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20. Accumulated Losses
21. Related Party Disclosures
Directors
The names of each person holding the position of Director of Breakaway Resources Limited during the financial year were:
John Atkins – appointed 24th
November 2006
Jon Young – appointed since 2003
Garry Connell – appointed since 1999
Peter Buck – appointed 24th
June 2004 (appointed Managing Director 15th
May 2006)
Jeffrey Gresham – appointed 1st
October 2006
Directors’ Remuneration
- Information on Directors’ remuneration is disclosed in Note 22.
Directors’ Holdings of Shares and Share Options
The interests of Directors of the Company and their director-related
entities in shares and share options of the Company are set out as
follows:
Jon Young is also the Chairman of FMR Investments Pty Ltd (FMR) and therefore has an indirect interest in 18,502,258 shares held by FMR.
Transactions Wholly Owned Group
The Company performs certain office services and pays for certain items
on behalf of controlled entities. These transactions are in the normal
course of business and on normal terms and conditions. An interest
charge of 8.4% is charged on all loans to controlled entities.
Transactions with Controlled Entities
During the financial year the controlled entities were charged an
interest rate of 8.4% on the balance of loans outstanding as at 30th
June 2007. The amounts charged from parent entity are as follows.
(a) Details of Specified Directors and Specified Executives
(i) Specified Directors
| Mr JK Atkins | Chairman (Non-Executive) – appointed 24th November 2006 |
| Mr PS Buck | Managing Director |
| Mr JA Young | Director (Non-Executive) |
| Mr GP Connell | Director (Non-Executive) |
| Mr JJ Gresham | Director (Non-Executive) – appointed 1st October 2006 |
(ii) Specified Executives
| Mr GJ Mooney |
Company Secretary |
| Mr TG Hart | Financial Controller |
| Mr DJ Hutton | Exploration Manager |
| Mr DN Castleden | Manager Nickel Geology and Exploration |
(b) Remuneration of Specified Directors and Specified Executives
The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payment to the Non-Executive Directors and reviews their remuneration annually, based on market practices, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is $250,000. Fees for Non-Executive Directors are not linked to the performance of the economic entity.
The Board of Directors’ is responsible for setting the remuneration
of executive Board members and senior executives of the Company. Their
broad policy is to ensure the remuneration package properly reflects
the person’s duties and responsibilities and to ensure remuneration is
competitive in attracting, retaining and motivating people of the
highest quality. The Company’s performance is taken into consideration
when setting remuneration.
Directors and Executives remuneration included amounts paid by the Company during the year to indemnify Directors and Executives, and an allocation of insurance premiums paid by the Company or related parties in respect of Directors’ and Officers’ liabilities and legal expenses’ insurance contracts, in accordance with common commercial practice.
22. Director's and Executives' Remuneration
Equity Instruments
Option holdings
The movement during the reporting period in the number of options over
ordinary shares in the Company held, directly, indirectly or
beneficially, by each specified Director and Officer is as follows:
23. Employee Benefits
(a) Share base payments
The Company has an employee share option scheme which was approved at the 2003 Annual; General Meeting held on 24th
November 2003.
Each option is convertible to one ordinary share. The exercise price
of the options are determined in accordance with the rules of the plan
and will be the greater of 120% of the market value of shares on the
day the option is issued, 20 cents or a price determined by the
Directors in their discretion.
All employee options expire on the earlier of their expiry date or 30 days after termination of the employee’s employment.
There are no voting rights attached to the options or to the
unissued ordinary shares, voting rights will be attached to the issued
ordinary shares when options have been exercised.
Summary of options over unissued ordinary shares
Details of options over unissued ordinary shares as at the beginning and end of the reporting periods and movements during the year are set out below.
24. Segment Information
The company operates solely in the natural resources exploration and mining industry in Australia.
25. Notes To Statements Of Cash Flows
(a) Reconciliation of Cash
For the purposes of the statements of cash flows, cash includes cash on
hand and at bank. Cash at the end of the financial year as shown in the
statements of cash flows is reconciled to the related items in the
balance sheet as follows:
Non cash financing activities and investing activities
During the financial year ending 30th
June 2007 the Company incorporated a wholly owned subsidiary for $1 (refer note 26).
26. Business Combinations
Acquisition of Scotia Nickel Pty Ltd
On the 21st
August 2006 as part of the acquisition of the LionOre assets the
consolidated entity through its wholly subsidiary Altia Resources Pty
Ltd acquired 100% of the voting shares in Scotia Nickel Pty Ltd.
In connection with the business combination the Company issued
converting notes and shares to LionOre with a fair value of $6,256,152
at the date of acquisition.
The fair vale of the identifiable assets and liabilities of Scotia Nickel Pty Ltd as at the date of acquisition are:
27. Financing Arrangements
Performance guarantees
(i) Unconditional Performance Bonds have been lodged with the
Department of Mineral and Petroleum Resources for the progressive
rehabilitation and reclamation of the mineral tenements of a controlled
entity. These bonds have been provided under a guarantee facility
provided by Investec Bank (Australia) Limited with a restricted cash
deposit of $345,000 as at 30th
June 2007.
(ii) Unconditional Performance Bonds have been lodged with the
Department of Mineral and Petroleum Resources for the progressive
rehabilitation and reclamation of mineral tenements of the company. The
Bonds are secured by a fixed charge over a cash deposit account with
Macquarie Bank Limited totalling $59,000 as at 30th
June 2007
(iii) Unconditional Performance Bonds have been lodged with the
Department of Mineral and Petroleum Resources for the progressive
rehabilitation and reclamation of mineral tenements of the company. The
Bonds are secured by a fixed charge over a cash deposit account with
Bankwest totalling $11,200.
(iv) Unconditional Performance Bonds have been lodged with the
Department of Mineral and Petroleum Resources for the progressive
rehabilitation and reclamation of mineral tenements of the company. The
Bonds are secured by a fixed charge over a cash deposit account with
Westpac Bank totalling $30,000.
Other guarantees
(v) The Company has a $74,805 performance guarantees in place to secure the payment of rent under the Company’s lease of premises at its offices at 15 Rheola Street West Perth. This guarantee is secured by a $74,805 term deposit with Bankwest.
29. Additional Financial Instrument Disclosures
(a) Credit Risk Exposures
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
Recognised financial instruments
The credit risk on financial assets (excluding investments) of the consolidated entity, which have been recognised on the balance sheet, is the carrying amount, less any provision for doubtful debts.
(b) Interest Rate Risk
The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and liabilities is:
(c) Net fair values of financial assets and liabilities
Net fair values of financial assets and liabilities are determined by the consolidated entity on the following basis:
Recognised financial instruments
Listed shares included in other financial assets are traded in an organised financial market and the net fair value is determined by valuing them at the quoted market bid price for the shares at balance date.
Monetary financial assets and financial liabilities not readily traded in an organised financial market are determined by valuing them at the amounts due from customers (reduced for expected credit losses) or due to suppliers. The carrying amounts of accounts receivable, payables, bank loans, lease liabilities and employee benefits approximate net fair value.
(d) Liquidity risk
The consolidated entities objective is to maintain a balance between continuity of funding and flexibility through the use of cash at bank, finance leases and hire purchase contracts.
There is no significant liquidity risk with the consolidated entity.
30. Controlled Entities
31. Commitments
32. Commitments (Exploration)
The consolidated entity has minimum expenditure obligations in pursuance of the terms and conditions of mining tenements in the forthcoming year of approximately $3,389,460 (2006 $662,620). These obligations are not provided for in the financial report. These obligations may be varied from time to time subject to statutory approval.
33. Events Subsequent to Reporting Date
On the 30th July 2007 the Company issued 2,050,000 employee share options via the Company’s Employee Share Plan. The issued options are exercisable at 85 cents within 3 years following the date of issue but commencing not before the relevant vesting dates as follows:
• 50% vesting 12 months from date of issue and the remaining 50% vesting 24 months from the date of issue.
Directors’ Declaration
1. In the opinion of the Directors of Breakaway Resources Limited (“the Company”):
(a) The financial statements and notes, set out on pages 33 to 82, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the financial position of the Company and consolidated entity as at 30th June 2007 and of their performance, as represented by the results of their operations and their cash flows, for the year ended on that date; and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2. The Directors have been given the declaration required by section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30th June 2007.
Signed in accordance with a resolution of the Directors:
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| John Atkins Chairman |
Peter Buck
Managing Director |
