the entities it controlled during the period. Peter Toll Director BDO Audit (WA) Pty Ltd Perth, Western Australia BDO Audit (WA) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN , an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

18 Tel: Fax: Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF CASSINI RESOURCES LIMITED Report on the Financial Report We have audited the accompanying financial report of, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors declaration of the consolidated entity comprising the company and the entities it controlled at the year s end or from time to time during the financial year. Directors Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1 (a), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of, would be in the same terms if given to the directors as at the time of this auditor s report. BDO Audit (WA) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN , an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

19 Opinion In our opinion: (a) the financial report of is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity s financial position as at 30 June 2012 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1 (a). Report on the Remuneration Report We have audited the Remuneration Report included in the directors report for the year ended 30 June The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion, the Remuneration Report of for the year ended 30 June 2012 complies with section 300A of the Corporations Act BDO Audit (WA) Pty Ltd Peter Toll Director Perth, Western Australia Dated this 28 th day of September 2012 BDO Audit (WA) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN , an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

20 Consolidated Statement of Comprehensive Income For the period ended 30 June 2012 Note 2012 Revenue from Continuing Operations Interest received 2 64,364 Gain on sale of tenement 2 14,458 Finance costs (438) Employee and director benefits expense 3 (212,978) Financial and company secretarial expenses (156,545) Audit fees (34,823) Legal fees (66,433) Insurance (7,803) ASX and share registry fees (51,479) Share based payments expense (53,184) Consultants (45,408) Other Employee Expenses 3 (7,621) Exploration write off (50,179) Travel and entertainment (45,624) Other expenses (96,899) (Loss) before income tax (750,592) Income tax expense 4 (Loss) for the period (750,592) Other Comprehensive Income Total Comprehensive Income/(Loss) for the period (750,592) (Loss) attributable to the members of Cassini Resources Limited (750,592) Basic earnings per share (cents per share) 5 (6.26) The above consolidated statement of comprehensive income is to be read in conjunction with the accompanying notes. Page 18

21 Consolidated Statement of Financial Position As at 30 June 2012 Note 2012 ASSETS Current Assets Cash and cash equivalents 7 1,886,916 Other receivables 8 44,539 Total Current Assets 1,931,455 Non Current Assets Property, plant and equipment 9 56,302 Exploration and evaluation expenditure 10 3,009,204 Total Non current Assets 3,065,506 TOTAL ASSETS 4,996,961 LIABILITIES Current Liabilities Trade payables 11 73,915 Other payables ,936 Total Current Liabilities 227,851 TOTAL LIABILITIES 227,851 NET ASSETS 4,769,110 EQUITY Issued capital 13 5,336,948 Options reserve ,754 Accumulated Losses (750,592) TOTAL EQUITY 4,769,110 The above consolidated statement of financial position is to be read in conjunction with the accompanying notes. Page 19

22 Consolidated Statement of Cash Flows For the period ended 30 June 2012 Note 2012 Cash flows from operating activities Payments for exploration and evaluation expenditure (612,497) Payments to suppliers and employees (671,234) Interest received Net cash flows used in operating activities 16 (1,283,731) Cash flows from investing activities Property plant and equipment (56,303) Net cash flows used in investing activities (56,303) Cash flows from financing activities Proceeds from issue of shares and options 3,400,501 Capital raising costs (173,553) Net cash flows from financing activities 3,226,948 Net increase/(decrease) in cash and cash equivalents 1,886,916 Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 1,886,916 The above consolidated statement of cash flows is to be read in conjunction with the accompanying notes. Page 20

23 Consolidated Statement of Changes in Equity For the period ended 30 June 2012 Issued Capital Accumulated Losses Option Reserve Total Balance at 10 March 2011 Profit for the period (750,592) (750,592) Other Comprehensive Income Total Comprehensive Income (750,592) (750,592) Transaction with owner, directly recorded in equity: Issue of shares 5,510,501 5,510,501 Issue of options 182, ,754 Share issue costs (173,553) (173,553) Balance at 30 June ,336,948 (750,592) 182,754 4,769,110 The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes. Page 21

24 Notes to the consolidated Financial Statements 1. Summary of significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated. These financial statements are for the consolidated Group consisting of Cassini Resources Limited (the Company) and its subsidiaries, together referred to as Cassini or the Group. (a) Basis of preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act is a listed public company, incorporated and domiciled in Australia. Cassini Resources Limited is a for profit entity for the purpose of preparing the financial statements. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non current assets, financial assets and financial liabilities. An individual entity is no longer presented as the consequence of a change to the Corporations Act Financial information for as an individual entity is included in Note 25. The accounting period is for the period 10 March 2011, the date of incorporation, to 30 June (b) Principles of consolidation Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of ] ( Company or Parent Entity ) as at 30 June 2012 and the results of all subsidiaries for the period then ended. and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity. Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Page 22

25 Notes to the consolidated Financial Statements (cont d) 1. Summary of significant accounting policies (cont d) (b) Principles of consolidation (cont d) Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de consolidated from the date that control ceases. The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. Intercompany transactions, balance and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction proves evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Subsidiaries are accounted for in the parent entity financial statements at cost. (c) Foreign Currency Translation Non monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non monetary assets such as equities whose changes in the fair value are presented in other comprehensive income are included in the related reserve in equity. (d) Leases Leases of property, plant and equipment where the Group as lessee has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short term and long term payables. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the asset s useful life or over the shorter of the asset s useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight line basis over the period of the lease. Lease income from operating leases where the Group is a lessor is recognised in income on a straight line basis over the lease term. The respective leased assets are included in the balance sheet based on their nature. The Group currently has no leases. Page 23

26 Notes to the consolidated Financial Statements (cont d) (e) Contributed equity Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities. 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. Where any Group company purchases the Company s equity instruments, for example as the result of a share buy back or a share based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of. (f) Earnings per share Basic earnings per share is calculated by dividing: the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares; by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares (note 5). (g) Property, plant and equipment Land and buildings are shown at fair value, based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the re valued amount of the asset. All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Increases in the carrying amounts arising on revaluation of land and buildings are recognised, net of tax, in other comprehensive income and accumulated in reserves in equity. To the extent that the increase reverses a decrease previously recognised in profit or loss, the increase is first recognised in profit or loss. Decreases that reverse previous increases of the same asset are first recognised in other comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to profit or loss. Each year, the difference between depreciation based on the re valued carrying amount of the asset charged to profit or loss and depreciation based on the asset s original cost, net of tax, is reclassified from the property, plant and equipment revaluation surplus to retained earnings. Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost or re valued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows: Page 24

27 Notes to the consolidated Financial Statements (cont d) (g) Property, plant and equipment (cont d) Vehicles: 3 5 years Furniture, fittings and equipment: 3 8 years The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When re valued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets to retained earnings. (h) Trade payables These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. (i) Business combinations The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre existing equity interest in the subsidiary. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition by acquisition basis, the Group recognises any non controlling interest in the acquiree either at fair value or at the non controlling interest s proportionate share of the acquiree s net identifiable assets. The excess of the consideration transferred and the amount of any non controlling interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss. Page 25

28 Notes to the consolidated Financial Statements (cont d) (j) Parent entity information The financial information for the parent entity,, disclosed in note 25 has been prepared on the same basis as the consolidated financial statements, except as set out below. (i) Investments in subsidiaries, associates and joint venture entities Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of. Dividends received from associates are recognised in the parent entity s profit or loss, rather than being deducted from the carrying amount of these investments. (ii) Financial guarantees Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment. (iii) Share based payments The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity. (k) Income Tax The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the period as well unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Page 26