Final Results

Centamin Egypt Limited 07 September 2005 Preliminary results for the year ended 30 June 2005 CHAIRMAN'S REPORT It is my pleasure to present to you the annual report of the Company for the year ended 30 June 2005. We are finally back doing what we do best, that is discovering and developing mines. With seven drill rigs currently operating at the Sukari site, our geological resource is increasing daily and the momentum is quickly building toward the establishment of a substantial gold mining operation. This operation is the first step in achieving our stated Company objective of being a major North African Mining house, and a significant force in the world mining scene. Throughout the dispute with the previous Minister, we never took our eyes off the ball or wavered in our beliefs that we have a great Company with a great asset base. The fact that the Company has pioneered a major, world class discovery in an overlooked mineral field, provided us with the motivation during challenging times to achieve a successful resolution which we believe will, in time, deliver superior benefits and a just reward to our shareholders. Our relationship with the Egyptian Government is improving daily. His Excellency Eng. Sameh Fahmy, the Minister for Petroleum & Mineral Resources, together with the entire Board of the Egyptian Mineral Resource Authority (EMRA) and media entourage, visited Sukari in July as a show of support for the Company. The Minister stated on national television that the project has his and the Egyptian Government's full support, and acknowledged the Company's efforts and endeavours. We will continue to work with the Ministry and EMRA to help establish the framework for a successful Egyptian mining industry. As mentioned above, our immediate focus is to continue building the Sukari geological resource and move the project into production. Sukari is a major discovery with multi million ounce potential. Before our activities were interrupted, our resource contained 2.94Moz of gold, of which 1.8Moz are within the initial pit design, in various categories of ore classification. Ausenco Limited has recommenced the Feasibility Study to a bankable standard (BFS) into the development of a 4 to 5 million tonne per annum processing facility. The main focus of the feasibility study is to optimise the process flow sheets (flotation and CIL) to determine which capital/operating cost profile provides the best economics. At the time of writing this report, we have made significant progress in:- 1. Adding substantially to the 2.94Moz geological resource; 2. Elevating the inferred ore classification to mainly measured and indicated; 3. Determining the optimum process flow sheet; 4. Finalising the feasibility up-grade. We have a busy and exciting time ahead of us, seven drill rigs working 24 hours a day 7 days a week, assaying, metallurgical testwork, mine and plant design, finance and all other aspects of bringing a major mining operation into production. It is a significant step forward for Centamin, which I am sure, will lead to the recognition of the full value of the Company's assets. I would like to acknowledge our staff in Australia and Egypt for their loyalty and dedication throughout the past year. I would also like to thank my co-directors for their efforts, in particular the Managing Director who spent the majority of the year in Egypt, overseeing the Company's legal actions and negotiations with the government and implementing the successful restart of our operations. Finally, I would like again to thank the Company's major shareholders and Williams de Broe Plc in London for their continuing support. I look forward to welcoming you to the Annual General Meeting of the Company. On behalf of the Board Sami El-Raghy Chairman REVIEW OF OPERATIONS Drilling at Sukari has recommenced with two initial focuses; to elevate the ore contained within the first stage 1.8 million ounce optimised pit shell contained within the Amun and part of the Ra zone, from inferred to the measured and indicated resource categories and to increase the overall resource of the Sukari deposit. Drill assays received to date support this programme of conversion whilst also increasing the overall contained ounces within the proposed stage 1 pit shell. Drilling has also highlighted that significant mineralization continues at depth. Drill holes D323C, D329, D334, D336, D339 and D340 (from 10150N to 10300N) all successfully tested areas within the current pit shell and below the pit to the porphyry footwall contact where there is currently no resource or the resource is of inferred category. The broad and continuous zones of typical Sukari mineralisation will up grade the resource. Visible gold was intersected in D329 at the porphyry and footwall contact and included an intersection of 3m at 15.83g/t from 300 to 303m Drill holes D326, D342 and D346 proved the continuation of high grade gold mineralisation below the current pit and resource models and will contribute additional ounces to the resource. Both holes D342 and D346 display very good correlation with higher holes D306 and D308. Visible gold was noted in D326 on the contact with the footwall and this may be an extension of the high grade Hapi shoot, which is further south than expected, the intersection included 3m at 9.39g/t from 303 to 306m. Summary of the major drill intersections since recommencement Hole North From To Interval Au (g/t) Comments D322 10350 75 85 10 2.24 D323C 10125 138 180 42 1.90 incl. 138 145 7 4.67 D323C 224 242 18 1.81 D323C 275 292 17 1.76 D323C 303 309 3 9.39 Visible gold, highly sheared, brecciated D326 10075 170 216 46 2.00 D329 10150 249 261 12 2.27 Major quartz vein and stockwork D329 272 279 7 3.96 Crackle breccia and stockwork D329 300 303 3 15.83 Visible gold, breccia, arsenopyrite D336 10175 178 194 16 2.35 Mineralised from HW contact, shearing, breccias, arsenopyrite D336 201 212 11 2.36 Sheared, stockwork, minor quartz veins and arsenopyrite D339 182 200 17 1.97 Stockwork breccias and shears D340 10300 177 213 36 3.60 Stockwork, crackle breccias, arsenopyrite and shearing D342 10250 259 283 24 3.07 Mineralised from HW contact, shearing, quartz veins, arsenopyrite D346 10375 295 322 27 3.40 High alteration, breccia, shears and quartz veins The current drilling programme is also to test the remaining parts of the Ra zone north of 10900N and the Gazelle and Pharaoh zones to add to the overall resource. Four rock breakers are currently preparing drill access roads to the elevated northern slopes of the Sukari porphyry. Upon completion this will permit drilling from the wadi floor to the ridge of Sukari Hill. In the Ra, Gazelle and Pharaoh zones, from northing 11000N to 12200N (1200m strike where there is currently no drill access), a rock chip sampling and mapping programme has been completed on 100m spacing to 12200N and infilled on 50m spacing to 11450N. This programme has demonstrated that the mineralization continues north of the area containing the 2.94 million ounce resource. Results from samples and mapping have confirmed the continuation of mineralization along strike from the southern tip of the Amun zone (9900N) to the northern end of the Pharaoh zone (12200N). Mapping and assay data show that the mineralization is the same nature as that seen in the Amun and Ra zones, with zones of stockwork mineralization, brecciation, major quartz veins, shearing and intense alteration common at surface outcrop. The major orientation of the mineralization is controlled by a conjugate set of structures which strike northeast dipping at medium angles to the west and the second structure strikes to the north west dipping at medium angles to the east. FEASIBILITY STUDY Ausenco Limited has recommenced the Feasibility Study to a bankable standard (BFS) into the development of a 4 to 5 million tonne per annum processing facility, forecast to produce an initial 250,000 ounces of gold per annum. As part of the study, metallurgical samples were collected from the project and testwork is now underway and is focusing on three key areas: 1. additional comminution analysis for optimal grinding circuit sizing; 2. flotation testwork at various grind sizes; 3. whole ore leach at various grind sizes. Variability tests will also be conducted on a variety of ore types from the orebody. A site investigation has been conducted to review the infrastructure at Sukari, local towns and deep water ports and also to determine the optimal locations for the processing plant, tailings dam facility, waste dump and water pipeline route from the Red Sea to site. Geotechnical testwork is in progress to test the pit wall stability for pit wall design, the work programme includes 17 dedicated drill holes to investigate ground conditions within the porphyry, footwall and hangingwall rocks. Twelve of the seventeen geotechnical boreholes involve drilling diamond 'tails' from reverse circulation (RC) and diamond drill holes already planned by the Company for exploration and reserve infill drilling. Other work being carried out includes rock defect surveys, unconfined compressive strength tests and defect shear strength tests. A core re-logging programme was completed on 100m and 50m northings and a new coding system was introduced which allows for greater interrogation of the geological database. A digital elevation model was taken using the IKONOS satellite covering a 101sq km area over the Sukari Project. The information will be used to assist in volume calculations, infrastructure design layout and construction of the project. Overview of the Sukari Geology REGIONAL GEOLOGY The rock sequence at Sukari comprises part of the Neoproterozoic (1000-542Ma) Arabian-Nubian Shield, one of a number of areas of African continental crust that accreted and stabilised during the Pan-African Orogeny. At a district scale, the host sequence at Sukari comprises a NNE-striking melange of predominantly calc-alkaline igneous rocks and metasediments representing an accreted island arc or arcs. The Sefein-Sukari district-scale structure (about 25km long) is host to other gold deposits south of Sukari, such as Umm Ud and Kurdeman (Azzaz et al. 1977). DEPOSIT GEOLOGY The Sukari gold deposit is hosted in a felsic (calc-alkaline) intrusive known as the Sukari porphyry of granodiorite to tonalite composition (Harraz 1991). The porphyry may represent the root of a volcano or a magma chamber. The deposit is under a 2.5km-long ridge that is 100m wide in the south and up to 600m metres in the north. The trend of the hill is north-easterly following the regional structural grain. The porphyry dips to the east, averaging 65-70degrees, with localised flexures ranging between 30-80degrees. The gold mineralisation so far drilled is hosted totally within the Sukari porphyry and hangingwall porphyry dykes. This gold mineralisation is related to stockwork and through-going shear structures. Structure The structural controls on mineralisation within the main Sukari porphyry consists of a series of stacked brittle-extensional veins of short strike length within stockwork zones which are formed in relation to continuous through-going brittle-ductile shears zones which propagate from the footwall and hangingwall porphyry contacts. The Main Reef and the Hapi Zone are both examples of major east-dipping through-going shears which propagate from the footwall contact and dip from 35-50degrees easterly compared to 65-70degrees for the porphyry. Alteration The alteration assemblages within the Sukari porphyry related to mineralisation are sericite, silica, kaolinite, albite, and also (in the northern part of the resource) haematite. In the hangingwall silica-carbonate alteration (including some listvenite) associated with faulting is found within the serpentinites. Mineralisation Gold mineralisation at Sukari is related dominantly to sulphides; pyrite is the most abundant sulphide, followed by arsenopyrite. The sulphides occur disseminated in altered rocks and in quartz veins. Pyrite is found in all the mineralised zones. Deposition of pyrite was continuous throughout the various mineralising stages. Arsenopyrite is most common in the zones of higher-grade gold mineralisation, so it is common in the Main Reef and in the Hapi Zone. SEM and mineragraphic work (Mintek 2000), determined that high-purity gold occurs free in quartz, on the margins of pyrite and arsenopyrite crystals, and as microfracture fillings. Gold as electrum is paragenetically first as it is often occluded in pyrite and followed secondly by high purity gold (>900 fine) depleted in silver. REGIONAL EXPLORATION Regional Exploration has re-commenced, following the transition of the Sukari Concession for mine development and resource work. Mr Roger Speers, a senior geologist, was appointed in June to develop regional exploration projects and add economic gold resources to the Sukari inventory. Work is initially focused on evaluating prospectivity of the near-mine brownfield's potential at Sukari, targeting potential resource ounces outside the main porphyry that could be economically treated by the future Sukari process plant; mainly along the strongly carbonate-silica altered and sheared belt of rocks striking in a N to NE direction in the footwall to the main Sukari porphyry. Work so far has involved detailed review of all historical results and previous work, reports, mapping; data compilation, entry and validation, field mapping and rock chip sampling. Review work and planning of exploration programmes for previously developed high potential targets on the Sukari and other areas, is also underway. Several prospects and anomalies have been identified that require follow up. Work in the near-mine area is critical as it may have a strong impact on the siting of future mine infrastructure such as tailings dams, waste dumps and plant sites, currently under investigation for the bankable feasibility study. Field work consisted of check mapping, interpretation and rock chip sampling of geologically interesting zones in targeted prospect areas. Over 100 samples have been taken, with work continuing. Results are awaited. MINERAL EXPLORATION AND MINING TENEMENTS HELD IN EGYPT: Name Tenement reference Note Interest at Interest at 30 June 2005 20 June 2004 Eastern Desert Law 222 for 1994 1 100% 100% Rosetta Concession 2 50% 50% Notes: 1. Pharaoh Gold Mines NL (a wholly owned subsidiary of Centamin Egypt Limited) is the holder of a Mining (Exploitation) Lease covering an area of 160 km2 that contains the proposed Sukari mine site and surrounding prospects. This lease is issued under the existing Law 222 of 1994, which was enacted by the Egyptian Government specifically to accommodate the Company's exploration and mining activities in the Eastern Desert (the Eastern Desert Concession). The Lease has a tenure of thirty years with the option to renew for a further thirty years. 2. An Egyptian mineral concession held under application by Egyptian Pharaoh Investment (EPI) an Egyptian Company jointly owned by Centamin Egypt Limited and Kara Gold NL under an agreement with the Egyptian Government. Under the terms of this agreement to develop a heavy minerals project at Rosetta on the Mediterranean coast, east of Alexandria, any profit from mining and separation of the heavy minerals will be shared with the Egyptian Government after EPI recoups all of its development expense. Any profit from the upgrading of the ilmenite to pigment quality TiO2 (titanium dioxide) will be 100% EPI. AUSTRALIAN PROJECTS Nelson's Fleet The Company is entitled to a royalty over the Nelson's Fleet gold project near St Ives, Western Australia, from the St Ives Gold Mining Co Pty Ltd, a subsidiary of Gold Fields Ltd. The Company has not been informed of any mining of the tenement to date. ASX Listing Rule 5.10.1 Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by Mr R Osman who is a member of the Australasian Institute of Mining and Metallurgy with more than five years experience in the fields of activity being reported on and is an employee of the Company. His written consent has been received by the Company for this information to be included in this report in the form and context that it appears. Mr Osman declares an interest in shares of the Company. The information in this report that relates to mineral resources is based on information compiled by Mr Gary Brabham, a member of the Australasian Institute of Mining and Metallurgy. Mr Brabham was employed by Hellman & Schofield Pty Ltd a consultancy primarily concerned with estimation of mineral resources worldwide. Mr Brabham is a Competent Person under the meaning of the J.O.R.C. code with respect to the mineralisation being reported in this report. Mr Brabham has more than five years' experience in the mining industry and has given his consent to the public reporting of this information in the section headed Sukari Resource. For this report, measured resources lie in areas where drilling is available at nominal 25 x 25 metre spacing, indicated resources in areas drilled at approximately 25 x 50 metre spacing and inferred resources in areas of broader spaced drilling. The resource model extends to 750mRL (approximately 400 metres below surface) and resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction. Appropriate check sampling has been undertaken to verify the gold assays used in this estimate. References AKAAD, M.K., ABU ELA, A.M., & EL KAMSHOSHY, 1994, Geology of the Region West of Mersa Alam, Eastern Desert, Egypt. Annals of the Geological Survey of Egypt, v. XIX, pp1-15. AZZAZ S, AZAB M, KAROUS S, GOUBASHI M, BOUTROS N, KHALIFA K, KHALAF I, ABDEL RAZIK M, SOBKY M, ABBAS A, KOUSNATSOV B, STEPNOV E 1977, Results of prospecting and prospecting-exploration at the Sukari gold ore field in the central Eastern Desert in 1975 - 1977. EGSMA & USSR Technoexport Contract 78442, Sukari Party 7A/75 & 7A/76. Unpublished EGSMA documents 11/1978 & 98/1978, EGSMA, Cairo. HARRAZ, H.Z., 1991, Lithogeochemical Prospecting and Genesis of Gold Deposits in El Sukari Gold Mine, Eastern Desert, Egypt. Unpublished PhD thesis, Tanta University, Egypt. HELLMAN AND SCHOFIELD, 2003, Structural Controls on Mineralisation at Sukari Gold Deposit, Egypt. Unpublished report to Centamin Egypt Limited, July 2003. MINTEK SERVICES, 2000, Mineragraphic and SEM Reports, 40706-40737. Unpublished report to Centamin Egypt Limited. CORPORATE ACTIVITIES In April 2005, an agreement was reached with the Egyptian Mineral Resource Authority (EMRA) for a return to work at Sukari. The Company re-commenced operations on a new Mining (Exploitation) Lease covering an area of 160 km2, containing the proposed Sukari mine site and surrounding prospects. The lease was issued under the existing Law 222 of 1994, which was enacted by the Egyptian Government specifically to accommodate the Company's exploration and mining activities in the Eastern Desert. The Law remains unchanged and the Company has title for a period of 30 years from the date of re-commencement of activities and is renewable at the Company's election for a further period of 30 years. All tax and royalty arrangements remain unchanged. All Legal actions and the proceedings before the Centre for Arbitration that were initiated by the Company have been withdrawn. Drilling at Sukari recommenced on 15 May 2005. At the time activities at Sukari were interrupted, the Company had completed a scoping study and had commenced work on a Feasibility Study to a bankable standard (BFS) into the development of a 4 to 5 million tonne per annum processing facility, forecast to produce an initial 250,000 oz of gold per annum. This study recommenced during late May and is being prepared by Ausenco Limited. During July 2005, his Excellency, Engineer Sameh Fahmy, the Minister for Petroleum and Mineral Resources, the Deputy Minister, Engineer Amghad Ghonem, and the entire EMRA Board, together with a large media entourage visited the Sukari Project site where the Minister stated on national television that the project has his, and the Egyptian Government's full support. Negotiations are continuing on other areas within Egypt and the terms and conditions under which work on these areas will recommence. DIRECTORS' REPORT The Directors of Centamin Egypt Limited submit herewith the annual financial report of the Company for the financial year ended 30 June 2005. In order for the Company to comply with the provisions of the Corporations Act 2001, the directors' report is as follows: DIRECTORS The names and particulars of the directors of the Company during or since the end of the financial year are: Mr Sami El-Raghy B.Sc. (Hons), FAusIMM, FSEG Chairman, age 64 Director since 29 April 1993 A graduate of Alexandria University in 1962, Mr. El-Raghy worked in Egypt and Europe before moving to Australia in 1968 and joining American Smelting and Refining Company (Asarco). He was instrumental in the discovery and development of a number of gold mines, including the Wiluna Gold Mine for Asarco and the Mt Wilkinson Gold mine for Chevron Exploration. Mr. El-Raghy recognised the potential of the Marymia Dome and the Barwidgee Yandal Belt long before these areas became the most sought after mining areas in Australia. Mr. El-Raghy brings to the board over 38 years' experience in the industry, both in Australia and overseas. Mr Josef El-Raghy B.Comm Managing Director/CEO, age 34 Director since 26 August 2002 Josef El-Raghy holds a Bachelor of Commerce Degree from the University of Western Australia and had a ten year career in stock broking. He was formerly a director of both CIBC Wood Gundy and Paterson Ord Minnett. His expertise in international capital markets has greatly assisted the Company in its fundraising and development activities. Mr El-Raghy is also a Director of ISIS Resources Plc. Mr Colin Cowden FAII, ASA, ACIS, ACIM, FNIBA, CD Non Executive Director, age 61 Member Audit Committee Member Remuneration Committee Director since 8 March 1982 Colin Cowden is the Executive Chairman of Cowden Limited, a licensed insurance broking company formed in 1972. Cowden Limited is a prominent broking firm in Western Australia with branch offices in Sydney, Melbourne and Adelaide. Mr Cowden is also a director of OAMPS Limited. Mr G. Brian Speechly FAusIMM Non Executive Director, age 72 Member Audit Committee Member Remuneration Committee Director since 15 August 2000 Brian Speechly is a Fellow of the Australasian Institute of Mining and Metallurgy with over 49 years experience in the mining industry. During his career, Mr Speechly has been involved in over 320 mining projects and is recognised in Australia and overseas as an expert in both underground and open pit mining and design. He is particularly noted for his innovative and low cost approaches to mining issues. Mr Speechly is currently a Director of Dynasty Metals & Mining Inc. Dr Thomas G. Elder PhD, FIMM, FGS Non Executive Director, age 66 Director since 8 May 2002 Tom Elder is the President and a Director of Mano River Resources Inc. and non-executive Director of Chaco Resources Plc. He is a graduate geologist with an extensive background in mineral exploration gained with major resource companies including BP Minerals, Rio Tinto and Cominco. He has run exploration programs in the United Kingdom, Spain, Italy, Portugal and Greenland and had special responsibility for project development in the former Soviet Union. MANAGEMENT Mr Roger Speers BEng (1st Hons WASM), AIG Senior Exploration Geologist Mr Speers is an experienced exploration geologist who was employed for 41/2 years in regional exploration and near mine resource development with AngloGold Ashanti at their Geita Gold Mine and regional projects in Tanzania. Prior to Tanzania, Mr Speers was employed by AngloGold and Acacia Resources in Western Australia at their Sunrise Dam and Laverton/Kalgoorlie regional exploration teams. Mr Speers is responsible for developing the potential additional regional gold resources around Sukari as well as assisting with the Sukari resource development. Mr Richard Osman B.Sc.(Hons.), M.Sc., MCSM, MAusIMM Senior Mine Geologist - Sukari Mr Osman holds a master's degree from Camborne School of Mines in Mining Geology and is an experienced mine and exploration geologist who was employed in the mining geology and near mine resource development for 5 years at the Jubilee and Big Bell operations in Western Australia owned by New Hampton Goldfields and Harmony Gold. Mr Osman is responsible for drill hole planning, reserve definition and implementation of and maintaining all of the mining data systems at Sukari. Mr Michael Kriewaldt MSc, FAusIMM, MGSA, FSEG, MAIG Exploration Mr Kriewaldt holds a degree of Master of Science and has worked as a geologist since 1955 with Mt Isa Mines, Broken Hill South, the Geological Survey of Western Australia, Asarco Australia and Eon Metals, during which time he has amassed considerable knowledge and experience in the exploration for gold and base metals. He is credited with directing the attention of Asarco to the Wiluna Gold Mines area and was instrumental in the success of the company in that area. Mr Kriewaldt also recognised the potential of the Nelson's Fleet project and was solely responsible for the success of Centamin's exploration effort in that area. He is a member of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists, the Geological Society of Australia and the Society of Economic Geologists Mrs Heidi Brown SIA(Aff) Company Secretary Mrs Brown has experience in the finance and securities industries and holds a Diploma from the Securities Institute of Australia. Mr John Lynch Office Manager - Perth Mr Lynch has been in the mining industry in a technical capacity for over 33 years, with Western Mining, Chevron Exploration and Eagle Mining. Mr Dennis W Franks, B. Bus, FCPA Finance Mr Franks has in excess of 30 years experience in the finance-investment banking and mining and exploration industries. He has an Accounting Degree and has considerable experience in the management of listed companies both within Australia and overseas. Mr Youssef El-Raghy General Manager - Egyptian Operations An officer graduate of the Egyptian Police Academy Mr El-Raghy held senior management roles within the Egyptian Police force for a period in excess of ten years, having attained the rank of captain, prior to joining the Company. Mr El-Raghy has extensive contacts within the government and industry and maintains excellent working relationships with all of the Company's stakeholders within Egypt. Mr Esmat El-Raghy Field Manager - Sukari Operation A retired Air Defence General, Esmat is responsible for field administration and liaising with the army, police and local authorities. Mr Taha Lamada Administration Manager - Egyptian Operations A commerce graduate of Alexandria University, Taha is responsible for Egyptian administration and human resource management. Mr Samir Abd El-Aziz Finance Manager - Egyptian Operations A Chartered Accountant and member of the Society of Accounting and Auditing, Samir is responsible for implementation of the Company's Egyptian budget and dealings with Egyptian banks and financial institutions. directors' meetings The number of directors' meetings and number of meetings attended by each of the directors of the Company during the financial year were: Director No of Meetings No of Meetings Held Attended Mr S El-Raghy 4 4 Mr C Cowden 4 4 Mr G B Speechly 4 4 Dr T G Elder 4 4 Mr J El-Raghy 4 3 In addition to these formal meetings, during the year the Directors considered and passed thirteen (13) Circular Resolutions pursuant to clause 15.10 of the Company's constitution. AUDIT COMMITTEE MEETINGS Director No of Meetings No of Meetings Held Attended Mr C Cowden 1 1 Mr G B Speechly 1 1 Since year end, the Audit Committee has met once to consider matters within its terms of reference. REMUNERATION COMMITTEE MEETINGS AND RESOLUTIONS Director No of Meetings No of Meetings Held Attended Mr C Cowden 2 2 Mr G B Speechly 2 2 During the year, the Remuneration Committee met twice to consider matters within its terms of reference. PRINCIPAL ACTIVITIES The principal activity of the consolidated entity during the course of the financial year was the exploration for precious and base metals. There were no significant changes in the nature of the activities of the consolidated entity during the year. DIVIDENDS No dividends have been declared or paid since the end of the previous financial year. CHANGES IN STATE OF AFFAIRS There was no change in the state of affairs of the consolidated entity during the financial year. FUTURE DEVELOPMENTS It is the objective of the Company, to continue to drill at the Sukari project, so as to increase the overall size of the geological resource, whilst at the same time, conclude the Bankable Feasibility Study into the proposed construction of a processing plant with a throughput rate of up to 5 million tonnes per annum. Subsequent to this, the Company's intention is to arrange project development finance so as to commence construction of the processing plant and ancillary infrastructure. OPTIONS OPTIONS ISSUED DURING THE FINANCIAL YEAR: A total of 1,185,000 unlisted options were issued during the financial year to 30 June 2005. The details of these options are as follows:- Number of Ordinary shares under option Exercise Price Expiry Date 775,000 $0.2804 04 February 2008 410,000 $0.2804 17 February 2008 OPTIONS CONVERTED DURING THE FINANCIAL YEAR: There were 150,000 options exercised at a price of $0.2310 during the financial year. OPTIONS GRANTED TO DIRECTORS There were no options granted to directors during the financial year to 30 June 2005. EMPLOYEE OPTION PLAN At the Annual General Meeting on 29 November 2002, shareholders approved the Employee Options Plan 2002. The following options have been issued to Executives and Employees under the plan to date. Number of Ordinary shares under option Exercise Price Expiry Date 1,160,000 23.10 cents 12 November 2006 130,000 23.10 cents 17 November 2006 750,000 35.49 cents 15 December 2006 775,000 28.04 cents 04 February 2008 410,000 28.04 cents 17 February 2008 OPTIONS ISSUED SUBSEQUENT TO BALANCE DATE No options have been issued subsequent to balance date. Details of the number of options held by Directors or held in companies controlled by them at the date of this report are set out in 'Directors' Shareholdings'. ENVIRONMENTAL REGULATIONS The consolidated entity is currently complying with relevant environmental regulations and has no outstanding environmental orders against it. EVENTS SUBSEQUENT TO BALANCE DATE There are no significant events subsequent to balance date. REVIEW OF OPERATIONS A review of the Company's operations is located at the front of this report. INDEMNIFICATION OF OFFICERS & AUDITORS During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company and any related body corporate against a liability incurred as a director to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise indemnified its officers or auditors. REMUNERATION REPORT 1. DIRECTORS' REMUNERATION The Remuneration Committee reviews the remuneration packages of all directors on an annual basis. Remuneration packages are reviewed with due regard to performance and other relevant factors. 2005 Primary Post Employment Equity Name Salary/ Bonus Non-Monetary Super-annuation Share Options Total Fees *** $ $ $ $ $ $ S El-Raghy, Chairman* 376,283 150,000 144 - - 526,427 J El-Raghy, Managing Director/CEO 224,808 - 20,449 22,481 - 267,738 T Elder, Non-executive Director* 49,580 - - - **9,573 59,153 C Cowden, Non-executive Director 25,000 - - 2,250 **9,573 36,823 G B Speechly, Non-executive Director 25,000 - - 2,250 **9,573 36,823 Total 700,671 150,000 20,593 26,981 28,719 926,964 * Non-resident directors ** Options value as per Black Scholes pricing method *** Bonus paid in respect to performance and represents 28.5% of total remuneration. 2004 Primary Post Employment Equity Name Salary/ Non-Monetary Superannuation Share Total Fees $ $ Options $ $ $ S El-Raghy, Chairman* 322,979 4,383 12,802 - 340,164 J El-Raghy, Managing 205,500 22,445 20,600 - 248,545 Director/CEO T Elder, Non-executive Director* 55,753 - - **28,724 84,477 C Cowden, Non-executive Director 25,000 - 2,250 **28,724 55,974 G B Speechly, Non-executive Director 25,000 - 2,250 **28,724 55,974 Total 634,232 26,828 37,902 86,172 785,134 * Non-resident directors (Sami El-Raghy from 01 January 2004) ** Options value as per Black Scholes pricing method. The total value of these options was $38,297 for each individual respectively. Options Issued to Directors Name Office No of Unquoted Options Exercise Price Expiry Date Mr C N Non-Executive 250,000 35.49 cents 15 December 2006 Cowden Director Mr G B Speechly Non-Executive 250,000 35.49 cents 15 December 2006 Director Dr T G Non-Executive 250,000 35.49 cents 15 December 2006 Elder Director The above options were issued on the 15 December 2003. There were no options issued to, lapsed or exercised by Directors during the current year. 2. EXECUTIVES' REMUNERATION Other than the Executive Directors' remuneration as set out above the following table discloses the specified executives of the Company and Group: 2005 Primary Post Employment Equity Name Salary/Fees Superannuation Share Total Options* $ $ $ $ H Michael, Project Manager** 89,856 8,986 - 98,842 M J Lynch, Office Manager 74,489 10,571 16,851 101,911 D Franks, Finance 87,599 16,588 9,997 114,184 M Kriewaldt, Exploration 69,000 - - 69,000 H A Brown, Company 51,596 4,644 15,425 71,665 Secretary C Tyndall, Company 17,832 189 4,568 22,589 Secretary*** Total 390,372 40,978 46,841 478,191 * Options value as per Black Scholes pricing model ** Mr Michael ceased employment with the Company on 26 November 2004. *** Mrs Tyndall ceased employment with the Company on 19 July 2004. 2004 Primary Post Employment Equity Name Salary/ Bonus Superannuation Share Total Fees Options $ $ $ $ $ H N Michael, Project Manager 201,972 - 20,197 *24,159 246,328 M J Lynch, Office 92,341 - 9,150 *34,266 135,757 Manager D W Franks, Joint Company 85,535 - 14,712 *13,707 113,954 Secretary M Kriewaldt, Exploration Manager 69,000 - - - 69,000 H A Brown, Joint Company Secretary 42,414 4,200 3,817 *13,707 64,138 Total 491,262 4,200 47,876 *85,839 629,177 * Options value as per Black Scholes pricing model Options issued to Executives Name Office No of Unquoted Exercise Issue Date Expiry Date Options Price Mr M J Lynch Office 250,000 23.10 cents 12 November 2003 12 November 2006 Manager 100,000 28.04 cents 04 February 2005 04 February 2008 Mr D W Franks Finance 100,000 23.10 cents 12 November 2003 12 November 2006 100,000 28.04 cents 04 February 2005 04 February 2008 Mrs H A Brown Company 100,000 23.10 cents 12 November 2003 12 November 2006 Secretary 200,000 28.04 cents 04 February 2005 04 February 2008 Mrs C Tyndall* Company 100,000 23.10 cents 12 November 2003 12 November 2006 Secretary * Mrs Tyndall ceased employment with the Company on 19 July 2004. Value of Executives Options granted, exercised and lapsed during the year Name Options Options Options Total Value Value of Percentage of Total Granted Exercised Lapsed of Options Options Remuneration for the year Value at Value at Value at Granted, Included in that consists of Options Grant Exercise Time of Exercised and Remuneration Date Date Lapse Lapsed for the Year $ $ $ $ $ % H N Michael - - 483,172 483,172 - - M J Lynch 13,572 - - 13,572 16,851 16.5 D W Franks 13,572 - - 13,572 9,997 8.76 H A Brown 27,143 - - 27,143 15,425 21.52 C Tyndall - - - - 4,568 20.22 Options are issued to Executives under the Employee Share Option Plan 2002. Options are offered to Executives at the discretion of the Directors, having regard, among other things, to the Executives length of service with the Group, and to the past and potential contribution of the person to the Group. DIRECTORS' SHAREHOLDINGS The relevant interest of each Director in the share capital of the Company shown in the Register of Directors' Shareholdings as at the date of this report is: Specified Balance at Granted Received on Net Balance at Balance Unquoted Director 01 July 2004 as exercise of other 30 June held options remuneration options change 2005 nominally S El-Raghy 78,235,754 - - - *78,235,754 - - C Cowden 223,026 - - 50,000 273,026 - 250,000 G Speechly - - - - - - 250,000 T Elder - - - - - - 250,000 J El-Raghy 79,185,754 - - - *79,185,754 - *The total shares held by Mr S El-Raghy and Mr J El-Raghy arise due to them both being directors/trustees of the following personally related entities: - Nordana Pty Ltd 4,990,668 shares - Nordana Pty Ltd 17,595,714 shares - El-Raghy Kriewaldt Pty Ltd 55,299,372 shares - S & M El-Raghy 350,000 shares The balance of 950,000 shares are held by Mr J El-Raghy being a director of Montana Realty Pty Ltd Since the end of the previous financial year no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors shown in the consolidated accounts) because of a contract made by the Company, its controlled entities or a related body corporate with the Director or with a firm of which the Director is a member, or with an entity in which the Director has a substantial interest. For further details refer to Note 22. Signed in accordance with a resolution of the directors made pursuant to s. 298 (2) of the Corporations Act 2001. On behalf of the Directors _________________________ Josef El-Raghy Managing Director/CEO Perth, 06 September 2005 Declaration of independence Dear Board Members, Centamin Egypt Limited In accordance with section 370C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Centamin Egypt Limited. As lead audit partner for the audit of the financial statements of Centamin Egypt Limited for the financial year ended 30 June 2005, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours sincerely DELOITTE TOUCHE TOHMATSU Keith Jones Partner Chartered Accountants CORPORATE GOVERNANCE STATEMENT The Board of Directors of Centamin Egypt Limited is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of Centamin Egypt Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. To ensure the Board is well equipped to discharge its responsibilities it has established guidelines for the nomination and selection of Directors and for the operation of the Board. Unless disclosed below, the best practice recommendations of both the ASX Corporate Governance Council and the AIM Listing Rules (The Alternative Investment Market of the London Stock Exchange), including the Combined Code On Corporate Governance have been applied for the entire financial year ended 30 June 2005. Where there has been any variation from the recommendations it is because the Board believes that the Company is not as yet of a size, nor are its financial affairs of such complexity to justify some of those recommendations and as such those practices continue to be the subject of the scrutiny of the full Board. Board Composition: The Board comprises five Directors, of whom the Chairman and the Managing Director are the only Executive Directors. Both the ASX Listing Rules and the Combined Code on Corporate Governance favour that the Chairman be an independent Director, however as Mr Sami El-Raghy has been primarily based in Egypt during this stage of the Company's development, where his knowledge of the Company's projects, the Egyptian language, culture and government contacts are invaluable, the Board believe that his role and status be both as an Executive and as Chairman. The skills, experience and expertise relevant to the position of each Director who is in office at the date of the annual report, their attendances at meetings and their term of office are detailed in the Directors' Report. The majority of the Board are independent Directors, the names of the Directors of the Company in office at the date of this statement are: Name Position Committees Sami El-Raghy Chairman - Executive Director Josef El-Raghy Managing Director/CEO Colin N. Cowden Independent Director Audit and Remuneration G. Brian Speechly Independent Director Audit and Remuneration Thomas G. Elder Independent Director When determining whether a Director is independent, the Board has determined that the Director must not be an Executive and: â€¢ is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company; â€¢ within the last three years has not been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment; â€¢ within the last three years has not been a principal or employee of a material professional adviser or a material consultant to the Company or another group member, or an employee materially associated with the service provided; â€¢ is not a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a significant supplier or customer; â€¢ has no material contractual relationship with the Company or another group member other than as a Director of the Company; â€¢ is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director's ability to act in the best interests of the Company. Independent Directors have the right to seek independent professional advice in the furtherance of their duties as Directors, at the Company's expense. Written approval must be obtained from the Managing Director prior to incurring expenses on behalf of the Company. S El-Raghy, J El-Raghy, and G B Speechly are also Directors of the wholly owned subsidiary companies, Pharaoh Gold Mines NL, Viking Resources Ltd, and North African Resources NL. J El-Raghy and T Elder are also Directors of the subsidiary Company, Centamin Limited. The Board and Board Nominations: The Company does not presently operate a nomination committee however as the Company approaches the development of the Sukari project and as it shifts its corporate profile increasingly towards the capital markets of Europe, the Board is establishing guidelines for the future nomination and selection of potential new directors. In the interim, the full Board (subject to members voting rights in general meeting) is responsible for selection of new members and has regard to a candidate's experience and competence in areas such as mining, exploration, geology, finance and administration that can assist the Company in meeting its corporate objectives and plans. Under the Company's Constitution: â€¢ the maximum number of Directors on the Board is ten; â€¢ a Director (other than the Managing Director) may not retain office for more than three years without submitting for re-election; and â€¢ at the Annual General Meeting each year effectively one third of the Directors in office (other than the Managing Director) retire by rotation and must seek re-election by shareholders. Securities Trading Policy: The Company has not as yet adopted a formal securities trading policy however the Directors and employees are restricted from acting on material information until it has been released to the market in accordance with the ASX requirements of continuous disclosure. Furthermore the ability of Directors and certain employees of AIM listed companies to deal in the Company's securities is restricted in a number of ways, by statute, common law and by Rule 21 of the AIM Rules. This rule imposes restrictions beyond those imposed by law in that the Directors and certain employees and persons connected with them do not abuse and do not place themselves under suspicion of abusing price-sensitive information that they have or are thought to have, especially in periods leading up to announcement of results (close periods). Remuneration Committee and Policies: The Remuneration Committee comprises Mr Colin Cowden and Mr Brian Speechly, both independent Directors. All compensation arrangements for Directors and Senior Executives are determined by the Remuneration Committee and approved by the Board, after taking into account the current competitive rates prevailing in the market. The amount of remuneration for all Directors including the full remuneration packages, comprising all monetary and non-monetary components of the Executive Directors and Executives, are detailed in the Directors' Report. All Executives receive base salary, superannuation, fringe benefits and in some cases, performance incentives. Executives and staff, if invited by the Board of Directors, may participate in the Employee Share Option Plan. These packages are reviewed on an ongoing basis and in most cases are reviewed against predetermined performance criteria. All remuneration paid to executives is valued at the cost to the Company. Shares issued to Executives are valued as the difference between the market price of those shares and the amount paid by the Executive. Options are valued using the Black-Scholes methodology. The Board expects that the remuneration structure that is implemented will result in the Company being able to attract and retain the best Executives to manage the economic entity. It will also provide the Executives with the necessary incentives to work to grow long-term shareholder value. The Board can exercise its discretion in relation to approving incentives, bonuses and options and can recommend changes to the Committee's recommendations. There are no schemes for retirement benefits other than statutory superannuation for independent Directors. External auditors: The auditors of the Company, Deloitte Touche Tohmatsu ('Deloitte'), have open access to the Board of Directors at all times. Deloitte have audited the Company and its subsidiaries for a number of years and have adopted a policy of rotating audit partners every five years. The last rotation of the audit partner occurred during the financial year ended 30 June 2003. Deloitte do attend the Company's Annual General Meeting and it is consistent with their current business practice. Audit committee: The Audit Committee comprises Mr Colin Cowden and Mr Brian Speechly, both independent Directors. The Company has a duly constituted Audit Committee which comprises the two Australia based independent Directors whose names, qualifications and attendances are included in the Directors' Report. The responsibilities of the Audit Committee are laid out in its terms of reference, and amongst other things, includes the responsibility to ensure that an effective internal control framework exists within the entity, to produce half year and annual financial statements. This includes the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations. Managing risks: The Board meets regularly to evaluate, control, review and implement the Company's operations and objectives. Regular controls established by the Board include: â€¢ detailed monthly financial reporting; â€¢ delegation of authority to the Managing Director to ensure approval of expenditure obligations; â€¢ implementation of operating plans, cash flows and budgets by management and Board monitoring of progress against projections; and â€¢ procedures to allow Directors, and management in the furtherance of their duties, to seek independent professional advice via the utilisation of various external technical consultants. The Board recognises the need to identify areas of significant business risk and to develop and implement strategies to mitigate these risks. Commitment to stakeholders & ethical standards: The Board supports the highest standards of corporate governance and requires its members and the management and staff of the Company to act with integrity and objectivity in relation to: â€¢ Compliance with laws and regulations affecting the Company's operations; â€¢ The ASX's Corporate Governance and the AIM Rules, including the Combined Code On Corporate Governance; â€¢ Employment practices; â€¢ Responsibilities to the community; â€¢ Responsibilities to the individual; â€¢ The environment; â€¢ Conflict of interests; â€¢ Confidentiality; â€¢ Ensure that shareholders and the financial community are at all times fully informed in accordance with the spirit and letter of the ASX's continuous disclosure requirements and the AIM Rules; â€¢ Corporate opportunities or opportunities arising from these for personal gain or to compete with the Company; â€¢ Protection of and proper use of the Company's assets and â€¢ Active promotion of ethical behaviour. Monitoring of the Board's Performance and Communication to Shareholders: In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all Directors is constantly reviewed by the Chairman. The Company does not presently have an evaluation of the Board and all the Board members performed by an independent consultant however it may do so once the Company commences development of the Sukari project. The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the Directors. Information is communicated to the shareholders through: â€¢ the Annual Report which is distributed to all shareholders; â€¢ the availability of the Company's Quarterly Report to shareholders so requesting; â€¢ the Half-Yearly Report distributed to shareholders so requesting; â€¢ adherence to continuous disclosure requirements; â€¢ the Annual General Meeting and other meetings so called to obtain shareholder approval for Board action as appropriate; and â€¢ the provision of the Company's website containing all of the above mentioned reports and its constant update and maintenance. Statement by the Managing Director and Company Secretary The Managing Director and Company Secretary confirm to the board that the group's financial position presents a true and fair view and that the financial statements are founded on a sound system of risk management, internal compliance and control. Further, it is confirmed that the groups risk management and internal compliance is operating efficiently and effectively. Independent audit report to the members of Centamin Egypt Limited Scope The financial report and directors' responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both Centamin Egypt Limited (the company) and the consolidated entity, for the financial year ended 30 June 2005. The consolidated entity comprises the company and the entities it controlled at the year's end or from time to time during the financial year. The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report. Audit approach We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal controls, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. We performed procedures to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with the Corporations Act 2001 and Accounting Standards and other mandatory professional reporting requirements in Australia so as to present a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and performance as represented by the results of their operations and their cash flows. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates made by the directors. While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the financial report of Centamin Egypt Limited is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2005 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (b) other mandatory professional reporting requirements in Australia. DELOITTE TOUCHE TOHMATSU KEITH F JONES Partner Chartered Accountants Perth, 6 September 2005 DIRECTORS' DECLARATION The directors declare that: a) The attached financial statements and notes thereto comply with Accounting Standards; b) The attached financial statements and notes thereto give a true and fair view of the financial position and performance of the Company and the consolidated entity; c) In the directors' opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001; and d) In the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. e) The directors have given the declarations required by s.295A of the Corporations Act 2001. Signed in accordance with a resolution of the directors made pursuant to s. 295 (5) of the Corporations Act 2001. On behalf of the Directors __________________________ Josef El-Raghy Managing Director/CEO Perth, 06 September 2005 STATEMENT OF FINANCIAL PERFORMANCE for the FINANCIAL YEAR ENDED 30 JUNE 2005 Consolidated Company Note 2005 2004 2005 2004 $ $ $ $ Revenue from ordinary activities 2 1,148,660 1,061,278 1,585,071 2,543,447 Administration expenses 2 (1,132,327) (2,014,620) (1,200,686) (1,894,759) Foreign exchange (loss)/gain (543,942) 299,098 (562,767) 289,790 Promotional expenses (145,044) (125,766) (144,044) (125,766) Travelling expenses (108,371) (134,292) (108,371) (134,292) Other Expenses (25,884) - - - -------- -------- -------- -------- (Loss)/Profit From Ordinary Activities Before Income Tax Benefit (806,908) (914,302) (430,797) 678,420 Income tax benefit relating to ordinary activities 3 - - - - -------- -------- -------- -------- Net (Loss)/Profit (806,908) (914,302) (430,797) 678,420 -------- -------- -------- -------- Net (Loss)/Profit Attributable to Members of the Parent Entity (806,908) (914,302) (430,797) 678,420 -------- -------- -------- -------- Total Changes in Equity Other than those Resulting from Transactions with Owners as Owners (806,908) (914,302) (430,797) 678,420 ======== ======== ======== ======== Earnings Per Share: Basic (cents per share) 30 (0.16) (0.18) (0.086) (0.48) Diluted (cents per share) 30 (0.16) (0.18) (0.086) (0.48) The statement of financial performance is to be read in conjunction with the notes to the financial statements. STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2005 Consolidated Company Note 2005 2004 2005 2004 $ $ $ $ CURRENT ASSETS Cash assets 17,984,972 21,133,460 17,907,208 21,101,548 Receivables 5 298,118 30,258 8,956 28,905 Prepayments 6 114,527 151,400 22,206 22,429 --------- --------- --------- --------- Total current assets 18,397,617 21,315,118 17,938,370 21,152,882 --------- --------- --------- --------- NON-CURRENT ASSETS Receivables 5 - - 27,511,390 24,631,961 Plant and equipment 7 1,178,079 1,012,896 57,235 63,363 Investments 8 - - 5,511,169 5,511,169 Exploration expenditure 9 28,715,883 26,662,812 330,821 330,821 --------- --------- --------- --------- Total non-current assets 29,893,962 27,675,708 33,410,615 30,537,314 --------- --------- --------- --------- Total assets 48,291,579 48,990,826 51,348,985 51,690,196 CURRENT LIABILITIES Accounts payable 10 232,549 204,314 69,748 95,916 Provisions 11 234,092 168,869 166,049 84,945 --------- --------- --------- --------- Total current liabilities 466,641 373,183 235,797 180,861 --------- --------- --------- --------- NON-CURRENT LIABILITIES Accounts payable 10 196,850 217,297 - - --------- --------- --------- --------- Total non-current liabilities 196,850 217,297 - - --------- --------- --------- --------- Total liabilities 663,491 590,480 235,797 180,861 --------- --------- --------- --------- --------- --------- --------- --------- Net assets 19 47,628,088 48,400,346 51,113,188 51,509,335 ========= ========= ========= ========= EQUITY Contributed equity 12 68,602,890 68,568,240 68,602,890 68,568,240 Reserves 13 2,809,287 2,809,287 3,409,287 3,409,287 Accumulated losses 14 (23,784,089) (22,977,181) (20,898,989) (20,468,192) --------- --------- --------- --------- Total equity 47,628,088 48,400,346 51,113,188 51,509,335 ========= ========= ========= ========= The statement of financial position is to be read in conjunction with the notes to the financial statements. STATEMENT OF CASH FLOWS for the FINANCIAL YEAR ENDED 30 JUNE 2005 Consolidated Company Note 2005 2004 2005 2004 $ $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 54,599 55,847 54,599 45,616 Receipts from controlled entities - - 538,934 1,492,400 Payments to supplies and employees (1,535,333) (2,440,230) (1,410,336) (2,171,050) Interest received 1,046,309 1,005,431 1,046,137 1,005,431 -------- -------- -------- -------- Net cash (used in) / provided by operating activities 21 (434,425) (1,378,952) 229,334 372,397 -------- -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Payment for plant and equipment (1,184,490) (1,019,312) (46,910) (43,242) Sale of plant and equipment 930,439 2,718 30,778 2,718 Advances to controlled entities - 3,944 (2,879,425) (3,771,368) Payments for exploration (2,053,071) (1,400,354) - (330,821) -------- -------- -------- -------- Net cash used in investing activities (2,307,122) (2,413,004) (2,895,557) (4,142,713) -------- -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the conversion of options 34,650 - 34,650 - -------- -------- -------- -------- Net cash provided by financing activities 34,650 - 34,650 - -------- -------- -------- -------- Net decrease in cash held (2,706,897) (3,791,956) (2,631,573) (3,770,316) Effect of exchange rate changes on the balance of cash held in foreign currencies (441,591) 299,097 (562,767) 289,790 Cash at the beginning of the financial year 21,133,460 24,626,319 21,101,548 24,582,074 -------- -------- -------- -------- Cash at the end of the financial year 21 17,984,972 21,133,460 17,907,208 21,101,548 ======== ======== ======== ======== The statements of cash flows are to be read in conjunction with the notes to the financial statements. NOTES TO THE FINANCIAL STATEMENTS for the FINANCIAL YEAR ENDED 30 JUNE 2005 1. Summary of Significant Accounting Policies (A) FINANCIAL REPORTING FRAMEWORK The financial report is a general purpose financial report and has been prepared in accordance with applicable Accounting Standards, Urgent Issues Group Consensus Views, the Corporations Act 2001, and complies with other requirements of the law. The financial report has been prepared on the basis of historical cost and except where stated, does not take into account changing money values or current valuations of non-current assets. The accounting policies have been consistently applied by the entities in the economic entity and, except where there is a note of a change in accounting policy, are consistent with those of the previous year. This financial report is denominated in Australian Dollars. (B) SIGNIFICANT ACCOUNTING POLICIES Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability thereby ensuring that the substance of the underlying transactions or other events are reported. The following significant accounting policies have been adopted in the preparation and presentation of the financial report. (C) PRINCIPLES OF CONSOLIDATION The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the economic entity, being the Company and its controlled entities as defined in accordance with accounting standard AASB 1024 'Consolidated Accounts'. The consolidated financial statements include the information and results of each controlled entity from the date on which the Company obtains control and until such time as the Company ceases to control such entity. In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full. (D) TAXATION The economic entity adopts the liability method of tax effect accounting. Income tax benefit is calculated on the loss from ordinary activities adjusted for permanent differences between taxable and accounting income. The tax effect of timing differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is carried forward in the statement of financial position as a future income tax benefit or a provision for deferred income tax. Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain. (E) NON-CURRENT ASSETS The carrying amounts of all non-current assets, except exploration expenditure, are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds the recoverable amount, the asset is written down to the lower amount. In assessing recoverable amounts the relevant cash flows have not been discounted to their present value. (F) INVESTMENTS Investments in controlled entities are carried at recoverable amount. Dividends and distributions are brought to account in the statement of financial performance when they are proposed by the controlled entities. (G) EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE Exploration, evaluation and development costs are accumulated in respect of each separate area of interest where rights of tenure are current. These costs are carried forward where they are expected to be recouped through sale or successful development and exploitation of the area of interest, or, where activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the year the decision is made. Each area of interest is also reviewed annually and accumulated costs written off to the extent that they will not be recoverable in the future. As at balance date: â€¢ The economic entity is still progressing exploration to delineate reserves; â€¢ An upgraded feasibility study with respect to the areas of interest is in the process of being completed; and â€¢ The realisable value is dependant upon the current and future gold and mineral sands prices. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. When production commences, carried forward exploration, evaluation and development costs will be amortised on a unit of production basis over the life of the economically recoverable reserves. Restoration costs are provided for at the time of the activities which give rise to the need for restoration. If this occurs prior to commencement of production, the costs are included in deferred exploration and development expenditure. If it occurs after commencement of production, restoration costs are provided for and charged to the statement of financial performance as an expense. (H) PLANT AND EQUIPMENT Items of plant and equipment are recorded at cost and depreciated from the date of acquisition on a reducing balance method over their estimated useful lives. The following estimated useful lives are used in the calculation of depreciation: Plant, Equipment & Office Furniture - 4 - 10 years Motor Vehicles - 2 - 8 years (I) SUPERANNUATION FUND The Company contributes to, but does not participate in, compulsory superannuation funds on behalf of the Employees and Directors in respect of salaries and directors' fees paid. Contributions are charged against income as they are made. (J) FOREIGN CURRENCY All foreign currency transactions during the year have been brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at balance date are translated at the exchange rate existing at that date. All exchange differences are brought to account in the statement of financial performance of the financial period in which they arise. The assets and liabilities of the controlled entity incorporated overseas (being an integrated foreign operation) are translated using the temporal method. Monetary items are translated using the exchange rate at balance date and non-monetary items are translated at exchange rates current at the transaction dates. Exchange differences arising on translation are taken directly to the statement of financial performance. (K) RECEIVABLES Trade receivables and other receivables are recorded at amounts due less any allowance for doubtful debts. (L) ACCOUNTS PAYABLE Trade payables and other accounts payable are recognised when the economic entity becomes obliged to make future payments resulting from the purchase of goods and services. (M) INTEREST-BEARING LIABILITIES Bank loans and other loans are recorded at an amount equal to the net proceeds received. Interest expense is recognised on an accrual basis. Ancillary costs incurred in connection with the arrangement of borrowings are deferred and amortised over the period of the borrowing. (N) DEBT AND EQUITY INSTRUMENTS ISSUED BY THE COMPANY Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. (O) REVENUE RECOGNITION Sale of Goods and Disposal of Assets - Revenue from the sale of goods and disposal of other assets is recognised when the economic entity has passed control of the goods or other assets to the buyer. Contribution of Assets - Revenue arising from the contribution of assets is recognised when the economic entity gains control of the contribution or the right to receive the contribution. (P) JOINT VENTURES Interest in joint venture operations are reported in the financial statements by including the economic entity's share of assets employed in the joint venture, the share of liabilities incurred in relation to the joint venture and the share of any expenses incurred in relation to the joint venture in their respective classification categories. (Q) GOODS AND SERVICES TAX Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or ii) for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. (R) EMPLOYEE BENEFITS Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably. Provisions made in respect of wages and salaries, annual leave, sick leave, and other employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Consolidated Company 2. Loss from Ordinary Activities 2005 2004 2005 2004 $ $ $ $ Loss from ordinary activities has been arrived at after including: OPERATING REVENUE Income - other persons 1,046,309 1,005,431 1,046,137 1,005,431 Administration & management fees - Other entities in - - 538,934 1,492,400 the wholly-owned group Other income 102,351 55,847 - 45,616 -------- -------- -------- -------- 1,148,660 1,061,278 1,585,071 2,543,447 Foreign exchange rate gain/(loss) (543,942) 299,098 (562,767) 289,790 -------- -------- -------- -------- 604,718 1,360,376 1,022,304 2,833,237 -------- -------- -------- -------- OPERATING EXPENSES Depreciation 88,870 136,962 22,260 26,955 Office lease payments 51,212 50,731 51,212 50,731 Allowance for doubtful - - 3,870 4,593 debts Loss on deconsolidation of 102,351 - - - PGML* * Refer Note 20 Consolidated Company 2005 2004 2005 2004 $ $ $ $ 3. Taxation The prima facie income tax benefit on the Loss from Ordinary Activities reconciles to the income tax benefit in the financial statements as follows: Loss / (Profit) from Ordinary Activities 806,908 914,302 430,797 (678,420) -------- -------- -------- -------- Income tax (benefit )/expense calculated at 30% of Loss / (Profit) from Ordinary (242,072) (274,291) (129,539) 203,526 Activities Permanent differences: Other 150,954 (1,216) 153,024 (1,216) Tax expense/(benefit) of timing 57,245 466,840 57,245 - differences not brought to account Tax benefit/(utilised) of losses 33,873 (191,333) (80,730) (202,310) not brought to account -------- -------- -------- -------- Income tax benefit - - - - attributable to Loss from -------- -------- -------- -------- Ordinary Activities The future benefit of tax losses and other timing differences have not been brought to account because there is no virtual certainty as to their recovery. They are estimated to be: Consolidated Company 2005 2004 2005 2004 $ $ $ $ Tax Losses - revenue 5,951,891 24,063,163 5,951,891 3,822,297 Tax Losses - capital 600,000 600,000 600,000 - -------- -------- -------- -------- Tax Losses 6,551,891 24,663,163 6,551,891 3,822,297 -------- -------- -------- -------- Tax Effect at 30% 1,965,567 7,398,949 1,965,567 1,146,689 The above carried forward tax losses with respect to exploration expenditure can only be utilised to offset foreign sourced mining income. Whilst foreign losses were recognised in the 30 June 2004 accounts, due to changes in the tax legislation effective from 1 July 2004, it is now likely these losses will never be utilised. Accordingly, the 30 June 2005 loss disclosure only includes Australian losses. The future income tax benefit will only be utilised if: â€¢ the companies that make up the economic entity derive future assessable income of a nature and amount sufficient to enable the benefit from the losses to be realised; â€¢ the companies that make up the economic entity continue to comply with the conditions for deductibility imposed by the law; and â€¢ no changes in taxation legislation adversely affect the companies that make up the economic entity in realising the benefit from the losses. Tax Consolidation System Legislation has been passed to allow groups, comprising a parent entity and its Australian resident wholly-owned entities, to elect to consolidate and be treated as a single entity for income tax purposes. This legislation, which includes both mandatory and elective elements, is applicable to the Company. The group elected to enter its first tax consolidation and be treated as a single entity for income tax purposes from 1 July 2003. The head entity for tax purposes is Centamin Egypt Limited. 4. Segment Reporting Primary reporting - Business Segments The economic entity is engaged in the business of exploration for precious and base metals only, which is characterised as one business segment only. As the economic entity has only one business segment, all the necessary reporting disclosures are disclosed elsewhere in the notes to the financial statements. Secondary reporting - Geographical Segments The principal activity of the economic entity during the year was the exploration for precious and base metals in Egypt. Consolidated Company 5. Receivables 2005 2004 2005 2004 $ $ $ $ CURRENT Other Receivables 280,748 23,825 202 22,929 GST receivable 17,370 6,433 8,754 5,976 -------- -------- -------- -------- 298,118 30,258 8,956 28,905 -------- -------- -------- -------- NON-CURRENT Loans and advances to controlled - - 30,547,129 27,663,830 entities Less: Allowance for doubtful debts - - (3,035,739) (3,031,869) -------- -------- -------- -------- - - 27,511,390 24,631,961 -------- -------- -------- -------- The loans to controlled entities are amounts that have been advanced for expenditure on exploration, prospecting and development activities. Consolidated Company 6. Prepayments 2005 2004 2005 2004 $ $ $ $ CURRENT Other 114,527 151,400 22,206 22,429 -------- -------- -------- -------- 7. Plant and Equipment CONSOLIDATED Plant, Equipment & Office Furniture Motor Vehicles Total $ $ $ Gross Carrying Amount Balance at 30 June 2004 1,820,963 140,673 1,961,636 Additions 1,005,677 178,815 1,184,492 Disposals (980,603)* (34,545) (1,015,148) ----------- ----------- ---------- Balance at 30 June 2005 1,846,037 284,943 2,130,980 ----------- ----------- ---------- Accumulated Depreciation Balance at 30 June 2004 (838,090) (110,650) (948,740) Depreciation expense (61,227) (27,643) (88,870) Disposals 76,936 7,773 84,709 ----------- ----------- ---------- Balance at 30 June 2005 (822,381) (130,520) (952,901) ----------- ----------- ---------- Net Book Value ----------- ----------- ---------- As at 30 June 2004 982,873 30,023 1,012,896 ----------- ----------- ---------- ----------- ----------- ---------- As at 30 June 2005 1,023,656 154,423 1,178,079 ----------- ----------- ---------- * On 18 May 2005, an agreement was reached whereby the drilling rigs would be transferred from Pharaoh Gold Mines Limited ('PGML') to Pharaoh Gold Mines NL. PGML has since been sold and the name changed. Refer to Note 20. 7. Plant and Equipment (continued) COMPANY Plant, Equipment & Office Furniture Motor Vehicles Total $ $ $ Gross Carrying Amount Balance at 30 June 2004 433,177 34,545 467,722 Additions 14,183 32,727 46,910 Disposals (5,665) (34,545) (40,210) ----------- ----------- ---------- Balance at 30 June 2005 441,695 32,727 474,422 ----------- ----------- ---------- Accumulated Depreciation Balance at 30 June 2004 (396,586) (7,773) (404,359) Depreciation expense (16,568) (5,692) (22,260) Disposals 1,659 7,773 9,432 ----------- ----------- ---------- Balance at 30 June 2005 (411,495) (5,692) (417,187) ----------- ----------- ---------- Net Book Value ----------- ----------- ---------- As at 30 June 2004 36,591 26,772 63,363 ----------- ----------- ---------- ----------- ----------- ---------- As at 30 June 2005 30,200 27,035 57,235 ----------- ----------- ---------- Consolidated Company 2005 2004 2005 2004 $ $ $ $ Aggregate depreciation allocated, whether recognised as an expense or capitalised as part of the carrying amount of other assets during the year: Plant, equipment and office furniture 61,227 110,223 16,568 16,462 Motor vehicles 27,643 26,739 5,692 10,493 -------- -------- -------- -------- 88,870 136,962 22,260 26,955 -------- -------- -------- -------- Included above, the following amounts were - - - - capitalised within exploration expenditure: -------- -------- -------- -------- 8. Investments Consolidated Company NON CURRENT Note 2005 2004 2005 2004 $ $ $ $ Shares in controlled entities - - 5,959,455 5,959,455 Recoverable amount write down - - (448,286) (448,286) -------- -------- -------- -------- - - 5,511,169 5,511,169 -------- -------- -------- -------- 9. Exploration Expenditure Exploration, evaluation and Consolidated Company development expenditure (a) - At Cost Note 2005 2004 2005 2004 $ $ $ $ Balance at the beginning of the year 26,662,812 25,262,458 - - Expenditure for the year 1,722,250 1,069,533 - - Take up joint venture 330,821 330,821 330,821 330,821 assets -------- -------- -------- -------- Balance at the end of the year 28,715,883 26,662,812 330,821 330,821 -------- -------- -------- -------- (b) Included within the cost amount of assets is $5,311,744 being the excess of consideration over the net tangible assets acquired on the acquisition of Pharaoh Gold Mines NL in January 1999. This amount has been treated as part of the cost of exploration and evaluation. 10. Accounts Payable Consolidated Company 2005 2004 2005 2004 $ $ $ $ CURRENT Trade payables 214,151 35,584 7,094 22,546 Other creditors and accruals - director - - - - personally related entities Other creditors and accruals 18,398 168,730 62,654 73,370 -------- -------- -------- -------- 232,549 204,314 69,748 95,916 -------- -------- -------- -------- NON-CURRENT Other creditors and accruals - director personally related entities 196,850 217,297 - - Other creditors and accruals - - - - -------- -------- -------- -------- 196,850 217,297 - - -------- -------- -------- -------- 11. Current Provisions Consolidated Company CURRENT 2005 2004 2005 2004 Employee Benefits $ $ $ $ Opening Balance 168,869 64,923 84,945 64,923 Additional provision recognised 130,986 159,526 135,686 67,990 Reductions due to payment (65,763) (55,580) (54,582) (47,968) --------- -------- -------- -------- Closing Balance 234,092 168,869 166,049 84,945 --------- -------- -------- -------- 12. Contributed Equity Consolidated Company 2005 2004 2005 2004 $ $ $ $ Balance at beginning of year 68,568,240 68,568,240 68,568,240 68,568,240 Exercise of 150,000 options @ 23.10 cents issued under the Employee Share Option Plan 34,650 - 34,650 - --------- -------- --------- -------- Balance at end of year 68,602,890 68,568,240 68,602,890 68,568,240 --------- -------- --------- -------- 2005 2004 No. $ No. $ Fully Paid Ordinary Shares Balance at beginning of year 501,910,369 68,568,240 501,910,369 68,568,240 Exercise of 150,000 options @ 23.10 cents issued under the Employee Share Option Plan 150,000 34,650 - - --------- -------- --------- -------- Balance at end of year 502,060,369 68,602,890 501,910,369 68,568,240 --------- -------- --------- -------- Fully paid ordinary shares carry one vote per share and carry the right to dividends. Unlisted Options Expiring Unlisted Employee Options Options 2005 09/11/03 No. No. Balance at beginning of year - 5,290,000 Issued during the year - 1,185,000 Exercised during the year - (150,000) Lapsed/Expired during the year - (3,000,000) --------------- --------------- Balance at end of year - 3,325,000 --------------- --------------- Options 2004 Balance at beginning of year 49,999,744 - Issued during the year - 5,290,000 Exercised during the - - year Lapsed/Expired during the year (49,999,744) - --------------- --------------- Balance at end of year - 5,290,000 --------------- --------------- The details of these options are as follows:- i) Balance at beginning of the financial year Options - Series Number Grant Date Expiry/ Exercise Price Exercise Date $ Issued 11 November 2003 250,000 11 November 11 November 0.2900 2003 2005 Issued 12 November 2003 1,160,000 12 November 12 November 0.2310 2003 2006 Issued 17 November 2003 130,000 17 November 17 November 0.2310 2003 2006 Issued 15 December 2003 750,000 15 December 15 December 0.3549 2003 2006 Issued 10 March 3,000,000 10 March 2004 10 March 2009 0.2362 2004 Total number of options 5,290,000 ii) Granted during the financial year Options - Series Number Grant Date Expiry/ Exercise Price Exercise Date $ Issued 04 February 2005 775,000 04 February 04 February 0.2804 2005 2008 Issued 17 February 2005 410,000 17 February 17 February 0.2804 2005 2008 Total number of options 1,185,000 The options have been received for nil consideration and are unvested at the end of the year. iii) Lapsed during the financial year Options - Series Number Grant Date Expiry/ Exercise Price Exercise Date $ Issued 10 March 2004 3,000,000 10 March 10 March 2009 0.2362 2004 Total number of 3,000,000 options iii) Exercised during the financial year Options - Series Number Grant Date Expiry/ Exercise Price Exercise Date $ Issued 12 November 2002 150,000 12 November 12 November 0.2310 2003 2006 Total number of options 150,000 v) Balance at 30 June 2005 Options - Series Number Grant Date Expiry/ Exercise Price Exercise Date $ Issued 11 November 2003 250,000 11 November 11 November 0.2900 2003 2005 Issued 12 November 2003 1,010,000 12 November 12 November 0.2310 2003 2006 Issued 17 November 2003 130,000 17 November 17 November 0.2310 2003 2006 Issued 15 December 2003 750,000 15 December 15 December 0.3549 2003 2006 Issued 04 February 2005 775,000 04 February 04 February 0.2804 2005 2008 Issued 17 February 2005 410,000 17 February 17 February 0.2804 2005 2008 Total number of options 3,325,000 13. Reserves Consolidated Company 2005 2004 2005 2004 $ $ $ $ Option reserve Balance at the beginning of the year 2,273,713 2,273,713 2,273,713 2,273,713 Transfer to Contributed - - - - Equity following conversion --------- -------- -------- -------- of Options issued for consideration Balance at the end of the year 2,273,713 2,273,713 2,273,713 2,273,713 Reserve created from the issuing of options for consideration. --------- -------- -------- -------- Asset realisation reserve 535,574 535,574 535,574 535,574 -------- -------- -------- -------- -------- Reserve created from the realisation of particular assets. Capital Reserve - - 600,000 600,000 Reserve created from the cancellation of shares in the Company held by Pharaoh Gold Mines NL. --------- -------- -------- -------- 2,809,287 2,809,287 3,409,287 3,409,287 --------- -------- -------- -------- There is currently no formal policy for realisation of the reserves. 14. Accumulated Losses Consolidated Company 2005 2004 2005 2004 $ $ $ $ Balance at the beginning of the year 22,977,181 22,062,879 20,468,192 21,146,612 Current year's loss / (profit) 806,908 914,302 430,797 (678,420) -------- -------- --------- -------- Balance at the end of the year 23,784,089 22,977,181 20,898,989 20,468,192 -------- -------- --------- -------- 15. Employee Benefits Consolidated Company 2005 2004 2005 2004 $ $ $ $ --------- -------- -------- -------- The aggregate employee benefit liability recognised and included in the financial statements is as follows: 234,092 168,869 166,049 84,945 Provision for employee benefits: Current (note 11) --------- -------- -------- -------- 16. Number of Employees Consolidated Company 2005 2004 2005 2004 No. No. No. No. Number of Employees 93 42 5 7 -------- -------- -------- -------- 17. Contingent Liabilities There are no contingent liabilities to report as at 30 June 2005. 18. Commitments for Expenditure Consolidated Company 2005 2004 2005 2004 $ $ $ $ Lease of office premises Not longer than 1 year 52,005 16,942 52,005 16,942 Longer than 1 year and not longer than 5 years 73,674 - 73,674 - -------- -------- -------- -------- 19. Net Assets of the Group The net asset position of the group is lower than that of the Company. This position is a result of fees being charged to the subsidiary through the inter-company account which are expensed within the subsidiary. Management believe that it would be misleading to have a provision against the inter-company receivable to align the net asset position of the Company and the Consolidated Group. Management believe that the recovery of these amounts will satisfactorily be made through the exploitation of the project in due course. 20. Particulars in Relation to Controlled Entities Country of Incorporation 2005 2004 PARENT ENTITY % % Centamin Egypt Limited Australia CONTROLLED ENTITIES Viking Resources Limited Australia 100 100 North African Resources NL Australia 100 100 Pharaoh Gold Mines NL Australia 100 100 Centamin Limited Bermuda 100 100 Pharaoh Gold Mines Limited* Bermuda - 100 * On 30 May 2005, Centamin Limited sold the shares in Pharaoh Gold Mines Limited to a third party. The Consolidated entity recognised a loss of $102,351 on deconsolidation. 21. Notes to the Statements of Cash Flows (a) RECONCILIATION OF CASH For the purpose of the Statements of Cash Flows, cash includes cash on hand and at bank and deposits. Cash as at the end of the financial year as shown in the Statements of Cash Flows is reconciled to the related item in the statement of financial position as follows: Consolidated Company 2005 2004 2005 2004 $ $ $ $ Cash 17,984,972 21,133,460 17,907,208 21,101,548 --------- -------- -------- -------- (b) RECONCILIATION OF LOSS FROM ORDINARY ACTIVITIES TO NET CASH USED IN OPERATING ACTIVITIES (Loss) / Profit from ordinary activities before income tax (806,908) (914,302) (430,797) 678,420 Add/(less) non-cash items: Depreciation 88,870 136,962 22,260 26,955 Foreign exchange rate (gain)/loss 543,942 (299,098) 562,767 (289,790) Changes in assets and liabilities during the year: (Increase)/decrease in receivables (267,860) (2,627) 19,949 (21,877) (Increase)/decrease in prepayments 36,873 (66,382) 223 5,090 Increase/(decrease) in trade creditors & accruals (29,342) (233,505) 54,932 (26,401) --------- -------- -------- -------- Net cash used in operating activities (434,425) (1,378,952) 229,334 372,397 --------- -------- -------- -------- 22. Related Parties SPECIFIED DIRECTORS & SPECIFIED EXECUTIVES a) The names of each person holding the position of Specified Director and Specified Executive of Centamin Egypt Limited during the financial year are laid out in Note 23. b) Details of specified directors' and specified executives' remuneration are set out in Note 23. c) The details of the movement in the shareholding during the financial year are as follows: Specified Balance at Granted Received on Net Balance at Balance Director 01 July as exercise other 30 June held 2004 remuneration of options change 2005 nominally S El-Raghy *78,235,754 - - - *78,235,754 - Chairman C Cowden 223,026 - - 50,000 273,026 - Non-executive Director G Speechly - - - - - - Non-executive Director T Elder - - - - - - Non-Executive Director J El-Raghy *79,185,754 - - - *79,185,754 - Managing Director/ CEO *The total shares held by Mr S El-Raghy and Mr J El-Raghy arise due to them both being directors/trustees of the following personally related entities: - Nordana Pty Ltd 4,990,668 shares - Nordana Pty Ltd 17,595,714 shares - El-Raghy Kriewaldt Pty Ltd 55,299,372 shares - S & M El-Raghy 350,000 shares The balance of 950,000 shares are held by Mr J El-Raghy being a director of Montana Realty Pty Ltd Specified Balance at Granted Received on Net Balance at Balance Executive 01 July as exercise other 30 June held 2004 remuneration of options change 2005 nominally M Lynch 505,000 - - - 505,000 50,000 Office Manager D Franks - - - - - - Finance H Brown - - - - - - Company Secretary M Kriewaldt 1,963,333 - - - 1,963,333 - Exploration d) The details of the options to acquire ordinary shares are as follows:- Specified Balance at Granted Exercised Other Balance at Balance vested Director/ 01 July as changes 30 June at 30 Specified 2004 remuneration - lapsed 2005 June 2005 Executive Directors S El-Raghy - - - - - - C Cowden 250,000 - - - 250,000 - G Speechly 250,000 - - - 250,000 - T Elder 250,000 - - - 250,000 - Executives H Michael 3,000,000 - - (3,000,000) - - M Lynch 250,000 100,000 - - 350,000 250,000 D Franks 100,000 100,000 - - 200,000 100,000 H Brown 100,000 200,000 - - 300,000 100,000 C Tyndall 100,000 - - - 100,000 100,000 Total 4,300,000 400,000 - (3,000,000) 1,700,000 550,000 Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the economic entity since the end of the previous financial year and there were no material contracts involving directors' interests at year-end. OTHER TRANSACTIONS WITH DIRECTORS Mr S El-Raghy and Mr J El-Raghy are also directors and shareholders of El-Raghy Kriewaldt Pty Ltd ('El-Raghy Kriewaldt'). El-Raghy Kriewaldt provides office premises to the Company. All dealings with El-Raghy Kriewaldt are in the ordinary course of business and on normal terms and conditions. Rent and office outgoings paid to El-Raghy Kriewaldt during the year were $51,612 (2004: $50,731). A director of the Company, Mr. C. Cowden has an interest as a director and controlling shareholder of Cowden Limited, Insurance Brokers. This Company provides insurance broking services to the Company. All dealings with this Company are in the ordinary course of business and on normal terms and conditions. Premiums paid to Cowden Limited during the year were $36,397 (2004: $50,936). LOANS RECEIVABLE AND PAYABLE During the year the Company provided funds to and received funding from controlled entities. Refer to Note 5 and Note 10 for details. 23. REMUNERATION OF DIRECTORS AND SPECIFIED EXECUTIVES The Directors of Centamin Egypt Limited during the financial year were: - Mr Sami El-Raghy (Chairman); - Mr Josef El-Raghy (Managing Director/CEO); - Dr Thomas G Elder (Non-Executive Director); - Mr Colin Cowden (Non-Executive Director); and - Mr G. Brian Speechly (Non-Executive Director). The specified executives during the financial year were: - Mr Harry Michael (Project Manager until 26 November 2004); - Mr M. John Lynch (Office Manager); - Mr Dennis W Franks (Finance); - Mr Michael Kriewaldt (Exploration); - Mrs Heidi Brown (Company Secretary); and - Mrs Cecilia Tyndall (Company Secretary until 19 July 2004). (a) Contracts for services Remuneration and other terms of employment for the specified Directors and the specified Executives are formalised in service agreements. Each of these agreements provide for the provision of a base salary, superannuation and a motor vehicle for the Executive Directors. The provision of performance related bonus to any Executive Directors and any Executives is made at the discretion of the Board of Directors. Contracts for service do not provide for terms which affect remuneration in future periods. The terms of the contracts provide for bonuses to be paid at the discretion of the Directors. (b) Specified Directors' and specified executives' remuneration The Board reviews the remuneration packages of all specified Directors and specified Executives on an annual basis. Remuneration packages are reviewed and determined with due regard to current market rates and are benchmarked against comparable industry salaries, adjusted by a performance factor to reflect changes in the performance of the Company. The remuneration packages for specified Directors for this financial year are detailed as follows: (c) Specified directors' remuneration 2005 Primary Post Employment Equity Name Salary/Fees Bonus Non-Monetary Superannuation Share Options** Total $ $ $ $ $ Executive Directors S El-Raghy* 376,283 150,000 144 - - 526,427 J El-Raghy 224,808 - 20,449 22,481 - 267,738 Total 751,091 150,000 20,643 22,481 - 794,215 Non-Executive Directors T Elder* 49,580 - - - 9,573 59,153 C Cowden 25,000 - - 2,250 9,573 36,823 G B 25,000 - - 2,250 9,573 36,823 Speechly Total 99,580 - - 4,500 28,719 132,799 Grand 700,671 150,000 20,593 26,981 28,719 926,964 Total * Non-resident Directors ** Options value as per Black Scholes pricing method. The total value of these options was $38,297 (calculated in 2004) for each individual respectively. 2004 Primary Post Employment Equity Name Salary/Fees Non-Monetary Superannuation Share Options Total $ $ $ $ $ S El-Raghy* 322,979 4,383 12,802 - 340,164 J El Raghy 205,500 22,445 20,600 - 248,545 T Elder* 55,753 - - **28,724 84,477 C Cowden 25,000 - 2,250 **28,724 55,974 G B 25,000 - 2,250 **28,724 55,974 Speechly Total 634,232 26,828 37,902 86,172 785,134 * Non-resident directors (Sami El-Raghy from 01 January 2004) ** Options value as per Black Scholes pricing method. The total value of these options was $38,297 for each individual respectively. The share options granted to Mr T Elder, Mr C Cowden and Mr G B Speechly have been valued internally by the Company using the Black-Scholes Option Pricing Model. The total value of these options is $38,297 for each individual respectively. These options vest and are exercisable over a period of twelve months, with 50% vesting and exercisable after six months on 15 June 2004 and the other 50% vesting and exercisable after twelve months on 15 December 2004. These options expire on 15 December 2006. (d) Specified executives' remuneration 2005 Primary Post Employment Equity Total value of options Name Salary/Fees Superannuation Share Total granted during the year Options* $ $ $ $ $ H Michael 89,856 8,986 - 98,842 - M J Lynch 74,489 10,571 16,851 101,911 13,572 D W Franks 87,599 16,588 9,997 114,184 13,572 M Kriewaldt 69,000 - - 69,000 - H A Brown 51,596 4,644 15,425 71,665 27,143 C Tyndall 17,832 189 4,568 22,589 - Total 390,372 40,978 46,841 478,191 54,287 * Options value as per Black Scholes pricing model ** Mr Michael ceased employment with the Company on 26 November 2004 *** Mrs Tyndall ceased employment with the Company on 19 July 2004 2004 Primary Post Employment Equity Name Salary/Fees Bonus Superannuation Share Total Total value of Options options granted $ $ $ $ $ $ H N Michael 201,972 - 20,197 *24,159 246,328 483,172 M J Lynch 92,341 - 9,150 *34,266 135,757 45,688 D W Franks 85,535 - 14,712 *13,707 113,954 18,275 M Kriewaldt 69,000 - - - 69,000 - H A Brown 42,414 4,200 3,817 *13,707 64,138 18,275 Total 491,262 4,200 47,876 *85,839 629,177 65,410 * Options value as per Black Scholes pricing model The share options granted to the above Executives have been valued internally by the Company using the Black-Scholes option pricing method. Options are offered to Executives at the discretion of the Directors, having regard, among other things, to the Executives length of service with the Group, and to the past and potential contribution of the person to the Group. Below is a breakdown of the options granted to the Executives. These options for M Lynch, D Franks and H Brown these options vest over a period of twelve months, with 50% exercisable and vesting after six months and the other 50% exercisable and vesting after 12 months. The options of H Michael lapsed during the year upon cessation of employment. Name Issue Date No of Unquoted Options Exercise Price Expiry Date Mr M J 12 November 2003 250,000 23.10 cents 12 November 2006 Lynch 04 February 2005 100,000 28.04 cents 04 February 2008 Mr D W 12 November 2003 100,000 23.10 cents 12 November 2006 Franks 04 February 2005 100,000 28.04 cents 04 February 2008 Mrs H A 12 November 2003 100,000 23.10 cents 12 November 2006 Brown 04 February 2005 200,000 28.04 cents 04 February 2008 Mrs C 12 November 2003 100,000 23.10 cents 12 November 2006 Tyndall . 24. Options granted to Directors There were no unquoted options granted to Directors during the financial year. 25. Options granted to Executives The unquoted options granted to Executives during the financial year were:- Name Office Number of Unquoted Options Exercise Price Expiry Date Mr D W Finance 100,000 $0.2804 04 February 2008 Franks Mr M J Office 100,000 $0.2804 04 February 2008 Lynch Manager Mrs H A Company 200,000 $0.2804 04 February 2008 Brown Secretary 26. Options granted to Employees At the Annual General Meeting on 29 November 2002, shareholders approved the Employee Option Plan 2002. To date, the following unquoted options have been issued under the Employee Option Plan:- Number of Unquoted Options Issue Date Exercise Price Expiry Date Number of Employees 1,160,000* 12 November 2003 23.10 cents 12 November 2006 18 130,000 17 November 2003 23.10 cents 17 November 2006 3 750,000 15 December 2003 35.49 cents 15 December 2006 3 775,000 04 February 2005 28.04 cents 04 February 2008 10 410,000 17 February 2005 28.04 cents 17 February 2008 10 * 150,000 options were exercised at $0.2310 each by four (4) different employees. Consolidated Company 2005 2004 2005 2004 $ $ $ $ 27. Auditors' Remuneration Auditing the financial report 32,000 29,500 27,000 25,000 Other services - Tax - 15,380 - 15,380 -------- -------- -------- -------- 32,000 44,880 27,000 40,380 -------- -------- -------- -------- 28. Interests in Joint Ventures The consolidated entity has material interests in the following unincorporated venture:- JOINT VENTURES Principal Activities Percentage Interest 2005 2004 % % Egyptian Pharaoh Investments Exploration 50 50 --------------- -------- -------- The following amount represents the economic entity's interest in assets employed in the above joint venture. The amount is included in the consolidated financial statements under the respective category. Consolidated & Company 2005 2004 $ $ Non Current Assets Exploration expenditure 330,821 330,821 29. Superannuation The Company contributes to, but does not participate in, compulsory superannuation funds on behalf of its employees and Directors. Contributions are charged against income as they are made. 30. Earnings Per Share Consolidated 2005 2004 Cents Per Share Cents Per Share Basic earnings per share (0.16) (0.18) Diluted earnings per share (0.16) (0.18) Basic Earnings per Share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: 2005 2004 $ $ -------- -------- Loss (a) (806,908) (914,302) -------- -------- 2005 2004 No. No. -------- -------- Weighted average number of ordinary shares (b) 501,961,547 501,910,369 -------- -------- (a) The Loss used in the calculation of basic earnings per share equates to the Net Loss in the Statement of Financial Performance. (b) The options are considered to be potential ordinary shares and are therefore excluded from the weighted average number of ordinary shares used in the calculation of basic earnings per share. Where dilutive, potential ordinary shares are included in the calculation of diluted earnings per share. Diluted Earnings per Share The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows: 2005 2004 $ $ -------- -------- Loss (a) (806,908) (914,302) -------- -------- 2005 2004 No. No. -------- -------- Weighted average number of ordinary shares and potential ordinary shares (b) 501,961,547 501,910,369 -------- -------- (a) The Loss used in the calculation of diluted earnings per share equates to the Net Loss in the Statement of Financial Performance. (b) Weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share equates to the weighted average number of ordinary shares used in the calculation of basic earnings per share, because the potential ordinary shares have no dilutive effect. 2005 2004 (c) The following potential ordinary shares are not No. No. dilutive and are therefore excluded from the weighted -------- -------- average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share: Options 3,325,000 5,290,000 -------- -------- 31. Events Subsequent to Balance Date There have been no material events subsequent to balance date. 32. Financial Instruments a) Interest Rate Risk The following table details the consolidated entity's exposure to interest rate risk as at reporting date: Average Variable Fixed Non Interest Total Interest Rate % Interest Interest Rate Bearing Rate (< 1 yr) 2005 $ $ $ $ FINANCIAL ASSETS Cash 5.36 1,663,921 16,270,838 50,213 17,984,972 Receivables - - 298,118 298,118 -------- -------- -------- -------- 1,663,921 16,270,838 348,331 18,283,090 -------- -------- -------- -------- FINANCIAL LIABILITIES Accounts - - 429,399 429,399 payable Employee - - 234,092 234,092 Benefits -------- -------- -------- -------- - - 663,491 663,491 -------- -------- -------- -------- 2004 FINANCIAL ASSETS Cash 4.93 608,593 20,501,155 23,712 21,133,460 Receivables - - 30,258 30,258 -------- -------- ------ -------- 608,593 20,501,155 53,970 21,163,718 -------- -------- -------- -------- FINANCIAL LIABILITIES Accounts payable - - 421,611 421,611 Borrowings - - 168,869 168,869 -------- -------- -------- -------- - - 590,480 590,480 -------- -------- -------- -------- b) Credit Risk Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the economic entity. The economic entity has adopted a policy of only dealing with credit-worthy counter-parties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The economic entity measures credit risk on a fair value basis. The economic entity does not have any significant credit risk exposure to any single counter-party or any group counter-parties having similar characteristics. The carrying amount of financial assets recorded in the financial statements represents the economic entity's maximum exposure to credit risk without taking account of the value of collateral or other security obtained. c) Net Fair Value The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in note 1 to the financial statements. d) Currency Risk The economic entity holds the majority of its funds in an Australian bank and periodically forwards British Pounds and Australian Dollars to its office in Egypt. The majority of transactions performed in Egypt are conducted in British Pounds or US dollars however a small reserve of Egyptian Pounds is maintained to meet day to day administration expenses. The economic entity has not entered into any forward foreign exchange contracts to hedge the exchange rate risk arising from any anticipated future transactions. As at 30 June 2005, Egyptian Â£1,036 (2004: Â£589), US$2,403 (2004: US$51,500) and GBP Â£1,585,294 (2004: Â£1,914,914), Euro â‚¬14 (2004: â‚¬17) bank balances were unhedged. 33. Impact of the Adoption of Australian Equivalents of International Financial Reporting Standards Centamin Egypt Limited ('Centamin') will be required to adopt Australian Accounting Standards Board (AASB) equivalents to International Financial Reporting Standards (A-IFRSs), for its financial reporting at the half year ending 31 December 2005 and the full year ending 30 June 2006. At these dates a first time adopter of Australian equivalent A-IFRSs will be required to restate its comparative financial statements using all A-IFRSs, except for AASB 132 Financial Instruments: Disclosure and Presentation, AASB 139 Financial Instruments: Recognition and Measurement, AASB 4 Insurance Contracts and AASB6 Exploration for and Evaluation of Mineral Resources. For Centamin this means the preparation of an opening balance sheet in accordance with A-IFRSs as at 1 July 2004, with the majority of restatement adjustments being made, retrospectively, against opening retained earnings. Centamin has commenced transitioning its accounting policies, systems and financial reporting from current Australian Accounting Standards to Australian equivalents of International Financial Reporting Standards ('A-IFRS'). The process for identification of the key impacts on the consolidated entity includes the completion of an impact assessment to identify the significant financial and systems changes required and the proposed actions to transition to A-IFRS. The consolidated entity allocated internal resources to conduct an initial impact assessment. As Centamin has a 30 June year end, priority has been given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to A-IFRS as at 1 July 2004. Set out below are the key areas where accounting policies will change and may have an impact on the financial report. The amounts disclosed below are a best estimate as at the date of preparing the financial statements and may change due to: 1. further work being performed by the A-IFRS project team; and 2. potential amendments to the Australian equivalents to the International Financial Reporting Standards ('A-IFRSs') and interpretations thereof being issued by the standard setters and the International Financial Reporting Interpretations Committee ('IFRIC'). Share Based Payments - Company and Group Under AASB 2 Share Based Payments, the Company will be required to determine the fair value of options issued to employees as remuneration and recognise an expense in the Statement of Financial Performance over the vesting period. This standard is not limited to options and also extends to other forms of equity based remuneration. It applies to all share-based payments issued after 7 November 2002 which have not vested as at 1 January 2005. Under the current accounting policy no amounts are recognised in the financial accounts in relation to equity based compensation schemes. The expected adjustment as at 1 July 2004 is a reduction in retained earnings of $Nil and the recognition of $63,504 as an expense for the year ended 30 June 2005. Income Taxes - Company and Group Under AASB 112 Income Taxes, the Company will be required to use a balance sheet liability method which focuses on the tax effects of transactions and other events that affect amounts recognised in either the Statement of Financial Position or a tax-based balance sheet. The application of AASB 112 Income Taxes could result in increases in deferred tax assets and deferred tax liabilities as a consequence of the recognition of deferred taxes associated with fair value adjustments in relation to business combinations, revaluations of land and buildings and investments in associates. Deferred tax assets could also increase due to the differing requirements for the recognition of carried forward tax losses. There will be no impact on the cumulative financial position at 30 June 2005, at transition or the result for the year. This is because:- Tax Losses A deferred tax asset will not be recognised for carry forward tax losses because it is not probable that future taxable profits will be available against which the unused tax losses can be utilised. Investment in Subsidiaries Centamin Egypt Limited will not recognise any deferred tax liabilities for taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint ventures. This is because:- (a) Centamin Egypt Limited has the ability to control the timing of the reversal of the temporary difference; and (b) it is probable that the temporary difference will not reverse in the foreseeable future. Impairment of Assets - Company and Group Under AASB 136 Impairment of Assets, the recoverable amount of an asset is determined as the higher of net selling price and value in use. This will result in a change in the current accounting policy which determines the recoverable amount of an asset on the basis of discounted cash flows. There is not expected to be any adjustment required under A-IFRS in the Consolidated Entity for the year ended 30 June 2005 and the date of transition. Rehabilitation - Company and Group Under AASB 137 Provisions, Contingent Liabilities and Contingent Assets, the Company will be required to recognise the full provision for rehabilitation, based on discounted future cash flows, at the date of transition to IFRS. A corresponding asset net of depreciation to the date of transition may qualify for recognition as part of development costs and be amortised together with development assets. The Company, via its wholly owned subsidiary, Pharaoh Gold Mines NL (Pharaoh), is a party to a Concession Agreement with the Government of the Arab Republic of Egypt, whereby Pharaoh is exploring for gold and associated minerals in the Eastern Desert of Egypt. Pharaoh has progressed the Sukari Project to the stage where a feasibility study is presently being carried out to a bankable standard into the development of a 4 to 5 million tonne per annum processing facility. If the Sukari Project goes into production, then under the terms of Concession Agreement, Pharaoh or the Operating Company, (which will be owned equally by Pharaoh and the Government), as the case may be, shall be responsible for the reasonable restoration and rehabilitation of the project area, in a manner consistent with good international practice in the mining industry. As the Company is not yet in production, there is no obligation for a rehabilitation provision at this stage. Property, plant and equipment - Company and Group On transition to A-IFRS, the entity has several options in the determination of the cost of each tangible asset and can also elect to use the cost or fair value basis for the measurement of each class of property, plant and equipment after transition. At the date of this report, it is likely that the entity will continue to measure property, plant and equipment on the historical cost option. There is not expected to be any adjustment required under A-IFRS in the Consolidated Entity for the year ended 30 June 2005. Business Combinations - Company and Group Under A-IFRS, the purchase method of accounting must be applied where there is a business combination, however, not all acquisitions will qualify as a business combination, and as such the purchase method of accounting for these acquisitions will no longer be appropriate. In addition, the legal acquirer may not be the acquirer per A-IFRS and the consolidated accounts may consequently reflect the fair values of the legal acquirer's assets and liabilities rather than the fair value of the assets and liabilities of the legal entity acquired. At the date of this report, it is likely that the entity will not re-open prior business combination transactions. There is not expected to be any adjustment required under A-IFRS in the Consolidated Entity for the year ended 30 June 2005 and at transition. Exploration and Evaluation - Company and Group AASB 6 Exploration for and Evaluation of Mineral Resources is effective from 1 January 2005 and early adoption will not be permitted. The new standard requires entities to perform impairment testing on exploration and evaluation assets when facts and circumstances suggest that the carrying amount may be impaired. Impairment of exploration and evaluation assets is assessed at a cash generating unit or group of cash generating units level provided this is no larger than an area of interest. There is not expected to be any adjustment required under A-IFRS in the Company or Consolidated Entity for the year ended 30 June 2005. ADDITIONAL ASX INFORMATION Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is as follows. The information is as at 19 August 2005. SUBSTANTIAL SHAREHOLDERS (holding more than 5%) Fully Paid Ordinary Shares Shareholder Ordinary Shares Percentage El-Raghy Kriewaldt Pty Ltd 55,299,372 11.01% Willbro Nominees Limited 52,379,001 10.43% BBHISL Nominees Limited 42,520,859 8.47% Euroclear Nominees Limited 40,473,000 8.06% TOP 20 SHAREHOLDERS (a) Fully Paid Ordinary Shares Quoted Shares Number % Held El-Raghy Kriewaldt Pty Ltd 55,299,372 11.01% Willbro Nominees Limited 52,379,001 10.43% BBHISL Nominees Limited 42,520,859 8.47% Euroclear Nominees Limited 40,473,000 8.06% Nefco Nominees Pty Ltd 20,835,146 4.15% Chase Nominees Limited 20,051,628 3.99% Goldman Sachs Securities (Nominees) Limited 18,800,000 3.74% Nordana Pty Ltd 17,595,714 3.50% Pershing Keen Nominees Limited 15,775,356 3.14% Morstan Nominees Limited 13,153,000 2.62% Goldman Sachs International 11,650,584 2.32% HSBC Global Custody Nominee (UK) Limited 9,680,441 1.93% Vidacos Nominees Limited 8,580,000 1.71% TD Waterhouse Nominees (Europe) Limited 7,784,708 1.55% Mellon Nominees (UK) Limited 7,060,051 1.41% HSBC Custody Nominees (Australia) Limited 6,900,000 1.37% Barclayshare Nominees Limited 6,885,575 1.37% State Street Nominees Limited 5,258,188 1.05% Nordana Pty Ltd 4,990,668 0.99% The Bank of New York (Nominees) Limited 4,290,000 0.85% Total 369,963,291 73.66% At 19 August 2005, there were 502,060,369 fully paid ordinary shares held by 1,823 individual shareholders. All issued ordinary shares carry one vote per share. (b) Options Unquoted Options Number % Held Issued under Employee Share Option Plan 2002 3,075,000 92.48% Other 250,000 7.52% Total 3,325,000 100.00% DISTRIBUTION OF HOLDERS OF EQUITY SECURITIES Holding Range Ordinary Shares Unquoted Options 1 - 1,000 119 - 1,001 - 5,000 583 - 5,001 - 10,000 363 - 10,001 - 100,000 580 20 100,001 and over 178 8 Total 1,823 28 As at 19 August 2005, there were 174 shareholders with less than marketable parcel. CLASS OF SHARES AND VOTING RIGHTS The voting rights attaching to the ordinary shares, set out in Clause 12.8 of the Company's Constitution are: 'Subject to any rights or restrictions for the time being attached to any class or classes of shares' - (a) at meetings of members or classes of members each member entitled to vote may vote in person or by proxy or attorney; and; (b) on a show of hands every person present who is a member has one vote for each ordinary share held and on a poll every person present or by proxy or attorney has one vote for each ordinary share held.' VENDOR SHARES There are no vendor securities on issue at the date of this report. This information is provided by RNS The company news service from the London Stock Exchange

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