Hannans Annual Report 2008

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HAnnAns RewARd ltd AnnuAl RepoRt

foR tHe finAnciAl yeAR ended 30 JunE 2008
Corporate directory ................................................................................................... 1 Strategic Plan ............................................................................................................ 2 Directors report ........................................................................................................ 2 Auditors independence declaration ......................................................................... 29 Directors declaration ............................................................................................... 31 Independent audit report ......................................................................................... 32 Income statement.................................................................................................... 34 Balance sheet.......................................................................................................... 35 Statement of changes in equity................................................................................ 36 Cash flow statement ................................................................................................ 38 Notes to the financial statements ............................................................................. 39
corporate directory
Board of directors
Independent Non-Executive Chairman Mr Richard Scallan Managing Director Mr Damian Hicks Non-Executive Directors Dr Ernest Dechow Mr William Hicks Mr Terrence Grammer Mr Frank Cannavo Company Secretary Mr Ian Gregory
Principal Office Level 2, 11 Ventnor Avenue West Perth, Western Australia 6005
Registered Office Level 2, 11 Ventnor Avenue West Perth, Western Australia 6005
Share Registry Computershare Level 2, 45 St Georges Terrace Perth, Western Australia, 6000 T: 1300 557 010 www.computershare.com.au
Postal Address PO Box 1227 West Perth, WA, 6872
Auditors Stantons International Level 1, 1 Havelock Street West Perth, Western Australia 6005
Contact Details T: +61 8 9324 3388 F: +61 8 9324 3366 E: admin@hannansreward.com W: www.hannansreward.com ABN 52 099 862 129
Hannans Reward Ltd Annual Report 2008
di re c to r s r e po rt
strategic plan
Vision
To build a successful exploration and production company
Mission
Our mission is to develop a company that has a material interest in a portfolio of mineral projects that are being rapidly progressed whether they are exploration, development or production assets. We recognise that a professional, knowledgeable and ethical team of directors, employees and consultants is the key to our business.
Our focus is to provide shareholders with a satisfactory return on investment by managing our people, projects and capital in an entrepreneurial and responsible manner.
directors report
The Directors of Hannans Reward Ltd (Hannans) submit the annual financial report of the Company for the financial year ended 30 June 2008. Hannans principal activity is exploration on its tenements and apply for and acquire additional tenements with the objective of identifying economic mineral deposits. There was no significant change in the nature of the companys activities during the year. Below is a summary of the Companys main exploration projects and activities that have taken place throughout the year to 30 June 2008. We encourage you to visit www.hannansreward.com for a comprehensive review of the Companys activities. Hannans believes the following projects have the potential to host economic minerals deposits: Forrestania (east of Hyden, WA); Nickel and Gold Queen Victoria Rocks (south-west of Coolgardie, WA); Nickel and Gold Maggie Hays South (west of Norseman, WA); Copper-Molybdenum-Gold Jigalong (east of Newman, WA); Iron, Manganese and Base Metals Sunday (east of Leonora, WA). Gold and Base Metals The location of each of these projects is highlighted on the opposite page. What follows is a summary of the compelling reasons to be a Hannans shareholder.
H a n n a n s R e wa R d Lt d
project summary
Forrestania Hannans Forrestania project, comprising ground in joint venture and wholly owned tenements, is located within the world-class Forrestania nickel belt and adjoins ground owned by major mining companies Western Areas (ASX:WSA) and Kagara (ASX:KZL). Please refer to the project location map on the opposite page highlighting Hannans strategic land position. The recent discovery of the Spotted Quoll nickel deposit by Western Areas highlights the fact that opportunity remains for the discovery of high grade close-to-surface nickel sulphide deposits within the Forrestania region. As a micro-cap Company with an active exploration programme in one of the richest nickel belts in Australia, exploration discovery by Hannans will likely lead to an immediate re-rating of the stock. It may also attract corporate interest from national and international nickel focused companies looking to gain a foothold in the Forrestania region. Exploration conducted during the year has confirmed that this increasingly large tenement package has the potential to host nickel sulphides. This exploration has primarily involved broad ground based geophysical surveys (fixed loop and moving loop), soil sampling and reverse circulation drilling. These activities suggest that additional air core drilling is required to better understand the geological setting within the tenement package prior to conducting reverse circulation and diamond drilling of co-incident geophysical and geochemical nickel targets. To date the ground being worked by Hannans has been solely focused within joint venture ground highlighted in light blue on the opposite page. In this instance our joint venture partner is Cullen Resources Ltd (ASX:CUL) and Hannans is the sole contributing party holding an 80% interest in these tenements. During the coming year Hannans also looks forward to commencing work on the 100% owned tenements once they have been granted (currently applications) and approvals obtained. The work plan is to continue geophysical and geochemical sampling together with aircore drilling and RC/diamond drilling. Field activities at Forrestania occur in rotation with field activities at Jigalong, Maggie Hays and QVR Projects depending on approvals, contractor availability and weather conditions. Additional efforts will also be directed towards assessing the gold potential of the project. This project has the potential to be a company maker for Hannans. The following is a list of ASX Announcements made from 1 July 2007 that relate to the work completed at Forrestania by Hannans.
Date 16-Jul-2008 05-May-2008 24-Apr-2008 03-Mar-2008 15-Feb-2008 01-Feb-2008 05-Dec-2007 16-Nov-2007 01-Nov-2007 01-Nov-2007 17-Oct-2007 08-Oct-2007 28-Aug-2007 31-Jul-2007
4 Hannans Reward Ltd Annual Report 2008
Announcement Title 4th Quarter Activities Report Investor Presentation 3rd Quarter Activities Report Exploration Portfolio Presentation Focus on Australian Gold, Nickel and Iron 2nd Quarter Activities Report Forrestania Exploration Update Forrestania New Tenement Application AGM Presentation 1st Quarter Activities Report Outline of Exploration Activity for 2nd Quart Drilling at Forrestania Mid Quarter Exploration Update Placement Update - Shandong Landbridge Group
jigalong
With the assistance of the Jigalong Traditional Owners and joint venture partner Jigalong Community Inc recent exploration activities have substantially advanced the understanding of the Jigalong Project. It is possible that this large (approx 2,000km2) project hosts iron, manganese and base metals. The Jigalong Project is located in the East Pilbara which is rapidly becoming home to major mining companies including BHP Billiton, Rio Tinto (Ausquest (ASX:AQD) equity partner), Cleveland Cliffs (Ausquest (ASX:AQD) equity partner), Fortescue Metals Group, Hancock Prospecting (Mineral Resources (ASX:MIN) partner) and Atlas iron (Warwick Resources (ASX:WRK partner). These companies have entered the region either on their own account, through equity placements or joint ventures principally in
the search for iron and manganese. Please refer to the location map below highlighting Hannans position within the East Pilbara Manganese province. Hannans, through its interest in the Jigalong Project, is centrally located within this province and remains one of the few ASX listed exploration companys not aligned with a major mining company. This is considered to be a positive outcome because shareholders remain fully leveraged to future exploration discovery and corporate activity. Hannans has recently completed a very large ground based gravity survey and reverse circulation drill programme (59 holes for 7,059 meters) at Jigalong in the search for iron and manganese. Initial iron intercepts received during September included 16m@59% iron (including 6m@60%Fe) with many assays yet to be received. Recently
samples from 14 holes have been submitted for manganese analysis. Most importantly Hannans Technical Team has vastly improved its understanding of the Projects geological setting through the many days of prospecting and observations from drilling. From a pure iron perspective the Jigalong Project is squeezed between two separate iron projects owned by FerrAus Ltd (ASX:FRS) which have reported iron targets of 315 million tonnes. Hannans is waiting on assays from its first pass reconnaissance RC drilling across an 8km feature that may yet prove to be prospective for iron mineralisation along the full extent of the feature. The possibility of Jigalong hosting a diverse range of minerals is also considered probable when one considers that the edge of the Sylvania Dome hosts iron (BHPB, Warwick Resources, FerrAus), gold (Independence Group (ASX:IGO)) and copper-lead-zinc (Prairie Downs
(ASX:PDZ)). The Jigalong project wraps around the eastern edge of the Sylvania Dome. The field season at Jigalong is from late March through to late October. The period November through mid March is a very difficult period to be in the field due to severe seasonal weather conditions and an awareness of traditional lore business which may restrict movement within the project area. When field access is restricted Hannans takes the opportunity to process the data collected during the field season and reallocates resources to other projects in the portfolio. Once again the Jigalong project is a large, highly prospective project for a range of commodities. Hannans and its partner will attempt to unlock the value of the project through diligent, progressive exploration activities. The following is a list of ASX Announcements made from 1 July 2007 that relate to the work completed at Jigalong by Hannans.
Date 09-Sep-2008 01-Sep-2008 04-Aug-2008 16-Jul-2008 25-Jun-2008 28-May-2008 05-May-2008 24-Apr-2008 03-Mar-2008 15-Feb-2008 01-Feb-2008 22-Jan-2008 03-Dec-2007 26-Nov-2007 21-Nov-2007 01-Nov-2007 17-Oct-2007 28-Aug-2007 25-Jul-2007
Announcement Title Jigalong - Iron Discovery Jigalong - Manganese Drilling Jigalong - Iron Update 4th Quarter Activities Report Jigalong - Iron Update Jigalong - Manganese Investor Presentation 3rd Quarter Activities Report Exploration Portfolio Presentation Focus on Australian Gold, Nickel and Iron 2nd Quarter Activities Report Jigalong Iron Targets Corporate Presentation Jigalong Gold and Base Metals Targets Jigalong Iron - Gravity Survey 1st Quarter Activities Report Outline of Exploration Activity for 2nd Quart Mid Quarter Exploration Update Iron uranium and lead anomalism at Jigalong P
Amanda Arrowsmith (Hannans Exploration Manager), Fred Taylor (JCI) and Brian Samson (JCI)
Iron drilling
Bedded outcropping manganese
John Bridson (Independent Consultant), Ralph Blackman (Independent Consultant), Amanda Arrowsmith (Hannans Exploration Manager)
Terry Grammer (Hannans Director), John Stockley (Independent Consultant) Amanda Arrowsmith (Hannans Exploration Manager), Damian Hicks (Hannans Managing Director)
View over Jigalong Project looking east while drilling manganese
Queen Victoria rocks

Hannans firmly believes that QVR will one day prove to host a nickel deposit. With the significant work being completed at Forrestania and Jigalong, the Board made the decision to seek a well funded and technically excellent partner to advance this project. The Company has been working towards identifying a partner since early April 2008 and is hopeful that a binding joint venture agreement will be entered into by mid October 2008. Please refer to the location map below. QVR has been owned 100% by Hannans since it listed on the ASX in 2003. The area south-west of Coolgardie is attracting significant interest from major nickel miner Mincor
Resources (ASX:MCR) through a joint venture with a junior exploration company; this ground adjoins Hannans ground. The most recent major exploration activity for nickel completed by Hannans was a large helicopter borne geophysical survey (VTEM) that returned results suggesting a large number of targets remain to be tested within the greater project area. Historically nearly all of the nickel exploration completed by Hannans and others has focused on the small area (less than 5km2) know as the Spargos Prospect. These results will form the basis for additional ground based geophysical surveys and drilling in the coming year. A substantial amount of work was also completed (soil sampling, air core drilling and a lithogeochemistry study) in the search for gold mineralisation. These activities also assisted in identifying areas prospective for nickel mineralisation. All of this data provides an extensive database of information for future partners to base their work on.
maggie Hays soutH

Maggie Hays South is located approximately 25km south-east of Russian mining giant Norilsks Maggie Hays and Emily Ann nickel sulphide mines. Please refer the project location map on the opposite page. The Maggie Hays South Project is proceeding through the necessary approvals required to drill test on Lake Johnston. Exploration activities completed by Hannans have identified anomalous copper-molybdenum-gold soil anomalies that disappear under the Lake. It is anticipated that approvals for exploration will be obtained prior to the end of 2008 at which time Hannans can take the exciting step of commencing drill testing. A regional review of publicly available magnetic surveys has also lead Hannans to significantly increase its tenement position within the region. Maggie Hays South is a Company favourite and expectations are high that it will produce significant exploration results in the next twelve months.
sunday
At Sunday, Hannans joint ventured out its gold rights to a well credentialed gold focused exploration company called Australian Mineral Fields Ltd (www.australianmf.com.au) that has already achieved encouraging gold assays. Hannans has retained the base metals rights due to the projects favorable geological setting and location south-east of an operating base metals mine.
11
news flow
The potential flow of project related news during the next few months includes:
Month September October November December
News Jigalong Iron Assays Jigalong Manganese Drilling Update Jigalong Iron Assays QVR Joint Venture Agreement Jigalong Manganese Assays Jigalong Base Metals Assays Forrestania Aircore drilling
During the year the Company reinforced its commitment to exploring within Western Australia by removing all non-Western Australian assets from its portfolio. Hannans aims to make a significant minerals discovery, establish a reserve base and convert that value into cash flow to fund future activities. If Hannans maintains a tight capital structure with well funded exploration programmes, shareholders remain highly leveraged to share price appreciation through exploration, discovery and or project acquisition. The Hannans Team has also grown during the year with all members (be they directors, employees or consultants) playing a positive role in the exploration, business development
and administration of this progressive company. A special thank you goes to our Executive Staff including Amanda Arrowmsith (Exploration Manager), Maureen Varis (Executive Assistant) and Michael Craig (Finance & Compliance) for their professionalism and support throughout the year. Please note that the section following this report on pages 13 to 28 contains detailed information covering the board of directors, the projects, capital structure and compliance related matters. I encourage shareholders to consider this information and if you have any questions please do not hesitate to contact me. Please stay involved with Hannans as we work towards achieving our goals.
Directors
the BoarD of Directors
The names and particulars of the Directors of the Company during or since the end of the financial year are Mr Richard Scallan Independent Non-Executive Chairman (Appointed Director on 23 May 2002) Mr Scallan is a Mining Engineer with 47 years experience in underground and open cut mining in both Southern Africa and Australia. Mr Scallan was employed by the Anglo American Corporation of South Africa Limited for 26 years before immigrating to Australia and joining Goldfields Limited in 1981 and has managed deep level gold, uranium, nickel, copper, chrome, platinum, mineral sands and tin mines. During the past 3 years Mr Scallan has not served as a Director of any other ASX listed companies. Within the last 10 years Mr Scallan has held positions as General Manager, Kundana Gold Pty Ltd and Paddington Gold Pty Ltd (both owned by Goldfields Limited) in Kalgoorlie, Western Australia and General Manager, RGC Limited Renison Tin Division in Zeehan, Tasmania. Mr Damian Hicks Managing Director (Appointed Director on 11 March 2002) Mr Hicks was a founding Director of Hannans Reward Limited and appointed to the position of Managing Director on 5 April 2007. He formerly held the position of Executive Director and Company Secretary. Prior to incorporation of the Company, Mr Hicks was a business analyst for three years, worked with law firms for five years and an international chartered accounting firm for one year. Mr Hicks holds a Bachelor of Commerce (Accounting and Finance) from the University of Western Australia, is admitted as a Barrister and Solicitor of the Supreme Court of Western Australia, holds a Graduate Diploma in Applied Finance & Investment from FINSIA (formerly the Securities Institute of Australia), a Graduate Diploma in Company Secretarial Practice from Chartered Secretaries in Australia and is a Graduate Member of the Australian Institute of Company Directors During the past 3 years Mr Hicks has not served as a Director of any other ASX listed companies. Mr Hicks is a Non-Executive Director of funds management company, Growth Equities Pty Ltd (www.growthequities.com.au). Dr Ernest Dechow Non-Executive Director (Appointed Director on 11 March 2002) Dr Ernest Dechow was a founding Director of Hannans Reward Ltd and has over 41 years of experience in the mining and mineral exploration industry. In the late fifties and early sixties he was engaged in base metal exploration in Zambia, the United States and Canada before arriving in Australia to manage a joint venture of overseas companies exploring in Eastern Australia. In 1968 he formed E. Dechow and Co Pty Ltd, Consulting Geologists and since that time has been consulting and contracting out of Kalgoorlie and Perth for Australian and overseas companies in Australia, Southern Africa and Brazil and for the United Nations in Brazil as well as exploring on a personal basis for potential mines in Indonesia, Vietnam and Namibia. During the past 3 years Dr Dechow has not served as a Director of any other ASX listed companies. Dr Dechow has a PhD from Yale University in the United States, is a Life Member of the Society of Economic Geologists and a Member of the Australian Institute of Mining and Metallurgy.
Hannans Reward Ltd Annual Report 2008 13
Di re c to r s r e po rt
Mr William Hicks Non-Executive Director (Appointed Director on 11 March 2002) Mr Hicks was a founding Director of Hannans Reward Ltd and has been actively involved in the progress and development of a number of well-known exploration companies. He was a director and secretary of Spargos Reward Gold Mines NL and was instrumental in the listing on the ASX of both Central Kalgoorlie Gold Mines NL and Maritana Gold NL. Mr Hicks is a Fellow of the Australian Institute of Company Directors and a Pharmaceutical Chemist. During the past 3 years Mr Hicks has not served as a Director of any other ASX listed companies. Mr Terrence Grammer Non- Executive Director (Appointed Director on 10 October 2005) Mr Grammer is a geologist with over 31 years experience in mining and mineral exploration with extensive experience in Australia, Southern Africa, East Asia & New Zealand and has operated in Western Australia since 1988. He has extensive experience in exploring for gold and base metals. Mr Grammer was awarded The Association of Mining and Exploration Companies (AMEC) joint Prospector of the Year Award in 2000 for the Discovery of Jubilee Mines NLs Cosmos Nickel Deposit. The initial Cosmos discovery defined a resource of approximately 400,000t @ 8.2% Ni. The project has grown significantly since then. He was also a founder and promoter in 1999 of the successful nickel explorer Western Areas NL where he was the Exploration Manager from 2000 until retiring in 2004. During the past 3 years Mr Grammer has served as a Director of two ASX listed Company, Montezuma Mining Company Limited and South Boulder Mines Ltd.
Mr Frank Cannavo Non-Executive Director (Appointed Director on 3 October 2006) Mr Cannavo was appointed to the Board as a Director on 3 October 2006. Mr Cannavo has been a long term supporter of a number of exploration companies that have made the transition to developer/producer and brings this experience and his understanding of the commodities markets to the Company. Mr Cannavo resides in Melbourne, Victoria providing the Company with Board representation in the Eastern States. Mr Cannavo is a Member of the Australian Institute of Company Directors. During the past 3 years Mr Cannavo has served as a Director of one ASX listed company, Medic Vision Limited. Unless otherwise stated, the above named Directors held office from the whole of the financial year and up to the date of this report. The details for the company secretary are as follows: Mr Ian Gregory Company Secretary (appointed 5 April 2007) Mr Gregory holds a Bachelor of Business from Curtin University. Prior to founding his own business in 2005 Mr Gregory was the Company Secretary of Iluka Resources Ltd (6 years), IBJ Australia Bank Ltd Group (12 years) and the Griffin Group of Companies (4 years). Mr Gregory is the immediate past Chairman of the Western Australian branch of the Chartered Secretaries Australia. The following table sets out each directors relevant interest in shares and options of Hannans Reward Ltd as at the date of this report.
Director Richard Scallan Damian Hicks Terrence Grammer Ernest Dechow William Hicks Frank Cannavo
Ordinary Shares 2,586,755 3,675,000 3,100,001 11,437,163 1,501,599
Options over Ordinary Shares 250,000 4,500,000 1,750,000 250,000 250,000
During and since the end of the financial year an aggregate 4,000,000 share options were granted to the following directors as part of their remuneration by Hannans Reward Ltd.
Director Richard Scallan Damian Hicks Terrence Grammer Ernest Dechow William Hicks Frank Cannavo
Number of Options Granted 250,000 3,000,000 250,000 250,000 250,000
Number of Ordinary Shares Under Option 250,000 3,000,000 250,000 250,000 250,000
At the 2007 AGM shareholders approved the issue to Mr Cannavo of 2,250,000 unlisted options exercisable at 80 cents each on or before 30 June 2011 (750,000), 30 June 2012 (750,000) and 30 June 2013 (750,000). As Mr Cannavo retired as an Executive Director on 5 May 2008 these options did not vest and have therefore been cancelled. The Board will seek shareholder approval at the 2008 AGM to issue Mr Cannavo with 250,000 unlisted options exercisable at 80 cents each on or before 30 June 2011.
remuneration report
The remuneration report is set out under the following main headings A. Principles used to determine the nature and amount of remuneration B. Details of remuneration C. Service agreements D. Share-based compensation E. Additional information. The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. A. Principles used to determine the nature and amount of remuneration. The whole board form the Remuneration Committee. The remuneration policy has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long term incentives based on key performance areas affecting the Groups financial results. The board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group. The boards policy for determining the nature and amount of remuneration for board members and senior executives of the Group is as follows: The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the board. All executives receive a base salary(which is based on factors such as length of service and experience) and superannuation. The board reviews executive packages annually and determines policy recommendations by reference to executive performance and comparable information from industry sectors and other listed companies in similar industries. The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract and retain the highest calibre of executives and reward them for performance that results in long term growth in shareholder wealth. The executive directors and executive receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits. All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Options are valued using the Black-Scholes methodology. The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The board determines payments to the nonexecutive directors and reviews the remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to nonexecutive directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the Group. However, to align directors interests with shareholder interests, the directors are encouraged to hold shares in the Company.
Performance based remuneration The Company currently has no performance based remuneration component built into director and executive remuneration packages. Company performance, shareholder wealth and directors and executive remuneration. The remuneration policy has been tailored to increase the direct positive relationship between shareholders investment objectives and directors and executive performance. Currently, this is facilitated through the issue of options to the directors and executives to encourage the alignment of personal and shareholder interests. The company believes this policy will be effective in increasing shareholder wealth.
B. Details of remuneration Details of remuneration of the directors and key management personnel (as defined in AASB 124 Related Party Disclosures) of Hannans Reward Ltd are set out in the following table. The key management personnel of Hannans Reward Ltd and the Group include the Directors and Company Secretary as listed on page 13 and 14. Given the size and nature of operations of Hannans Reward Ltd, there are no other employees who are required to have their remuneration disclosed in accordance with the Corporations Act 2001. The tables below show the 2008 and 2007 figures for remuneration received by the directors.
Short Term Salary & fees $ 32,400 32,400 49,936 183,487 93,349 391,572 Nonmonetary $
Post-employment Superannuation $ 2,916 32,400 4,494 16,513 1,651 57,974 Prescribed benefits $
Equity Other benefits Other $ Options $ 29,640 29,640 29,640 29,640 212,156 330,716
(insurance)
2008 Richard Scallan Ernest Dechow William Hicks Terrence Grammer Damian Hicks Frank Cannavo Total
Bonus $
$ 2,010 2,010 2,010 2,010 2,010 2,010 12,060
Total $ 66,966 64,050 64,050 86,080 414,166 97,010 792,322
Short Term Salary & fees $ 27,900 27,900 137,615 137,615 33,600 364,630 Nonmonetary $
Post-employment Superannuation $ 2,511 27,900 12,385 12,385 3,024 58,205 Prescribed benefits $
Equity Other benefits Other $ Options $

(insurance)
2007 Richard Scallan Ernest Dechow William Hicks Damian Hicks Terrence Grammer Frank Cannavo Total
Bonus $
$ 2,247 2,247 2,247 2,247 2,247 1,665 12,900
Total $ 32,658 30,147 30,147 152,247 152,247 38,289 435,735
C. Service Agreements Damian Hicks The Board renegotiated an employment agreement for Damian Hicks as Managing Director for a period of three years commencing on 1 July 2007. The remuneration package generally comprises $200,000 per annum (inclusive of superannuation entitlements) and reimbursement of work related expenses. At the 2007 AGM shareholders approved the issue to Mr Hicks of 3,000,000 unlisted options exercisable at 80 cents each on or before 30 June 2011 (1,000,000), 30 June 2012 (1,000,000) and 30 June 2013 (1,000,000). Frank Cannavo Mr Cannavo was appointed as an Executive Director for a period of three years commencing on 1 July 2007. The remuneration package generally comprised $100,000 per annum (inclusive of superannuation entitlements) and reimbursement of work related expenses.
At the 2007 AGM shareholders approved the issue to Mr Cannavo of 2,250,000 unlisted options exercisable at 80 cents each on or before 30 June 2011 (750,000), 30 June 2012 (750,000) and 30 June 2013 (750,000). As Mr Cannavo retired as an Executive Director on 5 May 2008 these options did not vest and have therefore been cancelled. The Board will seek shareholder approval at the 2008 AGM to issue Mr Cannavo with 250,000 unlisted options exercisable at 80 cents each on or before 30 June 2011. Mr Cannavo is currently a Non-Executive Director D. Share-based Compensation Options are issued to directors and executives as part of their remuneration. The options are not based on performance criteria, but are issued to the majority of directors and executives of Hannans Reward Ltd to increase goal congruence between executives directors and shareholders. The following options were granted to or vesting with key management personnel during the year. The model inputs for the options granted are listed in note 8.
During the financial year % of grant vested 100% 33% 100% 100% 100% % of grant forfeited 100% % of compensation for the year consisting of options 44% 51% 46% 46% 34% 0%
Name Richard Scallan Damian Hicks Dr Ernest Dechow William Hicks Terrence Grammer Frank Cannavo(i)
Option Series 29 Nov 2007 29 Nov 2007 29 Nov 2007 29 Nov 2007 29 Nov 2007 29 Nov 2007
No. Granted 250,000 3,000,000 250,000 250,000 250,000 2,250,000
No. vested 250,000 1,000,000 250,000 250,000 250,000
(i) Frank Cannavo resigned as Executive Director on 5 May 2008 and therefore these options did not vest as per the terms upon which shareholder approval was granted.
During the year, the following directors exercised options that were granted to them as part of their compensation. Name Frank Cannavo No of options exercised 250,000 No. of ordinary shares issued 250,000 Amount paid $ 50,000 Amount unpaid $ nil
The following table summarises the value of director and executive options granted, exercised or lapsed during the year Value of options granted at the grant date (i) $ 29,750 410,000 29,750 29,750 29,750 307,500 Value of options exercised at the exercise date $ 20,000 Value of options lapsed at the date of lapse(ii) $) 244,239
Name Richard Scallan Damian Hicks(iii) Dr Ernest Dechow William Hicks Terrence Grammer Frank Cannavo (iv)
(i) The value of options granted during the period is recognised in compensation over the vesting period of the grant. (ii) The value of options lapsing during the period due to the failure to satisfy a vesting condition is determined assuming the vesting condition had been satisfied. (iii) During the year 1,000,000 options exercisable at 20 cents on or before 31 March 2008, expired. (iv) At the 2007 AGM shareholders approved the issue to Mr Cannavo of 2,250,000 unlisted options exercisable at 80 cents each on or before 30 June 2011 (750,000), 30 June 2012 (750,000) and 30 June 2013 (750,000). As Mr Cannavo retired as an Executive Director on 5 May 2008 these options did not vest and have therefore been cancelled.
E. Additional information Performance income as a proportion of total compensation No Performance based bonuses have been paid to key management personnel during the financial year. Directors Meetings The following tables set out the number of Directors meetings held during the financial year and the number of meetings attended by each Director. Board Member Damian Hicks Richard Scallan Terrence Grammer Ernest Dechow William Hicks Frank Cannavo Board Meetings held while Director 5 5 5 5 5 5 Attended 5 5 5 5 5 4 Circular Resolution Passed 1 1 1 1 1 1 Total 6 6 6 6 6 5
Dates of Board Meetings and Circulating Resolutions Board Meetings 13 August 2007 18 September 2007 1 November 2007 30 January 2008 30 April 2008 Circulating Resolutions 1 February 2008
projects
The Projects are constituted by the following tenements: Rent $ Expenditure Commitment $ Interest %
Project
Tenement Number
Area
Area Unit
Note
Forrestania
M77/544 P77/3055 E77/1327 E77/1354 P77/3607 P77/3585 P77/3613 P77/3582 P77/3583 P77/3588 P77/3584 P77/3586 P77/3587 E77/1406
434 43 2 5 119 172 172 180 196 197 200 200 200 5 56 70 70 5 97 117 193 200 200 200 200 8 31 14 33 20 115 118 120 121
HA HA Blocks Blocks HA HA HA HA HA HA HA HA HA Blocks Blocks Blocks Blocks Blocks HA HA HA HA HA HA HA Blocks Blocks Blocks Blocks Blocks HA HA HA HA
6,492 94 227 569 261 378 378 396 431 433 440 440 440 569 9,917 12,397 12,397 569 213 257 424 440 440 440 440 1,416 10,980 1,593 3,757 2,277 253 259 264 266
43,400 2,000 15,000 15,000 4,760 6,880 6,880 7,200 7,840 7,880 8,000 8,000 8,000 15,000 56,000 70,000 70,000 15,000 3,880 4,680 7,720 8,000 8,000 8,000 8,000 20,000 31,000 20,000 33,000 20,000 4,600 4,720 4,800 4,840
80 80 80 80 80 80 80 80 80 80 80 80 80 80 100 100 100 100 90 90 90 90 90 90 90 100 100 100 100 100 100 100 100 100
2,4 4 4,5 4,5 4 4 4 4 4 4 4 4 4 4,5 1,5 1,5 1,5 5 4 4 4 4 4 4 4 5 5 5 5 5
Jigalong
E52/1813 E52/1812 E52/1819
Maggie Hays South
E63/1091 P63/1478 P63/1473 P63/1479 P63/1474 P63/1475 P63/1476 P63/1477
QVR
E15/0734 E15/0755 E15/0921 E15/0913 E15/0971 P15/4965 P15/4967 P15/4964 P15/4966
projects (cont)
The Projects are constituted by the following tenements: Rent $ Expenditure Commitment $ Interest % Project Tenement Number Area Area Unit Note
Sunday
M37/0389 P37/6432 P37/6429 P37/6430 L37/0149 P37/7163 P37/7164 P37/7165 P37/7144 P37/7159 P37/7166 P37/7145 P37/7146 P37/7147 P37/7148 P37/7149 P37/7150 P37/7151 P37/7152 P37/7154 P37/7155 P37/7158 P37/7160 P37/7161 P37/7162 P37/7141 P37/7140 P37/7142 P37/7143 P37/7136 P37/7167 P37/7139 P37/7137 P37/7138 P37/7153
25 192 199 199 1 121 122 190 73 97 109 112 120 120 120 120 120 120 120 120 120 120 120 120 120 121 122 122 122 174 180 198 200 200 200
HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA
374 422 437 437 13 266 268 418 160 213 239 246 264 264 264 264 264 264 264 264 264 264 264 264 264 266 268 268 268 382 396 435 440 440 440
10,000 7,680 7,960 7,960 4,840 4,880 7,600 2,920 3,880 4,360 4,480 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,840 4,880 4,880 4,880 6,960 7,200 7,920 8,000 8,000 8,000
90 100 100 100 90 90 90 100 100 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 100 100 100 100 100 90 100 100 100 90
4,6
4,6 4,6 4,6
4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6 4,6
4,6
4,6
1. Part interest held on trust for Jigalong Community Inc as per Memorandum of Understanding dated 20 October 2003 2. Gold rights only 3. Subject to farm-in arrangement 4. Partner free-carried by Hannans Reward Ltd. 5. One graticular block is approximately 2.86 km2 or 286 ha. 6. Partner farming-in to gold rights only. Applications for tenements controlled by Hannans Reward Ltd are as follows:
Project Forrestania
Tenement Number P77/3763 P77/3945 P77/3944 P77/3943 M77/875 E77/1597 E77/1568 E77/1512
Area 16 92 118 125 49 6 21 41 51 55 57 64 129 43 22 25
Area Unit HA HA HA HA HA Block (1) Block(1) Block(1) SB SB SB SB SB HA SB SB
Jigalong
E52/2218 E69/2235 E52/2060 E52/2150 E46/780
Maggie Hays South
P63/1664 E63/1206 E63/1207
1. One graticular block is approximately 2.86 km2 or 286 ha.
capital structure
The Hannans Reward Ltd issued capital is as follows: Ordinary Fully Paid Shares At the date of this report there are the following number of Ordinary fully paid shares Number of shares Ordinary fully paid shares Shares Under Option At the date of this report there are 9,717,867 unissued ordinary shares in respect of which options are outstanding. Number of options Balance at the beginning of the year Movements of share options during the year Issued, exercisable at 50 cents on or before 31 December 2010 Issued, exercisable at 40 cents on or before 31 December 2010 Issued, exercisable at 80 cents on or before 30 June 2011 Issued, exercisable at 80 cents on or before 30 June 2012 Issued, exercisable at 80 cents on or before 30 June 2013 Cancelled (80 cents, expiring 30 June 2011) Cancelled (80 cents, expiring 30 June 2012) Cancelled (80 cents, expiring 30 June 2013) Expired (20 cents, expired 31 March 2008) Exercised (20 cents, expired 2 May 2008) Total number of options outstanding at the date of this report The balance is comprised of the following: Date options issued 30 March 2006 11 May 2006 5 February 2007 1 November 2007 1 November 2007 1 November 2007 18 January 2008 Expiry date 31 March 2010 30 April 2010 31 December 2010 30 June 2011 30 June 2012 30 June 2013 31 December 2010 Exercise price (cents) 20 20 50 80 80 80 40 Number of options 3,000,000 500,000 500,000 2,000,000 1,000,000 1,000,000 1,717,867 9,717,867 250,000 1,717,867 2,750,000 1,750,000 1,750,000 (750,000) (750,000) (750,000) (1,000,000) (250,000) 9,717,867 5,000,000 84,528,597
Total number of options outstanding at the date of this report
No person entitled to exercise any option referred to above has had, by virtue of the option, a right to participate in any share issue of any other body corporate. Hannans Reward Ltd has the following substantial shareholders: Name William Hicks Craton Capital Number of shares 11,437,163 6,946,000 Percentage of issued capital 13.5% 8.2%
Range of Shares as at 29 August 2008 Range 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - 9,999,999,999 Total Total Holders 55 240 241 518 99 1,153 Units 32,693 804,417 2,051,834 18,657,186 62,982,467 84,528,597 % Issued Capital 0.04 0.95 2.43 22.07 74.51 100.00
Unmarketable Parcels as at 29 August 2008 Minimum parcel size Minimum $ 500.00 parcel at $ 0.265 per unit 1,887 Holders 89 Units 83,767
Top 20 holders of Ordinary Shares as at 29 August 2008 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Name Marfield Pty Limited Anz Nominees Limited Cash Income A/C Mr Terrence Ronald Grammer Aust Global Resources Pty Ltd Susern Holdings Pty Ltd Mossisberg Pty Ltd Mandies Meats Pty Ltd Number 2 Account Mr Damian Peter Hicks Mr Lafras Luitingh Kanaslex Pty Limited Dixon International Pty Ltd Mr Frank Cannavo Mr Anthony Cannavo Mr Frank Cannavo Mr James Laurence Berry Bonord Pty Ltd C W Hulls & Co Super Fund Lippo Securities Nominees (BVI) Ltd Mr Francesco Rizzo Mrs Francesca Rizzo Lymeridge Pty Ltd Mr Anthony Cannavo Mr Frank Cannavo Banksia Investments Pty Ltd Total of top 20 Holders of ordinary shares. Units 8,678,247 7,633,440 3,675,000 3,636,363 2,600,000 2,250,000 2,100,000 2,008,401 2,000,000 1,502,000 1,329,240 1,251,559 1,200,000 1,170,000 1,100,000 1,000,000 900,635 850,000 830,712 715,710 46,431,307 % of Issued Capital 10.27 9.03 4.35 4.30 3.08 2.66 2.48 2.38 2.37 1.78 1.57 1.48 1.42 1.38 1.30 1.18 1.07 1.01 0.98 0.85 54.94
Financial Review The Group began the financial year with cash reserve of $4,502,168. In February 2008 the company made a placement of 4.2 million ordinary shares to sophisticated investors to raise $1.3 million. Funds were used actively to advance the Groups projects located in Australia. During the year total exploration expenditure incurred by the Group amounted to $1,848,686. In line with the Groups accounting policies, all exploration expenditure was expensed as incurred. Net administration expenditure incurred amounted to $1,286,251. This has resulted in an operating loss after income tax for the year ended 30 June 2008 of $3,134,937 (2007: $2,598,294). As at 30 June 2008 cash and cash equivalents totalled $2,943,188. 2008 Revenues $ Geographic segments Australia Scandinavia Consolidated revenues and loss from ordinary activities before income tax. Shareholder Returns Basic loss per share (cents) 2008 (3.84) Summary of 5 Year Financial Information as at 30 June 2007 (3.62) 342,108 4 342,112 3,047,865 87,072 3,134,937 Results $
2008 Cash and cash equivalents Balance of exploration expenditure at beginning of the year Exploration Expenditure Expensed Acquisitions / Options Capitalised Less exploration expenditure written off Balance No of issued shares No of options Share price Market capitalisation (Undiluted) 1. Listed on ASX on 5 December 2003 Summary of Share Price Movement Price Highest Lowest Latest
2007 4,502,168 (1,795,653) 79,983,929 5,250,000 $0.61 48,790,197
2006 2,674,406 (884,206) 67,814,233 4,750,000 $0.15 10,172,135
2005 1,040,600 1,624,528 (317,822) 125,000 (2,067,350) 33,016,503 18,248,494 $0.09 2,971,485
20041 2,285,833 144,099 (500,429) 980,000 1,624,528 32,916,503 16,648,494 $0.16 5,266,640
2,943,188 (1,848,686) 84,528,597 9,717,867 $0.25 21,132,149
Date 3 July 2007 26 March & 14 April 2008 25 September 2008
$0.62 $0.12 $0.25
ASX Announcements that related to Corporate and Capital Matters
Date 08-Aug-2008 31-Jul-2008 16-Jul-2008 09-Jul-2008 06-May-2008 30-Apr-2008 07-Apr-2008 03-Apr-2008 14-Mar-2008 31-Jan-2008 17-Jan-2008 24-Dec-2007 30-Nov-2007 01-Nov-2007 01-Nov-2007 01-Nov-2007 01-Nov-2007 29-Oct-2007 02-Oct-2007 21-Sep-2007 21-Sep-2007 31-Aug-2007 29-Aug-2007 31-Jul-2007 31-Jul-2007
Announcement Title Change of Directors Interest Notice 4th Quarter Cash Flow Report Change of Directors Interest Notice Change of Directors Interest Notice Appendix 3B New Issue Shares / Directors Int 3rd Quarter Cash Flow Report Change of Directors Interest Notice Change of Directors Interest Notice Financial Report for the Half Year 2nd Quarter Cash Flow Report Placement Completed Change of Directors Interest Notice Appendix 3B AGM Results AGM Presentation Stock Exchange Listing of Hannans Scandinavia Placement Update 1st Quarter Cash Flow Report Placement Update Notice of Meeting Annual Report 2007 Placement Update Appendix 3B Placement Update Quarterly Cash Flow Report
corporate structure
The corporate structure of the Hannans Reward Limited group is as follows:
Hannans Reward Ltd

(Listed on ASX)
HR Equities Pty Ltd
100%
HR Subsidiary Pty Ltd
100%
Errawarra Pty Ltd*
HR Forrestania Pty Ltd
100%
100%
* Part interest held on trust for Jigalong Community Inc as per Memorandum of Understanding dated 20 October 2003
compliance
Corporate Governance Statement The Company has adopted a Code of Conduct for its Board members which is available to be viewed on the Companys web site, www.hannansreward.com. Directors of the Company are expected to exercise considered and independent judgement on matters before them. To discharge this expectation Directors may, from time to time, need to seek independent, expert opinion on matters before them. Directors may seek professional advice with the prior approval of the Chairman, which will not be unreasonably withheld. The Board has implemented a procedure for accessing professional advice. The Company complies with the Principles of Good Corporate Governance and Best Practice Recommendations other than in the matters set out below: ASX Principle Principle 2: Structure the Board to add value Recommendation 2.1 Reference/Comment The Board considers that the composition of the existing Board is appropriate given the scope and size of the Companys operations and the skills matrix of the existing Board members. The Board as a whole will identify candidates and assess their skills in deciding whether an individual has the potential to add value to the Company. The Board may also seek independent advice to assist with the identification process. The Board aims to maximize the funds available for exploration in order to implement the Companys strategy and therefore has not gone to the expense of meeting this recommendation. The Board is aware of its legal obligations with respect to trading in securities and is aware of the potential damage to the Companys reputation should a Board member trade in shares prior to release of all material information into the public domain. Whilst the Company does not have a CFO, the Executive Director oversees preparation of the financial statements utilising external professional assistance from a chartered accounting firm and signs the accounts in full knowledge of his legal responsibilities. The Board considers that due to the scope and size of the Companys operations it is not appropriate to establish an audit committee. The Chairman of the Board meets at least annually with both the Auditor and the Accountant to discuss the Companys financial position and adherence to applicable standards. Refer to comments on Recommendation 4.2. Refer to comments on Recommendation 4.2. Refer to comments on Recommendation 2.5.
2.4
2.5
Principal 3: Promote ethical and responsible decision making Principal 4: Safeguard integrity of financial reporting
3.2
4.1
4.2
4.3 4.4 Principle 5: Make timely and balanced disclosures Principle 9: Remunerate fairly and responsibly 5.2
9.2 9.5
The Board considers that due to the scope and size of the Companys operations it is not appropriate to establish a remuneration committee. Refer to comments on Recommendation 2.5. The Board is aware of the complex environment in which it operates and uses its experience and judgment to ensure that it addresses the legitimate concerns and issues of stakeholder organizations and that such an approach is good business practice.
Principle 10: Recognise legitimate interests of stakeholders
10.1
Additional Compliance Statements Risk Management The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that activities are aligned with the risks and opportunities identified by the board. The Company believes that it is crucial for all board members to be part of this process, and as such the board has not established a separate risk management committee. The board has a number of mechanisms in place to ensure managements objectives and activities are aligned by the board. These include the following: Board approval of a strategic plan, which en compasses strategy statements designed to meet stakeholders needs and manage business risk. Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets. Significant Changes in State of Affairs Other than those disclosed in this annual report no significant changes in the state of affairs of the Group occurred during the financial year. Significant Events after the Balance Date No matters or circumstances, besides those disclosed at note 27, have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the group, the results of those operations, or state of affairs of the Group in future financial years. Likely developments and Expected Results The Group expects to maintain the present status and level of operations and hence there are no likely developments in the Groups operations. Environmental Regulation and Performance The Group is subject to significant environmental regulation in respect to its exploration activities. The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that is aware of and is in compliance with all environmental legislation. The directors of the Group are not aware of any breach of environmental legislation for the year under review. Insurance of Directors and Officers During or since the financial year, the Company has had premiums insuring al the directors of Hannans Reward Ltd against costs incurred in defending conduct involving: a) A wilful breach of duty b) A contravention of sections 182 or 183 of the Corporations Act 2001, As permitted by section 199B of the Corporations Act 2001. The total amount of insurance contract premiums paid is $12,060. Dividends No dividends were paid or declared during the financial year and no recommendation for payment of dividends has been made. Non-Audit Services During the year Stantons International or associated entities did not provide any non-audit services to the Group.
auDitors inDepenDence Declaration

The auditors independence declaration as required under section 307C of the Corporations Act 2001 is included on page 31 of the financial report.
Signed in accordance with a resolution of the Directors made pursuant to s298(2) of the Corporations Act 2001.
On behalf of the Directors
Damian Hicks Managing Director Perth, Western Australia this 26 day of September 2008
Directors Declaration
The Directors declare that: (a) in the Directors opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (b) in the Directors opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position as at 30 June 2008 and performance of the Company and consolidated entity for the financial year ended on that date; and (c) the audited remuneration disclosures set out in the directors report comply with Accounting standards AASB 124 Related Party Disclosures and Corporations Regulations 2001. (d) the Directors have been given the declarations required by s.295A of the Corporations Act for the financial year ended 30 June 2008. Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Damian Hicks Managing Director Perth
income s tat e m e n t
for the financial year enDeD 30 june 2008
Consolidated Note Revenue Other Income Employee and contractors expense Finance costs Depreciation expense Consultants expenses Occupancy expenses Marketing expenses Exploration and evaluation expenses Other expenses Loss from continuing operations before income tax expense/benefit Income tax expense/benefit Loss from continuing operations attributable to members of the parent entity Loss per share: Basic (cents per share) Diluted (cents per share) 19 19 (3.84) (3.84) (3.62) (3.62) 5 (3,134,937) 6 (2,598,294) 5 5 2008 $ 250,244 91,868 (827,935) (15,092) (325,328) (84,267) (55,977) (1,848,686) (319,764) 2007 $ 265,415 (576,118) (14,521) (175,065) (53,425) (20,822) (1,795,653) (228,105)
Company 2008 $ 247,948 (827,935) (15,092) (320,534) (84,267) (55,977) (1,801,785) (305,947) (3,163,589) 2007 $ 265,256 (576,118) (14,521) (173,664) (53,425) (20,822) (1,765,372) (222,454) (2,561,120)
(3,134,937)
(2,598,294)
(3,163,589)
(2,561,120)
Notes to the financial statements are included on pages 39 to 63.
B alance she e t
as at 30 june 2008
Consolidated Note Current assets Cash and cash equivalents Trade and other receivables Other financial assets Total current assets Non-current assets Trade and other receivables Property, plant and equipment Other financial assets Total non-current assets Total assets Current liabilities Trade and other payables Provisions Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity 17 18 19 13,402,566 889,942 (11,194,366) 3,098,142 12,234,874 321,626 (8,059,429) 4,497,071 15 16 170,450 14,570 185,020 185,020 3,098,142 158,046 15,948 173,994 173,994 4,497,071 12 13 14 52,329 31,504 83,833 3,283,162 49,339 49,862 99,201 4,671,065 28(a) 10 11 2,943,188 82,942 173,199 3,199,329 4,502,168 69,696 4,571,864 2008 $ 2007 $
Company 2008 $ 2,886,305 66,519 173,199 3,126,023 2007 $ 4,450,884 61,115 4,511,999
52,329 31,504 50,056 133,889 3,259,912
49,339 49,862 50,055 149,256 4,661,255
140,473 14,570 155,043 155,043 3,104,869
112,857 15,948 128,805 128,805 4,532,450
13,402,566 889,942 (11,187,639) 3,104,869
12,234,874 321,626 (8,024,050) 4,532,450
s tatemen t o f c h a n g e s i n e qu i t y
Consolidated
For the year ended 30 June 2008 At beginning of year Loss for the year Issue of shares Issue of options Shares issue expenses At end of year Ordinary Shares $ 12,234,874 1,412,150 (244,458) 13,402,566
Attributable to equity holders Option Reserve $ 321,626 568,316 889,942 Accumulated Losses $ (8,059,429) (3,134,937) (11,194,366) Total Equity $ 4,497,071 (3,134,937) 1,412,150 568,316 (244,458) 3,098,142
Attributable to equity holders Ordinary Shares $ 7,821,433 4,542,000 (128,559) 12,234,874 Option Reserve $ 300,192 21,434 321,626 Accumulated Losses $ (5,461,135) (2,598,294) (8,059,429) Total Equity $ 2,660,490 (2,598,294) 4,542,000 21,434 (128,559) 4,497,071
For the year ended 30 June 2007 At beginning of year Loss for the year Issue of shares Issue of options Shares issue expenses At end of year
Company
For the year ended 30 June 2008 At beginning of year Loss for the year Issue of shares Issue of options Shares issue expenses At end of year Ordinary Shares $ 12,234,874 1,412,150 (244,458) 13,402,566
Attributable to equity holders Option Reserve $ 321,626 568,316 889,942 Accumulated Losses $ (8,024,050) (3,163,589) (11,187,639) Total Equity $ 4,532,450 (3,163,589) 1,412,150 568,316 (244,458) 3,104,869
Attributable to equity holders Ordinary Shares $ 7,821,433 4,542,000 (128,559) 12,234,874 Option Reserve $ 300,192 21,434 321,626 Accumulated Losses $ (5,462,930) (2,561,120) (8,024,050) Total Equity $ 2,658,695 (2,561,120) 4,542,000 21,434 (128,559) 4,532,450
For the year ended 30 June 2007 At beginning of year Loss for the year Issue of shares Issue of options Shares issue expenses At end of year
c ash flow s tat e m e n t

Consolidated Note Cash flows from operating activities Payments for exploration and evaluation Payments to suppliers and employees Interest received Joint venture contributions Net cash used in operating activities Cash flows from investing activities Payment for investment securities Proceeds on sale of investment securities Amounts advanced to related parties Amounts advanced to outside entities Payment for property, plant and equipment Proceeds from sale of property plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issues of equity securities Payment for share issue costs Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year 28(a) 17 17 1,338,400 (77,538) 1,260,862 (1,558,980) 4,502,168 2,943,188 4,500,000 (128,558) 4,371,442 1,874,396 2,627,772 4,502,168 (173,199) (8,232) 10,000 (171,431) 3,437 (23,890) (20,453) 28(c) (1,848,686) (1,043,821) 244,096 (2,648,411) (1,667,021) (1,056,405) 171,833 75,000 (2,476,593) 2008 $ 2007 $
Company 2008 $ (1,344,486) (1,094,025) 241,801 (2,196,710) (474,558) (155,941) (8,232) 10,000 (628,731) 1,338,400 (77,538) 1,260,862 (1,564,579) 4,450,884 2,886,305 2007 $ (1,471,104) (1,043,864) 171,674 75,000 (2,268,294) (1) 3,437 (259,529) (23,890) (279,983) 4,500,000 (128,558) 4,371,442 1,823,165 2,627,719 4,450,884
notes to t h e f i n a n c i a l s tat e m e n t s
for the year enDeD 30 june 2008
1. General Information Hannans Reward Limited (the Company) is a listed public Company, incorporated in Australia. The Companys registered office and its principal place of business are as follows: Registered office Level 2 11 Ventnor Avenue West Perth WA 6005 Principal place of business Level 2 11 Ventnor Avenue West Perth WA 6005
2. Adoption of new and revised accounting standards Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008 reporting periods. The Groups and parent entitys assessment of the impact of these new standards and interpretations is set out below. New standards and interpretations not mentioned are considered unlikely to impact on the financial reporting of the Group and parent entity. (i) AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or after 1 January 2009. AASB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of a management approach to reporting on financial performance. The information being reported will be based on what the key decision makers are using internally for evaluating segment performance and deciding how to allocate resources to operating segments. The group has not yet decided when to adopt AASB 8. Adoption of AASB 8 may result in different segments and different types of information being reported in the segment note of the financial report. However, at this stage, it is not expected to affect any of the amounts recognised in the financial statements. (ii) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101 A revised AASB 101 was issued in September 2007 and is applicable for annual reporting periods beginning on or after 1 January 2009. It requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. If an entity has made a prior period adjustment or has reclassified in the financial statements, it will need to disclose a third balance sheet (statement of financial position), this one being as at the beginning of the comparative period. The group intends to apply the revised standard from 1 July 2009. (iii) Revised AASB 3 Business Combinations(Amended) AASB 3 (revised) changes the way in which an entity will account for business combinations. The key changes include, the immediate expensing of all transaction costs; measurement of contingent consideration at acquisition date with subsequent changes through the income statement; measurement of non-controlling (minority) interests at fair value of the proportionate share of the fair value of the underlying net assets; guidance on issues such as reacquired rights of the vendor indemnities; and the inclusion of combinations by contract alone and those involving mutuals. The revised standard becomes mandatory for the Groups 30 June 2010 financial statements. The entity has been unable to assess the financial impact of this change on the entitys financial report in the period of initial application. (iv) Revised AASB 127 Consolidated and Separate Financial Statements. AASB 127 changes the accounting for investments in subsidiaries. Key changes include: the remeasurement to the fair value of any previous/retained investment when control is obtained/lost, with any resulting gain or loss recognised in profit or loss. The revised standard becomes mandatory for the Groups 30 June 2010 financial statements. The entity has been unable to assess the financial impact of this change on the entitys financial report in the period of initial application.
n otes to t h e f i n a n c i a l s tat e m e n t s
3. Summary of accounting policies Statement of compliance The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. The financial report includes the separate financial statements of the Company and the consolidated financial statements of the Group. Accounting Standards include Australian equivalents to International Financial Reporting Standards (A-IFRS). Compliance with the A-IFRS ensures that the consolidated financial statements and notes of the consolidated entity comply with International Financial Reporting Standards (IFRS). The financial statements were authorised for issue by the Directors on 26 September 2008 Basis of preparation The financial report has been prepared on the basis of historical cost, except for certain financial assets and liabilities which are carried at fair value. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2008 and the comparative information presented in these financial statements for the year ended 30 June 2007. (a) Cash and cash equivalents Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of outstanding bank overdrafts. (b) Employee benefits Provision is made for benefits accruing to employees in respect of wages and salaries and annual leave when it is probable that settlement will be required and they are capable of being measured reliably. Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the entity in respect of services provided by employees up to reporting date. (c) Financial assets Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs. Subsequent to initial recognition, investments in subsidiaries are measured at cost. Other financial assets are classified into the following specified categories: financial assets at fair value through profit or loss, available-for-sale financial assets, and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Available-for-sale financial assets Shares and options held by the consolidated entity are classified as being available-for-sale and are stated at fair value less impairment. Gains and losses arising from changes in fair value are recognised directly in the available-for-sale revaluation reserve, until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in the available-for-sale revaluation reserve is included in profit or loss for the period.
Financial assets at fair value through profit or loss The consolidated entity classifies certain shares as financial assets at fair value through profit or loss. Financial assets held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss. Loans and receivables Trade receivables, loans, and other receivables are recorded at amortised cost less impairment. (d) Financial instruments issued by the Company Debt and equity instruments Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. Transaction costs on the issue of equity instruments Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued. (e) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or ii. for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. (f) Impairment of assets At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase. (g) Income tax Current tax Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable). Deferred tax Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items. In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the entity intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the period Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to tems credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess. Tax consolidation Legislation to allow groups, comprising a parent entity and its Australian resident wholly owned entities, to elect to consolidate and be treated as a single entity for income tax purposes was substantively enacted on 21 October 2002. The Company has elected not to proceed with tax consolidation at this stage.
(h) Intangible assets Exploration and Evaluation Expenditure Exploration, evaluation and development expenditure incurred may either be expensed immediately to the profit and loss or be accumulated in respect of each identifiable area of interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which: (i) such costs are expected to be recouped through successful development and exploitation or from sale of the area; or (ii) exploration and evaluation activities in the area have not, at balance date, reached a stage which permit a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing. Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit in the year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Notwithstanding the fact that a decision not to abandon an area of interest has been made, based on the above, the exploration and evaluation expenditure in relation to an area may still be written off if considered appropriate to do so. (i) Joint ventures Jointly controlled assets and operations Interests in jointly controlled assets and operations are reported in the financial statements by including the entitys share of assets employed in the joint ventures, the share of liabilities incurred in relation to the joint ventures and the share of any expenses incurred in relation to the joint ventures in their respective classification categories. Jointly controlled entities Interests in jointly controlled entities are accounted for under the equity method in the consolidated financial statements and the cost method in the Company financial statements. (j) Operating cycle The operating cycle of the entity coincides with the annual reporting cycle. (k) Payables Trade payables and other accounts payable are recognised when the entity becomes obliged to make future payments resulting from the purchase of goods and services. (l) Presentation currency The entity operates entirely within Australia and the presentation currency is Australian dollars. (m) Principles of consolidation The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity, being the Company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 127 Consolidated and Separate Financial Statements. A list of subsidiaries appears in note 24 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements. On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair values of the identifiable net assets acquired exceeds the cost of acquisition, the deficiency is credited to profit and loss in the period of acquisition. The interest of minority shareholders is stated at the minoritys proportion of the fair values of the assets and liabilities recognised.
The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full. (n) Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. Depreciation is provided on plant and equipment. Depreciation is calculated on a straight line or diminishing value basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method is reviewed at the end of each annual reporting period. The depreciation rates used for each class of depreciable assets are: Class of fixed asset Depreciation rate (%) Office furniture 11.25 20.00
Office equipment 7.50 66.67 Motor vehicle (o) Provisions Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably. (p) Revenue recognition Dividend and interest revenue Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. (q) Share-based payments Equity-settled share-based payments granted after 7 November 2002 that were unvested as of 1 January 2005, are measured at fair value at the date of grant. Fair value is measured by use of the Black and Scholes model or binomial model. The expected life used in the model has been adjusted, based on managements best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the entitys estimate of shares that will eventually vest. For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognised at the current fair value determined at each reporting date. 18.75
4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty In the application of the Groups accounting policies, which are described in note 3, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: Key estimates impairment The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. No impairment has been recognised in respect of exploration and evaluation for the year ended 30 June 2008. Exploration and evaluation expenditure is not capitalised and is expensed directly through the profit and loss. Key estimates share based payments The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black Scholes model. Key judgments doubtful debts provision The Directors believe that the intercompany loan from Hannans Reward Ltd to Errawarra Pty Ltd and HR Forrestania Pty Ltd, if recoverable, would only be recoverable in the long term and have therefore provided for the full amount as at 30 June 2008. All other intercompany loans are considered recoverable.
Consolidated 2008 $ 5. Loss from operations (a) Revenue Interest revenue -Bank -Other Joint venture contributions (b) Other Income Gain on sale of subsidiary 91,868 91,868 (c) Loss before income tax Loss before income tax has been arrived at after charging the following gains and (losses) from continuing and discontinued operations: Loss on disposal of investments Equity settled share based payments Loss on disposal of fixed assets Equity settled share based payments Loss before income tax has been arrived at after charging the following expenses. Provision for recoverability of loan to subsidiary Depreciation of noncurrent assets Operating lease rental expenses: Minimum lease payments Employee benefit expense includes: Post employment benefits: Defined contribution plans Share-based payments: Equity settled share-based payments 401,396 21,434 69,394 52,427 84,267 53,425 (475,146) (1,498) 15,092 (438) (21,434) 14,521 249,522 722 250,244 190,415 75,000 265,415 2007 $
Company 2008 $ 2007 $
245,990 1,958 247,948
190,256 75,000 265,256
(475,146) (1,498) 457,298 15,092
(438) (21,434) 209,528 14,521
84,267
53,425
69,394 401,396
52,427 21,434
Consolidated 2008 $ 6. Income taxes (a) Income tax recognised in profit or loss Tax expense comprises: Current tax expense Deferred tax expense relating to the origination and reversal of temporary differences Total tax expense The prima facie income tax expense on pretax accounting loss from operations reconciles to the income tax expense in the financial statements as follows: Loss from operations Income tax benefit calculated at 30% Effect of expenses that are not deductible in determining taxable profit Effect of unused tax losses and tax offsets not recognised as deferred tax assets Income tax attributable to operating loss The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period. Unrecognised deferred tax balances The following deferred tax assets and (liabilities) have not been brought to account : Tax losses revenue Tax losses capital Net temporary differences 3,199,113 2,386 109,971 3,311,470 Tax consolidation Relevance of tax consolidation to the consolidated entity 2,351,355 2,386 120,751 2,474,492 (3,134,937) (940,481) (2,598,294) (779,488) 2007 $
Company 2008 $ 2007 $
(3,163,589) (949,077)
(2,561,120) (768,336)
125,459 815,022
16,788 762,700
125,459 823,618
17,160 751,176
2,990,997 2,386 109,748 3,103,131
2,271,908 2,386 120,453 2,394,747
Legislation to allow groups, comprising a parent entity and its Australian resident wholly owned entities, to elect to consolidate and be treated as a single entity for income tax purposes was substantively enacted on 21 October 2002. The Company has elected not to proceed with tax consolidation at this stage.
7.
Key management personnel disclosures (a) Details of key management personnel The Directors of Hannans Reward Ltd during the year were: Richard Scallan Ernest Dechow William Hicks Terrence Grammer Damian Hicks Frank Cannavo There were no executives of Hannans Reward Ltd during the year. (b) Key Management personnel compensation The aggregate compensation made to key management personnel of the company and the Group is set out below Consolidated 2008 $ Short-term employee benefits Post-employment benefits Other long term benefits Share-based payment 391,572 57,974 12,060 330,716 792,322 2007 $ 364,630 58,205 12,900 435,735 Company 2008 $ 391,572 57,974 12,060 330,716 792,322 2007 $ 364,630 58,205 12,900 435,735
The compensation of each member of the key management personnel of the Group is set out in the Directors Remuneration report on pages 16 to 19. 8. Share-based payments The Company has an ownership-based compensation arrangement for employees of the Company. Each option issued under the arrangement converts into one ordinary share of Hannans Reward Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. Options neither carry rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. The number of options granted is at the sole discretion of the Directors. Incentive options issued to Directors (executive and non-executive) are subject to approval by shareholders and attach vesting conditions as appropriate.
The following share-based payment arrangements were in existence during the current and comparative reporting periods: Exercise price Expiry date $ 31 March 2010 30 April 2010 31 December 2010 31 December 2010 30 June 2011 30 June 2012 30 June 2013 0.20 0.20 0.50 0.40 0.80 0.80 0.80 Fair value at grant date $ 0.073 0.081 0.086 0.097 0.119 0.138 0.153
Options series 31 March 2010 30 April 2010 31 December 2010 31 December 2010 30 June 2011 30 June 2012 30 June 2013
Number 3,000,000 250,000 250,000 1,717,867 2,750,000 1,750,000 1,750,000
Grant date 31 March 2006 11 May 2006 5 February 2007 18 January 2008 1 November 2007 1 November 2007 1 November 2007
The fair value of the share options granted during the financial year is $1,003,420 (2007: $21,434). Options were priced using a Black and Scholes model. The expected life used in the model has not been adjusted. Expected volatility is based on the movement of the underlying share price over the over the expected term of the option. No allowance has been made for the effects of early exercise. Option series Inputs into the model Grant date share price Exercise price Expected volatility Option life Dividend yield Risk-free interest rate 31 December 2010 25.0 cents 40 cents 100% 35 months Nil 6.64% 30 June 2011 31.5 cents 80 cents 100% 44 months Nil 6.64% 30 June 2012 31.5 cents 80 cents 100% 56 months Nil 6.64% 30 June 2013 31.5 cents 80 cents 100% 68 months Nil 6.64%
The following reconciles the outstanding share options granted at the beginning and end of the financial year: 2008 Weighted average exercise price $ 0.22 0.71 0.80 0.20 0.20 0.80 0.22 2007 Weighted average Exercise price $ 0.20 0.50 0.22 0.22
Number of options Balance at beginning of the financial year Granted during the financial year Forfeited during the financial year Expired during the financial year Exercised during the financial year Balance at end of the financial year (i) Exercisable at end of the financial year 5,000,000 8,217,867 (2,250,000) (1,000,000) (250,000) 9,717,867 1,000,000
Number of options 4,750,000 250,000 5,000,000 5,000,000
(i) Exercised during the financial year The following share options granted under the share option plan where exercised during the financial year 2008 Option Series 3 May 2006 Number Exercised 250,000 Exercise Date 2 May 2008 Share price at exercise date 0.28 cents
(ii) Balance at end of the financial year The share options outstanding at the end of the financial year had a weighted average exercise price of $0.69 (2007: 0.22) and a weighted average remaining contractual life of 3.45 years(2007: 2.36).
Consolidated 2008 $ 9. Remuneration of auditors Audit or review of the financial report 25,028 25,028 The auditor of Hannans Reward Ltd is Stantons International 10. Current trade and other receivables Other debtors Goods and services tax (GST) recoverable 19,166 63,776 82,942 11. Other current financial assets Loans to outside entities (i) 173,199 173,199 16,204 53,492 69,696 20,545 20,545 2007 $
Company 2008 $ 25,028 25,028 2007 $ 20,545 20,545
19,034 47,485 66,519 173,199 173,199
16,181 44,934 61,115
(i) The loan has been made to Scandinavian Shield Ltd and the terms of the loan require it to be repaid on or before 31 March 2009. Security for the loan is a mortgage over 100% of the assets of Scandinavian Shield Ltd. 12. Non-current trade and other receivables Other receivables - bonds 52,329 52,329 49,339 49,339 52,329 52,329 49,339 49,339
Consolidated Office furniture and equipment at cost $ 13. Property, plant and equipment Gross carrying amount Balance at 1 July 2006 Additions Balance at 1 July 2007 Additions Disposal Balance at 30 June 2008 Accumulated depreciation and impairment Balance at 1 July 2006 Depreciation expense Balance at 1 July 2007 Depreciation expense Disposal Balance at 30 June 2008 Net book value As at 30 June 2007 As at 30 June 2008 38,086 31,504 Company Gross carrying amount Balance at 1 July 2006 Additions Balance at 1 July 2007 Additions Disposal Balance at 30 June 2008 Accumulated depreciation and impairment Balance at 1 July 2006 Depreciation expense Balance at 1 July 2007 Depreciation expense Disposal Balance at 30 June 2008 Net book value As at 30 June 2007 As at 30 June 2008 38,086 31,504 11,776 49,862 31,504 14,861 11,804 26,665 14,814 41,479 9,507 2,717 12,224 278 (12,502) 24,368 14,521 38,889 15,092 (12,502) 41,479 40,861 23,890 64,751 8,232 72,983 24,000 24,000 (24,000) (24,000) 72,983 64,861 23,890 88,751 11,776 49,862 31,504 14,861 11,804 26,665 14,814 41,479 9,507 2,717 12,224 278 (12,502) 24,368 14,521 38,889 15,092 (12,502) 41,479 40,861 23,890 64,751 8,232 72,983 24,000 24,000 (24,000) 64,861 23,890 88,751 8,232 (24,000) 72,983 Motor Vehicle $ Total $
Consolidated 2008 $ 13. Property, plant and equipment (contd) Aggregate depreciation allocated, whether recognised as an expense or capitalised as part of the carrying amount of other assets during the year: Office furniture and equipment Motor vehicle 14,814 278 15,092 14. Other non-current financial assets Shares in controlled entities (note 24) Loans to subsidiaries Provision for non recoverability 15. Current trade and other payables Trade payables (i) Other 116,450 54,000 170,450 130,140 27,906 158,046 11,804 2,717 14,521 2007 $
Company 2008 $ 2007 $
14,814 278 15,092
11,804 2,717 14,521
4 736,620 (686,568) 50,056
4 279,320 (229,269) 50,055
86,473 54,000 140,473
84,951 27,906 112,857
(i) The average credit period on purchases of goods and services is 30 days. No interest is charged on the trade payables for the first 30 to 60 days from the date of the invoice. Thereafter, interest is charged at various penalty rates. The consolidated entity has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. 16. Current provisions Employee benefits 17. Issued capital 84,528,597 fully paid ordinary shares (2007: 79,983,929) 13,402,566 13,402,566 12,234,874 12,234,874 13,402,566 13,402,566 12,234,874 12,234,874 14,570 14,570 15,948 15,948 14,570 14,570 15,948 15,948
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.
2008 No 17. Issued capital (contd) Fully paid ordinary shares Balance at beginning of financial year Interest acquired in tenement 7 September 2006 (i) Placement of shares 14 February 2007 Placement of shares 1 May 2007 Issue of shares 29 November 2007 (ii) Placement of shares 17 February 2008 Options converted to shares 2 May 2008 Share issue costs Balance at end of financial year 79,983,929 250,000 4,294,668 250,000 84,778,597 12,234,874 73,750 1,288,400 50,000 (244,458) 13,402,566 $
2007 No $
67,814,233 200,000 8,333,333 3,636,363 79,983,929
7,821,433 42,000 2,500,000 2,000,000 (128,559) 12,234,874
Fully paid ordinary shares carry one vote per share and carry the right to dividends. (i) The fair value was determined by reference to the trading price of the shares at the time of negotiating the acquisition. (ii) The company issued the shares in exchange for the pre-emptive right to acquire projects in Papua New Guinea sourced by JLM Resources Ltd. Consolidated 2008 $ 18. Reserves Option reserve 889,942 889,942 Share options As at 30 June 2008, options over 9,717,867 ordinary shares in aggregate are as follows: Share options on issue at year end or exercised during the year Details of unissued shares or interests under option are: Number of shares under option 3,000,000 500,000 500,000 1,717,867 2,000,000 1,000,000 1,000,000 321,626 321,626 889,942 889,942 321,626 321,626 2007 $ Company 2008 $ 2007 $
Issuing entity Hannans Reward Ltd Hannans Reward Ltd Hannans Reward Ltd Hannans Reward Ltd Hannans Reward Ltd Hannans Reward Ltd Hannans Reward Ltd
Class of shares Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary
Exercise price of option 20 cents each 20 cents each 50 cents each 40 cents each 80 cents each 80 cents each 80 cents each
Expiry date of options 31 March 2010 30 April 2010 31 December 2010 31 December 2010 30 June 2011 30 June 2012 30 June 2013
18. Reserves (cont) Share options are all unlisted, carry no rights to dividends and no voting rights. During the year 1,000,000 (31 March 2008) options expired. On 2 May 2008 250,000 options with an exercise price of 20 cents were converted to ordinary shares. During the year Frank Cannavo resigned as Executive Director and options associated with the position lapsed in accordance with the terms they were issued. The company originally issued a total of 6,250,000 unlisted director options exercisable at 80 cents each on, or before 30 June 2011(2,750,000), 30 June 2012 (1,750,000) and 30 June 2013 (1,750,000). This has subsequently reduced to 4,000,000 exercisable at 80 cents on or before 30 June 2011(2,000,000), 30 June 2012 (1,000,000) and 30 June 2013(1,000,000) Consolidated 2008 $ 19. Accumulated losses Balance at beginning of financial year (Loss) attributable to members of the parent entity Balance at end of financial year (8,059,429) (3,134,937) (11,194,366) (5,461,135) (2,598,294) (8,059,429) (8,024,050) (3,163,589) (11,187,639) (5,462,930) (2,561,120) (8,024,050) 2007 $ Company 2008 $ 2007 $
Consolidated 2008 Cents per share 20. Loss per share Basic loss per share: From continuing operations Total basic earnings per share (3.84) (3.84) (3.62) (3.62) 2007 Cents per share
The consolidated entity incurred a loss for the year and the diluted earnings per share is the same as the basic earnings per share.
Basic earnings per share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: 2008 $ Earnings (a) (3,134,937) 2008 No. Weighted average number of ordinary shares for the purposes of basic earnings per share 81,593,862 2007 $ (2,598,294) 2008 No. 71,679,206
Consolidated 2008 $ 21. Commitments for expenditure Exploration, evaluation & development (expenditure commitments) Not longer than 1 year Longer than 1 year and not longer than 5 years Longer than 5 years 944,230 1,888,460 2,832,690 803,829 1,607,658 2,411,487 2007 $
Company 2008 $ 2007 $
660,054 1,320,108 1,980,162
746,017 1,492,034 2,238,051
22. Contingent liabilities and contingent assets In the opinion of the Directors, there are no contingent liabilities as at 30 June 2008 and none were incurred in the interval between the year end and the date of this financial report.
23.
Jointly controlled operations and assets Name of entity Principal activity Interest 2008 % Forrestania Sunday Maggie Hays South Exploration Exploration Exploration 80% 90% 90% 2007 % 80% 90% 90%
The Company agreed to free-carry the joint venture partys to a decision to mine based on completion of a bankable feasibility study. The consolidated entitys interest in assets employed in the above jointly controlled operation is included in the Company and consolidated financial statements but do not form part of the total assets as the expenditure exploration, evaluation and development is expensed. Contingent liabilities and capital commitments The capital commitments and contingent liabilities arising from the consolidated entitys interests in joint ventures are disclosed in notes 21 and 22 respectively.
24.
Subsidiaries Name of entity Country of Incorporation Ownership Interest 2008 % Parent entity: Hannans Reward Ltd (i) Subsidiaries: HR Subsidiary Pty Ltd Errawarra Pty Ltd (ii) HR Equities Pty Ltd (iii) HR Forrestania Pty Ltd (ii) Australia Australia Australia Australia 100% 100% 100% 100% 100% 100% 100% 100% Australia 2007 %
(i) Hannans Reward Ltd is the head entity All the companies are members of the group. (ii) The 100% interest in Errawarra Pty Ltd and HR Forrestania Pty Ltd is held via HR Subsidiary Pty Ltd. (iii) The 100% interest in HR Equities Pty Ltd is held by the parent entity. During the year HR Subsidiary Pty Ltd acquired a 100% interest in a newly incorporated company Scandinavian Shield Ltd. HR Subsidiary relinquished control on 11 June 2008 when Scandinavian Shield issued shares to external shareholders. On 25 October 2007 HR Subsidiary Pty Ltd acquired 100% interest in Swedish company Hannans Scandinavia AB for $17,259. The foreign company was sold to Scandinavian Shield Ltd on the 20 March 2008 for $17,259
25.
Segment Information The following is an analysis of the revenue and results for the period, analysed by geographical segment, Hannans Reward Limiteds primary basis of segmentation. The group had two geographic segments, being Australia and Scandinavia. Control of Scandinavia Shield Ltd, the ultimate holder of the Scandinavia assets, was relinquished on 11 June 2008 and as at that date the Hannans Group no longer has an interest in Scandinavia.
Segment revenue Revenue 2008 $ Australia Scandinavia Consolidated 250,240 4 2007 $ 265,415 Total 2008 $ 250,240 4 250,244 2007 $ 265,415 265,415
Segment result 2008 $ Australia Scandinavia Loss before income tax benefit Income tax benefit Loss for the year Segment assets and liabilities Assets 2008 $ Australia Scandinavia Consolidated 3,283,162 3,283,162 2007 $ 4,671,065 4,671,065 Liabilities 2008 $ 185,020 185,020 2007 $ 173,994 173,994 (3,047,865) (87,072) (3,134,937) (3,134,937) (3,134,937) 2007 $ (2,598,294) (2,598,294) (2,598,294) (2,598,294)
26.
Related party disclosures (a) Equity interests in related parties Equity interests in subsidiaries Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 24 to the financial statements.
Equity interests in associates and joint ventures Details of interests in associates and joint ventures are disclosed in note 23 to the financial statements.
(b) Key management personnel remuneration Details of key management personnel remuneration are disclosed in note 7 to the financial statements.
26.
Related party disclosures (cont.)
(c) Key management personnel equity holdings Fully paid ordinary shares of Hannans Reward Ltd Directors 2008 Richard Scallan Ernest Dechow William Hicks Terry Grammer Damian Hicks Frank Cannavo 2007 Richard Scallan Ernest Dechow William Hicks Terry Grammer Damian Hicks Frank Cannavo 3,100,001 11,153,249 3,675,000 2,278,401 20,206,651 Share options of Hannans Reward Ltd Granted as remuneration No. 250,000 250,000 250,000 250,000 3,000,000 Vested but not exercisable No. Vested and Options exercivested sable during year No. No. 250,000 250,000 250,000 250,000 250,000 250,000 1,750,000 1,000,000 3,500,000 1,200,000 1,200,000 3,100,001 11,153,249 3,675,000 2,278,401 1,200,000 21,406,651 3,100,001 11,153,249 3,675,000 2,278,401 1,200,000 21,406,651 250,000 250,000 283,914 308,354 51,559 643,827 3,100,001 11,437,163 3,675,000 2,586,755 1,501,559 22,300,478 Balance at 1 July No. Granted as remuneration No. Received on exercise of options No. Net other change No. Balance at 30 June No.
Directors 2008 Richard Scallan Ernest Dechow William Hicks Terry Grammer Damian Hicks Frank Cannavo 2007 Richard Scallan Ernest Dechow William Hicks Terry Grammer Damian Hicks Frank Cannavo
Bal at 1 July No. 1,500,000 2,500,000 250,000 4,250,000 1,500,000 2,500,000 4,000,000
Exercised No.
Net other change No.
Bal at 30 Bal vested June at 30 June No. No. 250,000 250,000 250,000 1,750,000 4,500,000 7,000,000 1,500,000 2,500,000 250,000 4,250,000 250,000 250,000 250,000 1,750,000 2,000,000 4,500,000 1,500,000 2,500,000 250,000 4,250,000
1,750,000 2,500,000 5,000,000
(1,000,000)
(250,000)
4,000,000 (250,000) (1,000,000) 250,000 250,000
1,500,000 2,500,000 250,000 4,250,000
Consolidated 2008 $ (d) Other transactions with specified Directors The loss from operations includes the following items of revenue and expense that resulted from transactions other than remuneration, loans or equity holdings, with specified Directors or their personally-related entities: Rental expense (85 Maritana Street, Kalgoorlie) Total recognised as expenses (e) Transactions with other related parties Other related parties include: the parent entity; entities with joint control or significant influence over the consolidated entity; associates; joint ventures in which the entity is a venturer; subsidiaries; former key management personnel; and other related parties. Amounts receivable from and payable to these related parties are disclosed in note 14 to the financial statements. All loans advanced to and payable to related parties are unsecured and subordinate to other liabilities. No interest is charged on the outstanding intercompany loan balance during the financial year, Hannans Reward Ltd received interest of nil (2007: Nil) from loans to subsidiaries, and paid interest of nil (2007: Nil) to subsidiaries. (f) Parent entity The ultimate parent entity in the consolidated entity is Hannans Reward Ltd. 25,942 25,942 25,780 25,780 2007 $
27.
Subsequent events There has been no other matters or circumstance, other than that referred to in the financial statement or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.
Consolidated 2008 $ 28. Notes to the cash flow statement (a) Reconciliation of cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows: Cash and cash at bank Term deposit (b) Non-cash financing and investing activities Acquisition of tenement interests (c) Reconciliation of loss for the year to net cash flows from operating activities Loss for the year (Gain)/loss on sale or disposal of investments (Gain)/loss on disposal of fixed assets Depreciation of non-current assets Equity settled share-based payments Exploration expenditure written off Provision for loan to subsidiary Changes in net assets and liabilities, net of effects from acquisition and disposal of businesses: (Increase)/decrease in assets: Trade and other receivables Increase/(decrease) in liabilities: Trade and other payables and provisions Net cash from operating activities 11,026 (2,648,411) 36,847 (2,476,593) (16,236) 6,461 (3,134,937) 1,498 15,092 475,146 (2,598,294) 438 14,521 21,434 42,000 42,000 1,750,800 1,192,388 2,943,188 3,309,780 1,192,388 4,502,168 2007 $
Company 2008 $ 2007 $
1,693,917 1,192,388 2,886,305
3,258,496 1,192,388 4,450,884
42,000
(3,163,589) 1,498 15,092 475,146 457,299
(2,561,120) 438 14,521 21,434 42,000 209,528
(8,394) 26,238 (2,196,710)
(6,495) 11,400 (2,268,294)
29.
Financial instruments (a) Financial risk management objectives The consolidated entitys manages the financial risks relating to the operations of the consolidated entity. The consolidated entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The use of financial derivatives is governed by the consolidated entitys board of Directors. The consolidated entitys activities expose it primarily to the financial risks of changes in interest rates. The consolidated entity does not enter into derivative financial instruments to manage its exposure to interest rate. (b) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements. (c) Foreign currency risk management The group does not transact in foreign currencies, hence no exposure to exchange rate fluctuations arise. (d) Interest rate risk management The consolidated entity is exposed to interest rate risk as it places funds at both fixed and floating interest rates. The risk is managed by maintaining an appropriate mix between fixed and floating rate products which also facilitate access to money. Maturity profile of financial instruments The following tables detail the consolidated entitys and companys exposure to interest rate risk. Fixed maturity dates Weighted average effective Variable Less 1-5 5+ interest rate interest rate than 1 year years years % $ $ $ $
Consolidated 2008 Financial assets: Cash and cash equivalents Trade and other receivables Loans Financial liabilities: Trade and other payables 2007 Financial assets: Cash and cash equivalents Trade and other receivables Financial liabilities: Trade and other payables
Non interest bearing
Total
7.0% 7.0% 8.5%
1,750,545 1,750,545
1,192,388 52,329 119,975 1,364,692
255 2,943,188 82,942 53,224 135,271 173,199
136,421 3,251,658 170,450 170,450 170,450 170,450
6.0% 6.0%
3,309,525 3,309,525
1,192,388 49,339 1,241,727
255 4,502,168 69,696 119,035 69,951 4,621,203 158,046 158,046 158,046 158,046
29.
Financial instruments (cont.)
Company 2008 Financial assets: Cash and cash equivalents Trade and other receivables Loans Financial liabilities: Trade and other payables 2007 Financial assets: Cash and cash equivalents Trade and other receivables Financial liabilities: Trade and other payables
Weighted Fixed maturity dates average effective Variable Less 1-5 5+ interest rate interest rate than 1 year years years % $ $ $ $
Non interest bearing
Total
7.0% 7.0% 8.5%
1,693,662 1,693,662
1,192,388 52,329 119,975 1,364,692
255 2,886,305 66,519 53,224 118,848 173,199
119,998 3,178,352 140,473 140,473 140,473 140,473
6.0% 6.0%
3,258,241 3,258,241
1,192,388 49,339 1,241,727
255 4,450,884 61,115 110,454 61,370 4,561,338 112,857 112,857 112,857 112,857
(e) Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The consolidated entity exposure and the credit ratings of its counterparties are continuously monitored. The consolidated entity measures credit risk on a fair value basis. The consolidated entity does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The consolidated entity currently doesnt have any debtors apart from GST receivable which is claimed at the end of each quarter during the year. The loans are secured over 100% of the assets of Scandinavian Shield Limited It is a policy of the consolidated entity that creditors are paid within 30 days (f) Fair value of financial instruments Except as detailed in the following table, the Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values (2007: net fair value). The fair values and net fair values of financial assets and financial liabilities are determined as follows : the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices. (g) Liquidity risk management The consolidated entity manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Company does not perform any sensitivity analysis and none is disclosed in the financial statements as the impact would not be material.
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Hannans Reward ltd

Telephone: +61 8 9324 3388 Facsimile: +61 8 9324 3366 Email: admin@hannansreward.com Web: www.hannansreward.com

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st we

ABn 52 099 862 129

HAnnAns RewARd ltd AnnuAl RepoRt

Postal Address PO Box 1227 West Perth, WA, 6872

Hannans Reward Ltd Annual Report 2008

Hannans Reward Ltd Annual Report 2008

Hannans Reward Ltd Annual Report 2008

Hannans Reward Ltd Annual Report 2008

Hannans Reward Ltd Annual Report 2008

Hannans Reward Ltd Annual Report 2008

Bedded outcropping manganese

View over Jigalong Project looking east while drilling manganese

Hannans Reward Ltd Annual Report 2008

Queen Victoria rocks

10 Hannans Reward Ltd Annual Report 2008

maggie Hays soutH

Hannans Reward Ltd Annual Report 2008

Month September October November December

12 Hannans Reward Ltd Annual Report 2008

Hannans Reward Ltd Annual Report 2008 13

Ordinary Shares 2,586,755 3,675,000 3,100,001 11,437,163 1,501,599

Options over Ordinary Shares 250,000 4,500,000 1,750,000 250,000 250,000

14 Hannans Reward Ltd Annual Report 2008

Number of Options Granted 250,000 3,000,000 250,000 250,000 250,000

Hannans Reward Ltd Annual Report 2008 15

$ 2,010 2,010 2,010 2,010 2,010 2,010 12,060

Total $ 66,966 64,050 64,050 86,080 414,166 97,010 792,322

Equity Other benefits Other $ Options $

$ 2,247 2,247 2,247 2,247 2,247 1,665 12,900

Total $ 32,658 30,147 30,147 152,247 152,247 38,289 435,735

16 Hannans Reward Ltd Annual Report 2008

No. Granted 250,000 3,000,000 250,000 250,000 250,000 2,250,000

No. vested 250,000 1,000,000 250,000 250,000 250,000

Hannans Reward Ltd Annual Report 2008 17

18 Hannans Reward Ltd Annual Report 2008

2,4 4 4,5 4,5 4 4 4 4 4 4 4 4 4 4,5 1,5 1,5 1,5 5 4 4 4 4 4 4 4 5 5 5 5 5

E52/1813 E52/1812 E52/1819

Maggie Hays South

E63/1091 P63/1478 P63/1473 P63/1479 P63/1474 P63/1475 P63/1476 P63/1477

E15/0734 E15/0755 E15/0921 E15/0913 E15/0971 P15/4965 P15/4967 P15/4964 P15/4966

Hannans Reward Ltd Annual Report 2008 19

4,6 4,6 4,6

20 Hannans Reward Ltd Annual Report 2008

Area 16 92 118 125 49 6 21 41 51 55 57 64 129 43 22 25

Area Unit HA HA HA HA HA Block (1) Block(1) Block(1) SB SB SB SB SB HA SB SB

E52/2218 E69/2235 E52/2060 E52/2150 E46/780

Maggie Hays South

P63/1664 E63/1206 E63/1207

1. One graticular block is approximately 2.86 km2 or 286 ha.

Hannans Reward Ltd Annual Report 2008 21

Total number of options outstanding at the date of this report

22 Hannans Reward Ltd Annual Report 2008

Hannans Reward Ltd Annual Report 2008 23

2007 4,502,168 (1,795,653) 79,983,929 5,250,000 $0.61 48,790,197

2006 2,674,406 (884,206) 67,814,233 4,750,000 $0.15 10,172,135

2,943,188 (1,848,686) 84,528,597 9,717,867 $0.25 21,132,149

Date 3 July 2007 26 March & 14 April 2008 25 September 2008

$0.62 $0.12 $0.25

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Hannans Reward Ltd Annual Report 2008 25

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