TIDMKGLD
RNS Number : 1509Y
Kolar Gold Limited
27 November 2014
27 November 2014
Kolar Gold Limited
Final results for the year ended 30 June 2014
Kolar Gold Limited (AIM: KGLD, referred to as 'KGL', 'Kolar
Gold' or the 'Company') is pleased to announce its audited results
for the year ended 30 June 2014.
The annual report and accounts are available on the Company's
website.
Enquires:
Kolar Gold Limited
+61 414 874 491 / +61 417
Nick Spencer / Chris Clowes 197 288
N + 1 Singer (Nomad and Joint Broker)
James Maxwell / Jen Boorer +44 20 7496 3000
Pareto Securities (Joint Broker)
Will Slack +44 20 7786 4370
Tavistock Communications
Ed Portman / Nuala Gallagher +44 20 7920 3150
Churchgate Partners
Sumir Bhardwaj +44 7768 696760
Chairman's Report
During the last year financial year, Kolar Gold has made some
key steps including a restructuring of our partnership with gold
explorer GMSI and the subsequent grant of the Jonnagiri gold mining
licence to GMSI. The Indian Supreme Court also ruled that the BGML
tender sale and mine revival should proceed. The federal elections
then took place in May of this year, which slowed all business
proceedings. Conditions now do seem to be more conducive for Kolar
Gold to achieve its aim of becoming a significant participant in
gold mining in India but it is still a difficult environment in
which to proceed quickly.
This month, we have taken a major step forward at GMSI with its
major shareholders (Kolar Gold holds 25.3%) agreeing to a funding
package to support a large drill programme at Jonnagiri and to
provide GMSI with working capital. The objective is to upgrade the
resource at Jonnagiri to a level where its viability as a producing
mine can be established.
Geomysore Services India Private Limited ("GMSI")
The focus of the past year has been on developing Kolar Gold's
interest in GMSI and its key gold assets. As previously announced,
in August 2013 Kolar Goldrevised its arrangements with GMSI, in
order to focus on developing prioritised, later stage gold
exploration and mining licences. At the same time, measures were
taken to reduce costs and conserve cash in Kolar Gold.
In October 2013, GMSI was granted a mining licence at Jonnagiri,
the first such grant in India for gold since 2003. Jonnagiri has
710k ounces of JORC Resource and an exploration target of
2-5Moz.
As at 30th June, 2014 Kolar Gold's shareholding in GMSI was 24.2
per cent. Since the year end GMSI's shareholders have funded
further exploration and working capital costs through a rights
issue, in which Kolar Gold participated slightly in excess of its
pro rata entitlement by subscribing INR 17.3 million (GBP0.18
million), so that Kolar Gold currently holds 25.3 per cent of
GMSI.
Subsequently, on 26 November 2014, the four major shareholders
in GMSI representing 94 per cent of its equity have entered into a
new shareholders' agreement and subscription agreement whereby they
intend to subscribe for up to INR 158.2 million (GBP1.63 million)
in new equity to provide GMSI with working capital for its
exploration operations over the next nine months, pro rata to their
current shareholdings. The INR 158.2 million (GBP1.63 million)
funding will be undertaken in four tranches between November 2014
and May 2015. Additionally, Thriveni Earth Movers Limited
("Thriveni") a Mine Developer & Operator and major shareholder
in GMSI has agreed to subscribe for additional equity in GMSI up to
a total value of INR 144.7 million (GBP1.49 million) to support a
further 15,800 m of drilling at Jonnagiri. Finally, as part of the
new funding arrangements, Kolar Gold has been granted an option for
12 months from now to subscribe for a further INR 128.1 million
(GBP1.32 million) in equity in GMSI. All these transactions will
take place at an agreed INR 1,098.0 million (GBP11.32 million) pre
new money valuation for GMSI today.
Kolar Gold intends to subscribe for its pro rata allocation of
the INR 158.2 million (GBP1.63 million) fund raising totalling INR
42.6 million (GBP0.44 million). If all major GMSI shareholders take
up their rights and the drilling contract is executed in full as
anticipated, Kolar Gold's interest in GMSI would be 22.9 per cent,
and if its INR 128.1 million (GBP1.32 million) option is exercised
in full this would rise to 29.3 per cent. Thriveni has indicated
that it is willing to subscribe for up to INR 79.1 million (GBP0.82
million) and AIR, a 36.7 per cent shareholder in GMSI, also intends
to subscribe for its allocation. The subscription will provide GMSI
with access to working capital and enable it to take the next steps
in determining the viability of the Jonnagiri deposit as a
producing mine. KGL believes this deposit has the potential to
become one of the first new gold mines in India for 30 years.
GMSI continues its discussions with Deccan Gold Mines Limited
("DGM"), whose shares are listed on the Bombay Stock Exchange
("BSE") about a possible merger of the two companies as one route
towards combining gold assets and resources and accessing the
Indian capital markets for future funding. The Board of GMSI and
its shareholders will continue to work with DGM on this
amalgamation but also explore all other routes to a BSE listing and
access to appropriate funding.
Bharat Gold Mines Limited ("BGML")
Kolar Gold continues to work with its partner, the united BGML
unions, on the proposed acquisition of the BGML assets, a
significant and separate opportunity for Kolar Gold, which remains
the other leg of the Company's Indian gold strategy.
The BGML ex-employees unions, with Kolar Gold as their technical
and financial collaborator, have a right of first refusal ("ROFR")
to acquire the BGML mine assets which was confirmed in June 2013
when the Supreme Court of India issued an official court order to
proceed with the tender sale and revival of the old BGML mine and
community. The Government has appointed an advisor to finalise the
tender draft and manage the tender process, which we anticipate
will commence in 2015. We and our partners have a preferred
position in the tender process, and we are working on financing
options.
Summary
Kolar Gold is uniquely positioned to be a key participant in the
development of the Indian gold mining sector. We aim to use our
cash prudently in order to maximise long-term shareholder returns
while taking full advantage of the opportunities we have created.
The coming year should be a pivotal one in progressing Kolar Gold's
two clear Indian gold strategies, and we look forward to providing
a further update on these developments over the months ahead.
Harvinder Hungin
Chairman
Kolar Gold Limited
26 November 2014
Chief Executive Officer's Report
The Company at the balance sheet date had the following key
interests:
-- an effective interest of 24.2% in Geomysore Services India
Private Limited (currently 25.3%);
-- a right of first refusal ("ROFR"), in association with the
Cooperative Societies of Bharat Gold Mines Limited ("BGML")
Ex-employees, to acquire the BGML mining assets through a tender
process to be held by the owner, the Government of India; and
-- cash balances of GBP3.4m.
In the last 12 months, we have made some important steps forward
following a review of our Indian business and gold exploration
strategy, with the implementation of new arrangements with our
partner GMSI, who succeeded with their first Mining Lease grant;
and Supreme Court ruling success supporting the BGML sale tender.
All this is against a backdrop of a federal election in May that
delivered a new pro-business government and which we believe should
be a more conducive environment for Kolar Gold's mine development
plans in India.
Firstly, we have worked to develop a closer relationship with
our established partner, GMSI, a Bangalore based exploration group,
and to focus on pursuing the most promising gold exploration and
mining licences. The initial step was a Heads of Agreement ("HoA")
with GMSI that was signed in August 2013, with subsequent funding
of the company by shareholders to which Kolar Gold contributed,
resulting in Kolar Gold holding an equity stake in GMSI of 24.2% at
the financial year end.
GMSI has been active in the delivery of key licence applications
which led to the successful grant of a Mining Licence in October
2013 at Jonnagiri in Andhra Pradesh. This is a major step for GMSI
becoming a mine developer and gold producer.
Since the year-end the major shareholders in GMSI have entered
into a new funding agreement for a significant exploration drilling
campaign for up to 15,800m of resource drilling at Jonnagiri. The
drilling programme will focus on providing both increased
confidence in the current resource base as well as attempting to
extend the currently delineated ore bodies, which presently have a
710koz resource and a 2-5Moz exploration target. On the basis of
the results of this drilling programme GMSI intends to commence
work on scoping and pre feasibility studies to assess the viability
of constructing a new gold mine.
Lastly, working closely with our partner, the combined BGML
Ex-employee Unions Society, we have worked hard on the proposed
acquisition of Bharat Gold Mines Limited ("BGML") gold mining
assets, which represents a significant and separate opportunity for
Kolar Gold and remains the second leg of KG's Indian gold strategy.
The tender for the privatisation was expected to be issued just
before the recent federal election, following the successful 2013
decision of the Supreme Court of India instructing the Government
to proceed with the asset sale and mine revival, but the election
delayed this process.
Heads of Agreement (HoA) with GMSI
In August 2013, Kolar Gold entered into a Heads of Agreement
with GMSI, which included further investment at that time and
myself joining the board of GMSI as a non-executive director. Kolar
Gold gained an initial 30% shareholding in GMSI which gave Kolar
Gold exposure to GMSI's extensive portfolio of Indian gold licence
rights and applications, including a new gold project at
Jonnagiri.
Through our partnership with, and investment in GMSI, we will
together explore and develop selectively from its portfolio of 49
gold projects. This will enable Kolar Gold to accelerate access to
gold operations in India that are nearer production, subject to
obtaining sufficient funding, and spread licence risk across a
larger portfolio. GMSI's portfolio includes project and first
application rights to 11 Reconnaissance Permits, 32 Prospecting
Licences (including two granted), and six Mining Leases (including
one granted) covering over 11,000 sq km across India with 1.36Moz
JORC resources defined.
It was pleasing to report that a significant milestone was
achieved, with GMSI being granted a Mining Lease at Jonnagiri,
located in Andhra Pradesh, Southern India, in October 2013. The
Jonnagiri mining lease has an open pittable deposit of 2.9Mt at an
average grade of 2.1g/t Au containing a JORC indicated resource of
190,000ozs Au and an underground deposit of 3.5Mt at an average
grade of 4.6g/t Au containing a JORC inferred resource of
520,000ozs Au. There are significant gold intersections in the
Temple block of 36.4m grading 2.65g/t Au at a depth of 200m and
29.6m at 3.59g/t Au at a depth of 320m. Our Competent Person, James
Lally at Mining Associates, has confirmed there is high potential
to increase the size of the deposits through further definition of
existing lodes and extensions and exploration of new lodes already
identified and has validated a 2-5Moz exploration target.
To assist exploration and fund development of the Jonnagiri
deposit, Thriveni Earth Movers Limited ("Thriveni"), a Mine
Developer & Operator, subscribed for a stake in GMSI in
November 2013. This provided key initial funding for the Jonnagiri
drilling programme, diluting Kolar Gold's holding at the year end
to 24.2%. Since the year end shareholders have funded further
exploration through a rights issue, in which Kolar Gold
participated by subscribing INR 17.3 million (GBP0.18 million) as
part of a larger INR 44.4 million (GBP0.46 million) fund raising.
As a result, Kolar Gold's shareholding in GMSI increased slightly
to 25.3% due to some shareholders not taking up their rights.
Significantly, this month, Kolar Gold and the other major GMSI
shareholders have entered into an agreement for new working capital
funding and the extension of the two rig drill programme to drill
up to 15,800m at Jonnagiri, over the next nine months. The
programme is intended to upgrade and extend the gold resource and
to enable feasibility work to begin.
GMSI shareholders intend to subscribe a total of up to INR 158.2
million (GBP1.63 million) in new equity to fund GMSI and the
drilling activities at an agreed pre-money valuation of INR 1,098.0
million (GBP11.32 million), in four instalments between November
2014 and May 2015. KGL will have a right to subscribe for shares in
GMSI alongside other major GMSI shareholders, pro rata to their
shareholdings, at this agreed valuation. This will amount to an
investment by Kolar Gold of INR 42.6 million (GBP0.44 million) if
all shareholders choose to participate and elect to take up their
entitlements in full.
GMSI will undertake up to a further 15,800 m of drilling at
Jonnagiri and Thriveni has agreed to subscribe for additional
equity in GMSI up to a total value of INR 144.7 million (GBP1.49
million) at the same pre new money valuation of GMSI today of INR
1,098.0 million (GBP11.32 million).
Finally, Kolar Gold has an option to subscribe for up to INR
128.1 million (GBP1.32 million) in new equity at the same valuation
during the period of 12 months from entering into the
agreement.
Allied to this funding programme, the GMSI board has also agreed
to strengthen the GMSI management team with the appointment of a
new Mining Engineer and additional geologists to support it's
development to become a mine developer then gold producer. The
present CEO of the company has tendered his resignation effective
December end and GMSI is therefore also going to appoint a new CEO.
We look forward to bringing these execution skills and experience
into action to develop additional gold deposits from the large gold
exploration portfolio held by GMSI.
Discussions continue between GMSI and Deccan Gold Mines Limited
("DGM"), which is listed on the Bombay Stock Exchange ("BSE"), on
the previously announced plans to amalgamate these two companies to
achieve a listing of the combined group on the BSE. Kolar Gold and
GMSI are, in parallel, reviewing all other routes to achieve the
necessary future fund raising required to further develop
Jonnagiri, as well as other priority gold projects.
Bharat Gold Mines Limited (BGML) Acquisition
Kolar Gold, jointly with its partner, the combined BGML
Ex-employee Unions Society, has continued to make progress, albeit
slowly, in the pursuit of the acquisition and development of the
BGML gold mine assets. The matter was passed to the Supreme Court
for final direction on the tender sale process and we were very
encouraged with the official court order from the Supreme Court in
July 2013 to proceed with the sale and revival of the BGML mine by
tender process, giving the right of first/last refusal to the
Society and to Kolar Gold as their technical and financial
collaborator. This is a significant legal step for both parties and
for mine revival.
Subsequently, the Government of India selected an advisor to be
responsible for finalising the sale tender documents, managing the
tender process and undertaking a revaluation of the BGML tender
assets. In May, India held its general election and the BJP formed
the new Government. The election has had the effect of delaying the
release of the tender but this new government has evidenced more
interest in BGML revival and we anticipate the process will
commence again in 2015.
Kolar Gold, in conjunction with the BGML ex-employee unions, is
preparing its technical and financial proposal and qualification
documents in order to submit an acceptable counter offer at the
appropriate time to meet the requirements of the tender
document.
We believe that our exploration and development of the
surrounding Kolar Gold Projects in the last few years at South
Kolar, in conjunction with GMSI, which has rights to all adjoining
gold licence areas in the Kolar Gold Belt, will demonstrate our
commitment to gold exploration in this region and should assist
this process.
Conclusion
The next 12 months are expected to be a very busy time for Kolar
Gold as we support GMSI in the exploration and development of the
Jonnagiri mining licence and proceed with our efforts to
consolidate and explore GMSI's large gold portfolio of potential
world class gold assets. In particular, GMSI's shareholders have
now agreed funding for the next exploration stage of the Jonnagiri
Mining Lease area, which presents an excellent opportunity for
Kolar Gold to participate in what could become the only private
gold mine producer in India.
Kolar Gold has the ability to perform a pivotal role in the
emergence and development of the Indian gold mining sector. Getting
to this point has been a long, complex and challenging feat, but
the opportunity is clear. Kolar Gold will deploy its cash and
management resources carefully in the best interests of all its
shareholders in order to best utilise these unique quality gold
opportunities we now have established access to. 2015 will be a
particularly important year in progressing Kolar Gold's two clear
gold strategies in India, and we look forward to providing further
updates on these developments in the New Year.
Nick Spencer
Chief Executive Officer.
Kolar Gold Limited
26 November 2014
Directors' Report
The directors present their report together with the
consolidated financial statements of the Group comprising Kolar
Gold Limited (the Company) and its subsidiaries for the year ended
30 June 2014 and the auditor's report thereon.
Performance review
The Group made a comprehensive loss of GBP5,631,480 during the
year ended 30 June 2014 (2013: loss of GBP2,199,438).
Principal activities and future developments
The Group's principal activity is the development of gold
exploration and mining assets in India, in partnership with its
Indian associate, GMSI and securing and reviving the historic gold
mines of the Kolar Goldfields of Bharat Gold Mines Limited in that
region.
Subsequent event
On 26 November 2014 the major shareholders in GMSI entered into
a new shareholders' agreement and subscription agreement whereby
they intend to subscribe for up to INR 158.2 million (GBP1.63
million) in new equity to provide GMSI with working capital for its
exploration operations over the next nine months, pro rata to their
current shareholdings, at a pre new money valuation for GMSI today
of INR 1,098.0 million (GBP11.32 million). The INR 158.2 million
(GBP1.63 million) funding will be undertaken in four tranches
between November 2014 and May 2015. Any shareholder not subscribing
in the first tranche can do so later in subsequent tranches and
shares not subscribed for can be taken up by major shareholders,
Kolar Gold and Thriveni Earth Movers Limited ("Thriveni").
GMSI will execute a two rig drilling contract of up to 15,800m
to increase and upgrade the gold resource at the Jonnagiri mining
lease area, at a drill cost of up to INR 144.7 million (GBP1.49
million), to be funded by the subscription by Thriveni for further
equity in GMSI, also at the same pre new money valuation for GMSI
today of INR 1,098.0 million (GBP11.32 million), within the next 12
months.
Kolar Gold intends to subscribe for its pro rata allocation of
the up to INR 158.2 million (GBP1.63 million) fund raising
totalling up to INR 42.6 million (GBP0.44 million). If all major
GMSI shareholders take up their rights and the drilling contract is
executed in full as anticipated, Kolar Gold's interest in GMSI
would be 22.9 per cent, and if its INR 128.1 million (GBP1.32
million) option is exercised in full this would rise to 29.3 per
cent. Thriveni has indicated that it is willing to subscribe for up
to INR 79.1 million (GBP0.82 million) and AIR, a 36.7 per cent
shareholder in GMSI, also intends to subscribe for its
allocation.
Principal risks and uncertainties
The Group is exposed to a variety of financial risks including
foreign exchange risk, interest rate risk, liquidity risk and
credit risk. These risks are discussed in detail in Note 2.
Note 13 to the financial statements - Financial instruments and
associated risks
The Board of Directors is committed to effective risk management
and is responsible for ensuring that the Group has an appropriate
framework in place to identify and effectively manage business
risks and to monitor business performance and the Group's financial
position. The Board is also responsible for overseeing compliance
with regulatory, prudential, legal and ethical standards.
Accounting policies
The accounting policies of the Group as set out on pages 18 to
25 have been applied consistently during the year.
Dividends
No dividends have been paid or declared and the Directors do not
recommend the declaration of a dividend for the year ended 30 June
2014 (2013: nil).
The UK Takeover Code
On 30 September 2013, certain changes to the UK Takeover Code
came into effect which meant that the Company became subject to the
UK Takeover Code on that date. This is due to the Company's
incorporation in Guernsey, being one of the relevant jurisdictions
now subject to the UK Takeover Code.
Directors' remuneration and interests
2014
Remuneration Interests
Director Cash-based Share-based Totals Shares Options
payments payments
GBP GBP GBP No. No.
Harvinder Hungin (Chairman) 45,000 8,147 53,147 1,700,000(1) 750,000
Nicholas Spencer (Chief
Executive Officer)Refer
Note 17 252,427 - 252,427 1,763,569 Nil
Stephen Coe 35,000 6,788 41,788 237,439 600,000
Stephen Oke 40,000 6,788 46,788 Nil 600,000
Shiv Khemka (resigned
14.8.13) 5,000 - 5,000 Nil Nil
V Sivakumar (appointed
14.8.13) 25,986 - 25,986
------------ -------- ------------- ----------
TOTALS 403,413 21,723 425,136 3,701,008 1,950,000
=========== ============ ======== ============= ==========
2013
Remuneration Interests
Director Cash-based Share-based Totals Shares Options
payments payments
GBP GBP GBP No. No.
Harvinder Hungin (Chairman) 45,000 8,119 53,119 1,700,000(1) 600,000
Nicholas Spencer (Chief
Executive Officer) Refer
Note 17 258,752 12,588 271,340 1,763,569 1,850,000
Richard Johnson (Resigned
7.12.12) Refer Note 16 235,124 - 235,124
Stephen Coe(2) 27,708 14,057 41,765 237,439 475,000
Stephen Oke 40,000 6,765 46,765 Nil 475,000
Shiv Khemka 30,000 - 30,000 Nil Nil
------------ -------- ------------- ----------
TOTALS 636,584 41,529 678,113 3,701,008 3,400,000
=========== ============ ======== ============= ==========
(1) SG Hambros Trust Company (Channel Islands) Limited hold
1,700,000 Ordinary Shares and 200,000 options, as trustee of the
Carlyle Settlement, in which Harvinder Hungin and his family have
an interest.
(2) Portion paid by the issue of shares
The above remuneration relates to Kolar Gold Limited directors
only. The Key Management Personnel remuneration disclosed in Note
17 to the financial statements has been calculated on a
consolidated basis and includes payments to other Key Management
Personnel. No director or member of management of the Company
receives any remuneration from GMSI.
Results for the year and state of affairs at 30 June 2014
The Consolidated Statement of Comprehensive Income and the
Consolidated Statement of Financial Position are set out on pages
13 and 14 of the financial statements.
Accounting records
The Directors believe that they have complied with the
requirements of Section 244 of the Companies (Guernsey) Law 2008,
as amended with regards to the financial statements by employing
appropriate expertise and providing adequate resources to the
financial function within the Group.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Directors'
Report and the Financial Statements in accordance with applicable
law and regulations.
Companies (Guernsey) Law 2008, as amended and AIM rules require
the Directors to prepare financial statements for each financial
year. Under that law they have elected to prepare the financial
statements in accordance with International Financial Reporting
Standards as adopted by the EU and applicable law.
The financial statements are required by law to give a true and
fair view of the state of affairs of the company and of the profit
or loss of the company for the year.
In preparing these financial statements, the Directors are
required to:
n select suitable accounting policies and then apply them
consistently;
n make judgements and estimates that are reasonable and
prudent;
n state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
n prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure that
the financial statements comply with the Companies (Guernsey) Law
2008, as amended and AIM rules. They have general responsibility
for taking such steps as are reasonably open to them to safeguard
the assets of the Company and to prevent and detect fraud and other
irregularities.
Directors' confirmation
The Directors confirm that they have complied with the
requirements in preparation of the financial statements as at the
date of approval of this report. So far as the Directors who held
office at the date of approval of this Directors' Report are aware,
there is no relevant audit information of which the Company's
auditor is unaware, having taken all the steps the Directors ought
to have taken to make themselves aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
Going concern
After making enquiries, and considering the current level of
activity, financial arrangements made and for the reasons disclosed
in note 1.3 of the financial statements, the Directors consider
that the Company will have adequate resources to continue in
operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing the
financial statements.
Corporate governance statement
The Company, being listed on AIM, is not required to comply with
the UK Corporate Governance Code ("the Code"). However, the Company
has given consideration to the main principles of the Code and the
Directors support the objectives of the Code and intend to comply
with those aspects that they consider relevant to the Group's size
and circumstances. Details of these are set out below.
The Board of Directors
The Board currently comprises one Executive and four
Non-Executive Directors, two of which are independent. The Board
formally meets approximately every three months and is responsible
for setting and monitoring Group strategy, reviewing budgets and
financial performance, ensuring adequate funding, examining major
acquisition opportunities, formulating policy on key issues and
reporting to the Shareholders.
Internal Financial Control
The Board is responsible for establishing and maintaining the
Group's system of internal financial controls. Internal financial
control systems are designed to meet the particular needs of the
Group and the risk to which it is exposed, and by its very nature
can provide reasonable, but not absolute, assurance against
material misstatement or loss. The Directors are conscious of the
need to keep effective internal financial control. The Directors
have reviewed the effectiveness of the procedures presently in
place and consider that they are appropriate to the nature and
scale of the operations of the Group.
The Audit Committee
An Audit Committee has been established which comprises three
Non-Executive Directors - Stephen Coe (who chairs the Committee),
Stephen Oke and Harvinderpal Hungin all of whom are considered to
have recent and relevant financial experience. The Committee is
responsible for ensuring that the financial performance of the
Group is properly reported on and monitored, and for meeting the
Auditor and reviewing the reports from the Auditor relating to
accounts and internal controls. The Committee also reviews the
Group's annual and interim financial statements before submission
to the Board for approval. The role of the Audit Committee is also
to consider the appointment of the Auditor, audit fees, scope of
audit work and any resultant findings.
The Remuneration Committee
The Remuneration Committee comprises three Non-Executive
Directors - Stephen Oke (who chairs the Committee), Stephen Coe and
Harvinderpal Hungin. It is responsible for reviewing the
performance of the Executive Directors and for setting the scale
and structure of their remuneration, paying due regard to the
interests of Shareholders as a whole and the performance of the
Group. The remuneration of the Chairman and the Non-Executive
Directors is determined by the Board as a whole, based on a review
of the current practices in other similar companies.
On behalf of the Board
Harvinder Hungin
Chairman
26 November 2014
Kolar Gold Limited and its controlled entities
Consolidated Satement of Comprehensive Income
for the year ended 30 June 2014
Group
Note 2014 2013
GBP GBP
Other income - 267
SUN Mining warrants expensed for
services 10 - (77,542)
Options issued to Directors 10 (21,723) (21,649)
Salaries and wages (380,566) (551,049)
Advisory and due diligence - GMSI
and other prospective gold assets (52,963) (741,671)
Other administrative expenses (900,884) (887,201)
Dilution of investment in associate 6 (1,326,888) -
Impairment of investment in associate 6 (2,865,325) -
Loss from operating activities (5,548,349) (2,278,845)
------------- ------------
Finance income 54,250 99,188
Finance costs (501) (14,271)
Net financing income/(expense) 53,749 84,917
------------- ------------
Share of loss of associate 6 (126,938) -
Loss before tax (5,621,538) (2,193,928)
Income tax expense 5 - -
------------- ------------
Loss for the year (5,621,538) (2,193,928)
Other comprehensive loss
Items that are or may be reclassified
subsequently to profit or loss
Foreign exchange translation variances (9,942) (5,510)
------------- ------------
Total comprehensive loss for the
year (5,631,480) (2,199,438)
============= ============
Basic and diluted loss per share
(p) 12 5.29 2.14
All results are derived from continuing activities.
Kolar Gold Limited and its controlled entities
Consolidated Statement of Financial Position
as at 30 June 2014
Group
2014 2013
Note GBP GBP
Non-current assets
Plant and equipment 13,403 19,674
Investment in associate 6 2,503,017 -
Exploration and evaluation assets 7 - 6,122,168
Total non-current assets 2,516,420 6,141,842
------------ ------------
Current assets
Trade and other receivables 9,235 29,544
Prepayments and other assets 24,707 27,506
Term deposits 2,060,236 4,671,734
Cash and cash equivalents 1,370,181 698,817
Total current assets 3,464,359 5,427,601
------------ ------------
Total assets 5,980,779 11,569,443
------------ ------------
Current liabilities
Trade and other payables 8 336,040 321,450
Employee benefits 9 142,325 134,760
Total current liabilities 478,365 456,210
------------ ------------
Non-current liabilities
Employee benefits 9 3,544 4,606
------------ ------------
Total non-current liabilities 3,544 4,606
------------ ------------
Total liabilities 481,909 460,816
------------ ------------
Total net assets 5,498,870 11,108,627
============ ============
Equity
Share capital 7,440,546 7,440,546
Share premium 15,690,724 15,690,724
Reserves 3,836,691 3,824,910
Accumulated losses (21,469,091) (15,847,553)
------------ ------------
Total equity 5,498,870 11,108,627
============ ============
These financial statements were approved by the Board of
Directors on 26 November 2014 and were signed on its behalf by:
Harvinder Hungin
Chairman
Kolar Gold Limited and its controlled entities
Consolidated Statement of Changes in Equity
for year ended 30 June 2014
Share Share premium Share Foreign Accumulated Total equity
capital based exchange losses
payment translation
reserve reserve
GBP GBP GBP GBP GBP GBP
---------- -------------- ---------- ------------- ------------- -------------
Balance at 30 June
2012 7,010,625 15,700,535 4,081,682 14,116 (13,653,625) 13,153,333
Loss for the year - - - - (2,193,928) (2,193,928)
Other comprehensive
loss - foreign exchange
translation variances - - - (5,510) - (5,510)
---------- -------------- ---------- ------------- ------------- -------------
Total comprehensive
loss for the year - - - (5,510) (2,193,928) (2,199,438)
---------- -------------- ---------- ------------- ------------- -------------
Exercise of SUN warrants 408,318 (43,749) (364,569) - - -
Other issues of ordinary
shares 21,603 33,938 - - - 55,541
Equity-settled transactions - - 99,191 - - 99,191
---------- -------------- ---------- ------------- ------------- -------------
Total contributions
by and distributions
to owners 429,921 (9,811) (265,378) - - 154,732
---------- -------------- ---------- ------------- ------------- -------------
Balance at 30 June
2013 7,440,546 15,690,724 3,816,304 8,606 (15,847,553) 11,108,627
Loss for the year - - - - (5,621,538) (5,621,538)
Other comprehensive
loss - foreign exchange
translation variances - - - (9,942) - (9,942)
---------- -------------- ---------- ------------- ------------- -------------
Total comprehensive
loss for the year - - - (9,942) (5,621,538) (5,631,480)
Other issues of ordinary
shares - - - - - -
Equity-settled transactions - - 21,723 - - 21,723
---------- -------------- ---------- ------------- ------------- -------------
Total contributions
by and distributions
to owners - - 21,723 - - 21,723
---------- -------------- ---------- ------------- ------------- -------------
Balance at 30 June
2014 7,440,546 15,690,724 3,838,027 (1,336) (21,469,091) 5,498,870
------------------------------- ---------- -------------- ---------- ------------- ------------- -------------
Kolar Gold Limited and its controlled entities
Consolidated Statement of Cash Flows
For the year ended 30 June 2014
Note 2014 2013
GBP GBP
Cash flows from operating activities
Loss for the year (5,621,538) (2,193,928)
Adjustments for:
Depreciation 8,299 6,410
Dilution of investment in associate 1,326,888 -
Impairment of investment in associate 2,865,325 -
Share of loss of associate 126,938 -
Net financing (income)/expense (53,749) (84,917)
Foreign exchange variances 21,718 14,716
Equity-settled transactions 10 21,723 99,191
Operating loss before changes in
working capital and provisions (1,304,396) (2,158,528)
Change in trade and other receivables 4,582 21,021
Change in other current assets 2,799 23,181
Change in trade and other payables 14,590 (51,755)
Change in employee benefits 6,503 (42,582)
------------ ------------
Cash used in operating activities (1,275,922) (2,208,663)
Interest and finance costs paid (501) (14,271)
Net cash used in operating activities (1,276,423) (2,222,934)
------------ ------------
Cash flows from investing activities
Interest received 61,479 103,447
Funds placed on / withdrawn from
term deposit 2,611,498 (4,671,734)
Payments for investments (700,000) -
Payments for exploration and evaluation
assets - (676,323)
Payments for plant and equipment (2,028) (846)
Net cash used in investing activities 1,970,949 (5,245,456)
------------ ------------
Cash flows from financing activities
Proceeds from other share issues - 55,541
Net cash from financing activities - 55,541
------------ ------------
Net increase/(decrease) in cash
and cash equivalents 694,526 (7,412,849)
Foreign exchange gain/(loss) on
cash balances (23,162) (20,226)
Cash and cash equivalents at 1
July 698,817 8,131,892
------------ ------------
Cash and cash equivalents at 30
June
(Excludes term deposits of GBP2,060,236
(2013: GBP4,671,734)) 1,370,181 698,817
============ ============
Kolar Gold Limited and its controlled entities
Notes to the financial statements
1. Accounting policies
1.1 Reporting entity
The group financial statements consolidate those of Kolar Gold
Limited and its controlled entities (together referred to as the
"Group").
As at 30 June 2014, the wholly owned subsidiaries of the Company
are:
-- Kolar Gold Resources Limited (Mauritius);
-- Kolar Gold Resources (India) Private Limited; and
-- Kolar Gold Pty Limited
The group financial statements have been prepared and approved
by the directors in accordance with International Financial
Reporting Standards as adopted by the EU ("Adopted IFRSs"). The
financial statements comply with the Companies (Guernsey) Law, 2008
as amended and give a true and fair view of the state of affairs of
the Group.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
consolidated financial statements.
1.2 Measurement convention
The financial statements are prepared on the historical cost
basis, except for the following material item in the statement of
financial position and statement of comprehensive income:
-- Share-based payments are measured at fair value.
The financial statements are presented in Great British Pounds
(GBP).
1.3 Going concern
These financial statements have been prepared on the basis of
accounting principles applicable to a "going concern" which assumes
the Group will continue in operation for the foreseeable future and
will be able to realise its assets and discharge its liabilities in
the normal course of operations.
The Group currently has no source of operating cash inflows,
other than interest income, and has incurred net operating cash
outflows for the year ended 30 June 2014 of GBP1,276,423 (2013:
GBP2,222,934). At 30 June 2014, the Group had cash balances and
term deposits of GBP3,430,417 (2013: GBP5,370,551) and a surplus in
net working capital (current assets, including cash, less current
liabilities) of GBP2,985,994 (2013: GBP4,971,391).
The Directors have assessed cash requirements, including further
investment in GMSI under the agreements announced on 26 November
2014, and these forecasts indicate that KGL has sufficient cash to
meet its operating needs until early 2016. The Group has the option
to invest a further GBP1.3m in GMSI, but there is no commitment to
do so.
In the longer term, the Group's ability to develop and enhance
its interests in India, via BGML, if its tender bid is successful,
via the right of first refusal and its stake in GMSI, including
bringing the Jonnagiri mining assets to commercial production will
depend upon the ability of the Group and its partners and/or GMSI
to obtain further financing through equity financing, debt
financing or other means.
The only sources of future funds presently available to the
Group are the raising of equity capital by the Company or the sale
of its interest in GMSI either in whole or in part. The ability of
the Group to arrange such funding in the future will depend in part
upon the prevailing market conditions as well as the business
performance of the Group. There can be no guarantee that the Group
will be successful in its efforts to arrange additional financing,
if needed, on terms satisfactory to the Group. If adequate
financing is not available, the Group may be required to reduce its
investments and related activities.
1.4 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control
exists when the Group has the power to govern the financial and
operating policies of an entity so as to obtain benefits from its
activities. In assessing control, the Group takes into
consideration potential voting rights that are currently
exercisable. The acquisition date is the date on which control is
transferred to the acquirer. The financial statements of
subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control
ceases.
All entities were 100% owned and controlled by the parent
entity, Kolar Gold Limited during the period they were members of
the Group.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements.
1.5 Investment in associates
The cost of acquiring equity investments in entities over which
the Group is considered to have significant influence is
capitalised and classified as an investment in associates.
Significant influence is the power to participate in the financial
and operating policy decisions of the investee but is not control
or joint control of these policies.
The investment in associates is accounted for using the equity
method. Under this method, on initial recognition the investment in
an associate is recognised at cost, and the carrying amount is
increased or decreased to recognise the Group's share of the profit
or loss of the investee after the date of acquisition. The Group's
share of the investee's profit or loss is recognised in the Group's
profit or loss.The carrying amount is also adjusted for changes in
the Group's proportionate interest in the investee.
After application of the equity method, including recognising
the associate's losses, the Group applies the requirements of IAS
39 Financial Instruments: Recognition and Measurement to determine
whether it is necessary to recognise any additional impairment loss
with respect to its net investment in the associate. If any
indication of impairment is noted under IAS 39, the impairment
testing will follow the principals of IAS 36 Impairment of
Assets.
1.6 Classification of financial instruments issued by the Group
Following the adoption of IAS 32, financial instruments issued
by the Group are treated as equity only to the extent that they
meet the following two conditions:
(a) they include no contractual obligations upon the Group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company's exchanging a fixed amount of cash or other financial
assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Company's own shares, the
amounts presented in these financial statements for called up share
capital and share premium account exclude amounts in relation to
those shares.
Where a financial instrument that contains both equity and
financial liability components exists these components are
separated and accounted for individually under the above
policy.
1.7 Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other
receivables, cash and cash equivalents, loans and borrowings, and
trade and other payables.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition they are measured at
amortised cost using the effective interest method, less any
impairment losses.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Term deposits
Term deposits comprise bank deposits with maturity dates of
between 3 and 12 months from balance date.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose of the
statement of cash flows.
1.8 Plant and equipment
Plant and equipment are stated at cost less accumulated
depreciation and accumulated impairment losses.
Where parts of an item of plant and equipment have different
useful lives, they are accounted for as separate items of plant and
equipment.
Depreciation is charged to the income statement on a
straight-line basis over the estimateduseful lives of each part of
an item of plant and equipment. Land is not depreciated. The
estimated useful lives are as follows:
-- plant and equipment 2.5 to 5 years; and
-- fixtures and fittings 2.5 to 10 years
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
1.9 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the
respective functional currencies of the Group's entities at the
foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are retranslated to the functional
currency at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the
income statement. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the
transaction.
Foreign operations
The assets and liabilities of foreign operations are translated
to the Group's presentation currency, at foreign exchange rates
ruling at the balance sheet date. The revenues and expenses of
foreign operations are translated at an average rate for the year
where this rate approximates to the foreign exchange rates ruling
at the dates of the transactions. Exchange differences arising from
the translation of foreign operations are reported as an item of
other comprehensive income and accumulated in the translation
reserve. When a foreign operation is disposed of, such that control
is lost, the entire accumulated amount in the translation reserve,
is recycled to profit or loss as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a
subsidiary that includes a foreign operation while still retaining
control, the relevant proportion of the accumulated amount is
reattributed to non-controlling interests.
Exchange differences arising from a monetary item receivable
from or payable to a foreign operation, the settlement of which is
neither planned nor likely in the foreseeable future, are
considered to form part of a net investment in a foreign operation
and are recognised directly in equity in the translation
reserve.
1.10 Exploration and evaluation expenditure
Exploration and evaluation costs, including the costs of
acquiring licences, are capitalised as exploration and evaluation
assets on an area of interest basis. Costs incurred before the
Group has obtained the legal rights to explore an area are
recognised in the profit or loss.
Exploration and evaluation assets are only recognised if the
rights of the area of interest are current and either:
-- the expenditures are expected to be recouped through
successful development and exploitation of the area of interest;
or
-- activities in the area of interest have not at the reporting
date, reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves and
active and significant operations in, or in relation to, the area
of interest are continuing.
Exploration and evaluation assets are assessed for impairment
when facts and circumstances suggest that the carrying amount
exceeds the recoverable amount. For the purposes of impairment
testing, exploration and evaluation assets are allocated to
cash-generating units to which the exploration activity related.
The cash-generating unit shall not be larger than the area of
interest or the operating segment as disclosed in Note 3.
Once the technical feasibility and commercial viability of the
extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to
that area of interest are first tested for impairment and then
reclassified from intangible assets to mining property and
development assets within property, plant and development.
1.11 Impairment
A financial asset not carried at fair value through profit or
loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss.
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. 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 the purpose of impairment
testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the
"cash-generating unit").
An impairment loss is recognised if the carrying amount of an
asset or its cash generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash generated units are
allocated first to reduce the carrying amount of any goodwill
allocated to the units, and then to reduce the carrying amounts of
the other assets in the unit (group of units) on a pro rata
basis.
Impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
1.12 Employee benefits and other share based payment arrangements
Short-term benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided.
Long-term benefits
The Group's net obligation in respect of long-term employee
benefits is the amount of the future benefit that employees have
earned in return for their service in the current and prior
periods; that benefit is discounted to determine its present value,
and the fair value of the related assets is deducted. The discount
rate is the yield at the reporting date on government bonds that
have maturity dates approximating the terms of the Group's
obligations and that are denominated in the same currency in which
the benefit is expected to be paid.
Share-based payment transactions
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
Share-based transactions, other than those with employees, are
measured at the value of goods or services received where this can
be reliably measured. Where the services received are not
identifiable, their fair value is determined by reference to the
grant date fair value of the equity instruments provided. Should it
not be possible to measure reliably the fair value of identifiable
goods and services received, their fair value shall be determined
by reference to the fair value of the equity instruments provided
measured over the period of time that the goods and services are
received.
The expense is recognised in profit or loss (or capitalised as
part of an asset) when the goods are received or as services are
provided, with a corresponding increase in equity.
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no true-up for differences between
expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to recipients is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the recipients become unconditionally entitled to
payment. The liability is re-measured at each balance sheet date
and at settlement date. Any changes in the fair value of the
liability are recognised in profit or loss.
1.13 Expenses
Operating lease payments
Payments made under operating leases are recognised in profit or
loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised in profit or loss as an integral
part of the total lease expense.
Due diligence - GMSI and other prospective gold assets
These expenses relate to technical, legal and financial advisory
costs with respect to the agreements with GMSI and the assessment
of other prospective gold assets.
Financing income and expenses
Financing expenses comprise interest payable and finance charges
on shares classified as liabilities recognised in profit or loss
using the effective interest method, unwinding of the discount on
provisions, and net foreign exchange losses that are recognised in
the income statement (see foreign currency accounting policy note
1.5). Financing income comprise interest receivable on funds
invested, dividend income, and net foreign exchange gains.
Interest income and interest payable is recognised in profit or
loss as it accrues, using the effective interest method. Foreign
currency gains and losses are reported on a net basis.
1.14 Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in profit or loss except to the
extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill, the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised.
1.15 Earnings per share
The Group presents basic and diluted earnings or loss per share
data for its ordinary shares. Basic earnings/loss per share is
calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares outstanding during the period, adjusted for own
shares held. Diluted earnings/loss per share is determined by
adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding,
adjusted for own shares held, for the effects of all dilutive
potential ordinary shares, which comprise convertible notes and
share options and warrants granted.
1.16 Operating segments
Segment results that are reported to the Chief Executive Officer
include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets, head office expenses, and income
tax assets and liabilities.
Segment capital expenditure is the total cost incurred during
the period to acquire plant and equipment, and intangible assets
other than goodwill.
1.17 Adopted IFRS not yet applied
The following accounting standards
-- IFRS 10 Consolidated financial statements (plus subsequent amendments)
-- IFRS 11 Joint arrangements (plus subsequent amendments)
-- IFRS 12 Disclosure of interests in other entities
-- IFRIC 21 Accounting for levies
and amendments to the following accounting standards:
-- IAS 27 Separate financial statements
-- IAS 28 Investment in associates
-- IAS 32 Financial Instruments
-- IAS 36 Impairment of assets
-- IAS 39 Financial Instruments: Recognition and Measurement
--
Have not yet been applied by the Group and wouldn't have had a
material effect in these financial statements.
1.18 Use of estimates and judgements
The preparation of financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
In particular, information about assumptions and estimation
uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year are described in
the following notes:
-- going concern (note 1.3), and
-- Valuation of investment in associate (note 6).
2. Risk management
Overview
The Group has exposure to the following risks:
-- Credit risk;
-- Liquidity risk;
-- Tax risk;
-- Currency risk;
-- Market risk; and
-- Operational risk
This note presents information about the Group's exposure to
each of the above risks, its objectives, policies and processes for
measuring and managing risk, and its management of capital. Further
quantitative disclosures are included throughout these consolidated
financial statements.
Risk management framework
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework and
developing and monitoring the Group's risk management policies. Key
risk areas have been identified and the Group's risk management
policies and systems will be reviewed regularly to reflect changes
in market conditions and the Group's activities.
The Audit Committee oversees how management monitors compliance
with the Group's risk management policies and procedures and
reviews the adequacy of the risk management framework in relation
to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's bank deposits and receivables. The risk of non-collection
is considered to be low.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
Tax risk
The Company holds its investments in India through Kolar Gold
Resources Limited, a wholly owned Mauritian subsidiary.
A Tax Information Exchange Agreement is in place between
Guernsey and India.
The Group does not currently generate significant income in
India and its investment is capital in nature. Future tax
liabilities may be subject to how Indian tax law changes and how
the relevant double tax treaties are interpreted from time to
time.
Currency risk
The Group is exposed to currency risk on cash and cash
equivalents, receivables and payables that are denominated in a
currency other than the functional currency of the each of the
Group entities. In order to reduce currency risk, each entity holds
most of its funds in the same currency as its functional currency
in sufficient amounts to cover expected future outgoings for
several months. The Group does not use derivatives to hedge its
foreign currency exposures.
Market risk
The Group has acquired an interest in GMSI. This exposes the
Group to fluctuation in the value of that equity investment. The
Group is entitled to nominate one director to the board of GMSI and
will continue to work closely with GMSI to develop its
resources.
In addition, the Group's future revenues from product sales will
be affected by changes in the market price of gold and could also
be subject to exchange controls or similar restrictions.
Operational risk
The Group's business is at an early stage and is subject to
several operational risks. These risks include exploration and
mining risks, delays in approvals to undertake exploration
activities, actual resources differing from estimates, operational
delays and the availability of equipment, personnel and
infrastructure. The significantly larger portfolio of projects
resulting from the new agreements with GMSI will spread the risk
and impact of delays in licence approvals. In addition, the Group
has business and liability insurance policies in place to mitigate
some of these risks.
The Group is also dependent on key personnel and subject to the
actions of third parties, including staff of GMSI and other
contractors and suppliers.
The Group's operations are also subject to government laws and
regulations, particularly environmental regulation. The Right to
Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act was passed in India in 2013.
This legislation put in place a requirement for rehabilitation and
resettlement programmes for those affected by mining activities/
environmental damage. This does not have any direct impact on the
Group at present, but it may impact on its investment in GMSI.
Capital management
The Company has no loans or borrowings and has sufficient
resources, in the view of the Directors, to meet its working
capital requirements until early calendar year 2016.
The Group manages its capital through the preparation of
detailed forecasts, and tracks actual receipts and outlays against
the forecasts on a regular basis, to ensure that entities in the
Group will be able to continue as a going concern while maximising
the return to shareholders.
The capital structure of the Group consists of cash and cash
equivalents and equity comprising, capital, reserves and
accumulated losses.
3. Operating segments
The Group has one reportable segment, being Indian Exploration -
Investment in gold exploration activities and administration in the
Kolar Gold Fields region in Karnataka State, India.
The Group also has corporate administrative functions outside
India which generate corporate expenses that have not been
allocated to a segment.
The Group's Chief Executive Officer reviews internal management
reports for this segment on a monthly basis.
Information regarding the results of the reportable segment is
included below. The Group has no revenue at this stage of its
development and performance is measured based on expenses incurred
and exploration activity levels in the Indian segment.
Indian Exploration Corporate Total
2014 2013 2014 2013 2014 2013
GBP GBP GBP GBP GBP GBP
Income - 267 267
------------ ---------- ------------ ------------ ------------ ------------
Depreciation and
amortisation 5,385 1,936 2,914 4,474 8,299 6,410
------------ ---------- ------------ ------------ ------------ ------------
Share-based payments - - 21,723 99,191 21,723 99,191
------------ ---------- ------------ ------------ ------------ ------------
Dilution of investment
in associate 1,326,888 - - - 1,326,888 -
------------ ---------- ------------ ------------ ------------ ------------
Impairment of
investment in
associate 2,865,325 - - - 2,865,325 -
------------ ---------- ------------ ------------ ------------ ------------
Share of loss
of associate 126,938 - - - 126,938 -
------------ ---------- ------------ ------------ ------------ ------------
Other reportable
segment expenses 216,947 46,748 1,055,418 2,041,846 1,272,365 2,088,594
------------ ---------- ------------ ------------ ------------ ------------
Segment result
before tax (4,541,483) (48,684) (1,080,055) (2,145,244) (5,621,538) (2,193,928)
------------ ---------- ------------ ------------ ------------ ------------
Reportable segment
assets 2,517,496 6,240,220 3,463,283 5,329,223 5,980,779 11,569,443
------------ ---------- ------------ ------------ ------------ ------------
Exploration and
evaluation expenditure
capitalised - 6,122,168 - - 6,122,168
------------ ---------- ------------ ------------ ------------ ------------
Investments in
associate 2,503,017 - - - 2,503,017 -
------------ ---------- ------------ ------------ ------------ ------------
Other capital
expenditure - 846 2,028 - 2,028 846
------------ ---------- ------------ ------------ ------------ ------------
Reportable segment
liabilities (20,740) (667) (461,169) (460,149) (481,909) (460,816)
------------ ---------- ------------ ------------ ------------ ------------
Kolar Gold Limited and its controlled entities
Notes to the financial statements
4. Expenses and auditors' remuneration
2014 2013
GBP GBP
Included in loss for the year are the following:
Depreciation charge 8,299 6,410
======= =======
Operating lease expense 26,947 24,723
======= =======
Auditors' remuneration
Audit of financial statements 53,941 79,883
Other 10,000 6,209
------- -------
Auditors' remuneration 63,941 86,092
======= =======
5. Income tax expense
2014 2013
GBP GBP
Current tax expense
Current year - -
===== =====
Deferred tax expense
Origination and reversal of temporary -
differences -
===== =====
Tax expense in income statement - -
Reconciliation of effective
tax rate 2014 2014 2013 2013
% GBP % GBP
Loss for the year (5,621,538) (2,193,928)
Total income tax for the year - -
------------ ------------
Loss excluding income tax (5,621,538) (2,193,928)
------------ ------------
Income tax using the Company's
domestic rate (0.0) - (0.0) -
Effect of tax rates in foreign
jurisdictions (209,325) (271,071)
Non-deductible expenses 19,793 54,852
Current year losses for which
no deferred tax asset was recognised 189,532 216,219
Total current tax benefit - -
------ ------------ ------ ------------
A deferred tax asset of GBP3,512,847 (2013: GBP3,323,315) has
not been recognised in respect of losses, as there is currently
uncertainty surrounding the recoverability of such assets.
Kolar Gold Limited and its controlled entities
Notes to the financial statements
6 Investment in associate
In 2010 the Group entered into a contract to acquire the rights
to gold assets in the North Kolar, South Kolar and East Kolar
permit areas of India. The mining assets comprised mineral exploration
rights in these permit areas. The Group was committed, but not
obligated, to acquire the rights when, and only when, they had
been approved by the Government of India. At 30 June 2013, a
commitment, but not an obligation, existed in relation to this
acquisition of GBP4,716,981.
In August 2013 the Group entered into a Heads of Agreement with
GMSI to dissolve the above contract and return all rights in
the Kolar Gold Projects to GMSI. In consideration for the return
of all tenement rights to GMSI, the cancellation of a GBP300,000
advance from KGL to GMSI last year (which was accounted for
as an Exploration and evaluation asset last year), and a cash
consideration of GBP700,000, the Group acquired a 30% equity
interest in GMSI.
GMSI is accounted for as an associate because, while the Group
has influence over GMSI, it does not have control, and it is
accounted for on an equity accounting basis. The fair value
of the investment in GMSI at the time of the acquisition was
equivalent to the cost and fair value of the assets surrendered
of GBP6,822,168, and this amount has been determined to be the
acquisition cost of the investment in the associate.
In November 2013 GMSI issued shares to a third party amounting
to 20% of GMSI's issued share capital, in exchange for the provision
of services. As a result of this transaction and the purchase
arrangements, the Group's equity holding of GMSI fell to an
effective interest of 26%. Subsequent share issues have diluted
the Group further to 24.15%. Based on the above, between the
date of acquisition and 30 June 2014, the Group suffered a loss
on dilution in its investment totalling GBP1,326,888.
The carrying value of the investment in an associate is determined
as follows:
2014 2013
GBP GBP
Investment in an associate -
Acquisition cost 6,822,168 -
Dilution of investment (1,326,888) -
Impairment of investment (2,865,325)
Share of loss of associate (126,938) -
-------------------- --------
Total 2,503,017 -
==================== ========
The Board has considered the valuation of its investment in
GMSI and has recognised an impairment loss of GBP2,865,325.
In determining the impairment loss the Board has had regard
to the financial position of GMSI, the price of gold and exchange
rates at the reporting date, the valuations of junior and early
stage miners on world markets, discussions that have taken place
with third parties and with shareholders of GMSI concerning
fund raising for future activities. This has resulted in the
fair value of this the Group investment in GMSI as at balance
date to be GBP2,503,017, resulting in the Impairment.
The audited financial statements of GMSI for the year ended
31 March 2014, after adjusting to IFRS, show that GMSI had no
revenue, other than interest income of less than GBP5k, assets
of GBP2.4m (including GBP314k current) and liabilities of GBP132k
(all current).
On 26 November 2014 the major shareholders in GMSI entered into
a new shareholders' agreement and a subscription agreement whereby
they intend to subscribe for up to INR 158.2 million (GBP1.63
million) in new equity to provide GMSI with working capital
for its exploration operations over the next nine months, pro
rata to their current shareholdings, at a pre new money valuation
for GMSI today of INR 1,098.0 million (GBP11.32 million) - see
Note 18 Subsequent events.
Kolar Gold Limited and its controlled entities
Notes to the financial statements
7. Exploration and evaluation expenditure
2014 2013
GBP GBP
Balance at beginning of year 6,122,168 5,496,153
Geological services - 106,481
Salaries & wages - 194,454
Advances to GMSI - 300,000
Other expenses capitalised - 25,080
Transferred to investment in an associate (6,122,168) -
------------ -------------
Balance at end of year - 6,122,168
============ =============
8. Trade and other payables
2014 2013
GBP GBP
Trade and other payables due to related
parties 16,098 -
Other trade payables 139,894 161,966
Non-trade payables and accrued expenses 180,048 159,484
------------ -------------
336,040 321,450
============ =============
9. Employee benefits
2014 2013
GBP GBP
Current
Liability for annual leave 48,203 66,175
Liability for long service leave 94,122 68,585
-------- --------
142,325 134,760
Non-current
Liability for long service leave 3,544 4,606
-------- --------
145,869 139,366
======== ========
10. Share-based payments
a) Options
As at 30 June 2014, the following unexpired options were in existence
over the shares of Kolar Gold Limited:
Name Date of Ordinary Shares Expiry Date Exercise Price
Grant under option GBP
Harvinder Hungin
(1) 10.6.11 450,000 10.06.16 0.40
Stephen Coe (1) 10.6.11 350,000 10.06.16 0.40
Stephen Oke (1) 10.6.11 350,000 10.06.16 0.40
Harvinder Hungin
(2) 31.12.12 150,000 28.12.17 0.0838
Stephen Coe (2) 31.12.12 125,000 28.12.17 0.0838
Stephen Oke (2) 31.12.12 125,000 28.12.17 0.0838
Harvinder Hungin
(3) 25.11.13 150,000 25.11.18 0.0638
Stephen Coe (3) 25.11.13 125,000 25.11.18 0.0638
Stephen Oke (3) 25.11.13 125,000 25.11.18 0.0638
------------------
1,950,000
==================
Each option entitles the holder to subscribe for one ordinary share
in Kolar Gold Limited. Options do not confer any voting rights on
the holder.
(1) The above options were granted by Kolar Gold Limited on 10 June
2011 to directors. The options vested on grant date with no vesting
conditions.
(2) The above options were granted by Kolar Gold Limited on 31 December
2012 to directors. The options vested on grant date with no vesting
conditions.
(3) The above options were granted by Kolar Gold Limited on 25 November
2013 to directors. The options vested on grant date with no vesting
conditions.
850,000 options expired on 1 December 2013 and 2,700,000 options
expired on 17 June 2014.
No other options were issued during the year ended 30 June 2014.
Inputs for measurement of grant date fair values
The grant date fair values of all options issued was measured based
on the Black-Scholes formula. Expected volatility is estimated by
considering historic average share price volatility. The inputs
used in the measurement of the fair values at grant date of the
share-based payment plans are the following:
Additional
options
Kolar Gold
Ltd
2014
GBP
Fair value at grant date 0. 0543
Share price at grant date 0.0638
Exercise price 0.0638
Expected volatility 126.9%
Option life 5.0 years
Expected dividend nil
The number and weighted average exercise price of the options are
as follows:
Weighted average Number Weighted average
exercise price of exercise price Number of
GBP options GBP options
2014 2014 2013 2013
Options issued by Kolar
Gold Limited
Outstanding at the beginning
of the year 0.3533 5,100,000 0.372 5,350,000
Granted during the year 0.0638 400,000 0.0838 400,000
Expired during the year 0.3761 (3,550,000) 0.30 (650,000)
----------------- ------------ ----------------- --------------
0.2662 1,950,000 0.3533 5,100,000
================= ============ ================= ==============
The weighted average remaining contractual life of the options
is 2.8 years (2013 1.6 years).
b) Warrants
There were no unexercised warrants as at 30 June 2014.
On 17 June 2014 1,300,000 Broker warrants Series 1 and 1,500,000
Broker warrants Series 2 expired.
c) Share-based payment expense recognised in the income statement
2014 2013
GBP GBP
SUN Mining Initial warrants
Series 2 - 77,542
Options issued to non-executive
directors 21,723 21,649
Total share-based payment
expense 21,723 99,191
======= =======
11. Capital and reserves
Issued capital - Kolar Gold Limited
Ordinary Shares
(7p each)
a) Authorised capital 400,000,000
================
b) Movement in issued and fully paid share capital:
In issue at 1 July 2012 100,151,796
Issued to staff and consultants for services 308,623
Issued to SUN Mining on exercise of warrants 5,833,118
----------------
In issue at 30 June 2013 106,293,537
================
In issue at 1 July 2013 106,293,537
Issued -
----------------
In issue at 30 June 2014 106,293,537
====================================================== ================
c) Reconciliation to cash flows 2014
statement 2013
No. GBP No. GBP
Shares issued by Kolar Gold Limited
in lieu of cash for provision
of services at 16.07p per share - - 40,961 6,583
Shares issued by Kolar Gold Limited
in lieu of cash for provision
of services at 9.84p per share - - 192,662 18,958
Shares issued by Kolar Gold Limited
in lieu of cash for provision
of services at 40p per share - - 75,000 30,000
308,623 55,541
================================================= ======== =======
All shares issued by the Company are 'ordinary' shares and rank
equally in all respects, including for dividends, shareholder
attendance and voter rights at meetings, on a return of capital and
in a winding-up.
d) Reserves
Share premium reserve
The share premium reserve comprises the excess of consideration
received over the par value of the shares issued.
Share based payments reserve
The options reserve comprises the equity value of share based
payments issued by the Group.
Translation reserve
The translation reserve contains all foreign currency
differences arising from the translation of the financial
statements of foreign operations. Changes arising from monetary
items that are considered to be part of the net investment are also
included in the translation reserve.
12. Loss per share
The calculation of basic loss per share at 30 June 2014 was
based on the loss of GBP5,621,538 (2013: GBP2,193,928), and a
weighted average number of ordinary shares outstanding of
106,293,537 (2013: 102,462,294), calculated as follows:
2014 2013
GBP GBP
Loss attributable to ordinary shareholders 5,621,538 2,193,928
========== ==========
Weighted average number of ordinary
shares
'000 '000
Issued ordinary shares at 1 July 106,294 100,152
Effect of shares issued during
the year - 2,310
---------- ----------
Weighted average number of shares
at 30 June 106,294 102,462
========== ==========
Diluted loss per share
Options and warrants granted to the Directors, staff and
external consultants are considered to be potential ordinary shares
and have not been included in the determination of diluted loss per
share because they are not considered to be dilutive. The options
have not been included in the determination of the basic loss per
share.
2014 pence 2013 pence
per share per share
Basic and diluted loss per share 5.29 2.14
13. Financial instruments
(a) Fair values of financial instruments
The fair values of all financial assets and financial
liabilities are equal to their carrying amounts shown in the
statement of financial position.
Trade and other receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the balance sheet date if the effect is
material.
Trade and other payables
The fair value of trade and other payables is estimated as the
present value of future cash flows, discounted at the market rate
of interest at the balance sheet date if the effect is
material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand then the fair value is estimated at the
present value of future cash flows, discounted at the market rate
of interest at the balance sheet date.
(b) Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's receivables and cash and cash equivalents. The carrying
amount of cash, cash equivalents and term deposits represents the
maximum credit exposure on those assets. The cash and cash
equivalents are held with bank and financial institution
counterparties which are rated at least A for Australian and UK
banks, and BBB for Indian banks, based on rating agency Standard
and Poor's ratings.
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. Therefore, the maximum exposure to credit risk at
the reporting date was GBP3,439,652 (2013: GBP5,400,095 ), being
the total of the carrying amount of financial assets, shown in the
statement of financial position.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
The following are the contractual maturities of financial
liabilities, including estimated interest payments and excluding
the impact of netting agreements.
Financial liabilities Carrying Contractual 6 months 6-12 1 -2 years
amount cash flows or less months
GBP GBP GBP GBP GBP
30 June 2014
Trade and other
payables 336,040 336,040 238,890 - 97,150
========= ============ ========= ======== ===========
30 June 2013
Trade and other
payables 321,450 321,450 304,563 1,959 14,928
========= ============ ========= ======== ===========
(d) Currency risk
The Group's exposure to foreign currency risk is as follows.
This is based on the carrying amount for monetary financial
instruments which are held in a currency that differs from that
entity's functional currency, except derivatives when it is based
on notional amounts.
2014 2013
GBP GBP
Cash and cash equivalents - A$ and INR 56,370 129,415
Trade and other payables - US$ (10,959) (46,540)
--------- ---------
45,411 82,875
========= =========
The following significant exchange rates applied during the
year:
Average rate Reporting date spot rate Average rate Reporting date spot rate
2014 2014 2013 2013
GBP:A$ 1.7714 1.8039 1.5301 1.66287
GBP:INR 99.6019 102.065 85.85 90.6375
GBP:US$ 1.6259 1.70276 1.5687 1.52084
Sensitivity analysis
A strengthening of the GBP, as indicated below, against the
Australian dollar and Indian Rupee at 30 June 2014 would have
decreased equity by the amount shown below. This analysis is on
foreign currency exchange rate variances that the Group considered
to be reasonably possible at the end of the reporting period. The
analysis assumes that all other variables, in particular interest
rates, remain constant.
Equity Profit or loss
GBP GBP
30 June 2014
A$ (10 percent strengthening) 5,637 -
US$ (10 percent strengthening) (1,096) -
-------- ---------------
30 June 2013
A$ (10 percent strengthening) 12,942 -
US$ (10 percent strengthening) (4,654) -
======== ===============
A weakening of the GBP against the Australian dollar and Indian
Rupee at 30 June would have had the equal but opposite effect on
the amounts shown above, on the basis that all other variables
remain constant.
(e) Interest rate risk
Profile
At the reporting date the interest rate profile of
interest-bearing financial instruments was:
Carrying amount
2014 2013
GBP GBP
Variable rate instruments
Cash and cash equivalents 1,370,181 698,817
Term deposits 2,060,236 4,671,734
3,430,417 5,370,551
========== ==========
Cash flow sensitivity analysis for variable rate instruments
The Group's interest bearing assets at balance date were
invested with financial institutions with a minimum rating (S&P
long term rating) of A for Australian and UK banks, and BBB for
Indian banks and comprised solely bank accounts.
A change in interest rates would have increased/(decreased)
profit or loss by the amounts shown below. This analysis assumes
that all other variables, in particular foreign currency rates,
remain constant. This analysis is performed on the same basis for
2014.
2014 2013
Profit or loss Profit or loss
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Variable rate instruments 34,304 (34,304) 53,706 (53,706)
================ ================ ================ ================
14. Operating leases
2014 2013
Non-cancellable operating lease rentals are payable as follows: GBP GBP
Less than one year 21,427 23,692
Between one and five years 19,140 44,902
------- ---------
40,567 68,594
======= =========
15. Contingencies and commitments
In 2011 the Group entered into a contract with Geomysore
Services (India) Pvt Ltd ('GMSI') to purchase outstanding options
over, and undertake exploration activity in relation to certain
mineral exploration tenements in the Kolar Gold Fields region in
India. This contract entitled the Group to purchase these options
at a total cost of GBP4.4 million, once all governmental and
regulatory approvals have been obtained.
On 16 August 2013 the Group entered into agreements in which the
Group waived these option rights in exchange for an equity interest
in GMSI.
16. Group entities
Country of Ownership interest
incorporation 2014 2013
Kolar Gold Resources Limited (i) Mauritius 100% 100%
Kolar Gold Resources (India) Private Limited (ii) India 100% 100%
Kolar Gold Pty Ltd Australia 100% 100%
(i) Incorporated on 3 March 2011
(ii) Incorporated on 24 March 2011
17. Related parties
Key management personnel
2014 2013
Key management personnel remuneration GBP GBP
Cash-settled transactions 553,182 838,746
Share-based payments 21,723 48,958
-------- --------
574,905 887,704
======== ========
In addition to their salaries and fees, key management personnel
participate in the Group's share option programme (see Note
10).
Directors' remuneration and interests
2014 Remuneration Interests
Cash-based payments Share-based payments Totals Shares Options
GBP GBP GBP No. No.
Harvinder Hungin (Chairman) 45,000 8,147 53,147 1,700,000(1) 750,000(1)
Nicholas Spencer (Chief
Executive Officer)
- Salary 237,785 - 237,785 - -
- Superannuation 14,642 - 14,642 - -
-------------------- --------------------- -------- ------------- -----------
Total 252,427 - 252,427 1,763,569 -
-------------------- --------------------- -------- ------------- -----------
Stephen Coe 35,000 6,788 41,788 237,439 600,000
Stephen Oke 40,000 6,788 46,788 Nil 600,000
V Sivakumar 25,986 - 25,986 Nil Nil
Shiv Khemka 5,000 - 5,000 Nil Nil
-------------------- --------------------- -------- ------------- -----------
TOTALS 403,413 21,723 425,136 3,701,008 1,950,000
================================= ==================== ===================== ======== ============= ===========
2013 Remuneration Interests
Cash-based payments Share-based payments Totals Shares Options
GBP GBP GBP No. No.
Harvinder Hungin (Chairman) 45,000 8,119 53,119 1,700,000(1) 600,000(1)
Nicholas Spencer (Chief Executive
Officer) -
- Salary 236,621 12,588 249,209 n/a n/a
- Superannuation 22,131 - 22,131 n/a n/a
-------------------- --------------------- -------- ------------- -----------
Total 258,752 12,588 271,340 1,763,569 1,850,000
-------------------- --------------------- -------- ------------- -----------
Richard Johnson (Chief Operating
Officer)
- Salary 95,885 - 95,885 n/a n/a
- Superannuation 29,239 - 29,239 n/a n/a
- Termination pay 110,000 - 110,000 n/a n/a
-------------------- --------------------- -------- ------------- -----------
Total 235,124 - 235,124
-------------------- --------------------- -------- ------------- -----------
Stephen Coe (2) 27,708 14,057 41,765 237,439 475,000
Stephen Oke 40,000 6,765 46,765 Nil 475,000
Shiv Khemka 30,000 - 30,000 Nil Nil
-------------------- --------------------- -------- ------------- -----------
TOTALS 636,584 41,529 678,113 3,701,008 3,400,000
=================================== ==================== ===================== ======== ============= ===========
Directors' remuneration and interests (Cont'd)
(1.) SG Hambros Trust Company (Channel Islands) Limited hold
1,700,000 Ordinary Shares, as trustee of the Carlyle Settlement, in
which Harvinder Hungin and his family have an interest.
(2.) 50% of Stephen Coe's Director's fees was paid by the issue
of shares until December 2012.
Amounts owing to directors at 30 June 2014 were GBP16,098 (2013:
Nil).
GMSI is a related party, as the Company held a 24.15% equity
investment in this entity (see Note 6) as at balance date. There
were no amounts outstanding as at 30 June 2014.
SUN Mining is a related party, as Shiv Khemka, Vice Chairman of
SUN Group was a director until 14(th) August 2013, when he was
replaced by Vaidyanathan Sivakumar, a director of SUN Group.
SUN Group holds 11,666,237 (2013: 11,666,237) shares in the
Company. There were no transactions between the Group and SUN and
there were no amounts outstanding as at 30 June 2014.
18. Subsequent events
On 26 November 2014 the major shareholders in GMSI entered into
a new shareholders' agreement and subscription agreement whereby
they intend to subscribe for up to INR 158.2 million (GBP1.63
million) in new equity to provide GMSI with working capital for its
exploration operations over the next nine months, pro rata to their
current shareholdings, at a pre new money valuation for GMSI today
of INR 1,098.0 million (GBP11.32 million). The INR 158.2 million
(GBP1.63 million) funding will be undertaken in four tranches
between November 2014 and May 2015. Any shareholder not subscribing
in the first tranche can do so later in subsequent tranches and
shares not subscribed for can be taken up by major shareholders,
Kolar Gold and Thriveni Earth Movers Limited ("Thriveni").
GMSI will execute a two rig drilling contract of up to 15,800m
to increase and upgrade the gold resource at the Jonnagiri mining
lease area, at a drill cost of up to INR 144.7 million (GBP1.49
million), to be funded by the subscription by Thriveni for further
equity in GMSI, also at the same pre new money valuation for GMSI
today of INR 1,098.0 million (GBP11.32 million), within the next 12
months.
Kolar Gold intends to subscribe for its pro rata allocation of
the up to INR 158.2 million (GBP1.63 million) fund raising
totalling up to INR 42.6 million (GBP0.44 million). If all major
GMSI shareholders take up their rights and the drilling contract is
executed in full as anticipated, Kolar Gold's interest in GMSI
would be 22.9 per cent, and if its INR 128.1 million (GBP1.32
million) option is exercised in full this would rise to 29.3 per
cent. Thriveni has indicated that it is willing to subscribe for up
to INR 79.1 million (GBP0.82 million) and AIR, a 36.7 per cent
shareholder in GMSI, also intends to subscribe for its
allocation.
Independent auditor's report to the members of Kolar Gold
Limited
We have audited the Group financial statements (the "financial
statements") of Kolar Gold Limited (the "Company") for the year
ended 30 June 2014 which comprise the consolidated statements of
comprehensive income, the consolidated statement of financial
position, the consolidated statement of changes in equity, the
consolidated statement of cash flows and the related notes. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards as adopted by the EU.
This report is made solely to the Company's members, as a body,
in accordance with section 262 of the Companies (Guernsey) Law,
2008. Our audit work has been undertaken so that we might state to
the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of Directors'
Responsibilities set out on page 11, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's (APB's) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Group's circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Board of Directors; and the
overall presentation of the financial statements. In addition we
read all the financial and non-financial information in the
Directors' Report to identify material inconsistencies with the
audited financial statements. If we become aware of any apparent
material misstatements or inconsistencies we consider the
implications for our report.
Opinion on financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 30 June 2014 and of its loss for the year then ended;
-- are in accordance with International Financial Reporting Standards as adopted by the EU; and
-- comply with the Companies (Guernsey) Law, 2008.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies (Guernsey) Law 2008 requires us to report to
you if, in our opinion:
-- the Company has not kept proper accounting records; or
-- the financial statements are not in agreement with the accounting records; or
-- we have not received all the information and explanations,
which to the best of our knowledge and belief are necessary for the
purpose of our audit.
Lynton Richmond
For and on behalf of KPMG LLP
Chartered Accounts and Recognised Auditors
15, Canada Square
London
E14 5GL
26 November 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UBONRSBAAURA
Lionsgold (LSE:LION)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Lionsgold (LSE:LION)
Historical Stock Chart
Von Jul 2023 bis Jul 2024