ABN: Annual Financial Report for the Year Ended 30 June 2013

Transcription

1 ABN: Annual Financial Report for the Year Ended 30 June 2013

2 CORPORATE DIRECTORY ABN Directors Colin Ikin Alan Marlow Robert Timmins Gregory Hall Company secretary Jay Stephenson Registered office Level 4, 66 Kings Park Road, WEST PERTH WA 6006 Principal place of business Level 4, 66 Kings Park Road, WEST PERTH WA 6006 Share registry Advanced Share Registry Services Solicitors Steinepreis Paganin Bankers Westpac Auditors William Buck Audit (WA) Pty Ltd 1

3 CONTENTS Page Directors Report 3 Corporate Governance Statement 10 Auditor s Independence Declaration 16 Consolidated Statement of Profit or Loss and Other Comprehensive Income 17 Consolidated Statement of Financial Position 18 Consolidated Statement of Changes in Equity 19 Consolidated Statement of Cash Flows 20 Notes to and forming part of the Consolidated Financial Statements 21 Directors Declaration 42 Independent Auditor s Report 43 Additional Information 45 2

4 DIRECTORS REPORT Your Directors present their report, together with the financial statements of Namibian Copper NL (the Company) and its controlled entities (the Consolidated Group) for the financial year ended 30 June Directors The names of Directors in office at any time during or since the end of the year are: Mr Colin Ikin Mr Alan Marlow Mr Robert Timmins Mr Gregory Hall (appointed 14 June 2013) Company Secretary The following person held the position of Company Secretary at the end of the financial year: Mr Jay Richard Stephenson Chartered Secretary (FCIS) Master of Business Administration (MBA), Fellow of the Certified Practicing Accountants (FCPA), Certified Management Accountant (CMA), Member of the Australian Institute of Company Directors (MAICD) Principal Activities The Principal activities of the Consolidated Group during the financial year were the exploration of its Project in Namibia. Operating Results The consolidated loss of the consolidated group, after providing for income tax and eliminating non-controlling interests amounted to 2,397,945 (2012: loss of 606,819). Dividends Paid or Recommended No dividends have been paid or proposed since the start of the financial year, and the Directors do not recommend the payment of a dividend in respect of the financial year. Review of Operations The Consolidated Group continued its exploration of the Ongombo Copper Project in Namibia as well as investigating a number of possible acquisitions in various counties. In addition to the above, specifically the Consolidated Group announced the following: On 14 June 2013 the Consolidated Group announced the appointment of Mr Gregory Hall as a Non-Executive Director of the Company. On 19 April 2013, the Consolidated Group announced that an Independent Scoping Study by Coffee Mining of Johannesburg confirmed viability of developing the Ongombo Project. Significant Changes in State of Affairs There was no significant change in the state of affairs of the consolidated group during the financial year. 3

5 After Balance Date Events NAMIBIAN COPPER NL DIRECTORS REPORT There has not been any matter or circumstances occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated group, the results of the operations, or the state of the affairs of the consolidated group in future financial years. Future Developments The Consolidated Group will continue to proactively advance its exploration, development and acquisition strategy. A focus will be on growth opportunities to deliver shareholder value at the earliest opportunity, in addition to advancing its existing asset base. A magnetotellurics geophysical program was completed over the Ongombo project during the June 2013 quarter. Four lines of MT were completed on Sections 11600, 11800, and The aim of the MT survey was to define continuity of known mineralisation intersected by drilling in the shallow parts of the Central and East/Ost shoots at Ongombo. In general the data indicates variability of conductivity from one section to the next in the area surveyed. This implies the ore shoots can get stronger or weaker down-plunge over distances of 200m. The data substantiates the continuity of ore zones between the various shoots (the coalescing of mineralisation up and down-dip), at least in some portions of the area surveyed. Health and Safety Policy The Consolidated Group is committed to developing a culture which supports the health and safety of all employees, contractors, customers and communities associated with its business and operations. Environmental Regulations The Consolidated Group is subject to environmental regulation in respect of its exploration activities in Namibia and is committed to undertaking all its operations in an environmentally responsible manner. The Consolidated Group complies with the Mineral Resources Act and Environmental Protection Act. The Board believes that the Group has adequate systems in place for the future management of its environmental regulations and is not aware of any breach of those environmental requirements as they apply to the group. Information on Directors MR COLIN IKIN Chairman (Executive) Appointed 17 November 2008 Experience Colin was a stockbroker for 17 years and was a member of the Australian Securities Exchange and a director of an Australian stock broking firm. Colin has had extensive experience in the mining industry as Chief Executive Officer of several mining companies listed on the ASX and Alternative Investment Market in the UK. Colin has developed mines both in Australia and in Africa producing commodities including Copper, Nickel, Cobalt and Gold. Interest in Shares and Options Directorships held in other listed entities during the past three years 7,201,454 Ordinary Shares Chairman of Equamineral Holdings Limited Appointed 23 June

6 Information on Directors (Continued) NAMIBIAN COPPER NL DIRECTORS REPORT MR ALAN MARLOW Director (Non-Executive) Appointed 17 November 2008 Qualifications Geologist Experience Alan has 30 years experience as a geologist. After graduating from Leicester University in 1972 Alan moved to South Africa to work for the South African Geological Survey. After completing a Masters degree on the Bushveld Complex Alan joined Gencor s Johannesburg based exploration office. In 1978 Alan moved to Namibia where he undertook research work on the genesis of uranium mineralisation in the Damaran. After completing his Ph.D. with Leeds University Alan moved to Australia to work for a number of majors including BHP, WMC and CRA before becoming a full time consultant geologist. In his consulting capacity Alan has worked for numerous ASX listed companies operating in Australia, Europe, South America and Africa. Interest in Shares and Options 7,000,000 Ordinary Shares Directorships held in other listed Alan was previously a non-executive Director of Peninsula Minerals entities during the past three (resigned 30 September 2011) years MR ROBERT TIMMINS Director (Non-Executive) Appointed 17 November 2008 Qualifications Geoscientist Experience Robert received a Bachelor of Science in Agriculture from Sydney University in He also studied geophysics and metallurgy at the Kalgoorlie School of Mines. Robert has international experience in the collection, processing and interpretation of geophysical data. He has consulted extensively in Australia, USA, Bolivia, Chile, Namibia, Botswana, Zimbabwe, Zambia and South Africa for a variety of companies including Rio Tinto, BHPBilliton, Esso, Chevron, Mt Isa Mines, Pancontinental, CSA, Newmont and others. Interest in Shares and Options 7,000,000 Ordinary Shares Directorships held in other listed Non-executive Director of Equamineral Holdings Limited Appointed 24 entities during the past three November 2012 years MR GREGORY HALL Director (Non-Executive) Appointed 14 June 2013 Qualifications Geologist Experience Gregory received a Bachelor of Applied Geology (First Class Class) from the University of New South Wales in Greg is a Director of Golden Phoenix International Pty Ltd, a geological consulting company. He was Chief Geologist for the Placer Dome Group from 2000 to Prior to this he managed exploration in WA for CSR Limited. He has made significant contributions to the discovery of Rio Rinto s Yandi iron ore mine in the Pilbara region of WA and to Barricks Granny Smith gold mine in WA, including Keringal and Sunrise satellite gold mines. 5

7 Information on Directors (Continued) NAMIBIAN COPPER NL DIRECTORS REPORT Interest in Shares and Options Nil Directorships held in other listed Non-Executive Director of Zeus Uranium Limited Appointed 18 August entities during the past three years 2010 Non-Executive Director of Montero Mining and Exploration Limited who are listed on the TSX Appointed January 2010 Non-Executive Director of Laurentian Goldfields Limited who are listed on the TSX Appointed March 2007 Non-Executive Director of Colossus Minerals Inc who are listed on the TSX Appointed May 2008 Non-Executive Director of China Gold International Resources who are listed on the TSX Appointed October 2009 Meetings of Directors During the financial year, 1 meeting of Directors were held. Attendances by each Director during the year were as follows: DIRECTORS MEETINGS # Eligible to # Attended attend Colin Ikin 1 1 Alan Marlow 1 1 Robert Timmins 1 1 Gregory Hall 0 0 Indemnifying Officers or Auditor The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other than conduct involving a willful breach of duty in relation to the Company. Options At the date of this report, there were nil un-issued ordinary shares of Namibian Copper NL under option. 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. Non Audit Services There were no non-audit services provided by the auditors during the financial year. 6

8 Auditor s Independence Declaration NAMIBIAN COPPER NL DIRECTORS REPORT The auditor s independence declaration for the year ended 30 June 2013 has been received and can be found on page 16 of the Annual Report. Remuneration Report - Audited This report which forms part of the Directors Report, details the nature and amount about the remuneration of the Consolidated Group Directors and key management personnel receiving the highest remuneration. A. Remuneration Policy The remuneration policy of Namibian Copper NL has been designed to align director and management objectives with shareholder and business objectives by providing a fixed remuneration component, and offering specific long-term incentives, based on key performance areas affecting the Consolidated Group s financial results. The Board of Namibian Copper NL believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best management and directors to run and manage the Consolidated Group, as well as create goal congruence between directors, executives and shareholders. The Board s policy for determining the nature and amount of remuneration for Board members and senior executives of the Consolidated Group is as follows: The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the Board. All remuneration paid to Directors and executives is valued at the cost to the Company and expensed. Options given to Directors and Key Management Personnel are valued using the Black-Scholes methodology. The Board policy is to remunerate non-executive Directors at the lower end of market rates for comparable companies for time, commitment, and responsibilities. Independent external advice is sought when required. 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. Fees for non-executive Directors are not linked to the performance of the Consolidated Group. During the year ended 30 June 2013 remuneration was paid to directors in addition to the fees paid for consulting and corporate services related to the Entity. Colin Ikin was paid an annual salary of 150,000 as executive chairman of the Entity which commenced on 1 September Since October 2012 Mr Ikin is currently not drawing a salary from the Company, this was resolved by the board. Since October 2012 no set board fees were paid as this was deemed to be in the best interests of the Company at this time, this was resolved by the board. B. Remuneration Details of the nature and amount of each element of the emoluments of each of the KMP of the Company (the Directors) for the year ended 30 June 2013 are set out in the following tables: There were no cash bonuses paid during the year and there are no set performance criteria for achieving cash bonuses. 7

9 Remuneration Report - Audited NAMIBIAN COPPER NL DIRECTORS REPORT B. Remuneration (Continued) For the year ended 30 June 2013 Short-term benefits Post-employment benefits Equity Salary and fees Other benefits Superannuation Share-based payment options Other payments Total Performancebased Name % Directors: Colin Ikin 62, ,500 - Robert Timmins 23, ,350 - Alan Marlow 23, ,750 - Joshua Amukugo 8, ,344 - Gregory Hall Company Secretary: Jay Stephenson ,000* 9, , , ,944 - * This was paid to Wolfstar Group Pty Ltd a company of which Jay Stephenson is a director for the provision of corporate secretarial and accounting services For the year ended 30 June 2012 Short-term benefits Post-employment benefits Equity Salary and fees Other benefits Superannuation Share-based payment options Other payments Total Performancebased Name % Directors: Colin Ikin 125, ,000 - Robert Timmins 52, ,650 - Alan Marlow 86, ,535 - Joshua Amukugo 5, ,657 - Ben Shingenge Company Secretary: Jay Stephenson ,000* 30, , , ,842 - * This was paid to Wolfstar Group Pty Ltd a company of which Jay Stephenson is a director for the provision of corporate secretarial and accounting services 8

10 Remuneration Report - Audited NAMIBIAN COPPER NL DIRECTORS REPORT C. Service Agreements There are no service agreements with Directors at 30 June D. Share-based compensation There was no share-based compensation for the year ended 30 June 2013 or since the end of the financial year. Loans to Directors and Executives There are no loans at 30 June 2013 to any Director. Share options granted to directors and the most highly remunerated officers There were no options over unissued ordinary shares of Namibian Copper NL granted during or since the end of the financial year. - END OF REMUNERATION REPORT This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors. 27 day of September 2013, at Perth, Western Australia. ROBERT TIMMINS NON-EXECUTIVE DIRECTOR 9

11 CORPORATE GOVERNANCE STATEMENT As the framework of how the Board of Directors of Namibian Copper NL ( Company ) carries out its duties and obligations, the Board has considered the eight principles of corporate governance as set out in the ASX Good Corporate Governance and Best Practice Recommendations. The essential corporate governance principles are: 1. Lay solid foundations for management and oversight; 2. Structure the Board to add value; 3. Promote ethical and responsible decision-making; 4. Safeguard integrity in financial reporting; 5. Make timely and balanced disclosure; 6. Respect the rights of shareholders; 7. Recognise and manage risk; 8. Remunerate fairly and responsibly. 1. Lay solid foundations for management and oversight. Recommendation 1.1: Formalise and disclose the functions reserved to the Board and those delegates to management. Roles and Responsibilities: The roles and responsibilities of the Board are to: Oversee control and accountability of the Company; Set the broad targets, objectives, and strategies; Monitor financial performance; Assess and review risk exposure and management; Oversee compliance, corporate governance, and legal obligations; Approve all major purchases, disposals, acquisitions, and issue of new shares; Approve the annual and half-year financial statements; Appoint and remove the Company s Auditor; Appoint and assess the performance of the Managing Director and members of the senior management team; Report to shareholders. Recommendation 1.2: Companies should disclose the process for evaluating the performance of senior executives. The Board regularly reviews the performance of senior executives. Recommendation 1.3: Provide the information indicated in the ASX Corporate Governance Council s Guide to Reporting on Principle 1. The evaluation of performance of senior executives has taken place throughout the year. 2. Structure the Board to add value. Recommendation 2.1: A majority of the Board should be independent Directors. Recommendation 2.2: The Chairperson should be an independent Director. Recommendation 2.3: The roles of the Chairperson and Chief Executive should not be exercised by the same individual. Recommendation 2.4: The Board should establish a nomination committee. Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual directors. Recommendation 2.6: Companies should provide the information indicated in the Guide to reporting on Principle 2. 10

12 Membership NAMIBIAN COPPER NL CORPORATE GOVERNANCE STATEMENT The Board s membership and structure is selected to provide the Company with the most appropriate direction in the areas of business controlled by the Company. The Board currently consists of four members; a Chairman and three non-executive Directors. Refer to the Directors Report for details of each Director s profile. Chairman and Managing Director The Company does not have a Chief Executive. The Board is responsible for the management of the Company. The Company is at a size and stage in its development where a Chief Executive is not an efficient use of resources. Refer Departure table below. Performance Evaluation The Board assesses its performance, the performance of individual directors and the performance of its committees annually through a process of internal review. The Board also formally reviews its governance arrangements on a similar basis annually. The performance of Key Management Personnel ( KMP ) is reviewed on an annual basis by the Board and remuneration committee. Further details regarding the Board s remuneration policy for KMP is provided in the Remuneration Report on page 6. Nomination Committee The Company has a formal charter for the Nomination Committee, however, no Committee has been appointed to date. The Board as a whole deals with areas that would normally fall under the charter of the Nomination Committee. These include matters relating to the renewal of Board members and Board performance. Refer Departure Table below. Skills The Directors bring a range of skills and backgrounds to the Board including exploration, accountancy, finance, marketing, stockbroking, and mining. Experience The Directors have considerable experience in business at both operational and corporate levels. Meetings The Board meets when it is necessary to meet. Independent professional advice Each Director has the right to seek independent professional advice at the Company s expense for which the prior approval of the Chairman is required, and is not unreasonably withheld. 3. Promote ethical and responsible decision-making. Recommendation 3.1: Establish a code of conduct to guide the Directors, the Chief Executive Officer (or equivalent), and any other key executives as to: The practices necessary to maintain confidence in the Company s integrity; The practices necessary to take into account legal obligations and the reasonable expectations of shareholders; The responsibility and accountability of individuals for reporting and investigating reports of unethical practices. Recommendation 3.2: Establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity for the Board to assess annually both the objectives and progress in achieving team. General Comments: The Company believes that the promotion of diversity on Boards, in senior management and within the organisation generally broadens the pool for recruitment of high quality Directors and employees; is likely to support employee retention; through the inclusion of different perspectives, is likely to encourage greater innovation; and is socially and economically responsible governance practice. 11

13 CORPORATE GOVERNANCE STATEMENT The Company is in compliance with the ASX Corporate Governance Council s Principles & Recommendations on Diversity. The Board of Directors is responsible for adopting and monitoring the Company s diversity policy. The policy sets out the beliefs and goals and strategies of the Company with respect to diversity within the Company. Diversity within the Company means all the things that make individuals different to one another including gender, ethnicity, religion, culture, language, sexual orientation, disability and age. It involves a commitment to equality and to treating of one another with respect. The Company is dedicated to promoting a corporate culture that embraces diversity. The Company believes that diversity begins with the recruitment and selection practices of its Board and its staff. Hiring of new employees and promotion of current employees are made on the bases of performance, ability and attitude. Recommendation 3.3: Disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them. Recommendation 3.4: Disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the Board. General Comments: Currently there are no women employees in the whole organisation, in senior executive positions, or on the Board. Given the present size of the Company, there are no plans to establish measurable objectives for achieving gender diversity at this time. The need for establishing and assessing measurable objectives for achieving gender diversity will be re-assessed as the size of the Company increases. Recommendation 3.5: Provide the information indicated in the ASX Corporate Governance Council s Guide to Reporting on Principle Safeguard integrity in financial reporting. Recommendation 4.1: The Board should establish an audit committee. Recommendation 4.2: Structure the audit committee so that it consists of: Only non-executive Directors; A majority of independent Directors; An independent Chairperson, who is not Chairperson of the Board; At least three members. Recommendation 4.3: The Audit Committee should have a formal charter. Refer to Recommendation 4.1. Recommendation 4.4: Companies should provide the information indicated in the Guide to reporting on Principle 4. Integrity of Company s Financial Condition The Company s Company Secretary reports in writing to the Board that the consolidated financial statements of the Company for the half and full financial year present a true and fair view, in all material respects, of the Company s financial condition and operational results are in accordance with relevant accounting standards. Audit Committee The Company has a formal charter for an Audit Committee, however, no Committee has been appointed to date. (Refer Departure Table below) All members of the Board currently provide an active role in the following activities Review the Company s accounting policies; Review the content of financial statements; Review the scope of the external audit, its effectiveness, and independence of the external audit; Ensure accounting records are maintained in accordance with statutory and accounting standard requirements; Monitor systems used to ensure financial and other information provided is reliable, accurate, and timely; Review the audit process with the external auditors to ensure full and frank discussion of audit issues; Present half and full year financial statements to the Board. 12

14 5. Make timely and balanced disclosure. NAMIBIAN COPPER NL CORPORATE GOVERNANCE STATEMENT Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX Listing rules disclosure requirements, and to ensure accountability at a senior management level for that compliance. Being a listed entity on the ASX, the Company has an obligation under the ASX Listing Rules to maintain an informed market with respect to its securities. Accordingly, the Company advises the market of all information required to be disclosed under the Rules which the Board believes would have a material effect on the price of the Company's securities. The Company Secretary has been appointed as the person responsible for communication with the Australian Securities Exchange (ASX). This role includes responsibility for ensuring compliance with the continuous disclosure requirements of the ASX Listing Rules, and overseeing and co-ordinating information disclosure to the ASX, analysts, brokers, shareholders, the media, and the public. All shareholders have access to an annual report on the Company s website. Shareholders who have elected to receive a hardcopy will do so. Recommendation 5.2: Provide the information indicated in the ASX Corporate Governance Councils Guide to Reporting on Principle 5. Disclosure is reviewed as a routine agenda item at each Board meeting. 6. Respect the rights of shareholders. Recommendation 6.1: Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings. Recommendation 6.2: Companies should provide the information indicated in the Guide to Reporting Principle 6. The Company is committed to keeping shareholders fully informed of significant developments at the Company. In addition to public announcements of its financial statements and significant matters, the Company provides the opportunity for shareholders to question the Board and management about its activities at the Company's annual general meeting. The Company's auditor, William Buck Audit (WA) Pty Ltd, will be in attendance at the annual general meeting, and will also be available to answer questions from shareholders about the conduct of the audit and the preparation and content of the auditor's report. 7. Recognise and manage risk Recommendation 7.1: The Board or appropriate Board committee should establish policies on oversight and management of material business risks and disclose a summary of those policies. Recommendation 7.2: The chief executive officer (or equivalent) and the chief financial officer (or equivalent) to state in writing to the Board that: The statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board The Company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects. Recommendation 7.3: The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a system of risk management and internal control and that the system is operating effectively in all material respects in relation to the financial reporting risks. 13

15 CORPORATE GOVERNANCE STATEMENT Recommendation 7.4: Provide the information indicated in the ASX Corporate Governance Council s Guide to reporting on Principle 7. The Board oversees the Company's risk profile. The financial position of the Company and matters of risk are considered by the Board on a daily basis. The Board is responsible for ensuring that controls and procedures to identify, analyse, assess, prioritise, monitor, and manage risk are in place, being maintained and adhered to. The financial controller and Company Secretary state in writing to the Board that: The statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board. The Company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects. 8. Remunerate fairly and responsibly Recommendation 8.1: The Board should establish a Remuneration Committee. Recommendation 8.2: The Remuneration Committee should be structured so that it: consists of a majority of independent Directors; is chaired by an independent chair; has at least three members. Recommendation 8.3: Clearly distinguish the structure of Non-Executive Directors' remuneration from that of executives and senior executives. Recommendation 8.4: Provide the information indicated in the ASX Corporate Governance Council s Guide to Reporting on Principle 8. General Comments: Principles used to determine the nature and amount of remuneration The objective of the Company's remuneration framework is to ensure reward for performance is competitive and appropriate to the results delivered. The framework aligns executive reward with the creation of value for shareholders, and conforms to market best practice. Remuneration Committee The Company has a formal charter for the Remuneration Committee, however, no Committee has been appointed to date. The entire Board act as the Remuneration and Nomination Committee. The Board as a whole deals with areas that would normally fall under the charter of the Remuneration Committee. Refer to the table of departure from best practice recommendations. Directors' Remuneration Further information on Directors' and Executives' remuneration is set out in the Directors' Report and Note 5 to the financial statements. 14

16 Departure from Best Practice Recommendations NAMIBIAN COPPER NL CORPORATE GOVERNANCE STATEMENT From the Company s incorporation, the Company has complied with each of the Eight Essential Corporate Governance Principles and Best Practice Recommendations published by the ASX Corporate Governance Council, other than those items in the departure table below. Recommendation Reference ASX Guidelines Notification of Departure Explanation for Departure 2.3 The roles of Chairman and Chief Executive should be separate. 2.4 A separate Nomination Committee has not been formed. The Company is at a size and stage in its development where a Chief Executive is not an efficient use of resources. The Board considers that the Company is not currently of a size to justify the formation of a nomination committee. The Board as a whole undertakes the process of reviewing the skill base and experience of existing Directors to enable identification or attributes required in Directors. 4.2, 4.3, 4.4 A separate Audit Committee has not been formed. 8.1, 8.2, 8.3 A separate Remuneration Committee has not been formed. The Board considers that the Company is not of a size, nor are its financial affairs of such complexity to justify the formation of an audit committee. The Board as a whole undertakes the selection and proper application of accounting policies, the integrity of financial reporting, the identification and management of risk and review of the operation of the internal control systems. The Board considers that the Company is not currently of a size to justify the formation of a Remuneration Committee. The Board as a whole undertakes the process of reviewing the remuneration levels of the Board, and where required, outside advice is sought. 15

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18 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Note 2013 Interest Revenue 4 3,855 22,905 Other income 4 12, ,570 Less Expenses: Employee benefits (97,938) (134,858) Administration costs (149,615) (137,414) Consultation costs (32,834) (144,027) Depreciation and amortisation 12 (2,956) (6,688) Option expense - (146,938) Impairment expense 12 (1,965,797) - Other expenses (166,566) (448,439) Loss before income tax (2,399,813) (610,889) Income tax expense Loss for the year (2,399,813) (610,889) Other comprehensive income: Items that may be reclassified subsequently to profit or loss currency translation difference arising from consolidation 4,921 (5,578) Other comprehensive income for the year 4,921 (5,578) Total comprehensive loss for the year (2,394,892) (616,467) Net loss attributable to: Non-controlling interest (1,868) (4,070) Members of the parent entity (2,397,945) (606,819) (2,399,813) (610,889) Total comprehensive income / (loss) attributable to: Non-controlling interest (884) (5,186) Members of the parent entity (2,394,008) (611,281) (2,394,892) (616,467) 2012 Loss per share Basic and diluted loss per share 8 (0.03) (0.01) The above statement should be read in conjunction with the accompanying notes. 17

19 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Note ASSETS Current Assets Cash and cash equivalents 9 299, ,268 Trade and other receivables 10 2, ,361 Other current assets 11 34,282 34,412 Total Current Assets 336,746 1,036,041 Non-current Assets Intangible Assets 12 2,995 1,969,544 Mineral exploration and evaluation expenditure 13 1,130, ,354 Plant and equipment 14 3,474 5,679 Total Non-current Assets 1,136,936 2,943,577 TOTAL ASSETS 1,473,682 3,979,618 LIABILITIES Current Liabilities Trade and other payables 15 35, ,381 Total Current Liabilities 35, ,381 TOTAL LIABILITIES 35, ,381 NET ASSETS 1,438,345 3,833,237 EQUITY Contributed equity 17 6,005,690 6,005,690 Reserves 18 (3,584) 203,872 Accumulated losses (4,555,126) (2,369,558) Equity attributable to the members of Namibian Copper NL 1,446,980 3,840,004 Non-controlling interest (8,635) (6,767) TOTAL EQUITY 1,438,345 3,833,237 The above statement should be read in conjunction with the accompanying notes. 18

20 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Noncontrolling Translation Total Equity Foreign Issued Accumulated Based Capital Losses Payments Interest Reserve Reserve Opening balance 1 July ,005,690 (1,762,739) 65,439 (2,697) (2,927) 4,302,766 Loss for the year - (606,819) - (4,070) - (610,889) Other comprehensive income for the year (5,578) (5,578) Total comprehensive income for the year - (606,819) - (4,070) (5,578) (616,467) Options expensed during the year , ,938 Balance 30 June ,005,690 (2,369,558) 212,377 (6,767) (8,505) 3,833,237 Opening balance 1 July ,005,690 (2,369,558) 212,377 (6,767) (8,505) 3,833,237 Loss for the year - (2,397,945) - (1,868) - (2,399,813) Other comprehensive income for the year ,921 4,921 Total comprehensive income for the year - (2,397,945) - - 4,921 (2,394,892) Options expired during the year - 212,377 (212,377) Balance 30 June ,005,690 (4,555,126) - (8,635) (3,584) 1,438,345 The statement should be read in conjunction with the accompanying notes. 19

21 CONSOLIDATED STATEMENT OF CASH FLOWS Note 2013 CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from compensation fee 341,544 - Payments to suppliers and employees (479,266) (841,594) Interest received 3,855 22,362 Net cash outflow from operating activities 19 (133,867) (819,232) CASH FLOWS FROM INVESTING ACTIVITIES 2012 Payment for purchase of plant and equipment - (3,935) Payments for exploration expenditure (156,889) (122,908) Net cash outflow from investing activities (156,889) (126,843) Net decrease in cash and cash equivalents (290,756) (946,075) Effects of currency translation on cash and cash equivalents - 21,007 Cash and cash equivalents at the beginning of the period 590,268 1,515,336 NET CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 299, ,268 The statement should be read in conjunction with the accompanying notes. 20

22 NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS The financial report includes the consolidated financial statements and notes of Namibian Copper NL ( Parent Entity ) ( Consolidated Entity or Group ). Namibian Copper NL is a listed public company, incorporated and domiciled in Australia. The financial report was authorised for issue on 27 September 2013 by the board of directors. 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 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. Except for cashflow information, the financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The financial statements are presented in Australian dollars and all values are rounded to the nearest dollar. (a) Principles of Consolidation The consolidated financial statements incorporate the assets and liabilities of entities controlled by Namibian Copper NL as at 30 June 2013 and the results of all entities controlled for the year then ended. Namibian Copper NL and its controlled entities together are referred to in this financial report as the group or the consolidated entity. A controlled entity is any entity over which Namibia Copper NL has the power to govern the financial and operating policies so as to obtain benefits from the entity s activities. Controlled entities are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the group (refer to note 1(c)). Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of controlled entities have been changed where necessary to ensure consistency with the policies adopted by the Group. (b) Going Concern In preparing the financial statements the Directors note that the ability of the Consolidated Group to continue as a going concern is dependent upon: the containment of operating expenses at a level that is commensurate with the Consolidated Entity s revenue generating potential; the signed moratorium in place where all the directors of the Group have agreed to not invoice any consulting fees, effective from 31 October 2012 until further notice; the ability of the Parent Entity to raise sufficient capital and equity; the Group continuing to enhance the value of the retained assets; exploitation of the exploration and evaluation tenements; and the disposal of assets at a fair value that generates adequate cash flow to the Consolidated Entity. 21

23 NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont) (b) Going Concern (Cont) During the year ended 30 June 2013, the Group incurred significant one off expenditures of about 2.2M, which will be reduced in the future year. Given the Group is maintaining an exploration program, the Group has forecasted that it may require additional funding in the coming year to meet its budgeted operating and exploration expenditures for the next twelve months. In order to achieve the budget, the Group may undertake a further capital raising. The Group incurred a loss of 2,397,945 (2012: 606,819), net decreasing cashflows of 290,756 (2012: 946,075) and had a net asset balance of 1,446,980(2012: 3,840,004) for the year ended 30 June 2013, including a cash balance of 299,512 (2012: 590,268). At the date of this report and having considered the above factors, the Directors are confident that the Group will be able to continue as a going concern and be able to realise their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include adjustments relating to the recoverability and classification of the recorded assets amounts or the amounts and classification of liabilities that might be necessary should the Group not continue as going concern. If the Group is unable to raise additional capital, it would be able to defer or reduce its budgeted exploration expenditure such that the Group will remain a going concern for at least the period up to 12 months from the date of signing the financial report. The Directors are also actively looking at reducing costs such as ceasing all payments for director fees since October 2012 and liasing with service providers to reduce fees based on the reduced activity of the company. (c) Business Combination Business combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions). When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to business combinations are recognised as expenses in profit or loss when incurred. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. The business combination has been identified as a reverse acquisition where Namibian Copper NL (legal parent) is not the accounting parent and Namibian Resources Pty Ltd is deemed as the accounting parent. Goodwill Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of: (i) the consideration transferred; (ii) any non-controlling interest; and (iii) the acquisition date fair value of any previously held equity interest; 22

24 NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont) Goodwill (Continued) over the acquisition date fair value of net identifiable assets acquired. The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Fair value remeasurements in any pre-existing equity holdings are recognised in profit or loss in the period in which they arise. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss. The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method adopted in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non-controlling interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest's proportionate share of the subsidiary's identifiable net assets (proportionate interest method). In such circumstances, the Group determines which method to adopt for each acquisition and this is stated in the respective notes to these financial statements disclosing the business combination. Under the full goodwill method, the fair value of the non-controlling interests is determined using valuation techniques which make the maximum use of market information where available. Under this method, goodwill attributable to the non-controlling interests is recognised in the consolidated financial statements. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is tested for impairment annually. Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not affect the carrying amounts of goodwill. (d) Income Tax The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted at the end of the reporting period. Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the Statement of Profit or Loss and Other Comprehensive Income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. 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 taxation 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. (e) Exploration, Evaluation and Development Expenditure Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. 23

25 NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont) (e) Exploration, Evaluation and Development Expenditure (continued) Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. (f) Plant and Equipment Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. The depreciable amount of plant and equipment is depreciated on a straight line basis over the asset s useful life to the consolidated group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Asset Depreciation Rate Computer Hardware 33% Computer Software 25% 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 the carrying amount. These gains and losses are included in the Statement of Profit or Loss and Other Comprehensive Income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. (g) Foreign Currency Transactions and Balances Functional and presentation currency The functional currency of each of the Group s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity s functional and presentation currency. Transaction and balances 24