GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CORPORATE INFORMATION
Directors
Douglas Daws (Chairman)
Lloyd Jones (Non-executive Director)
David Ryan (Non-executive Director)
Maurice Catina (Non-executive Director)
Company Secretary
Maurice Catina
Registered Office
Suite 1, 346 Barker Road
Subiaco WA 6008
Telephone: +61 8 9481 4000
Facsimile: +61 8 9481 4088
Solicitor
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Telephone: +61 8 9321 4000
Bankers
Westpac Banking Corporation Limited
109 St George’s Terrace
Perth WA 6000
Share Register
Computershare Investor Services Pty Ltd
Level 2, RBA Building
45 St George’s Terrace
Perth WA 6000
Telephone: +61 8 9323 2000
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Telephone: +61 8 6382 4600
Stock Exchange Listing
The Company is listed on the Australian Stock Exchange Limited
ASX Code: GOT
Website
www.grooteresources.com.au
2
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONTENTS
Directors’ Report.............................................................................................................................3
Auditor’s Independence Declaration to the Directors of Groote Resources Limited ..................7
Statement of Comprehensive Income .............................................................................................8
Statement of Financial Position ......................................................................................................9
Statement of Cash Flows .............................................................................................................. 10
Statement of Changes in Equity ................................................................................................... 11
Notes to the Financial Report
Note 1 Basis of Preparation and Accounting Policies .................................................................. 12
Note 2 Exploration and Evaluation Expenditure .......................................................................... 12
Note 3 Issued Capital ................................................................................................................. 13
Note 4 Segment Reporting ......................................................................................................... 14
Note 5 Dividends ........................................................................................................................ 14
Note 6 Cash and Cash Equivalents ............................................................................................ 14
Note 7 Trade and Other Receivables .......................................................................................... 14
Note 8 Share Subscriptions in Advance ...................................................................................... 15
Note 9 Commitments and Contingencies .................................................................................... 15
Note 10 Related Party Transactions ............................................................................................. 15
Note 11 Events After Balance Date .............................................................................................. 15
Directors’ Declaration ................................................................................................................... 16
Independent Review Report .......................................................................................................... 17
3
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT
Your directors submit their report of Groote Resources Limited (“Groote Resources” or the “Company”)
for the half-year ended 31 December 2010 (“Balance Date”) and review report thereon.
DIRECTORS
The names of the directors of the Company in office during the half-year and until the date of this report
are as below. Directors were in office for this entire period unless otherwise stated.
Douglas Daws Executive Chairman
Lloyd Jones Non-executive Director
David Ryan Non-executive Director
Maurice Catina Non-executive Director
Simon Alexander Noon Executive Director (Resigned)
Barrie Bolton Non-executive Director (Resigned)
Stuart John Hall Non-executive Director (Resigned)
Alexander Robert Harry Hewlett Non-executive Chairman (Resigned)
REVIEW AND RESULTS OF OPERATIONS
The principal activities of the Company throughout the half-year have comprised of the following:
- Developing its Groote Eylant Project;
- Investing cash assets in interest bearing bank accounts; and
- The general administration of the Company.
The Company realised a net loss for the half-year of $755,221 (2009: $233,359).
4
GROOTE RESOURCES LIMITED ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT (CONTINUED)
REVIEW AND RESULTS OF OPERATIONS (CONTINUED)
Projects
Groote Eylandt Manganese Project
Exploration Licences Granted
On 30 July 2010, the Company announced it had been granted three exploration license applications
(EL27523, EL27550, EL27551) and one Authorisation under Section 178 (27605), which cover an area of
1665 km² of highly prospective, shallow marine terrain near Groote Eylandt in the Northern Territory (see
Figure 1).
Figure 1: Location map of Groote Eylandt tenements. Granted tenements (green), tenement applications (blue).
The Exploration Licences cover interpreted along strike and down-dip extensions of the Groote Eylandt
manganese deposit. The Groote Eylandt deposit has been mined continuously since 1966 and is owned by
Groote Eylandt Mining Company Pty Limited (“GEMCO”) which is jointly owned by BHP Billiton Pty Ltd
(60%) and the Anglo American Corporation (40%).
GEMCO’s 2009 resource of 150Mt @ 45.5% Mn is the world’s third largest manganese deposit producing
more than 3 million tonnes of manganese ore annually, accounting for more than 15% of the world’s highgrade
manganese ore supply. Due to the high-grade, proximity to port and Asian markets, this low impurity
and low strip ratio operation is Australia’s ninth most profitable mine and one of the lowest operating cost
manganese mines in the world.
5
GROOTE RESOURCES LIMITED ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT (CONTINUED)
REVIEW AND RESULTS OF OPERATIONS (CONTINUED)
Mt Alexander & Granites Bore Uranium Projects
On 23 November 2010 GOT announced it had entered into an agreement with public unlisted company
Heguy Resources Ltd for the farm out of Exploration Lease Application (E08/1987) known as the Mt
Alexander Project, located approximately 120km south of Onslow in Western Australia.
Under the terms of the agreement Heguy will enter into a farm in and joint venture agreement with Groote
that could see Heguy earn a 70% interest in the Project by spending A$1.8 million on exploration.
Under the terms of the agreement Heguy could earn a 60% interest in the Project by expending A$1M on
exploration within a period up to a maximum of two years.
Upon earning that 60% interest, Heguy and Groote will be deemed to have formed an unincorporated joint
venture, with Groote holding 40%.
Heguy would be the manager of the joint venture. Heguy could elect to earn a further 10% venture interest
by committing to spend within 18 months a further A$800,000 of joint venture costs with Groote’s 30%
retained interest ‘free carried’ until a ‘decision to mine’ is made.
The Board believes the farm out agreement for the Mount Alexander Project will allow Groote Resources
Limited to focus its efforts on the Groote Eylandt Manganese Project while maintaining shareholders’
interests.
CORPORATE
On 29 November 2010 Groote signed a non-binding Memorandum of Intent with Korea Resources
Corporation (KORES) to establish a framework of cooperation to provide a basis for entering into a
commercial relationship regarding the Groote Eylandt Manganese Project.
KORES is the Korean Government’s investment vehicle to further Korea's access to strategically important
mineral resources. KORES invests in overseas exploration, development and production of strategically
important mineral resources.
Subject to successful completion of a review of the Groote Eylandt Manganese Project by KORES the
parties anticipate entering into a formal commercial relationship after April 2011.
At the Balance Date the Company had received share subscriptions totalling $200,000 pursuant to the
options exercised.
6
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT (CONTINUED)
SUBSEQUENT EVENTS
During the period from the Balance Date to the date of this report the Company received $1,301,000
pursuant to the exercise of 6,505,000 unlisted $0.20 options.
On 6 January 2011 the Company announced the appointment of Mr. Doug Daws as Non-Executive
Chairman, replacing Mr Alexander Hewlett whom had resigned.
On the 14 February 2011 the company announcement the appointment of Mr Lloyd Jones, Mr David Ryan
& Mr Maurice Catina as Non-Executive Directors. Mr Stuart Hall and Mr Barrie Bolton had resigned from
their roles as Non-Executive Directors. Mr Simon Noon, Executive Director announced he will also resign
on or before 11 March 2011.
On the 21 February, Mr Doug Daws was appointed in the role as executive chairman.
Signed in accordance with a resolution of the directors and on behalf of the Directors by:.
Douglas Daws
Director
Perth, Western Australia
Dated this 8th day of March 2011
7
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
8th March 2011
Groote Resources Limited
The Board of Directors
Suite 4, 38 Colin Street
WEST PERTH, WA 6005
Dear Sirs,
DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF
GROOTE RESOURCES LIMITED
As lead auditor of Groote Resources Limited for the half - year ended 31 December 2010, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
• the auditor independence requirements of the Corporations Act 2001 in relation to the review;
and
• any applicable code of professional conduct in relation to the review.
This declaration is in respect of Groote Resources Limited and the entity it controlled during the
period.
Brad McVeigh
Director
BDO Audit (WA) Pty Ltd
Perth, Western Australia
8
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
Note
31 DEC 2010 31 DEC 2009
$ $
Interest income 122,028 17,637
ASX listing fees (30,529) (8,176)
Audit expenses (22,289) (8,525)
Company Secretarial & Accounting fees (37,215) (18,000)
Consultants fees (4,163) (47,658)
Insurance expenses (3,641) (6,629)
Office accommodation expenses (29,112) (5,093)
Investor relations expenses (74,354) (3,000)
Travel and accommodation (157,508) (8,174)
Depreciation expense (3,462) (1,187)
Director’s fees (54,000) (66,000)
Employment expense (130,254) (14,579)
Exploration expenditure expense (254,729) (31,448)
Other expenses (75,993) (32,527)
Loss before income tax (755,221) (233,359)
Income tax expense - -
Loss for the half-year after income tax (755,221) (233,359)
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME FOR THE HALF
YEAR ATTRIBUTABLE TO THE MEMBERS OF
GROOTE RESOURCES LIMITED (755,221) (233,359)
Loss per share (cents per share)
- basic (loss) per share for the half-year (0.91) (1.56)
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
9
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
Note
31 DEC 2010 30 JUN 2010
$ $
ASSETS
Current Assets
Cash and cash equivalents 6 4,811,704 4,366,465
Trade and other receivables 7 63,041 88,880
Total Current Assets 4,875,645 4,455,345
Non-current Assets
Exploration and evaluation expenditure 2 6,300,000 6,300,000
Property, plant and equipment 21,790 20,170
Total Non-current Assets 6,321,790 6,320,170
TOTAL ASSETS 11,197,435 10,775,515
LIABILITIES
Current Liabilities
Trade and other payables 81,891 61,248
Provisions
Share subscriptions in advance 8
47,522
200,000
13,893
2,148,630
Total Current Liabilities 311,414 2,223,771
TOTAL LIABILITIES 311,414 2,223,771
NET ASSETS 10,868,021 8,551,744
EQUITY
Contributed equity 3(a) 10,783,239 7,711,740
Reserves 4,665,277 4,665,277
Accumulated losses (4,580,495) (3,825,273)
TOTAL EQUITY 10,868,021 8,551,744
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
10
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
Note
31 DEC 2010 31 DEC 2009
$ $
Cash flows used in operating activities
Payments to suppliers and employees (783,862) (288,713)
Interest received 111,314 17,610
Net cash outflows used in operating activities (672,547) (271,103)
Cash flows from investing activities
Deposit - Reflective Minerals Pty Ltd - (200,000)
Payments for property, plant and equipment (5,082) (14,503)
Net cash outflows used in investing activities (5,082) (214,503)
Cash flows from financing activities
Proceeds from the issue of share capital 1,122,869 830,000
Net cash inflows from financing activities 1,122,869 830,000
Net increase in cash and cash equivalents 445,239 344,394
Cash and cash equivalents at beginning of half-year 4,366,465 1,056,325
Cash and cash equivalents at end of half-year 6 4,811,704 1,400,719
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
11
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2009 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Issued
Capital
$
Option
Reserve
$
Accumulated
Losses
$
Total
$
At 1 July 2010 7,711,740 4,665,277 (3,825,273) 8,551,744
Loss for the half-year - - (755,221) (755,221)
Total comprehensive income for the half-year - - (755,221) (755,221)
Transactions with owners in their capacity as
owners
Share issues:
- Costs of share issue, net of transaction costs 3,071,499 - - 3,071,499
At 31 December 2010 10,783,239 4,665,277 (4,580,495) 10,868,021
FOR THE HALF-YEAR ENDED 31 DECEMBER 2009
Issued
Capital
$
Option
Reserve
$
Accumulated
Losses
$
Total
$
At 1 July 2009 2,704,058 455,240 (2,142,518) 1,016,780
Loss for the half-year - - (233,359) (233,359)
Total comprehensive income for the half-year - - (233,359) (233,359)
At 31 December 2009 2,704,058 455,240 (2,375,877) 783,421
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
12
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
(a) Basis of Preparation
These general purpose financial statements for the half-year ended 31 December 2010 have been
prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001.
These half-year financial statements do not include all notes of the type normally included within the
annual financial statement and should be read in conjunction with the most recent annual financial
statements and public announcements made by Groote Resources Limited during the interim period in
accordance with continuous disclosure requirements of the Corporations Act 2001.
The half-year financial statements were approved by the Board of Directors on 8th March 2011.
(b) Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year
Certain new accounting standards and interpretations have been published that are no mandatory for
31 December 2010 reporting periods and have not been applied in these financial statements. The
company’s assessment of the impact of these new standards and interpretations is set out below.
AASB 9 Financial Instruments
In November 2009, The AASB issued AASB9 Financial Instruments which addresses the classification
and measurement of financial assets and liabilities. The standard may affect the Group’s accounting
for its financial assets and liabilities. This standard is not applicable until 1 January 2013 and the
Group is continuing to assess its full impact.
2 EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of areas of interest in the following phase:
31 DEC 2010 30 JUNE 2010
$ $
Exploration and evaluation phase – at cost
Balance at beginning of the half-year 6,300,000 6,300,000
Expenditure incurred 254,729 31,192
Impairment of deferred exploration expenditure (254,729) (31,192)
Balance at end of half-year 6,300,000 6,300,00
13
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
3 ISSUED CAPITAL
31 DEC 2010
Shares
31 DEC 2010
$
(a) Ordinary shares
Opening Balance 1 July 2010 73,189,371 8,160,257
7 Jul 2010 Options Exercised 9,967,937 2,298,597
10 Nov 2010 Options Exercised 1,000,000 200,000
31 Dec 2010 Options Exercised 2,902,500 580,500
Share Issue Costs (456,115)
Issued and fully paid shares carrying one
vote per share and dividend rights 87,059,808 10,783,239
31 DEC 2009
Shares
31 DEC 2009
$
(b) Ordinary shares
Opening Balance 1 July 2009 15,006,668 2,704,058
- -
Issued and fully paid shares carrying one
vote per share and dividend rights 15,006,668 10,783,239
At the Balance Date the Company had received share subscriptions totalling $200,000.
No options were issued during the half-year ended 31 December 2010 (2009: Nil).
14
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLILDATED HALF-YEAR FINANCIAL STATEMENTS (CONT.)
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
4 SEGMENT REPORTING
Directors have determined the Company has one reportable segment, being mineral exploration in
Western Australia. As the Company is focused on mineral exploration, the Board monitors the Company
based on actual versus budgeted exploration expenditure incurred by area of interest. This internal
reporting framework is the most relevant to assist the Board with making decisions regarding the
Company and its ongoing exploration activities, while also taking into consideration the results of
exploration work that has been performed to date.
31 DEC 2010 31 DEC 2010
$ $
Revenue from external sources - -
Reportable segment loss (254,729) (218,655)
Reportable segment assets 6,300,000 6,300,000
Reconciliation of reportable segment profit
or loss
Reportable segment loss (254,729) (218,655)
Interest income 122,028 49401
Unallocated:
- Corporate expenses (622,520) (1,513,501)
Loss before income tax (755,221) (1,682,755)
5 DIVIDENDS
No dividends were paid or declared by the Company during the half-year.
6 CASH AND CASH EQUIVALENTS
For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the following at 31
December:
31 DEC 2010 30 JUN 2010
$ $
Cash at bank and in hand 694,855 1,853,610
Term deposits 4,116,849 2,512,855
Commercial bills - -
4,811,704 4,366,465
7 TRADE AND OTHER RECEIVABLES
31 DEC 2010 30 JUN 2010
$ $
Accrued interest on deposits 10,714 -
Refunds receivable - -
GST receivable 20,881 85,239
Prepayments 32,046 3,641
63,041 88,880
15
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLILDATED HALF-YEAR FINANCIAL STATEMENTS (CONT.)
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
8 SHARE SUBSCRIPTIONS IN ADVANCE
31 DEC 2010 30 JUN 2010
$ $
Share subscriptions received in advance 200,000 2,148,630
200,000 2,148,630
9 COMMITMENTS & CONTINGENCIES
The Company has no contingent assets or liabilities. There were no changes in commitments and
contingencies to those disclosed in the most recent financial report at 30 June 2010.
10 RELATED PARTY TRANSACTIONS
(a) Transactions with key management personnel
Transactions with key management personnel receive fees, compensation in the form of short term
employment benefits, post employment benefits and share based payment awards. Key management
personnel received total compensation of $143,140 (2009: $84,000). This includes fees paid to members
of key management who were appointed to the board during the 6 months ending 31 December 2010.
11 EVENTS AFTER THE BALANCE SHEET DATE
During the period from the Balance Date to the date of this report the Company received $1,301,000
pursuant to the exercise of 6,505,000 unlisted $0.20 options.
On 6 January 2011 the Company announced the appointment of Mr. Doug Daws as Non-Executive
Chairman, replacing Mr Alexander Hewlett whom had resigned.
On the 14 February 2011 the company announcement the appointment of Mr Lloyd Jones, Mr David Ryan
& Mr Maurice Catina as Non-Executive Directors. Mr Stuart Hall and Mr Barrie Bolton had resigned from
their roles as Non-Executive Directors. Mr Simon Noon, Executive Director announced he will also resign
on or before 11 March 2011.
On the 21 February 2011, Mr Doug Daws was appointed in the role as executive chairman.
16
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ DECLARATION
In the opinion of the directors:
(a) the financial statements and notes as set out on pages 8 to 15 are in accordance with the
Corporations Act 2001, including:
(i) give a true and fair view of the Group’s financial position as at 31 December 2010 and of its
performance for the half-year ended on that date; and
(ii) comply with Australian Accounting Standard AASB 134 “Interim Financial Reporting”, the
Corporations Regulations 2001 and other mandatory professional requirements; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and
on behalf of the Directors:
Douglas Daws
Director
Perth, Western Australia
Dated this 8th day of March 2011
17
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE MEMBERS OF GROOTE RESOURCES LIMITED
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Groote Resources Limited, which
comprises the statement of financial position as at 31 December 2010, and the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the halfyear
ended on that date, notes comprising a statement of accounting policies and other explanatory
information, and the directors’ declaration of the consolidated entity comprising the disclosing
entity and the entity it controlled during the half-year.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the disclosing entity are responsible for the preparation of the half-year financial
report that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such control as the directors determine is necessary to enable the
preparation of the half-year financial report that is free from material misstatement, whether due
to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review.
We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that
makes us believe that the financial report is not in accordance with the Corporations Act 2001
including: giving a true and fair view of the consolidated entity’s financial position as at 31
December 2010 and its performance for the half-year ended on that date; and complying with
Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
As the auditor of Groote Resources Limited, ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with
Australian Auditing Standards and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the Corporations
Act 2001, which has been given to the directors of Groote Resources Limited, would be in the same
terms if given to the directors as at the time of this auditor’s report.
18
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us
believe that the half-year financial report of Groote Resources Limited is not in accordance with
the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December
2010 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations
Regulations 2001.
BDO Audit (WA) Pty Ltd
Brad McVeigh
Director
Perth, Western Australia
Dated this 8th day of March 2011
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CORPORATE INFORMATION
Directors
Douglas Daws (Chairman)
Lloyd Jones (Non-executive Director)
David Ryan (Non-executive Director)
Maurice Catina (Non-executive Director)
Company Secretary
Maurice Catina
Registered Office
Suite 1, 346 Barker Road
Subiaco WA 6008
Telephone: +61 8 9481 4000
Facsimile: +61 8 9481 4088
Solicitor
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Telephone: +61 8 9321 4000
Bankers
Westpac Banking Corporation Limited
109 St George’s Terrace
Perth WA 6000
Share Register
Computershare Investor Services Pty Ltd
Level 2, RBA Building
45 St George’s Terrace
Perth WA 6000
Telephone: +61 8 9323 2000
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Telephone: +61 8 6382 4600
Stock Exchange Listing
The Company is listed on the Australian Stock Exchange Limited
ASX Code: GOT
Website
www.grooteresources.com.au
2
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONTENTS
Directors’ Report.............................................................................................................................3
Auditor’s Independence Declaration to the Directors of Groote Resources Limited ..................7
Statement of Comprehensive Income .............................................................................................8
Statement of Financial Position ......................................................................................................9
Statement of Cash Flows .............................................................................................................. 10
Statement of Changes in Equity ................................................................................................... 11
Notes to the Financial Report
Note 1 Basis of Preparation and Accounting Policies .................................................................. 12
Note 2 Exploration and Evaluation Expenditure .......................................................................... 12
Note 3 Issued Capital ................................................................................................................. 13
Note 4 Segment Reporting ......................................................................................................... 14
Note 5 Dividends ........................................................................................................................ 14
Note 6 Cash and Cash Equivalents ............................................................................................ 14
Note 7 Trade and Other Receivables .......................................................................................... 14
Note 8 Share Subscriptions in Advance ...................................................................................... 15
Note 9 Commitments and Contingencies .................................................................................... 15
Note 10 Related Party Transactions ............................................................................................. 15
Note 11 Events After Balance Date .............................................................................................. 15
Directors’ Declaration ................................................................................................................... 16
Independent Review Report .......................................................................................................... 17
3
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT
Your directors submit their report of Groote Resources Limited (“Groote Resources” or the “Company”)
for the half-year ended 31 December 2010 (“Balance Date”) and review report thereon.
DIRECTORS
The names of the directors of the Company in office during the half-year and until the date of this report
are as below. Directors were in office for this entire period unless otherwise stated.
Douglas Daws Executive Chairman
Lloyd Jones Non-executive Director
David Ryan Non-executive Director
Maurice Catina Non-executive Director
Simon Alexander Noon Executive Director (Resigned)
Barrie Bolton Non-executive Director (Resigned)
Stuart John Hall Non-executive Director (Resigned)
Alexander Robert Harry Hewlett Non-executive Chairman (Resigned)
REVIEW AND RESULTS OF OPERATIONS
The principal activities of the Company throughout the half-year have comprised of the following:
- Developing its Groote Eylant Project;
- Investing cash assets in interest bearing bank accounts; and
- The general administration of the Company.
The Company realised a net loss for the half-year of $755,221 (2009: $233,359).
4
GROOTE RESOURCES LIMITED ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT (CONTINUED)
REVIEW AND RESULTS OF OPERATIONS (CONTINUED)
Projects
Groote Eylandt Manganese Project
Exploration Licences Granted
On 30 July 2010, the Company announced it had been granted three exploration license applications
(EL27523, EL27550, EL27551) and one Authorisation under Section 178 (27605), which cover an area of
1665 km² of highly prospective, shallow marine terrain near Groote Eylandt in the Northern Territory (see
Figure 1).
Figure 1: Location map of Groote Eylandt tenements. Granted tenements (green), tenement applications (blue).
The Exploration Licences cover interpreted along strike and down-dip extensions of the Groote Eylandt
manganese deposit. The Groote Eylandt deposit has been mined continuously since 1966 and is owned by
Groote Eylandt Mining Company Pty Limited (“GEMCO”) which is jointly owned by BHP Billiton Pty Ltd
(60%) and the Anglo American Corporation (40%).
GEMCO’s 2009 resource of 150Mt @ 45.5% Mn is the world’s third largest manganese deposit producing
more than 3 million tonnes of manganese ore annually, accounting for more than 15% of the world’s highgrade
manganese ore supply. Due to the high-grade, proximity to port and Asian markets, this low impurity
and low strip ratio operation is Australia’s ninth most profitable mine and one of the lowest operating cost
manganese mines in the world.
5
GROOTE RESOURCES LIMITED ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT (CONTINUED)
REVIEW AND RESULTS OF OPERATIONS (CONTINUED)
Mt Alexander & Granites Bore Uranium Projects
On 23 November 2010 GOT announced it had entered into an agreement with public unlisted company
Heguy Resources Ltd for the farm out of Exploration Lease Application (E08/1987) known as the Mt
Alexander Project, located approximately 120km south of Onslow in Western Australia.
Under the terms of the agreement Heguy will enter into a farm in and joint venture agreement with Groote
that could see Heguy earn a 70% interest in the Project by spending A$1.8 million on exploration.
Under the terms of the agreement Heguy could earn a 60% interest in the Project by expending A$1M on
exploration within a period up to a maximum of two years.
Upon earning that 60% interest, Heguy and Groote will be deemed to have formed an unincorporated joint
venture, with Groote holding 40%.
Heguy would be the manager of the joint venture. Heguy could elect to earn a further 10% venture interest
by committing to spend within 18 months a further A$800,000 of joint venture costs with Groote’s 30%
retained interest ‘free carried’ until a ‘decision to mine’ is made.
The Board believes the farm out agreement for the Mount Alexander Project will allow Groote Resources
Limited to focus its efforts on the Groote Eylandt Manganese Project while maintaining shareholders’
interests.
CORPORATE
On 29 November 2010 Groote signed a non-binding Memorandum of Intent with Korea Resources
Corporation (KORES) to establish a framework of cooperation to provide a basis for entering into a
commercial relationship regarding the Groote Eylandt Manganese Project.
KORES is the Korean Government’s investment vehicle to further Korea's access to strategically important
mineral resources. KORES invests in overseas exploration, development and production of strategically
important mineral resources.
Subject to successful completion of a review of the Groote Eylandt Manganese Project by KORES the
parties anticipate entering into a formal commercial relationship after April 2011.
At the Balance Date the Company had received share subscriptions totalling $200,000 pursuant to the
options exercised.
6
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ REPORT (CONTINUED)
SUBSEQUENT EVENTS
During the period from the Balance Date to the date of this report the Company received $1,301,000
pursuant to the exercise of 6,505,000 unlisted $0.20 options.
On 6 January 2011 the Company announced the appointment of Mr. Doug Daws as Non-Executive
Chairman, replacing Mr Alexander Hewlett whom had resigned.
On the 14 February 2011 the company announcement the appointment of Mr Lloyd Jones, Mr David Ryan
& Mr Maurice Catina as Non-Executive Directors. Mr Stuart Hall and Mr Barrie Bolton had resigned from
their roles as Non-Executive Directors. Mr Simon Noon, Executive Director announced he will also resign
on or before 11 March 2011.
On the 21 February, Mr Doug Daws was appointed in the role as executive chairman.
Signed in accordance with a resolution of the directors and on behalf of the Directors by:.
Douglas Daws
Director
Perth, Western Australia
Dated this 8th day of March 2011
7
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
8th March 2011
Groote Resources Limited
The Board of Directors
Suite 4, 38 Colin Street
WEST PERTH, WA 6005
Dear Sirs,
DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF
GROOTE RESOURCES LIMITED
As lead auditor of Groote Resources Limited for the half - year ended 31 December 2010, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
• the auditor independence requirements of the Corporations Act 2001 in relation to the review;
and
• any applicable code of professional conduct in relation to the review.
This declaration is in respect of Groote Resources Limited and the entity it controlled during the
period.
Brad McVeigh
Director
BDO Audit (WA) Pty Ltd
Perth, Western Australia
8
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
Note
31 DEC 2010 31 DEC 2009
$ $
Interest income 122,028 17,637
ASX listing fees (30,529) (8,176)
Audit expenses (22,289) (8,525)
Company Secretarial & Accounting fees (37,215) (18,000)
Consultants fees (4,163) (47,658)
Insurance expenses (3,641) (6,629)
Office accommodation expenses (29,112) (5,093)
Investor relations expenses (74,354) (3,000)
Travel and accommodation (157,508) (8,174)
Depreciation expense (3,462) (1,187)
Director’s fees (54,000) (66,000)
Employment expense (130,254) (14,579)
Exploration expenditure expense (254,729) (31,448)
Other expenses (75,993) (32,527)
Loss before income tax (755,221) (233,359)
Income tax expense - -
Loss for the half-year after income tax (755,221) (233,359)
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME FOR THE HALF
YEAR ATTRIBUTABLE TO THE MEMBERS OF
GROOTE RESOURCES LIMITED (755,221) (233,359)
Loss per share (cents per share)
- basic (loss) per share for the half-year (0.91) (1.56)
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
9
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
Note
31 DEC 2010 30 JUN 2010
$ $
ASSETS
Current Assets
Cash and cash equivalents 6 4,811,704 4,366,465
Trade and other receivables 7 63,041 88,880
Total Current Assets 4,875,645 4,455,345
Non-current Assets
Exploration and evaluation expenditure 2 6,300,000 6,300,000
Property, plant and equipment 21,790 20,170
Total Non-current Assets 6,321,790 6,320,170
TOTAL ASSETS 11,197,435 10,775,515
LIABILITIES
Current Liabilities
Trade and other payables 81,891 61,248
Provisions
Share subscriptions in advance 8
47,522
200,000
13,893
2,148,630
Total Current Liabilities 311,414 2,223,771
TOTAL LIABILITIES 311,414 2,223,771
NET ASSETS 10,868,021 8,551,744
EQUITY
Contributed equity 3(a) 10,783,239 7,711,740
Reserves 4,665,277 4,665,277
Accumulated losses (4,580,495) (3,825,273)
TOTAL EQUITY 10,868,021 8,551,744
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
10
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
Note
31 DEC 2010 31 DEC 2009
$ $
Cash flows used in operating activities
Payments to suppliers and employees (783,862) (288,713)
Interest received 111,314 17,610
Net cash outflows used in operating activities (672,547) (271,103)
Cash flows from investing activities
Deposit - Reflective Minerals Pty Ltd - (200,000)
Payments for property, plant and equipment (5,082) (14,503)
Net cash outflows used in investing activities (5,082) (214,503)
Cash flows from financing activities
Proceeds from the issue of share capital 1,122,869 830,000
Net cash inflows from financing activities 1,122,869 830,000
Net increase in cash and cash equivalents 445,239 344,394
Cash and cash equivalents at beginning of half-year 4,366,465 1,056,325
Cash and cash equivalents at end of half-year 6 4,811,704 1,400,719
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
11
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2009 HALF-YEAR FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Issued
Capital
$
Option
Reserve
$
Accumulated
Losses
$
Total
$
At 1 July 2010 7,711,740 4,665,277 (3,825,273) 8,551,744
Loss for the half-year - - (755,221) (755,221)
Total comprehensive income for the half-year - - (755,221) (755,221)
Transactions with owners in their capacity as
owners
Share issues:
- Costs of share issue, net of transaction costs 3,071,499 - - 3,071,499
At 31 December 2010 10,783,239 4,665,277 (4,580,495) 10,868,021
FOR THE HALF-YEAR ENDED 31 DECEMBER 2009
Issued
Capital
$
Option
Reserve
$
Accumulated
Losses
$
Total
$
At 1 July 2009 2,704,058 455,240 (2,142,518) 1,016,780
Loss for the half-year - - (233,359) (233,359)
Total comprehensive income for the half-year - - (233,359) (233,359)
At 31 December 2009 2,704,058 455,240 (2,375,877) 783,421
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
12
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
(a) Basis of Preparation
These general purpose financial statements for the half-year ended 31 December 2010 have been
prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001.
These half-year financial statements do not include all notes of the type normally included within the
annual financial statement and should be read in conjunction with the most recent annual financial
statements and public announcements made by Groote Resources Limited during the interim period in
accordance with continuous disclosure requirements of the Corporations Act 2001.
The half-year financial statements were approved by the Board of Directors on 8th March 2011.
(b) Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year
Certain new accounting standards and interpretations have been published that are no mandatory for
31 December 2010 reporting periods and have not been applied in these financial statements. The
company’s assessment of the impact of these new standards and interpretations is set out below.
AASB 9 Financial Instruments
In November 2009, The AASB issued AASB9 Financial Instruments which addresses the classification
and measurement of financial assets and liabilities. The standard may affect the Group’s accounting
for its financial assets and liabilities. This standard is not applicable until 1 January 2013 and the
Group is continuing to assess its full impact.
2 EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of areas of interest in the following phase:
31 DEC 2010 30 JUNE 2010
$ $
Exploration and evaluation phase – at cost
Balance at beginning of the half-year 6,300,000 6,300,000
Expenditure incurred 254,729 31,192
Impairment of deferred exploration expenditure (254,729) (31,192)
Balance at end of half-year 6,300,000 6,300,00
13
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
3 ISSUED CAPITAL
31 DEC 2010
Shares
31 DEC 2010
$
(a) Ordinary shares
Opening Balance 1 July 2010 73,189,371 8,160,257
7 Jul 2010 Options Exercised 9,967,937 2,298,597
10 Nov 2010 Options Exercised 1,000,000 200,000
31 Dec 2010 Options Exercised 2,902,500 580,500
Share Issue Costs (456,115)
Issued and fully paid shares carrying one
vote per share and dividend rights 87,059,808 10,783,239
31 DEC 2009
Shares
31 DEC 2009
$
(b) Ordinary shares
Opening Balance 1 July 2009 15,006,668 2,704,058
- -
Issued and fully paid shares carrying one
vote per share and dividend rights 15,006,668 10,783,239
At the Balance Date the Company had received share subscriptions totalling $200,000.
No options were issued during the half-year ended 31 December 2010 (2009: Nil).
14
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLILDATED HALF-YEAR FINANCIAL STATEMENTS (CONT.)
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
4 SEGMENT REPORTING
Directors have determined the Company has one reportable segment, being mineral exploration in
Western Australia. As the Company is focused on mineral exploration, the Board monitors the Company
based on actual versus budgeted exploration expenditure incurred by area of interest. This internal
reporting framework is the most relevant to assist the Board with making decisions regarding the
Company and its ongoing exploration activities, while also taking into consideration the results of
exploration work that has been performed to date.
31 DEC 2010 31 DEC 2010
$ $
Revenue from external sources - -
Reportable segment loss (254,729) (218,655)
Reportable segment assets 6,300,000 6,300,000
Reconciliation of reportable segment profit
or loss
Reportable segment loss (254,729) (218,655)
Interest income 122,028 49401
Unallocated:
- Corporate expenses (622,520) (1,513,501)
Loss before income tax (755,221) (1,682,755)
5 DIVIDENDS
No dividends were paid or declared by the Company during the half-year.
6 CASH AND CASH EQUIVALENTS
For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the following at 31
December:
31 DEC 2010 30 JUN 2010
$ $
Cash at bank and in hand 694,855 1,853,610
Term deposits 4,116,849 2,512,855
Commercial bills - -
4,811,704 4,366,465
7 TRADE AND OTHER RECEIVABLES
31 DEC 2010 30 JUN 2010
$ $
Accrued interest on deposits 10,714 -
Refunds receivable - -
GST receivable 20,881 85,239
Prepayments 32,046 3,641
63,041 88,880
15
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
NOTES TO THE CONSOLILDATED HALF-YEAR FINANCIAL STATEMENTS (CONT.)
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
8 SHARE SUBSCRIPTIONS IN ADVANCE
31 DEC 2010 30 JUN 2010
$ $
Share subscriptions received in advance 200,000 2,148,630
200,000 2,148,630
9 COMMITMENTS & CONTINGENCIES
The Company has no contingent assets or liabilities. There were no changes in commitments and
contingencies to those disclosed in the most recent financial report at 30 June 2010.
10 RELATED PARTY TRANSACTIONS
(a) Transactions with key management personnel
Transactions with key management personnel receive fees, compensation in the form of short term
employment benefits, post employment benefits and share based payment awards. Key management
personnel received total compensation of $143,140 (2009: $84,000). This includes fees paid to members
of key management who were appointed to the board during the 6 months ending 31 December 2010.
11 EVENTS AFTER THE BALANCE SHEET DATE
During the period from the Balance Date to the date of this report the Company received $1,301,000
pursuant to the exercise of 6,505,000 unlisted $0.20 options.
On 6 January 2011 the Company announced the appointment of Mr. Doug Daws as Non-Executive
Chairman, replacing Mr Alexander Hewlett whom had resigned.
On the 14 February 2011 the company announcement the appointment of Mr Lloyd Jones, Mr David Ryan
& Mr Maurice Catina as Non-Executive Directors. Mr Stuart Hall and Mr Barrie Bolton had resigned from
their roles as Non-Executive Directors. Mr Simon Noon, Executive Director announced he will also resign
on or before 11 March 2011.
On the 21 February 2011, Mr Doug Daws was appointed in the role as executive chairman.
16
GROOTE RESOURCES LIMITED
ABN 24 119 494 772
31 DECEMBER 2010 HALF-YEAR FINANCIAL REPORT
DIRECTORS’ DECLARATION
In the opinion of the directors:
(a) the financial statements and notes as set out on pages 8 to 15 are in accordance with the
Corporations Act 2001, including:
(i) give a true and fair view of the Group’s financial position as at 31 December 2010 and of its
performance for the half-year ended on that date; and
(ii) comply with Australian Accounting Standard AASB 134 “Interim Financial Reporting”, the
Corporations Regulations 2001 and other mandatory professional requirements; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and
on behalf of the Directors:
Douglas Daws
Director
Perth, Western Australia
Dated this 8th day of March 2011
17
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE MEMBERS OF GROOTE RESOURCES LIMITED
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Groote Resources Limited, which
comprises the statement of financial position as at 31 December 2010, and the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the halfyear
ended on that date, notes comprising a statement of accounting policies and other explanatory
information, and the directors’ declaration of the consolidated entity comprising the disclosing
entity and the entity it controlled during the half-year.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the disclosing entity are responsible for the preparation of the half-year financial
report that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such control as the directors determine is necessary to enable the
preparation of the half-year financial report that is free from material misstatement, whether due
to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review.
We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that
makes us believe that the financial report is not in accordance with the Corporations Act 2001
including: giving a true and fair view of the consolidated entity’s financial position as at 31
December 2010 and its performance for the half-year ended on that date; and complying with
Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
As the auditor of Groote Resources Limited, ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with
Australian Auditing Standards and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the Corporations
Act 2001, which has been given to the directors of Groote Resources Limited, would be in the same
terms if given to the directors as at the time of this auditor’s report.
18
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us
believe that the half-year financial report of Groote Resources Limited is not in accordance with
the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December
2010 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations
Regulations 2001.
BDO Audit (WA) Pty Ltd
Brad McVeigh
Director
Perth, Western Australia
Dated this 8th day of March 2011
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