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Directors' Report

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Page 14-15

 

The Directors of Nido Petroleum Limited present the Annual Financial Report for the year ended 31 December 2007.

Directors

The names and particulars of the Company’s Directors in office during the financial year and until the date of this report are as follows.  Directors were in office for the entire period unless otherwise stated.

Changes to the Company’s Board took place after year end with Gregor Dixon retiring as Chairman and non-executive director. David Whitby resigned as Managing Director and assumed the role of Chairman and non-executive director.  J.V. Emmanuel Araullo de Dios, formerly President and Country Head of Nido’s subsidiary Nido Petroleum Philippines Pty Ltd, was promoted to the position of President and Chief Executive Officer of Nido Petroleum Limited.  William Bloking was also appointed as a non-executive director of the Board.  All changes to the Board’s composition took place with effect from 6 February 2008.

Gregor Dixon

Non-Executive Chairman (Resigned effective 6 February 2008)
Member of Audit Committee (Resigned effective 6 February 2008)
B.Sc. (Hons) Geology (Queen Mary College, University of London)

Gregor is an energy consultant with 40 years’ energy industry experience, of which 26 years were with Unocal Corporation.  Gregor’s career with Unocal included postings in Bangkok, Balikpapan, Brunei, Cairo, London and Los Angeles.  Prior to retirement from Unocal he held the position of Vice President, Business Expansion Projects for Unocal’s ASEAN business unit.

Gregor is a member of the American Association of Petroleum Geologists (AAPG), the Petroleum Exploration Society of Australia (PESA), South East Asia Petroleum Exploration Society (SEAPEX) and the Society of Petroleum Engineers (SPE).

David Whitby

Managing Director (Resigned effective 6 February 2008)
Chairman (Appointed 6 February 2008)
B.E. Mechanical (Royal Military College, Canada)

David has 27 years of oil industry experience focusing on management, gas marketing, business development and reservoir engineering.

David’s prior work experience included appointments as Project Director of the West Java Gas Project with Conoco-Phillips in Jakarta, which included developing four large gas projects that are currently in production.  David also held the position of Vice President of Corporate Development for Gulf Indonesia, Jakarta, President of Gulf (Australia) Resources Ltd in Perth and Vice President of Heavy Oil for Husky Oil in Canada.  Prior to entering the oil industry, David was an officer in the Canadian Armed Forces military engineering branch.

J.V. Emmanuel Araullo de Dios (Jocot de Dios)

President and Chief Executive Officer (Appointed 6 February 2008)
B.Sc in BA (Uni. of Philippines), LL.B (Ateneo de Manila University), LL.M (Harvard Law School)

Jocot has over 15 years of experience in commercial and financial transactions, ten of them in the energy sector.  Prior to his appointment, Jocot held the position of President of the Company’s subsidiary, Nido Petroleum Philippines Pty Ltd, which he continues to hold.

Most recently, Jocot held the position of Managing Director at Merritt Advisory Partners Inc., an energy advisory company focusing on energy projects and transactions within Asia.  Jocot also served as Chairman of the Board of publicly listed PNOC Exploration Corporation (the oil and gas arm of the Philippine National Oil Company) and held the position of Undersecretary (Deputy Minister) of the Philippine Department of Energy for three years where he supervised the preparation of the Philippine Energy Plan.

Jocot had represented the Philippines in various international organizations including the APEC Energy Working Group.  In 2005, Jocot received the prestigious Secretary’s Award of Recognition for Distinguished Government Service.  He is a member of the boards of Phoenix Petroleum Philippines Inc., a publicly-listed downstream oil company in the Philippines, and Davies Energy Services, Inc., a Philippine-based energy services company.

Directors' - continued

James Brown

Non-Executive Director
Member and Chair of Audit Committee
B.E. (Hons) Civil (Adelaide University)

James is an energy consultant with 25 years of experience in the Asia-Pacific finance and energy sectors.  He was formerly a First Vice President of Merrill Lynch and head of Merrill Lynch’s energy research group, based in Sydney and Singapore.  His prior finance industry experience included positions with Morgan Stanley and Baring Securities in Sydney.  He worked with ExxonMobil in Australia for six years where he held positions in the areas of drilling engineering, reservoir engineering and gas marketing.

James is a member of the South East Asia Petroleum Exploration Society (SEAPEX).

Vincent S. Pérez

Non-Executive Director
Member of Audit Committee
B.Bus. Econs (Uni. of Philippines), MBA (Wharton School, Uni. of Pennsylvania)

Vince has over 17 years of experience in debt restructuring, capital markets, and private equity in emerging markets, including appointments in Pittsburgh, London, New York and Singapore with Mellon Bank and Lazard Freres.  In early 2001, he served as Philippine Undersecretary for Industry at the Department of Trade and Industry and Managing Head of the Board of Investments.  He then served as Philippine Energy Secretary from June 2001 to March 2005.

During the past six years, Vince has held Board positions on several listed companies including the Philippine National Bank, PNOC Energy Development Corporation, Del Monte Pacific Limited, and SM Investments Corporation.  Vince is a World Fellow at Yale University where he currently lectures on renewable energy.  Vince is also a member of the National Council of the World Wildlife Fund – US.

William Bloking

Non-Executive Director (Appointed 6 February 2008)
B.E Science (University of South Carolina) (Summa cum Laude)

William has over 32 years’ experience in the energy sector with ExxonMobil and the BHP Billiton Group, holding senior executive positions in Australia, Asia, South America and the USA.  Until recently, William was President of Australia/Asia Gas at BHP Billiton Petroleum, where he had overall strategic, commercial and corporate accountability for BHP Billiton’s international LNG business and its domestic gas business in Australia.  From 1999 to 2004, Bill was CEO of BHP Billiton Petroleum (North West Shelf), where he had full responsibility for interests held in the North West Shelf Project, the Browse LNG Project, the Bass Strait Project and the Pilbara LNG Project.  Prior to joining BHP William spent 24 years with ExxonMobil where he held a variety of senior executive positions including Chief Operating Officer of Esso Eastern Products Trading Company, Supply Operations Manager for the Far East and Western Hemisphere and General Manager of Natural Gas in Indonesia.

William is currently National Vice Chairman of the Australia-China Business Council, Governor of the American Chamber of Commerce in Australia, Adjunct Professor at Murdoch University, Fellow of the Australian Institute of Company Directors, Director of the Lions Eye Institute and the West Australian Symphony Orchestra and a member of the UWA Confucius Centre Advisory Board.

Marian Lamattina

Company Secretary
LL.B, B.A (Murdoch University)

Marian is a lawyer with over seven years of specialist experience advising clients in the energy, infrastructure and resources sectors.  Before joining Nido in 2005, Marian was an Associate with Minter Ellison, a major law firm in Perth.  Marian has experience advising in the areas of acquisitions, divestments, operations, risk management and regulatory compliance.

Marian is admitted to practise in the Supreme Court of Western Australia and the High Court of Australia.  She is a member of the Law Society of Western Australia, the Australian Corporate Lawyers Association and the Association of International Petroleum Negotiators.  Marian also holds the position of Convenor of the Board of Management for the Centre for Advocacy, Support and Education for Refugees, Inc.

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Page 16-17

Directors’ Meetings

The following table details the number of Directors’ meetings held during the financial year and the number of meetings attended by each Director. During the year, ten formal board meetings were held.

Principal Activities

The principal activities of the consolidated entity during the financial year, which occurred primarily in the Philippines, included:

  • Exploration for oil and gas;
  • Development  of oil and gas properties; and
  • Production and sale of oil and gas.

Other than the disposal of the group’s operations in the United Kingdom, there were no other significant changes in the nature of the principal activities during the year.

Operating and Financial Review

A full review of operations of the consolidated entity during the year ended 31 December 2007 is included in the section entitled “Operations Review’ preceding this Directors’ Report.

Summary of Financial Performance

A summary of key financial indicators for the Company, with prior year comparison, is set out in the following table:

The loss from continuing operations before income tax and finance costs of the group for the year ended 31 December 2007 was $14.8 million (2006: loss of $6.4 million).

The total net loss of the group for the year ended 31 December 2007 of $21.4 million (2006: loss of $7.5 million), was impacted by the following significant items:

  • An increase in finance costs relating to the convertible note of $10.4 million, which includes a non-cash fair value movement of $6.7 million (2006: ($1.1million)) in relation to the convertible note call option embedded derivative and interest and other costs which have been incurred in relation to the convertible note debt of $3.7 million (2006: $2.1 million).

Summary of Financial Performance - continued

  • A gain on disposal of the UK subsidiary, Nido Petroleum (UK) Limited, of $4.1 million (2006: Nil).
  • Share based payments decreased to $0.9 million (2006:  $2.0 million).  11,600,000 options were issued to employees in 2007 at a Black Scholes value ranging from $0.06 to $0.16 compared to 19.3 million options issued in 2006 at an average value of $0.106.
  • Administrative expenses increased to $5.3 million (2006: $2.6 million) due to the increased level in activities relating to the development and exploration programmes.
  • An impairment write-down of exploration expenditure capitalised is in relation to the West Linapacan field in Service Contract 14 of $0.5 million (2006: Nil).  This is due to the low level of current and planned activity to assess the existence of economically recoverable reserves of the field.
  • A net loss on disposal of Nido’s investment in Encore Oil plc of $0.8 million (2006: Nil).
  • An increase in employee benefits expense (net of share based payments expense) of $2 million to $4.8 million, to support the increased level of activities of Nido.
  • Net foreign currency losses $4.1 million (2006: gain of $0.1 million) due to the strengthening of the Australian dollar which had a negative impact on net US dollar balances.
  • Oil revenue from the Nido and Matinloc oil fields for the year was $2.2 million (2006: $2.9 million).  Gross oil production from the fields was 501 barrels of oil per day (bopd) (498 bopd for the same period last year).
  • Increase in interest income of 74% to $1.8 million (2006: $1.0 million).

Financing Activities

The Company’s financing costs primarily represent costs of the convertible note which appear in the income statement and in Note 18 to the financial statements. For the year ended 31 December 2007, finance costs relating to the convertible note totalled $10.4 million (2006: 1.0 million) and consisted of accrued interest expense of $2.3 million, accretion expense on the fair valuing of the underlying US$22 million liability of $1.2 million, amortisation of borrowing costs in of $0.1 million and movement in the value of the holder call option embedded derivative of $6.8 million.

The fair value of the call option represents the value of the option to the holder to convert the convertible note into fully paid shares in the Company.  The fair value has been determined using a Black Scholes model, taking into account factors such as share price volatility, expected life, exercise price and current share price.  As the Company’s share price changes, the value of the call option will change, resulting in a change to the liability reported in the balance sheet and an income or expense in the income statement. As at 31 December 2007, the value of the call option increased to $13.9  million (2006: $7.2 million), which reflects the movement in the Company’s share price from $0.175 at 31 December 2006 to $0.28 at 31 December 2007 and the decrease in the conversion price in the period from $0.26 to $0.23.

The underlying debt repayable to Merrill Lynch of US$22 million plus interest will not change, assuming that the convertible notes are not previously redeemed or converted, subject to the terms and conditions detailed in Note 18.

Summary of Financial Position

Nido’s financial position strengthened in 2007 with cash reserves at the end of 2007 increasing to $34.9 million compared to $29.9 million on 31 December 2006.  The increase in cash was due to $32.9 million raised during the year from the issue of 117,800,000 shares to investors and $4.1 million raised from the exercise of 42,137,500 options.

Development Activities

In 2007, substantial progress was achieved in the Galoc oil field development. The year’s expenditure of $14.5 million included:

  • Fabrication of the process equipment, well casing and tubulars completed in Indonesia;
  • Fabrication of the mooring base completed in Singapore;
  • Refurbishment of the subsea trees and fabrication of the subsea;
  • Successful completion of the pilot hole including the recovery of 38 metres of core;
  • The acquisition of a full suite of logs and five fluid samples;
  • Preliminary analysis of the well data; and
  • Successful drilling of Galoc 3 and 4 horizontal development wells.
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Page 18-19

Exploration Activities

In 2007, Nido undertook its largest ever seismic acquisition programme comprising around 5,000 km of 2D and 845 sq. km. of 3D seismic in a comprehensive and coordinated programme across its North West Palawan portfolio. The survey involved two seismic vessels over a 120-day period between September 2007 and January 2008. The net cost to Nido was US$12.7 million.

Nido also completed a preliminary Prospect and Lead inventory in SC 54 and SC 58 identifying 100 leads across a range of play types in water depths ranging from 100 m to 1,500 m, with several of these leads demonstrating potential for oil in place volumes greater than 500 mmbbls.

In August 2007, the Company elected to enter Sub-Phase 3 of SC 54 which commits the Company to drilling an exploration well by 4 February 2009.  Nido also secured a 12-month extension of Sub-Phase 2 of SC 58, which means that the Company has until January 2009 to fully interpret the large volume of seismic data acquired in 2007 prior to committing to drilling a well in Sub-Phase 3.

Corporate Activities

In October 2006, the Company executed an agreement with EnCore Oil plc (Encore) to sell its subsidiary, Nido Petroleum (UK) Limited (Nido UK).  Nido UK’s assets comprised a portfolio of eight exploration blocks.  On 16 January 2007, the Company completed the transaction resulting in the conversion of its United Kingdom assets into a shareholding of 8,985,577 shares in oil and gas exploration company Encore Oil plc which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.  Following an escrow period of 6 months, the Company decided to monetise its investment in Encore Oil plc, thus realising a 366% return on its original investment in the United Kingdom.  This decision enabled the Company to focus on the acceleration of the growing opportunities afforded by its core asset base in the Philippines particularly, within its exploration portfolio.

Dividends

No dividends were paid or declared by the consolidated entity during the financial year.  The Directors do not recommend payment of a dividend.

Corporate Structure

The Company is limited by shares and is incorporated and domiciled in Australia.

Employees

The consolidated entity had 24 employees of which 21 were full-time as at 31 December 2007 (2006: 18).

Significant Changes in the State of Affairs

Significant changes in the state of affairs of Nido during the financial year are detailed in the financial and activities review in this report.

Likely Developments and Expected Results

The Company’s near term focus is on the completion of the Galoc oil field development, with first oil planned for April 2008.  The cash flow generated from the Galoc oil field will enable the Company to plan and execute exploration drilling activities, which will commence in SC 54 in the second half of 2008.

Processing and interpretation of the 2D and 3D seismic data captured in the second half of 2007 and early 2008 in the North West Palawan Basin will continue in 2008 with a view to producing a risked Prospect and Lead inventory in order to rank targets for a multi-well exploration drilling campaign.

Remuneration Report (Audited)

This remuneration report outlines the Directors’ and Executives’ remuneration arrangements of Nido Petroleum Limited in accordance with the requirements of the Corporations Act 2001 and its Regulations.  It also provides remuneration disclosures required by paragraphs Aus 25.4 to Aus 25.7.2 of AASB 124 Related Party Disclosures which have been transferred to the remuneration report in accordance with Corporations Regulations 2M.06.04.

For the purposes of this report, Key Management Personnel of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the group, directly or indirectly, including any Director (whether executive or otherwise) of the parent company, and includes six Executives in the parent group receiving the highest remuneration.

For the purposes of this report the term “Executive” includes those Key Management Personnel who are not directors of the parent company or did not act in that capacity during the reporting period.

Remuneration Committee

The full Board carries out the role and responsibilities of the Remuneration Committee and is responsible for determining and reviewing the compensation arrangements for the Directors themselves, the Managing Director and the Executives.

Executive remuneration is reviewed annually having regard to individual and business performance, relevant comparative remuneration and internal and independent external advice.

Remuneration Policy

The performance of the Company depends upon the quality of its Directors, Executives and Staff.  To achieve its financial and operating activities, the Company must attract, motivate and retain highly skilled Directors and Executives.

Equally, the structure and level of rewards granted to Directors, Executives and Staff depend on the Company’s performance in any given financial year.  In assessing the Company’s performance, regard is given to the Company’s share price performance during the prior financial year.

Accordingly, the Company embodies the following principles in its remuneration framework:

Remuneration Structure

In accordance with best practice corporate governance, the structure of Non-Executive and executive remuneration is separate.  The remuneration structure for the Managing Director is the same as for the Executive.

Non-Executive Remuneration Structure

The Company’s constitution and the ASX Listing Rules specify that the aggregate fees of Non-Executive Directors shall be determined from time to time by a General Meeting.  An amount not exceeding the amount determined is then divided between the Directors as agreed.  The latest determination was at a General Meeting held on 18 June 1999 where the shareholders approved an aggregate remuneration of $150,000 per year.  The aggregate amount of fees sought to be approved by shareholders and the manner in which it is apportioned amongst Directors is reviewed annually.

In 2007, the Non-Executive Directors were paid fees associated with their duties as Directors, including their membership in Board committees, which fall within the approved aggregate remuneration level.

Separate from their duties as Directors, the Non-Executive Directors undertake work for the Company directly related to the evaluation and implementation of various business opportunities, including oil and gas exploration and production opportunities, new business ventures, government and regulatory advice and potential fund raising, for which they receive a daily rate.  These payments are made pursuant to consultancy agreements entered into by the Non-Executive Directors with the Company and are not taken into account when determining their aggregate remuneration levels.

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Page 20-21

Remuneration Report (Audited) - continued

Managing Director and Executive Remuneration Structure

Based on the current stage in the Company’s development, its size, structure and strategies, the Board considers that the Key Performance Indicator (KPI) in assessing the performance of Executives and their contribution towards increasing shareholder value is share price performance over the review period.

Individual and Company operating targets associated with traditional financial and non-financial measures are difficult to set given the small number of Executives and the need to be flexible and multi-tasked, as the Company responds to a continually changing business environment.  Consequently, a formal process of defining KPIs and setting targets against the KPIs has not been adopted at the present time.

In determining the make-up of Executive remuneration, the Board engaged an external consultant to provide independent advice.

Remuneration consists of the following key elements:

  • Fixed remuneration; and
  • Variable remuneration, comprising short term incentives (STI) and long term incentives (LTI).

The proportion of fixed remuneration and variable remuneration is established for each Executive by the Board.

Fixed Remuneration

The level of fixed remuneration is set to provide a base level of remuneration which is both appropriate to the position and is competitive in the market. Fixed remuneration is reviewed annually by the Board having regard to the Company and individual performance, relevant comparable remuneration in the oil and gas industry and external advice.

Executives receive their fixed remuneration in cash.  There are no fringe benefits at the present time.

Variable Remuneration – Short Term Incentive (STI)

The aim of the STI is to align the achievement of the Company’s business objectives with the remuneration received by the Executives charged with achieving those objectives.  The total potential STI available is set at a level so as to provide sufficient incentive to the Executives to achieve the goals and such that the cost to the Company is reasonable given the circumstances.

Annual STI payments granted to each Executive depend on the achievement of the Company’s business objectives over the preceding year and are based on recommendations from the Managing Director following collaboration with the Board.  Typically included are measures such as contribution to strategic initiatives, risk management and leadership or team contribution.

The aggregate of annual STI payments available for Executives across the Company is subject to the approval of the Board.  Payments are usually delivered as a cash bonus.  In addition to the annual plan, the Managing Director has the discretion to award “ad hoc” bonuses up to a maximum net amount of $1,500 per project or task to any employee for exceptional work.

The actual short term incentives for the year comprised of cash bonuses. The total cash bonuses paid for the year was $57,494 (2006: $67,600).

Variable Remuneration – Long Term Incentive (LTI)

The objective of the LTI plan is to reward Executives in a manner which aligns the element of remuneration with the creation of shareholder wealth.  As such LTIs are made to Executives who are able to influence the generation of shareholder wealth and thus have an impact on the Company’s strategic goals.

The level of LTI granted is, in turn, dependent on the Company’s recent share price, the seniority of the Executive, and the responsibilities the Executive assumes in the Company.

LTI grants to Executives are delivered in the form of employee share options.  These options are issued at an exercise price determined by the Board at the time of issue.  The employee share options are issued in accordance with the Company’s applicable Employee Share Option Plan and generally vest over a 30-month period.  Since 7 December 2007 and following the approval of shareholders in general meeting, a new Employee Share Option Plan (2007 ESOP) has been adopted which will govern the terms of option grants from that date.  The terms of the 2005 Employee Share Option Plan (2005 ESOP) will remain in force for those options granted prior to that date.

Typically, the grant of LTIs occurs at the commencement of employment or in the event that the individual receives a promotion and, as such, is not subsequently affected by the individual’s performance over time.  However, under certain circumstances, including breach of employment conditions, the Directors may cause the options to expire prior to their vesting date.  In addition, individual performance is more commonly rewarded over time through STIs.

Remuneration Report (Audited) - continued

Managing Director and Executive Employment Contracts

It is the Board’s policy that employment contracts are entered into with the Managing Director and Executives.  The Managing Director, Mr David Whitby, and Executives, as specified in the Remuneration of Directors and Executives table, are employed under contract.  These contracts have no termination date and under the terms of the contracts:

  • The Executive may resign from his/her position and thus terminate his/her contract by giving one month’s written notice.
  • In the event that the Company terminates an Executive’s employment, except in circumstances of misconduct or material breaches of their contract and, with the exception of the Company Secretary, the Company will pay the Executive 12 months of his/her fixed remuneration package.
  • In the event of a change of control in the Company, and with the exception of the Company Secretary, the Executive may within a period of three months after the change of control, terminate his/her employment.  The Executive will in this instance be paid 12 months of his/her fixed remuneration package.
  • Under the Company’s Employee Share Option Plan, upon resignation by the Executive or upon termination by the Company, any LTI options held that have vested will need to be exercised within 30 days of termination or they will be forfeited, unless the Board approves other terms it considers appropriate.  Any LTI options that have not vested will be forfeited.
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Page 22-23

Remuneration Report (Audited) - continued

Remuneration of Key Management Personnel

Remuneration Report (Audited) - continued

Remuneration of Key Management Personnel

Compensation Options to Directors - Granted and vested during the year

During the 2007 financial year, no options were granted as equity compensation benefits to Directors, nor did any options vest.  During the previous year options were granted as disclosed below.  The options were issued free of charge.  Each option entitles the holder to subscribe for one fully paid ordinary share in the Company at various exercise prices with various expiry dates.

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Page 24-25

Remuneration Report (Audited) - continued

Compensation Options to Executives - Granted and vested during the year

During the financial year, options were granted as equity compensation benefits to certain Executives either under the 2005 Employee Share Option Plan (2005 ESOP) or approved separately by shareholders, as disclosed below.  The options were issued free of charge.  Each option entitles the holder to subscribe to one fully paid ordinary share in the Company at various exercise prices with various expiry dates.

The table below sets out options granted in the year and options granted in previous years which vested during the year.

Remuneration Report (Audited) - continued

Value of Options Granted as Part of Remuneration for 2007

There were no alterations to the terms and conditions of options granted as remuneration since their grant date.

The maximum grant value, which will be payable assuming that all service and performance criteria are met, is equal to the number of options granted multiplied by the fair value at grant date. The minimum amount payable assuming that service and performance conditions are not met is zero.

Shares Issued on Exercise of Compensation Options

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Page 26-27

Directors’ Interests in Shares and Options of the Company

Particulars relating to:

  • Shares in Nido or in a body corporate that is related to Nido in which a Director has a relevant interest and the nature and extent of that interest; and
  • Relevant interests held in equity securities and other securities with rights of conversion to equity in Nido at the date of this report are:

The material contracts involving Directors’ interests during the financial year and up to the date of the Directors’ Report are disclosed in Note 28 of the financial statements and elsewhere in the Nido 2007 Annual Report.

Share and Option Schemes

Unissued shares

As at the date of issuing this report, there were 54,137,500 unissued ordinary shares under option (65,337,500 at reporting date). Refer to Note 25 of the financial statements for further details of the outstanding options.  Option holders do not have any right to participate in any share issue of the Company or any related body corporate.

Shares issued as a result of the exercise of Options

During the financial year and up to the date of this report, employees and Directors exercised the option to acquire 44,637,500 fully paid ordinary shares at a weighted average exercise price of $0.0974.

Corporate Governance

In recognising the need for the highest standards of corporate behaviour and accountability to shareholders, the Directors of the Company support the Principles of Corporate Governance, as detailed in the Company’s Corporate Governance Statement set out in this Annual Report.

Indemnification of Directors and Officers

During the year the Company paid premiums in respect of a contract insuring all Directors and Officers of the Company and its controlled entities against liabilities incurred as Directors or Officers to the extent permitted by the Corporations Act, 2001.  Due to a confidentiality clause in the contract, the amount of the premium has not been disclosed.

Environmental Regulations

The Company’s environmental obligations are regulated under the laws of the countries in which Nido has operations.  The Company has a policy of exceeding or at least complying with its environmental performance obligations.  No environmental breaches have been notified by any government agency as at the date of this report.

Subsequent Events

Nido has identified the following as events occurring after balance sheet date:

  1. Retirement of Mr Gregor Dixon and appointment of Mr. David Whitby as Chairman of the Board and Non Executive Director on 6 February 2008.
  2. Retirement of Mr David Whitby as Managing Director on 6 February 2008.
  3. Appointment of Mr Jocot de Dios as President and  Chief Executive Officer on 6 February 2008.
  4. Appointment of Mr William Bloking as Non Executive Director on 6 February 2008.

Rounding

The amounts contained in this report and in the financial statements have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC Class Order 98/0100.  The Company is an entity to which the Class Order applies.

Auditor’s Independence and Non-Audit Services

Auditor’s Independence Declaration

The Auditor’s Independence Declaration is included on page 28 of the report.

Non-Audit Services

The following non-audit services were provided by the entity’s auditor, Ernst & Young.  The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act.  The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

Ernst & Young received, or are due to receive, the following amounts for the provision of non-audit services.

Tax compliance and advice services   $170,612

 

Signed in accordance with a Resolution of the Directors.

Gregor Dixon
Chairman
7 March 2008

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