report for the half-year ended 30 june · pdf filehalf-year financial report for the period...

ABN 78 003 103 54

34 Bagot Road

Subiaco WA 6008

PO Box 8306

Subiaco East WA 6008

ASX code: MODABN 78 003 103 544

T +61 (8) 9388 9449

F +61 (8) 9388 9409

E [email protected]

W www.modresources.com.au

9 September 2011

Company Announcements OfficeAustralian Securities Exchange Limited10th Floor20 Bond StreetSYDNEY NSW 2000

REPORT FOR THE HALF-YEAR ENDED 30 JUNE 2011Previous Corresponding Period: 30 June 2010

Attached is our report for the six months ended 30 June 2011 incorporting the requirements ofAppendix 4D.

Results for announcement to the market ($‘000)

Revenues from ordinary activities decrease 33% to 362

Loss from ordinary activities after tax attributable to increase 278% to (2,391)Members

Net Loss for the period attributable to members increase 278% to (2,391)

Dividends (distributions) Amount per security Franked amountper security

Interim dividend NIL¢ NIL¢

Previous corresponding period NIL¢ NIL¢

Net tangible asset per security Current period Previouscorresponding period

Net tangible asset backing per ordinary security 3.40 cents per share 2.56 cents per share

Commentary on results for the period

Please refer to the attached Directors’ report and Financial Report for further information on a reviewof the consolidated entity’s operations and the financial position and performance of the consolidatedentity for the half-year ended 30 June 2011.

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P a g e | 2

34 Bagot Road

Subiaco WA 6008

PO Box 8306

Subiaco East WA 6008

ASX code: MODABN 78 003 103 544

T +61 (8) 9388 9449

F +61 (8) 9388 9409

E [email protected]

W www.modresources.com.au

Entities over which control has been gained or lost during the period

On 25 February 2011, the Company acquired 100% of Amphion International Limited, an unlistedpublic company which has been assessing resource investment opportunities in both Australia andoverseas, after shareholders approval at the general meeting on 21 February 2011.

The applicable accounting standards used by the consolidated entity have been prepared in accordancewith the Australian equivalents to International Financial Reporting Standards.

The financial report has been reviewed, and a copy of the independent review report is attached to thefinancial report.

Yours faithfully

MILES KENNEDYChairman

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Half-Year Financial Report

For the period ended 30 June 2011

MOD Resources Limited

ABN 78 003 103 544

(formerly Medical Corporation Australasia Limited)For

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MOD RESOURCES L IMITED

HALF -YEAR F INANCIAL REPORT 2011

MOD RESOURCES LIMITEDACN 003 103 544

(formerly Medical Corporation Australasia Limited)

CORPORATE DIRECTORY

Directors

Mr Miles Kennedy (Non-Executive Chairman)

Mr Simon Lee AO (Non-Executive Director)

Mr Mark Drummond (Non-Executive Director)

Mr Derek Byrne (Executive Director)

Mr Mark Clements (Executive Director)

Secretary

Mark Clements

Registered Office

34 Bagot RoadSUBIACO WA 6008Telephone: (61 8) 9388 9449Facsimile: (61 8) 9388 9409E-mail: [email protected]: www.modresources.com.au

Share Registry

Security Transfer Registrars Pty Ltd770 Canning HighwayAPPLECROSS WA 6153Telephone: (61 8) 9315 2333Facsimile: (61 8) 9315 2233E-mail: [email protected]

ASX CODE: MOD

Auditors

Grant Thornton Audit Pty LtdLevel 1, 10 Kings Park RoadWEST PERTH WA 6005

CONTENTS

Directors’ Report 1

Auditor’s Declaration of Independence 5

Consolidated Statement of Financial Position 6

Consolidated Statement of Comprehensive Income 7

Consolidated Statement of Changes in Equity 8

Consolidated Statement of Cash Flows 9

Notes to the Interim ConsolidatedFinancial Statements 10

Directors’ Declaration 29

Independent Review Report 30

Legal Advisors

Hardy BowenLevel 1, 28 Ord StreetWEST PERTH WA 6005

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D I R E C T O R S ’ R E P O R T - Page 1-



Directors' Report

Your directors submit their report for the half-year ended 30 June 2011.

DIRECTORS

The names of the Company’s directors 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.

Mr Miles Kennedy, Chairman (appointed Non-Executive Director 1 March 2011 and Chairman 14 April 2011)Mr Simon Lee AO, Non-Executive Director (retired as Chairman 14 April 2011)Mr Mark Drummond, Non-Executive Director (appointed 1 March 2011)Mr Derek Byrne, Executive Director (appointed 8 August 2011)Mr Mark Clements, Executive Director and Company SecretaryMr Michael Bowen, Non-Executive Director (retired 12 May 2011)

REVIEW AND RESULTS OF OPERATIONS

The consolidated net result of the consolidated entity after income tax was a loss of $2,390,966 (2010: loss$632,788) which included impairment of goodwill on acquisition of Amphion International Limited of$1,280,564 (2010: Nil) and share-based payments of $1,056,490 (2010: Nil).

The revenues from ordinary activities of $361,985 were 33% lower than the corresponding period (2010:$541,505).The consolidated entity made a gain of $91,981 on the sale of short-term investments (2010:$357,002). The unrealised loss on short-term financial assets on hand as at 30 June 2011 was $41,500 (2010: lossof $945,496).

Acquisition of Amphion International Limited (“Amphion”) and new Board Structure

On 22 December 2010 the Company announced its intention to move into the resources sector via the acquisitionof Amphion, an unlisted public company which had been formed to assess global resources opportunities and wasbacked by some of Australia’s leading industry figures.

On 25 February 2011, the Company completed the acquisition of Amphion and an associated placement of$2.8 million at $0.035 per share following shareholder approval at a general meeting held on 21 February 2011.

Mr Miles Kennedy and Mr Mark Drummond, the executive team of Amphion, were appointed as directors of theCompany on 1 March 2011 and on 14 April 2011, Mr Kennedy was appointed as Chairman of the Company.

On 29 March 2011, the Company announced it had entered into an agreement to acquire 14 exploration licencesin Botswana’s emerging Kalahari Copper Belt on the basis that the project met the Board’s strategy of obtaininginterests in resources projects in stable jurisdictions and which have the potential for large scale development.The Company also announced it was to pursue an extensive exploration program across the licences comprisingthe Botswana Copper Project which commenced with a preliminary drilling program and aeromagnetic analysis.

The Company’s transition into the resources sector has involved a significant change in the nature of MOD’sactivities and accordingly, it is required to re-comply with chapters 1 and 2 of the Listing Rules. A generalmeeting of shareholders was held on 20 July 2011 at which shareholders approved the change in the nature ofactivities of the Company and the acquisition of the Botswana Copper Project. At this meeting shareholders alsoapproved the change of name to “MOD Resources Limited” in order to better reflect the Company’s new focus.

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REVIEW AND RESULTS OF OPERATIONS (Continued)

The Board is also continuing to assess other prospective resources investment opportunities which cover a rangeof commodities (most notably gold and mineral sands) and a range of jurisdictions (including Australasia andAfrica). The Board is also seeking to expand its presence in the Kalahari Copper Belt beyond the licencescomprising the Botswana Copper Project.

Unlisted Directors’ Options Issued

During the period, the Company issued the following unlisted options to the Company directors,Mr Miles Kennedy and Mr Mark Drummond, after receiving shareholder approval at the general meeting held on21 February 2011:

Director OptionsIssued

Date of issue ExercisePrice

Expiry Date VestingCriteria

Mr Miles Kennedy 5,000,000 28 February 2011 $0.20 15 May 2013 100% on thedate of issue

Mr Mark Drummond 500,000

5,000,000

24 February 2011

28 February 2011

$0.20

$0.20

15 May 2013

15 May 2013

100% on thedate of issue100% on thedate of issue

Current Issued Capital

Description Number of Shares Number of Options

Shares on issue 376,746,589 12,000,000(1)

Escrowed until 1 August 2012 45,000,000 45,000,000(2)

TOTAL: 421,746,589 57,000,000

(1) Unlisted Options exercisable at $0.20 each on or before 15 May 2013.(2) Unlisted Options exercisable at $0.20 on or before 1 August 2014.

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SUBSEQUENT EVENTS


On 20 July 2011, the Company changed its name to MOD Resources Limited.

On 29 July 2011, the Company completed the following;

(i) Acquisition of GMR Resources pursuant to the GMR Sale Agreement

GMR Resources Limited owns 100% of GMR Drilling Services (Pty) Ltd, a company incorporated inBotswana which holds eight (8) prospecting licences located in an area southwest of the Central KalahariNational Park, Botswana.

The consideration paid by the Company under the GMR Sale Agreement consisted of:

a) $1,000,000 deposit paid 5 April 2011;b) the payment of $2,750,000 ($1,354,800 upon completion and $1,395,200 on 1 September 2011); andc) the issue of 37,741,500 shares and 37,741,500 options exercisable at $0.20 and expiring on

1 August 2014.

(ii) Acquisition of Northern Licenses in accordance with the Amagram Sale Agreement

GMR Resources Limited and the Company entered into a sale agreement with Amagram (Pty) Ltd, a

company incorporated in Botswana, and others whereby GMR Resources agreed to acquire six (6)

prospecting licences located in north western Botswana which upon acquisition, will be transferred to

GMR Drilling Services (Pty) Ltd.

The consideration paid by the Company under the Amagram Sale Agreement consisted of:

a) the payment of $750,000 upon completion; and

b) the issue of 7,258,500 shares and 7,258,500 options exercisable at $0.20 and expiring on

1 August 2014.

(iii) Placement

Issued 10,000,000 shares each at an issue price of $0.20 following the raising of up to $2,000,000 pursuant

to a prospectus issued on 5 July 2011 and supplementary prospectus dated 13 July 2011. The funds raised

by the Company will be used towards paying the consideration for Botswana Copper Project and for

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SUBSEQUENT EVENTS (Continued)

On 8 August 2011, Mr Derek Byrne was appointed as an Executive Director of the Company.

Mr Byrne is a Chartered Engineer with a First Class Honours Degree in Mining Engineering and an MBAspecialising in Financial Management & Negotiation Behaviour.

He has 26 years' experience in the resources sector gained across four continents. His background includesunderground, surface and marine mining in a diverse range of commodities and materials including gold, copper,coal, chromite, diamonds, manganese and uranium.

Mr Byrne has worked extensively throughout Africa on a range of mining projects in Botswana, DemocraticRepublic of Congo, Ghana, Zimbabwe, Angola, Namibia and South Africa. He has also worked in Australia forConsolidated Minerals, Uranium One and Kimberley Diamond Co, and in New Zealand for OceanaGoldCorporation.

He has experience in operating, technical, consulting and project development roles. His most recent role wasleading the team that permitted, constructed and commissioned Australia's fourth uranium mine.

Mr Byrne is the holder of First Class Mine Manager Certificates of Competence for Metalliferous Mines and CoalMines, is a Fellow of the Australian Institute of Mining & Metallurgy, a Fellow of the Institute of Materials,Minerals & Mining, a Member of the Australian Institute of Company Directors and a Member of the AustralianRadiation Protection Society.

On 9 August 2011, the Company was relisted on Australian Securities Exchange as MOD Resources Limited.

Other than the above, there has not been any other matter or circumstance that has arisen since the end of thehalf-year that has significantly affected, or may significantly affect, the operations of the consolidated entity, theresults of those operations, or the state of affairs of the consolidated entity in future financial years.

AUDITOR'S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration is set out on page 5 and forms part of the directors’ report for thehalf year ended 30 June 2011.

Signed in accordance with a resolution of the directors.


Perth, 9th September 2011

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Grant Thornton Audit Pty Ltd ABN 94 269 609 023 10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E [email protected] W www.grantthornton.com.au

- Page 5 -

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together

with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

Auditor’s Independence Declaration

To The Directors of MOD Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead

auditor for the review of MOD Resources Limited for the half-year ended 30 June 2011, I

declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act

2001 in relation to the review; and

b no contraventions of any applicable code of professional conduct in relation to the

review.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

J W Vibert

Director - Audit & Assurance

Perth, 9 September 2011

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AS AT 30 JUNE 2011CONSOLIDATED

NotesAs at

30 June 2011$

As at31 December 2010

$ASSETSCurrent AssetsCash and cash equivalents 4 9,810,934 7,555,108Trade and other receivables 84,139 484,181Other short-term financial assets 6 1,731,500 2,834,500Other current assets 4,189 9,085Total Current Assets 11,630,762 10,882,874

Non-Current AssetsDeposit paid 8 1,000,000 -Receivables 5 669,427 -Property, plant and equipment 4,695 288Total Non-Current Assets 1,674,122 288

TOTAL ASSETS 13,304,884 10,883,162

LIABILITIESCurrent LiabilitiesTrade and other payables 202,058 85,387Income tax payable 265,103 412,780Provisions 6,130 3,186Total Current Liabilities 473,291 501,353

Non-Current LiabilitiesDeferred income tax liabilities 351,547 664,319Total Non-Current Liabilities 351,547 664,319

TOTAL LIABILITIES 824,838 1,165,672

NET ASSETS 12,480,046 9,717,490

EQUITYEquity attributable to equity holders of the parentIssued capital 9 38,397,521 34,305,562Reserves 10 1,061,563 -Accumulated losses (26,979,038) (24,588,072)

TOTAL EQUITY 12,480,046 9,717,490

The accompanying notes form part of the financial report.

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FOR THE HALF-YEAR ENDED 30 JUNE 2011

CONSOLIDATEDNotes 2011

$2010

$

Gain on disposal of financial assets 2 91,981 357,002Investment related income 2 1,550 109,044Interest income 2 257,908 59,550Other income 2 10,546 15,909Impairment of goodwill on acquisition 2 (1,280,564) -Share based payments 2 (1,056,490) -Project expenses 2 (243,819) -Net loss from fair value adjustments of financial assets atfair value through profit or loss 2 (41,500) (945,496)Administrative expenses 2 (580,791) (213,948)Brokerage fees 2 (9,999) (14,782)Depreciation expense 2 (237) (67)

Loss before income tax (2,851,415) (632,788)

Income tax benefit 460,449 -

Net loss for the period (2,390,966) (632,788)

Total comprehensive loss for the period (2,390,966) (632,788)

Loss per share attributable to the members of parent:– basic loss per share (cents per share)– diluted loss per share (cents per share)

(0.72)(0.72)

(0.25)(0.25)


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Notes Attributable to equity holders of the parentTotal

Equity

CONSOLIDATED IssuedCapital

$

OptionsReserve

$

AccumulatedLosses

$ $

At 1 January 2010 34,305,562 - (27,295,314) 7,010,248

Loss for the period - - (632,788) (632,788)

At 30 June 2010 34,305,562 - (27,928,102) 6,377,460

At 1 January 2011 34,305,562 - (24,588,072) 9,717,490

Loss for the period - - (2,390,966) (2,390,966)

34,305,562 - (26,979,038) 7,326,524

Issuance of shares 9 2,800,000 - - 2,800,000

Issuance of shares and options for acquisition

of subsidiary9, 10 1,318,333 5,073 - 1,323,406

Capital raising costs 9 (26,374) - - (26,374)

Share based payments 10 - 1,056,490 - 1,056,490

At 30 June 2011 38,397,521 1,061,563 (26,979,038) 12,480,046


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$2010

$

Cash flows from operating activitiesPayments to suppliers and employees (748,885) (213,598)Interest income received 227,424 53,854Rent income received - 5,363Other income received 10,546 29,815

Net cash flows used in operating activities (510,915) (124,566)

Cash flows from investing activitiesPurchase of short-term financial assets (81,600) (2,006,919)Proceeds from sale of short-term financial assets 1,694,043 2,727,163Payment of deposit on mining asset (1,000,000) -Loan to other entity (669,427) -Net cash acquired with the subsidiary 54,743 -Purchase of property and equipment (4,644) (455)

Net cash flows (used in)/provided by investing activities (6,885) 719,789

Cash flows from financing activitiesProceeds from issue of shares 2,800,000 -Capital raising costs (26,374) -

Net cash flows provided by financing activities 2,773,626 -

Net increase in cash held 2,255,826 595,223Cash and cash equivalents at beginning of period 7,555,108 2,597,283

Cash and cash equivalents at end of period 4 9,810,934 3,192,506


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1. BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of PreparationThis general purpose financial statements for the interim half-year reporting period ended 30 June 2011 havebeen prepared in accordance with requirements of the Corporations Acts 2001 and Australian AccountingStandards including AASB 134 Interim Financial Reporting. Compliance with Australian Accounting Standardsensures that the financial statements and notes also comply with International Financial Reporting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statementsof MOD Resources Limited (formerly Medical Corporation Australasia Limited) and its controlled entities (theGroup). As such, it does not contain information that represents relatively insignificant changes occurring duringthe half-year within the Group. It is therefore recommended that this financial report be read in conjunction withthe annual financial statements of the Group for the year ended 31 December 2010, together with any publicannouncements made during the half-year.

The same accounting policies and methods of computation have been followed in this interim financial report aswere applied in the most recent annual financial statements except for the adoption of the following new andrevised Accounting Standards.

Accounting Standards not previously applied

The Group has adopted the new and revised Australian Accounting Standards issued by the AASB which aremandatory to apply to the current interim period and are applicable to the Group. Disclosures required by theseStandards that are deemed material have been included in this financial report on the basis that they represent asignificant change in information from that previously made available.

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EN

TS

-Page

12

-

MO

DR

ES

OU

RC

ES

LIM

IT

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HA

LF-Y

EA

RF

IN

AN

CIA

LR

EP

OR

T2

01

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FO

RT

HE

HA

LF

-YE

AR

EN

DE

D30

JUN

E20

11

1.B

AS

ISO

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PA

RA

TIO

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CO

UN

TIN

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ICIE

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sin

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pro

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nce

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tE

xp

lan

ati

onof

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men

tsE

ffec

tive

Dat

eIm

pa

ctof

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sta

nd

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onth

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na

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al

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ort

(if

sta

nd

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otea

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opte

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Rel

ated

pro

nou

nce

men

tw

hic

hm

ust

be

earl

ya

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ted

ifth

isst

an

da

rdis

earl

ya

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ted

Lik

ely

imp

act

AA

SB

201

0-4

Fur

ther

Am

end

men

tsto

Aus

tral

ian

Acc

ount

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ndar

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isin

gfr

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eA

nnua

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pro

vem

ents

Pro

ject

[AA

SB

1,A

AS

B7

,A

AS

B1

01,A

AS

B1

34an

dIn

terp

reta

tion

13]

Non

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inte

ract

ion

bet

wee

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uant

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ive

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idan

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app

lydi

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ncip

les

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AS

B13

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rsi

gnif

ican

tev

ents

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tran

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ions

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Cla

rify

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whe

nth

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its

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edon

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valu

eof

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awar

dsfo

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ount

sor

ince

ntiv

esot

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ise

gran

ted

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stom

ers

not

par

tici

pati

ngin

the

awar

dcr

edit

sche

me,

isto

be

tak

enin

acco

unt.

31

Dec

emb

er20

11T

heen

tity

wil

las

sess

the

imp

act

ofth

eam

end

men

tsfo

rth

eye

aren

ding

31

Dec

emb

er20

11de

pen

ding

onit

sb

usin

ess

stra

tegy

.

Non

eD

epen

din

gon

rele

vanc

eof

the

amen

dm

ents

,th

eim

pac

tis

unli

kel

yto

be

sign

ific

ant

atp

rese

ntti

me.

For

per

sona

l use

onl

y

NO

TE

ST

OT

HE

FIN

AN

CI

AL

ST

AT

EM

EN

TS

-Page

13

-

MO

DR

ES

OU

RC

ES

LIM

IT

ED

HA

LF-Y

EA

RF

IN

AN

CIA

LR

EP

OR

T2

01

1

FO

RT

HE

HA

LF

-YE

AR

EN

DE

D30

JUN

E20

11

1.B

AS

ISO

FP

RE

PA

RA

TIO

NA

ND

AC

CO

UN

TIN

GP

OL

ICIE

S(C

onti

nu

ed)

Ch

ange

sin

acco

un

tin

gp

olic

y(c

onti

nu

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New

/rev

ised

pro

nou

nce

men

tS

up

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ded

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nou

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xp

lan

ati

onof

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end

men

tsE

ffec

tive

Dat

eIm

pa

ctof

new

sta

nd

ard

onth

efi

na

nci

al

rep

ort

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sta

nd

ard

isn

otea

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ad

opte

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ated

pro

nou

nce

men

tw

hic

hm

ust

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earl

ya

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ted

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isst

an

da

rdis

earl

ya

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ted

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ely

imp

act

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105

4A

ustr

alia

nA

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iona

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rans

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man

Con

verg

ence

pro

ject

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eA

AS

Ban

dF

RS

B.

Thi

sst

anda

rdre

loca

tes

all

Aus

tral

ian

spec

ific

disc

losu

res

from

othe

rst

anda

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ep

lace

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revi

ses

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losu

res

inth

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llow

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mp

lian

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ith

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ount

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ndar

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hest

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ory

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isor

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ork

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ncia

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atem

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ner

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ose

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ecia

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udit

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put

atio

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reco

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iati

onof

net

oper

atin

gca

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owto

prof

it(l

oss)

30

June

201

2T

his

Sta

ndar

dse

tsou

tth

eA

ustr

alia

n-sp

ecif

icdi

sclo

sure

sfo

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titi

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atha

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dA

ustr

alia

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ccou

ntin

gS

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ards

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his

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ndar

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ntai

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req

uire

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tsth

atar

ead

diti

onal

toIF

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.

AA

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201

1-0

1N

otex

pec

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alia

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AA

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men

dm

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TE

ST

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HE

FIN

AN

CI

AL

ST

AT

EM

EN

TS

-Page

14

-

MO

DR

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LIM

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EP

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JUN

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PA

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TIO

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CO

UN

TIN

GP

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nu

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ange

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onti

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ffec

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tw

hic

hm

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da

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end

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30

June

201

2T

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abil

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eth

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fair

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emb

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his

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akes

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y

NO

TE

ST

OT

HE

FIN

AN

CI

AL

ST

AT

EM

EN

TS

-Page

15

-

MO

DR

ES

OU

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IT

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IN

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CIA

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EP

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Dec

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12T

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l use

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NO

TE

ST

OT

HE

FIN

AN

CI

AL

ST

AT

EM

EN

TS

-Page

16

-

MO

DR

ES

OU

RC

ES

LIM

IT

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LF-Y

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LR

EP

OR

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1

FO

RT

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AR

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JUN

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PA

RA

TIO

NA

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TIN

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New

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For

per

sona

l use

onl

y





2. REVENUE AND EXPENSES

Profit/(loss) from ordinary activities before income tax is arrived at after taking into account:


$2010

$

Gain on disposal of financial assets 91,981 357,002

Investment related income 1,550 109,044

Interest income 257,908 59,550

Other income 10,546 15,909

Net loss from fair value adjustments of financial assets atfair value through profit or loss (41,500) (945,496)

Impairment of goodwill on acquisition 11 (1,280,564) -

Share based payments (1,056,490) -

Project expenses (243,819) -

Administrative expenses- Salaries and wages- Financial and executive services- Directors fees- Travel and accommodation- Insurance- Professional fees- Rental expense on operating lease- Other administrative expenses

(112,009)(42,239)

(138,370)(25,240)

(1,328)(54,073)(64,671)

(142,861)

(43,603)(49,739)(12,500)(11,476)

(537)(32,010)(36,657)(27,426)

(580,791) (213,948)

Brokerage fees (9,999) (14,782)

Depreciation expense- Depreciation: plant and equipment (237) (67)

3. DIVIDENDS PAID AND PROPOSED

There have been no dividends paid and proposed during the half-year 30 June 2011 (2010: Nil) and for thefinancial year 31 December 2010 (2009: Nil).

For

per

sona

l use

onl

y





4. CASH AND CASH EQUIVALENTS

For the purposes of the half-year statement of cash flows, cash and cash equivalents comprise the following:

CONSOLIDATED30 June 2011

$31 December 2010

$

Cash at bank and in hand 157,930 1,066,245Short-term deposits 9,653,004 6,488,863

9,810,934 7,555,108

5. NON-CURRENT RECEIVABLES

Trades and other receivables includes a loan to GMR Resources Limited, which was an unrelated entity as at30 June 2011, of $669,427 (31 December 2010: Nil) and relates to the exploration and evaluation expenditurein relation to the Botswana Copper Project. The amount has not been classified as exploration expenditure as, atreporting date, the conditions precedent under the transaction had not been met. Refer to Note 14 for furtherdetails.

6. OTHER SHORT-TERM FINANCIAL ASSETSCONSOLIDATED

30 June 2011$

31 December 2010$

CurrentOther financial assets at fair value through profit or loss

Listed securities (1) 1,731,500 2,834,500

(1) Fair values of listed shares and options have been determined directly by reference to published price quotations in anactive market.

7. INVESTMENTS IN FINANCIAL ASSETS

Other than investments in controlled entities and associated entities, the consolidated entity had the followinginvestments at 30 June 2011;

Amphion International Limited 100% (31 December 2010: Nil)ObjectiVision Pty Ltd 28% (31 December 2010: 28%)Medsaic Pty Ltd 5% (31 December 2010: Nil)Allied Medical Limited 0.06% (31 December 2010: Nil)Immune System Therapeutics Ltd 3% (31 December 2010: Nil)Medevco Pty Ltd Nil (31 December 2010: 6%)

At 30 June 2011, the carrying values of these investments in financial assets are at nil value (31 December 2010:nil).

For

per

sona

l use

onl

y





8. DEPOSIT PAID

On 5 April 2011, a deposit of $1,000,000 was paid pursuant to the GMR Sale Agreement upon completion ofacquisition of the Botswana Copper Project. Refer to Note 14 for further details.

9. ISSUED CAPITALCONSOLIDATED

30 June 2011$

31 December 2010$

Issued capital366,746,589 fully paid ordinary shares 38,397,521 34,305,562

(2010: 249,079,918 ordinary shares)

30 June 2011 31 December 2010Number of

Shares $Number of

Shares $Movement in Shares on Issue

Beginning of the period 249,079,918 34,305,562 249,079,918 34,305,562

Issued during the year- shares issued to acquire Amphion (i) 37,666,671 1,318,333 - -- shares issued for cash (ii) 80,000,000 2,800,000 - -- capital raising costs - (26,374) - -

Ending of the period 366,746,589 38,397,521 249,079,918 34,305,562

(i) On 24 February 2011, the Company issued 37,666,671 fully paid ordinary shares following shareholder approval of theacquisition of 100% of Amphion International Limited pursuant to a sale agreement dated 21 December 2010 at a generalmeeting held on 21 February 2011.

(ii) On 24 February 2011, the Company issued 80,000,000 fully paid ordinary shares at a value of $0.035 each as part of aplacement to raise $2.8 million (before expenses of the issue).

For

per

sona

l use

onl

y




10. RESERVESCONSOLIDATED

30 June 2011$

31 December 2010$

Options reserve 1,061,563 -

Movement in Options reserve

The number of unlisted options outstanding over unissued ordinary shares at balance date is as follows:

Grant date Number ofoptions

30 June 2011$

31 December 2010$

Options – Acquisition of Amphion

Unlisted options exercisable at $0.20;expiring on 15 May 2013 24 February 2011 2,000,000 5,073 -

Directors’ Options

Unlisted options exercisable at $0.20;expiring on 15 May 2013 28 February 2011 10,000,000 1,056,490 -

12,000,000 1,061,563 -

The Option Reserve records the fair value of the options relating to the Amphion acquisition which were issued fornil consideration.

Following shareholder approval at the general meeting held on 21 February 2011, 2,000,000 unlisted options whichhave an exercise price of $0.20 and expire on 15 May 2013 were granted pursuant to the acquisition of Amphion on25 February 2011.

Following shareholder approval, 10,000,000 unlisted options which have an exercise price of $0.20 and expire on15 May 2013 were granted to Mr Miles Kennedy and Mr Mark Drummond on 28 February 2011.

The fair value of these options are expensed, from their date of grant, over their vesting period; fair value aredetermined as at date of grant using the Black & Scholes option pricing model that takes into account the exerciseprice, the term of the option, the underlying share price as at date of grant, the expected price volatility of theunderlying shares and the risk-free interest rate for the term of the option. The Company is required to expense theoptions on the basis that the fair value cost at date of grant is apportioned over the vesting period applicable to eachoption.

Date of issue Description of Unlisted Options Vesting criteria Deemedprice

Risk freerate

Pricevolatility

24 February 2011 Options – Acquisition of AmphionUnlisted options exercisable at $0.20;expiring on 15 May 2013

Vested at the date of theissue of the options

3.5 cents 4.95% 75%

Date of issue Description of Unlisted Options Vesting criteria Shareprice atgrantdate

Risk freerate

Pricevolatility

28 February 2011 Directors’ OptionsUnlisted options exercisable at $0.20;expiring on 15 May 2013

Vested at the date of theissue of the options

19 cents 4.95% 100%

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10. RESERVES (Continued)

The model inputs for assessing the fair value of options granted during the period are as follows:

a) Options are granted for no consideration and vest as described in the table above;b) Exercise price is as described in the table above;c) Grant date is as described in the table above;d) Expiry date is as described in the table above;e) Share price is based on the last bid price on ASX as at date of grant, as described in the table above;f) Expected price volatility of the Company shares is based on an independent assessment;g) Expected dividend yield is nil;h) Risk-free interest rate is based on the 3 year Commonwealth bond yield, as described in the table above.

11. ACQUISITION OF AMPHION INTERNATIONAL LIMITED

On 25 February 2011, the consolidated entity acquired Amphion International Limited (Amphion). Amphion wasan unlisted public company which had been assessing resource investment opportunities in both Australia andoverseas. The consideration consisted of 37,666,671 ordinary shares at a deemed price of $0.035 per share and2,000,000 unlisted options (Note 10) following shareholders approval at the 21 February 2011 general meeting.

This acquisition has not been accounted for as a business combination under AASB3: “Business Combination” asAmphion’s assets were not considered to constitute a business. Accordingly, the Amphion acquisition has beenaccounted for as an acquisition of assets, at cost based on the fair value of shares and options used for theacquisition. The attributable costs of the issuance of ordinary shares have been charged directly to equity as negativecontributed equity.

The fair value of the identifiable assets and liabilities of Amphion as of the date of acquisition were as follows:

$

Cash 54,743Liabilities (11,901)Fair value of identifiable net assets 42,842Goodwill arising on acquisition 1,280,564

1,323,406

Acquisition date fair value of consideration:$

Shares issued 1,318,333Unlisted options 5,073

1,323,406

The cashflow on acquisition is the cash acquired with the subsidiary of $54,743.

The Board has considered the goodwill arising on the acquisition of Amphion of $1,280,564 and resolved to impairthis amount as at 30 June 2011 on the basis that Amphion is an unlisted company and there is no active market toderive its fair value.F

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12. SEGMENT INFORMATION

(i) Segment performanceHealthcare and

Medical ProductsCash and Short-termFinancial Investments

Investments$

Australia$

Malaysia$

Total$

For the half-year ended 30 June 2011

Gain on disposal of financial assets - 91,981 - 91,981Investment related income - 1,550 - 1,550Interest income - 257,908 - 257,908

Total segment revenue - 351,439 - 351,439

Other income 10,546

Total group revenue 361,985


Segment net profit before tax - 341,440 - 341,440

Amounts not included in segment results butreviewed by the Board:- Goodwill impairment - - - (1,280,564)- Share based payments - - - (1,056,490)- Project expenses - - - (243,819)- Corporate charges - - - (581,028)- Net loss from fair value adjustments of

financial assets at fair value through profitor loss - (41,500) - (41,500)

- Income tax benefit - - - 460,449- Other income - - - 10,546

Loss after tax (2,390,966)


Gain on disposal of financial assets - 353,934 3,068 357,002Investment related income - 107,875 1,169 109,044Interest income - 59,476 74 59,550

Total segment revenue - 521,285 4,311 525,596

Other income 15,909

Total group revenue 541,505For

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12. SEGMENT INFORMATION (Continued)

(i) Segment performance (continued)Healthcare and


Investments$

Australia$

Malaysia$

Total$


Segment net profit before tax - 506,525 4,289 510,814

Amounts not included in segment results butreviewed by the Board:- Net loss from fair value adjustments of

financial assets at fair value through profitor loss - (913,894) (31,602) (945,496)

- Corporate charges - - - (214,912)- Foreign exchange gain - 26 871 897- other income - - - 15,909

Loss after tax (632,788)

(ii) Segment assets

30 June 2011

Segment assets - 11,542,434 - 11,542,434

Unallocated Assets- Deposit paid - - - 1,000,000- Receivables non-current - - - 669,427- Trade and other receivables - - - 84,139- Other current assets - - - 4,189- Plant and equipment - - - 4,695

Total assets 13,304,884

31 December 2010

Segment assets - 10,861,229 10,861,229

Unallocated Assets- Trade and other receivables - - - 12,560- Other current assets - - - 9,085- Plant and equipment - - - 288

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12. SEGMENT INFORMATION (Continued)

(iii) Segment liabilitiesHealthcare and


Investments$

Australia$

Malaysia$

Total$

30 June 2011

Segment liabilities - - - -Unallocated liabilities - - - 473,291Deferred income tax liabilities - - - 351,547

Total liabilities 824,838

31 December 2010

Segment liabilities - - - -Unallocated liabilities - - - 501,353Deferred income tax liabilities - - - 664,319

Total liabilities 1,165,672

13. COMMITMENTS

As at 30 June 2011, the Group had no commitments. However, following shareholder approval of the acquisitionof GMR Resources Limited and Amagram (Pty) Ltd licences at the general meeting on 20 July 2011, theCompany has paid consideration of $4,500,000 and issued 45,000,000 shares and 45,000,000 unlisted optionswith an exercise price of $0.20 expiring 1 August 2014.

On completion of the acquisition of GMR Resources Limited on 29 July 2011, the Group has acquired 14 miningtenements located in the North-West of Botswana, details of which are as follows;

Licence Number Size (km²) Commencement Date Renewal Date

Northern Licences

648/2009 156.3 1 July 2009 30 June 2012

649/2009 120.4 1 July 2009 30 June 2012

650/2009 359.8 1 July 2009 30 June 2012

651/2009 573.9 1 July 2009 30 June 2012

652/2009 801.7 1 July 2009 30 June 2012

686/2009 661.4 1 October 2009 30 September 2012

Southern Licences

034/2010 921.0 1 January 2010 31 December 2012








Total 8,359.50

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13. COMMITMENTS (Continued)

The minimum exploration expenditure commitments on these 14 licences total BWP17,200,000 ($5 million). TheBotswana government will retain a levy of 3% NSR (royalty on net smelter return) on base metals and a 5% NSRon precious metals. Furthermore, they also have the right to acquire a 15% working interest upon issuance of amining licence.

14. SUBSEQUENT EVENTS


On 20 July 2011, the Company changed its name to MOD Resources Limited.

On 29 July 2011, the Company completed the following;

(iv) Acquisition of GMR Resources pursuant to the GMR Sale Agreement

GMR Resources Limited owns 100% of GMR Drilling Services (Pty) Ltd, a company incorporated inBotswana which holds eight (8) prospecting licences located in an area southwest of the Central KalahariNational Park, Botswana.

The consideration paid by the Company under the GMR Sale Agreement consisted of:

a) $1,000,000 deposit paid 5 April 2011;b) the payment of $2,750,000 ($1,354,800 upon completion and $1,395,200 on 1 September 2011); andc) the issue of 37,741,500 shares and 37,741,500 options exercisable at $0.20 and expiring on

1 August 2014.

(v) Acquisition of Northern Licenses in accordance with the Amagram Sale Agreement

GMR Resources Limited and the Company entered into a sale agreement with Amagram (Pty) Ltd, a

company incorporated in Botswana, and others whereby GMR Resources agreed to acquire six (6)

prospecting licences located in north western Botswana which upon acquisition, will be transferred to

GMR Drilling Services (Pty) Ltd.

The consideration paid by the Company under the Amagram Sale Agreement consisted of:

a) the payment of $750,000 upon completion; and

b) the issue of 7,258,500 shares and 7,258,500 options exercisable at $0.20 and expiring on

1 August 2014.

(vi) Placement

Issued 10,000,000 shares each at an issue price of $0.20 following the raising of up to $2,000,000 pursuant

to a prospectus issued on 5 July 2011 and supplementary prospectus dated 13 July 2011. The funds raised

by the Company will be used towards paying the consideration for Botswana Copper Project and for

working capital and administrative expenses.

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14. SUBSEQUENT EVENTS (Continued)

On 8 August 2011, Mr Derek Byrne was appointed as an Executive Director of the Company.

Mr Byrne is a Chartered Engineer with a First Class Honours Degree in Mining Engineering and an MBAspecialising in Financial Management & Negotiation Behaviour.

He has 26 years' experience in the resources sector gained across four continents. His background includesunderground, surface and marine mining in a diverse range of commodities and materials including gold, copper,coal, chromite, diamonds, manganese and uranium.

Mr Byrne has worked extensively throughout Africa on a range of mining projects in Botswana, DemocraticRepublic of Congo, Ghana, Zimbabwe, Angola, Namibia and South Africa. He has also worked in Australia forConsolidated Minerals, Uranium One and Kimberley Diamond Co, and in New Zealand for OceanaGoldCorporation.

He has experience in operating, technical, consulting and project development roles. His most recent role wasleading the team that permitted, constructed and commissioned Australia's fourth uranium mine.

Mr Byrne is the holder of First Class Mine Manager Certificates of Competence for Metalliferous Mines and CoalMines, is a Fellow of the Australian Institute of Mining & Metallurgy, a Fellow of the Institute of Materials,Minerals & Mining, a Member of the Australian Institute of Company Directors and a Member of the AustralianRadiation Protection Society.

On 9 August 2011, the Company was relisted on Australian Securities Exchange as MOD Resources Limited.

Other than the above, there has not been any other matter or circumstance that has arisen since the end of thehalf-year that has significantly affected, or may significantly affect, the operations of the consolidated entity, theresults of those operations, or the state of affairs of the consolidated entity in future financial years.

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D I R E C T O R S ’ D E C L A R A T I O N - Page 29 -



Directors' Declaration

In accordance with a resolution of the directors of MOD Resources Limited (formerly Medical CorporationAustralasia Limited), I state that:

In the opinion of the directors:

(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act2001, including:

(i) give a true and fair view of the financial position as at 30 June 2011 and the performance for thehalf-year ended on that date of the consolidated entity; and

(ii) comply with Accounting Standard AASB 134 Interim Financial Reporting and the CorporationsRegulations 2001; and

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when theybecome due and payable.

On behalf of the Board


Perth, 9th September 2011

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Grant Thornton Audit Pty Ltd ABN 94 269 609 023 10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E [email protected] W www.grantthornton.com.au

- Page 30 -

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together

with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

Independent Auditor’s Review Report

To the Members of MOD Resources Limited

We have reviewed the accompanying half-year financial report of MOD Resources Limited

(“Company”), which comprises the consolidated financial statements being the statement of

financial position as at 30 June 2011, and the statement of comprehensive income,

statement of changes in equity and statement of cash flows for the half-year ended on that

date, a statement of accounting policies, other selected explanatory notes and the directors’

declaration of the consolidated entity, comprising both the Company and the entities it

controlled at the half-year’s end or from time to time during the half-year.

Directors’ responsibility for the half-year financial report

The directors of the Company are responsible for the preparation and fair presentation of

the half-year financial report in accordance with Australian Accounting Standards (including

the Australian Accounting Interpretations) and the Corporations Act 2001. This

responsibility includes establishing and maintaining internal controls relevant to the

preparation and fair presentation of the half-year financial report that is free from material

misstatement, whether due to fraud or error; selecting and applying appropriate accounting

policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report

based on our review. We conducted our review in accordance with the 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 30 June 2011 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

MOD Resources Limited, ASRE 2410 requires that we comply with the ethical

requirements relevant to the audit of the annual financial report. For

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- Page 31 -

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 complied with the independence requirements of the

Corporations Act 2001.

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 MOD 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 30 June

2011 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.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

J W Vibert

Director - Audit & Assurance

Perth, 9 September 2011

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report for the half-year ended 30 june · pdf filehalf-year financial report for the period...

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