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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Peninsular | LSE:PGL | London | Ordinary Share | GB00B09TKL88 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.25 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMPGL
RNS Number : 1081P
Peninsular Gold Limited
03 June 2015
03 June 2015
Peninsular Gold Limited
(the "Company" or "Peninsular" or "Group") (AIM: PGL)
FINAL RESULTS FOR THE YEAR ENDED 30TH JUNE 2014
Peninsular Gold Limited, the gold production and exploration group focused in Malaysia, today releases its Final Results for the year ended 30(th) June 2014.
Financial and Operations
-- Loss after tax for the Group of GBP4,306,343 (2013: Profit GBP2,312,194) -- Loss per share 5.01p (2013: Earnings 2.69p) -- GBP16.45m revenue for the Group (2013: GBP22.83m) -- 20,948 ounces of gold produced during the year
Post Period
-- Proposed change in conditions to environmental requirements in relation to tailings dams location caused operations at Raub to be suspended, as was announced 2 December 2014
-- Peninsular requested suspension from AIM on 2 December 2014 pending clarification of its financial position following the halting of operations at Raub
-- Tailings dam location issue resolved, with no new requirements, announced 1 June 2015 -- GBP1.8m raised for working capital via convertible loan notes in January -- Intention to secure additional funds during June 2015 -- Gold production at Raub intended to resume during July 2015
Enquiries:
Dato' Sri Andrew TY Patrick Watson Kam Finance Director Chairman and Chief Executive Peninsular Gold Ltd. Peninsular Gold Limited Tel: +44 (0)7799 885653 Tel: +60 (0)3 2698 8381 ------------------------------ ------------------------- Samantha Harrison / Martin Lampshire Stephen Francavilla Broker Nominated Advisor Daniel Stewart & Co. RFC Ambrian Limited Ltd. Tel: +44 (0)20 3440 Tel: +44 (0)20 7776 6800 6550 ------------------------------ -------------------------
PENINSULAR GOLD LIMITED
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30(TH) JUNE 2014
CHAIRMAN'S STATEMENT 2014
Dear Shareholders,
I am writing to update you on Peninsular Gold Limited's ("Peninsular") results for the year ended 30(th) June, 2014 and to also update you on the current position, given our recent announcements regarding the halting of operations at Raub and our plans to both restart the Raub operation and to secure the financial position of the Group.
The financial year to 30(th) June 2014 was a challenging one for Peninsular Gold, with the significant drop in in the gold price compared to the prior year, contributing to a full year loss of GBP4.3m (2013: profit of GBP2.3m) on a turnover of GBP16.5m (2013: GBP22.8m). A loss for the full year was not unexpected given the reported GBP2.8m loss for the first half of the year, to 31(st) December 2013. Gold production for the year to 30(th) June 2014 was 20,948 ounces (2013: 22,383 ounces).
Raub operations
As was announced on 2(nd) December 2014 we suspended operations at the Raub project whilst we resolved the potential issue of the Raub tailings storage facility's location and undertake maintenance work on the plant. Discussions with the relevant environmental and other authorities have been positive and management has now received confirmation that the existing conditions of the environmental permit remain unchanged. The Company's subsidiary Raub Australian Gold Mining Sdn. Bhd. "RAGM" has at all times been in compliance with the existing terms and conditions of the environmental licence.
Since the cessation of operations we have focused on the management of RAGM's bank loans and trade debts whilst also seeking to raise additional funds to cover overheads and to get the Raub mine operation restarted. To this end we have obtained the support of our main lenders and Bank Rakyat, Alkhair Bank and Peninsular's 2013 Convertible Loan Note holders all of whom have all agreed to defer payments until June 2015, with Bank Rakyat having recently agreed a further deferral to November 2015. Peninsular raised additional funds of GBP1.8m, as announced on 23(rd) January 2015, via the issue of convertible, redeemable unsecured loan notes.
We are continuing to seek additional funds or refinancing options whilst also seeking a further deferral of the 2013 Loan Notes, and Alkhair Bank's repayment obligations until the plant can be restarted and sufficient operational cashflows generated. Discussions to date have been positive with the bank and the loan note holders with respect to the further deferral. With regard to the potential additional funding, we are currently in discussions with several potential investors and hope to secure a raising in June 2015.
Our objective remains to restart the Raub operation toward the end of June, early July and to be producing gold in July 2015 and to raise additional funds which may also include the refinancing of the existing facilities. On the exploration front we also intend to recommence the exploration work at Raub, once funds allow, targeting additional near surface and deeper targets. Within the SEREM exploration grounds we will continue to develop and secure our exploration and mining permits.
We asked for Peninsular's shares to be suspended from AIM, on 2(nd) December 2014, following the halting of operations at Raub and pending the clarification of the Company's financial condition, which as described above we are currently trying to address via the restarting of the plant, the raising of additional funds and the further deferral of our existing financing obligations.
These matters have also impacted on the timing of the publishing of these annual accounts for the year to 30(th) June 2014 and our interim accounts to 31(st) December 2014.
CHAIRMAN'S STATEMENT 2014 (Continued)
Reserve and Resource Inventory
Project JORC Project Tonnes Grade Contained Area Classification (g/t Troy Au) Ounces --------- ---------------------- ---------- ---------- ------ ---------- Measured East RAUB Resource Lode 1,338,000 1.43 62,000 --------- ---------------------- ---------- ---------- ------ ---------- Indicated East RAUB Resource Lode 1,666,000 1.38 74,000 --------- ---------------------- ---------- ---------- ------ ---------- Measured + East RAUB Indicated Resources Lode 3,004,000 1.40 136,000 --------- ---------------------- ---------- ---------- ------ ---------- East RAUB Inferred Resource Lode 1,883,000 1.40 82,000 --------- ---------------------- ---------- ---------- ------ ---------- Measured, Indicated Total and East RAUB Inferred Resources Lode 4,887,000 1.39 218,000 --------- ---------------------- ---------- ---------- ------ ---------- RAUB Proven Reserves Tailings 8,600,000 0.73 202,000 --------- ---------------------- ---------- ---------- ------ ---------- RAUB Indicated Resource Tailings 1,600,000 0.74 37,200 --------- ---------------------- ---------- ---------- ------ ---------- TERSANG Indicated Resource Tersang 1,185,000 0.73 27,800 --------- --------------------- --------- ---------- ----- -------- TERSANG Inferred Resource Tersang 4,058,000 0.71 92,200 --------- --------------------- --------- ---------- ----- -------- Indicated and TERSANG Inferred Resources Tersang 5,243,000 0.71 120,000 --------- --------------------- --------- ---------- ----- --------
Notes:
Stated as prior to production commencing in February 2009. Total production to date since February 2009 was 99,364 troy ounces, all from the Raub project.
Values have been rounded to two or three significant figures to reflect the relative estimation precision of each resource classification. This rounding has also been applied to summations of raw values.
The information related to the current reserve and resource inventory presented in the above table has all been previously announced to the market. The relevant competent persons for the different projects are as follows:
1. The Raub (East Lode) project resources were compiled in May 2008 by Kevin Lowe, who is a member of the Australasian Institute Of Mining and Metallurgy and a full-time employee of Snowden Mining Industry Consultants, in accordance with the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves known as the JORC Code (JORC, 2004).
2. The Raub (Tailings) project was compiled in September 2007 and June 2008 by Bryan (Mort) Cowan, who is a member of the Australasian Institute of Mining and Metallurgy, in accordance with the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves known as the JORC Code (JORC, 2004).
3. The Tersang project resources were reported in June 2012 by Remi Bosc of Arethuse Geology Sarl, who is a Member of the European Federation of Geologists and an independent consultant in accordance with the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves known as the JORC Code (JORC 2004).
CHAIRMAN'S STATEMENT 2014 (Continued)
Corporate Social Responsibility
As a major local employer upon whom many depend, we believe that it is important for RAGM to return to full, profitable operation and to continue to contribute to the life and communities of the Raub area. We look forward to restarting the operation and to continuing to be a significant contributor to the life and communities of the Raub area.
Dato' Sri Andrew Tai Yeow Kam JP
Chairman and Chief Executive
Peninsular Gold Limited
Report of the Directors
For the Year Ended 30(th) June 2014
The directors' present their report and the audited financial statements for the year ended 30(th) June 2014.
Principal Activities
The principal activities of the Company and its subsidiaries during the year were the exploration and development of gold deposits and the production of gold dorébars in the state of Pahang in Peninsular Malaysia. These activities are performed via the Company's two wholly owned subsidiaries, Raub Australian Gold Mining Sdn. Bhd. ("RAGM") and S.E.R.E.M. Malaysia Sdn. Bhd. ("SEREM").
A detailed review of the Group's operations is included in the Chairman's Statement on pages 1-3.
Results and Dividends
The Consolidated Statement of Comprehensive Income for the year is set out on page 13. The Group made a loss after tax of GBP4,306,343 (2013: profit of GBP2,312,194). The directors do not recommend the payment of a dividend.
Directors
The names of the directors who held office during the year and to date were:
Dato' Sri Andrew Tai Yeow Kam
Dato' Mohamed Moiz Bin JM Ali Moiz
Dr. Yves Fernand Marcel Cheze
Mr. Timothy Patrick Watson
Directors' Biographies
Dato' Sri Andrew Tai Yeow Kam JP
Chairman and Chief Executive
Dato' Sri Andrew Tai Yeow Kam (age 52) is a British educated, Malaysian citizen with a law degree from the University of Buckingham. He is an advocate and solicitor of the High Court of Malaya having been admitted to the Malaysian Bar in 1988. His business and entrepreneurial experience, in addition to his long involvement in gold mining, has included the development and completion of a large township, development of an orchard project, and the successful management, over many years, of a major palm oil mill and plantation.
Peninsular Gold Limited
Report of the Directors (Continued)
For the Year Ended 30(th) June 2014
Dato' Mohamed Moiz Bin JM Ali Moiz
Non Executive Director
Dato' Mohamed Moiz Bin JM Ali Moiz (age 54), is a Malaysian citizen. He has a degree in Business Administration and International Finance, graduating in 1985. He worked for Timbco Sdn. Bhd., a company involved in timber trading, processing and forestry management as a Project Manager from 1985 to 1986. In 1987 he was appointed CEO of the Tradium Group of companies, which have interests in property development, fashion retailing, manufacturing, food and beverage and equity investments. In 1999, he was appointed Chief Executive Officer of Effective Capital Sdn. Bhd., a company which successfully undertook the migration of the central limit order book of securities traded in an over the counter market in Singapore, from the Central Depository (Pte) Ltd to the Kuala Lumpur Stock Exchange in June 2000. He currently sits on the boards of several private companies and has previously been the non-independent non-executive chairman of Bandar Raya Developments Bhd and also been on the board of Mieco Chipboard Bhd.
Dr. Yves Fernand Marcel Cheze (Ph.D, B.Sc. and M.Sc.)
Non Executive Director
Dr. Yves Cheze (age 64), a French citizen, studied geology at the University of Clermont-Ferrand and has over 30 years' worldwide experience in most aspects of mineral exploration. Most of his experience has been gained in Western and Eastern Africa, South-East Asia (including Irian Jaya, Indonesia and over ten years in Malaysia), Papua New Guinea and both North and South America. Whilst with the French company BRGM, he was responsible for large international exploration projects that led to the discovery of major gold deposits, including the Ariab Gold Belt in Sudan; he was also Project Manager for feasibility study of a 50 million Euro programme in Papua New Guinea, for the European Commission. Dr. Cheze resigned from BRGM in 2001 and subsequently set up his own geological consulting company in Malaysia where he now lives.
Timothy Patrick Watson (BSc.(Hons.), A.R.S.M., A.C.A.)
Finance Director
Mr. Watson (age 51) is a British citizen who started his career working with the Anglo American Corporation of South Africa before attending the Royal School of Mines at Imperial College to read mining engineering. He graduated in 1985 and returned to Anglo in South Africa, to work in the gold division before later changing career to become a Chartered Accountant with KPMG in the UK. His mining career focused on deep level gold mining operations covering both production and development.
As a Chartered Accountant he has over sixteen years' experience in financial and business management in senior roles with KPMG, Nationwide Building Society, PricewaterhouseCoopers and LogicaCMG where he headed their UK Consultancy business. His experience crosses a range of industries, principally focused on advising finance and business executives in the area of financial and cost management. He knows Malaysia and South East Asia well, having previously lived there for many years.
Directors' Emoluments
Details of the emoluments are included in Note 22 of the Financial Statements.
Peninsular Gold Limited
Report of the Directors (Continued)
For the Year Ended 30(th) June 2014
Directors and Directors' Interests
The directors and their families have the following interests in the shares of the Company:
1(st) July 30(th) June 2013 2014 Ordinary Shares Ordinary Shares of GBPNil par of GBPNil par value value Dato' Sri Andrew - - Tai Yeow Kam Dato' Mohamed Moiz Bin JM Ali Moiz 4,500,000 4,500,000 Dr. Yves Fernand Marcel Cheze 50,000 50,000 Mr. Timothy Patrick - - Watson Indirect Interests Dato' Sri Andrew Tai Yeow Kam (1) 21,638,869 21,638,869 Dato' Mohamed Moiz - - Bin JM Ali Moiz Dr. Yves Fernand - - Marcel Cheze Mr. Timothy Patrick - - Watson
(1) Dato' Sri Andrew Tai Yeow Kam's indirect interest in Peninsular Gold Limited is via his ownership of 99.9% of the shares of Akay Holdings Sdn. Bhd. and 70% of the shares of Akay Venture Sdn. Bhd. which owned 15.03% and 14.51% (2013: 15.03% and 14.51%) of Peninsular Gold Limited respectively at 30(th) June 2014.
At 3(rd) June 2015, the Company was aware of the following holdings of more than 3% of the issued share capital of the Company:
Number of % shares Akay Holdings Sdn. Bhd. 12,919,840 15.0 Akay Venture Sdn. Bhd. 12,474,213 14.5 Ruffer Baker Steel Gold 5,222,000 6.1 Fund Dato' Mohamed Moiz Bin JM 4,500,000 5.2 Ali Moiz Phoenix Gold Fund 4,131,525 4.8 Somercourt Investment 4,000,000 4.7 Mr. G. Cressman 3,853,791 4.5 Private Clients of Bank of Singapore 3,309,291 3.9 Granite Peak Ltd. 2,920,500 3.4 Credit Suisse AG Zurich 2,687,611 3.1 Mr. Wan Hazreek Putra Hussain Yusuf 2,600,000 3.0
Peninsular Gold Limited
Report of the Directors (Continued)
For the Year Ended 30(th) June 2014
Corporate Governance
The Board is committed to maintaining high standards of corporate governance. The Directors recognise the importance of sound corporate governance and intend to observe the requirements of the UK Corporate Governance Code, so far as they consider appropriate in light of the Company's size. However, it should not be considered that the Company has complied with the UK Corporate Governance Code.
Audit committee
An Audit Committee comprising two non-executive Directors, has been established by the Company. The Audit Committee is chaired by Dato' Mohamed Moiz bin JM Ali Moiz and meets at least twice each year. The Audit Committee is responsible for ensuring that appropriate financial reporting procedures are properly maintained and reported on and for meeting with the Group's auditors and reviewing their reports on the accounts and the Group's internal controls.
Remuneration committee
The Remuneration Committee, comprises two non-executive Directors and is chaired by Dr. Yves Cheze. The Remuneration Committee is responsible for reviewing the performance of the executives, setting their remuneration, determining the payment of bonuses and, in particular, the price per share and the application of performance standards which may apply to any such grant.
Risk management
The Company has established a Risks Committee, comprising two non-executive Directors. The Risks Committee is chaired by Dato' Mohamed Moiz Bin JM Ali Moiz. The Risks Committee is responsible for reviewing the compliance with regulatory and industry standards for environmental performance and occupational health and safety of personnel and the communities affected by the Company.
The Board reviews key business risks including the financial risks facing the Group in the operation of its business regularly.
Securities trading
The Company operates a share dealing code to prevent Directors and applicable employees from dealing in Ordinary Shares and Preference Shares during close periods in accordance with Rule 21 of the AIM Rules.
Company residency
The Company is not resident in the United Kingdom and is, therefore, not a close company within the meaning of the United Kingdom Corporation Tax Act 2010.
By order of the Board on 3(rd) June 2015
T. P. WATSON
Finance Director
Peninsular Gold Limited
Statement of Directors' Responsibilities
The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
Jersey Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and applicable law. Under company law, the directors must prepare financial statements that give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent;
-- state whether the financial statements have been prepared in accordance with IFRS as adopted by the European Union; and
-- prepared the financial statements on the going concern basis unless it is inappropriate to presume that the Company and Group will continue in business.
The directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.
Independent Auditors' Report to the Members of Peninsular Gold Limited
We have audited the Group and Parent Company financial statements ("the financial statements") of Peninsular Gold Limited for the year ended 30(th) June 2014 which comprise the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statement of Comprehensive Income, the Consolidated and Company Statement of Changes in Equity, the Consolidated and Company Statement of Cash Flows and the notes 1 to 27. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards ("IFRSs") as adopted by the European Union.
This report is made solely to the Company's members as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. 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 auditors' 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 auditors
As explained more fully in the Directors' Responsibilities Statement on page 8 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 and the Parent Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. 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 and Parent Company's affairs as at 30(th) June 2014 and of the Group's loss and the Parent Company's loss for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been properly prepared in accordance with the requirements of Companies (Jersey) Law 1991.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in Note 2(a) to the financial statements concerning the Group's and Parent Company's ability to continue as a going concern.
The going concern presumption may not be appropriate because its validity depends principally on the ability of the Group and the Parent Company to complete the following actions:
-- Raise sufficient funding to restart production at the Raub site, in order to generate positive cash flows; and
-- Secure agreement for postponement of capital repayments on the Group's borrowing facility with Alkhair International Islamic Bank Bhd. to November 2015.
These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group's and Parent Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group and Parent Company were unable to continue as a going concern.
Independent Auditors' Report to the Members of Peninsular Gold Limited (Continued)
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received by us; or
-- the financial statements are not in agreement with the accounting records and returns; or -- we have not received all the information and explanations we require for our audit.
Michael Kotsapas
For and on behalf of Moore Stephens LLP
Registered Auditors
Chartered Accountants
150 Aldersgate Street
London
EC1A 4AB
Dated: 3(rd) June 2015
Peninsular Gold Limited
Consolidated Statement of Financial Position at 30(th) June 2014
(Expressed in United Kingdom Sterling)
Note 30(th) 30(th) June 2014 June 2013 GBP GBP Non-Current Assets Property, plant and equipment 4 43,540,775 48,699,884 Other intangible assets 5 13,652,948 14,411,270 Mining development expenditure 6 7,262,637 7,946,387 Total Non-Current Assets 64,456,360 71,057,541 Current Assets Inventories 7 3,728,210 4,335,152 Other receivables 8 948,904 1,169,982 Short-term investments 9 159,855 157,873 Cash and cash equivalents 9 247,038 264,659 Total Current Assets 5,084,007 5,927,666 Current Liabilities Trade and other payables 10 (12,968,340) (10,763,097) Borrowings - current portion 11 (19,684,733) (3,427,937) Current tax liability (128,997) (297,334) Total Current Liabilities (32,782,070) (14,488,368) Net Current Liabilities (27,698,063) (8,560,702) Total Assets Less Current Liabilities 36,758,297 62,496,839 Non-Current Liabilities Trade and other payables 10 (540,000) (480,000) Long-term borrowings 11 (815,216) (20,751,921) Provision for restoration 12 (753,769) (822,986) Total Non-Current Liabilities (2,108,985) (22,054,907) Net Assets 34,649,312 40,441,932 ------------- -------------------- Shareholders' Equity Share capital 13 - - Stated capital account 13 40,897,957 40,897,957 Reserves (6,248,645) (456,025) Total Equity 34,649,312 40,441,932 ------------- --------------------
The financial statements were approved and authorised for issue by the Board on 3(rd) June 2015
and signed on its behalf by
T. P. WATSON
Finance Director
The accompanying notes form part of these financial statements
Peninsular Gold Limited
Company Statement of Financial Position at 30(th) June 2014
(Expressed in United Kingdom Sterling)
Note 30(th) 30(th) June 2014 June 2013 GBP GBP Non-Current Assets Property, plant and equipment 152 305 Investment in subsidiaries 3 19,155,259 19,183,185 Total Non-Current Assets 19,155,411 19,183,490 Current Assets Other receivables 8 17,630,361 16,430,361 Cash and cash equivalents 9 14,082 60,302 Total Current Assets 17,644,443 16,490,663 Current Liabilities Trade and other payables 10 (4,572,994) (3,876,329) Loans and borrowings 11 (1,176,072) - Total Current Liabilities (5,749,066) (3,876,329) Net Current Assets 11,895,377 12,614,334 Total Assets Less Current Liabilities 31,050,788 31,797,824 Non-Current Liabilities Trade and other payables 10 (540,000) (480,000) Long-term borrowings 11 (775,242) (803,168) Total Non-Current Liabilities (1,315,242) (1,283,168) Net Assets 29,735,546 30,514,656 ------------- ------------- Shareholders' Equity Share capital 13 - - Stated capital account 13 40,897,957 40,897,957 Reserves (11,162,411) (10,383,301) Total Equity 29,735,546 30,514,656 ------------- -------------
The financial statements were approved and authorised for issue by the Board on 3(rd) June 2015
and signed on its behalf by
T. P. WATSON
Finance Director
The accompanying notes form part of these financial statements
Peninsular Gold Limited
ConsolidatedStatement of Comprehensive Income
For the Year ended 30(th) June 2014
(Expressed in United Kingdom Sterling)
Note 30(th) 30(th) June 2014 June 2013 GBP GBP Revenue 2(m) 16,450,074 22,833,501 Cost of sales (12,760,462) (12,603,799) Gross Profit 3,689,612 10,229,702 Other operating expenses (1,239,810) (1,563,781) Administrative expenses (2,715,947) (3,923,266) (Loss)/Profit from Operations 15 (266,145) 4,742,655 Financial income 17 3,528 5,660 Finance costs 17 (2,328,685) (2,544,705) (Loss)/gain on foreign exchange (1,702,239) 345,298 Other income 3,897 1,829 (Loss)/Profit before Taxation (4,289,644) 2,550,737 Income tax expense 18 (16,699) (238,543) (Loss)/Profit for the Year (4,306,343) 2,312,194 Other Comprehensive (Expense)/Income: Exchange difference arising on translation of foreign operations (1,540,331) 243,818 Other Comprehensive (Expense)/Income for the year (1,540,331) 243,818 ------------- ---------------------------- Total Comprehensive (Expense)/Income for the Year (5,846,674) 2,556,012 ============= ============================ Other Comprehensive Expense attributable to shareholders of the Company (5,846,674) 2,556,012 ============= ============================ (Loss)/Profit attributable to shareholders of the Company 20 (4,306,343) 2,312,194 Basic and diluted (loss)/earnings per share 20 (5.01p) 2.69p ============= ============================
The accompanying notes form part of these financial statements
Peninsular Gold Limited
Consolidated Statement of Changes in Equity
For the Year ended 30(th) June 2014
(Expressed in United Kingdom Sterling)
Stated Share capital Accumulated Capital Other Translation capital account losses reserve Reserve* reserve Total GBP GBP GBP GBP GBP GBP GBP At 1(st) July 2012 - 40,897,957 (5,958,709) 456,303 - 2,490,369 37,885,920 Profit for the year - - 2,312,194 - - - 2,312,194 Other Comprehensive Income: Exchange difference arising on translation of foreign operations - - - - - 243,818 243,818 --------- ----------- ------------- -------- --------- ------------- ----------- Total Comprehensive Income for the Year - - 2,312,194 - - 243,818 2,556,012 --------- ----------- ------------- -------- --------- ------------- ----------- At 30(th) June 2013 - 40,897,957 (3,646,515) 456,303 - 2,734,187 40,441,932 --------- ----------- ------------- -------- --------- ------------- ----------- Loss for the year - - (4,306,343) - - (4,306,343) Other Comprehensive Expense: Exchange difference arising on translation of foreign operations - - - - - (1,540,331) (1,540,331) --- ----------- ------------ -------- ------- ------------ ------------ Total Comprehensive Expense for the Year - - (4,306,343) - - (1,540,331) (5,846,674) --- ----------- ------------ -------- ------- ------------ ------------ Equity element of Convertible loan notes - - - - 54,054 - 54,054 === =========== ============ ======== ======= ============ ============ At 30(th) June 2014 - 40,897,957 (7,952,858) 456,303 54,054 1,193,856 34,649,312 === =========== ============ ======== ======= ============ ============
*Other reserve relates to the equity element of convertible loan notes issued by the Company (note 11).
The accompanying notes form part of these financial statements
Peninsular Gold Limited
Company Statement of Comprehensive Income
For the Year ended 30(th) June 2014
(Expressed in United Kingdom Sterling)
Note 30(th) June 30(th) 2014 June 2013 GBP GBP Administrative expenses (734,756) (800,257) Loss from Operations 15 (734,756) (800,257) Financial income 17 18 32 Finance costs 17 (97,895) (60,336) (Loss)/profit on foreign exchange (531) 188 Loss before Taxation (833,164) (860,373) Income tax expense 18 - - Loss and Total Comprehensive Expense for the Year (833,164) (860,373) ------------ -----------
The accompanying notes form part of these financial statements
Peninsular Gold Limited
Company Statement of Changes in Equity
For the Year ended 30(th) June 2014
(Expressed in United Kingdom Sterling)
Share Stated Accumulated Capital Other capital capital Account losses reserve Reserve* Total GBP GBP GBP GBP GBP GBP At 1(st) July 2012 - 40,897,957 (9,979,231) 456,303 - 31,375,029 Loss and Total Comprehensive Expense for the Year - - (860,373) - - (860,373) At 30(th) June 2013 - 40,897,957 (10,839,604) 456,303 - 30,514,656 Loss and Total Comprehensive Expense for the Year - - (833,164) - - (833,164) Equity element of Convertible loan notes - - - - 54,054 54,054 At 30(th) June 2014 - 40,897,957 (11,672,768) 456,303 54,054 29,735,546 ========= ============ ============== ========== ========= ==================
*Other reserve relates to the equity element of convertible loan notes issued by the Company (note 11).
The accompanying notes form part of these financial statements
Peninsular Gold Limited
Consolidated Statement of Cash Flows
For the Year ended 30(th) June 2014
(Expressed in United Kingdom Sterling)
30(th) 30(th) Note June 2014 June 2013 GBP GBP Operating Activities (Loss)/profit before taxation (4,289,644) 2,550,737 Adjustments for: Depreciation of property, plant and equipment 4 1,720,822 2,043,468 Loss/(profit) on disposal of fixed assets 15 8,053 (12,812) Amortisation of mining development expenditure 6 340,882 736,833 Amortisation of other intangible assets 5 758,322 853,867 Amortisation of issue costs of convertible loan notes 11 7,353 - Unwinding of discount on restoration provision 12 23,160 25,287 Interest income 17 (3,528) (5,660) Preference dividend 17 60,000 60,000 Unrealised loss/(gain) on foreign exchange 1,665,524 (345,298) Finance costs 17 2,268,685 2,459,418 Cash inflow before working capital changes 2,559,629 8,365,840 Taxation paid (185,036) (173,119) Changes in working capital: Decrease/(increase) in other receivables 221,078 (134,174) Decrease/(increase) in inventories 606,942 (2,070,586) Increase in trade and other payables 2,205,243 3,786,752 Cash inflow from operating activities 5,407,856 9,774,713 ------------ ------------- Investing Activities Purchase of property, plant 4, and equipment 26 (1,976,103) (3,733,208) Interest received 3,528 5,660 Proceeds from disposal of fixed assets - 111,307 Mining development expenditure 6 (537,159) (153,681) Placement of fixed deposit 9 (1,981) (50,513) Cash outflow from investing activities (2,511,715) (3,820,435) ------------ ------------- Financing Activities Proceeds from bank loans - 25,213,083 Proceeds from issue of convertible loan notes 11 1,200,000 - Issue costs of convertible loan notes 11 (14,706) - Repayment of hire purchase obligations (55,631) (69,528) Repayment of bank loans (2,313,675) (27,469,651) Finance costs paid (1,689,181) (2,355,658) Cash outflow from financing activities (2,873,193) (4,681,754) ------------ ------------- Net increase in cash and cash equivalents 22,948 1,272,524 Impact of cash held in foreign currencies (40,569) (1,188,103) Cash and cash equivalents at beginning of year 264,659 180,238 Cash and cash equivalents at end of year 9 247,038 264,659 ------------ -------------
The accompanying notes form part of these financial statements
Peninsular Gold Limited
Company Statement of Cash Flows
For the Year ended 30(th) June 2014
(Expressed in United Kingdom Sterling)
Note 30(th) 30(th) June 2014 June 2013 GBP GBP Operating Activities Loss before taxation (833,164) (860,373) Adjustments for: Depreciation of property, plant and equipment 153 152 Amortisation of issue costs of convertible loan notes 11 7,353 - Interest income 17 (18) (32) Preference dividends 17 60,000 60,000 Finance costs 17 37,895 336 Cash outflow before working capital changes (727,781) (799,917) Changes in working capital Increase in trade and other payables 278,718 55,512 ----------- ----------- Cash outflow from operating activities (449,063) (744,405) Investing Activities Interest received 18 32 (Advance to)/repayment from subsidiaries (782,053) 663,714 Cash (outflow)/inflow from investing activities (782,035) 663,746 Financing Activities Proceeds from issue of convertible loan notes 11 1,200,000 - Issue costs of convertible loan notes 11 (14,706) - Finance costs paid (416) (336) ----------- ----------- Cash inflow/(outflow) from financing activities 1,184,878 (336) ----------- ----------- Net decrease in cash and cash Equivalents (46,220) (80,995) Cash and cash equivalents at beginning of year 60,302 141,297 ----------- ----------- Cash and cash equivalents at end of year 9 14,082 60,302 ----------- -----------
The accompanying notes form part of these financial statements
Peninsular Gold Limited
Notes to the Financial Statements for the Year ended 30(th) June 2014
1. Group and Company Information
Peninsular Gold Limited is a limited liability Company, incorporated under the laws of Jersey on 8(th) April 2005. The Company was quoted on AIM from 23(rd) June 2005. Its registered office is First Island House, Peter Street, St. Helier, Jersey. The Company's place of domicile is Jersey.
The Group is engaged in the exploration, development and mining of gold deposits. All of the Group's activities are undertaken in the state of Pahang, Malaysia.
On 17(th) June 2005 under the terms of share swap agreements, the Company acquired the whole of the issued share capital of Raub Australian Gold Mining Sdn. Bhd. ("RAGM") and S.E.R.E.M Malaysia Sdn. Bhd. ("SEREM").
The subsidiaries were acquired via share swap agreements, which valued the Peninsular Gold Limited shares issued as consideration at 50 pence per share. This valuation was provided by an independent valuer and was based on the gold resources and exploration grounds held by RAGM and SEREM.
2. Significant Accounting Policies (a) Basis of preparation
The financial statements have been prepared in accordance with applicable International Financial Reporting Standards, as adopted by the European Union ("IFRS"). The financial statements have been prepared under the historic cost basis.
The Group's accounting policies have been consistently applied to all the periods presented. The principal policies are set out in notes 2(b) to 2(u) below.
Going concern
The financial statements have been prepared on the going concern basis. At 30(th) June 2014 the Group had net current liabilities of GBP27.7 million (2013: GBP8.6 million). Of this total, GBP18.5 million (2013: GBP3.4 million) represents the current portion of bank loans repayable within one year.
The bank loans are presented as current liabilities, as at 30(th) June 2014 the Group was overdue with payments for April and May 2014 on its borrowings from Bank Rakyat Kerjasama Malaysia Bhd "Bank Rakyat". The Group had also not maintained the necessary level of Finance Service Cover Ratio on its borrowings from Bank Rakyat and from Alkhair International Islamic Bank Bhd. "Alkhair". Management had a verbal agreement from both banks on these matters prior to the year end as they were in negotiations with both banks and a third bank on refinancing via a club deal, and consider there to be no legal breach in the financial covenants on the loans. The presentation in these financial statements as current liabilities represents the accounting treatment to comply with IAS 1 "Presentation of Financial Statements".
Under the agreements reached since 30(th) June 2014, the classification of the loans total of GBP18,451,783 shown in net current liabilities above would have comprised a total of GBP2,015,765 due within one year and a balance of GBP16,436,018 being repayable between 2 to 5 years.
On 2(nd) December 2014, the Group issued an announcement to AIM that the production facility at Raub was being placed into a temporary care and maintenance period, and the shares of the Company were requested to be suspended from trading on the AIM market, while the Group reviewed its financing and working capital requirements.
Since this announcement, the Group has arranged an extension of its convertible loan notes of GBP1.2 million, which were due to mature on 24(th) December 2014. The loan notes were extended until 23(rd) June 2015 and management expect a further deferral to be agreed shortly.
(a) Basis of preparation (continued)
Going concern (continued)
The Group also negotiated an extension of capital repayments on its borrowing facilities with Bank Rakyat and with Alkhair, which were due to commence in December 2014. An initial extension on both facilities was made to March 2015, with a further extension since agreed to June 2015. Bank Rakyat has now agreed an additional deferral to November 2015. Management expect a similar extension to be granted by Alkhair.
On 23(rd) January 2015, the Group raised GBP1.8 million through the issue of convertible loan notes, to meet the Group's immediate working capital requirements and to assist with work to re-start the production facility at Raub. Details of the terms of the loan notes are given at note 27.
In June 2015, the Group is seeking additional funding of up to GBP4 million and is currently in discussions with several potential investors.
Management consider that the cost of re-starting production at Raub will be approximately GBP520,000. Works to restart the plant at Raub will take place in late June and early July 2015. Following the re-commencement of production, operations at Raub are expected to be cash positive. The funding to be raised in June 2015 is expected to be sufficient to meet the restart costs at Raub, and the working capital requirements of the company, including commencement of capital repayments on the bank finance facilities with Bank Rakyat and with Alkair International Islamic Bank Limited.
The directors consider that the above matters, and primarily the requirement to raise additional funding, represent a material uncertainty regarding the going concern position of the Group. The financial statements do not contain any adjustments to the value of assets and liabilities that would arise if the Group is not able to raise the necessary funding.
(b) Basis of consolidation
The Group financial statements include the assets, liabilities and results of Peninsular Gold Limited together with its subsidiaries, Raub Australian Gold Mining Sdn. Bhd. "RAGM" and S.E.R.E.M. Malaysia Sdn. Bhd. "SEREM" from the date of acquisition.
All intercompany transactions and balances within the Group are eliminated in the preparation of the consolidated financial statements. The financial statements of subsidiaries acquired are consolidated in the financial statements of the Group from the date that control commences until the date control ceases, using the purchase method of accounting.
(c) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Depreciation is provided on a straight-line basis at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Plant and equipment 20% Buildings 20% Motor vehicles 20% Furniture, fittings and equipment 10% Renovation 10% Leasehold land 10% Mining assets Units of production basis
Leasehold land refers to a piece of land owned by SEREM covered by mining certificate MC511.
Assets in the course of construction are capitalised in the assets under construction account and are not depreciated. Internal costs such as salaries, travelling and accommodation of staff directly involved in the development of construction are capitalised. On completion, the cost of construction is transferred to the appropriate category of property, plant and equipment and depreciated accordingly.
(d) Other intangible assets
Other intangible assets comprise principally measured reserves, indicated and inferred resources and the value of exploration grounds and licences. These assets have arisen as a result of the acquisition of RAGM and SEREM. They were independently valued just prior to the acquisition date of 17th June, 2005. Other intangible assets are recorded at cost and are reviewed annually for any indication that those assets have suffered an impairment loss and any such impairment would then be charged to profit or loss in the statement of comprehensive income for the period.
Once an intangible mining asset is developed into a producing asset, the value of the asset is written off over its producing life using the units of production basis.
The portion of the intangible assets that relate to the Raub projects are currently being amortised. The intangible assets relating to SEREM are not yet amortised, as no production has commenced.
(e) Mining development expenditure
Mining development expenditure is capitalised when it is probable that the projects will be successful and the cost can be measured reliably. Development expenditure that has been capitalised is amortised over the life of the interest to which such costs relate on a units of production basis and will be recognised in profit or loss in the statement of comprehensive income upon the commencement of commercial production.
Mining development expenditure comprises costs directly attributable to:
-- Researching and analysing existing exploration data; -- Conducting geological studies, exploratory drilling and sampling; -- Examining and testing extraction and treatment methods; -- Compiling pre-feasibility and feasibility studies; and -- Costs incurred in acquiring mineral rights.
Expenses in the categories above include capitalised salaries of relevant staff according to time spent on a project.
The portion of the mining development expenditure that relates to the Raub projects is currently being amortised. The mining development expenditure relating to SEREM has not yet been amortised, as production has not yet commenced.
(f) Inventories
Inventories of consumable supplies and spare parts are valued at the lower of cost and net realisable value. Cost comprises direct costs and overheads that have been incurred in bringing the inventories to their present location and condition. The FIFO method is used for determining costs. Gold is valued at net realisable value using market price at the year-end, or where applicable, a forward contract price. Work-in-progress comprises gold concentrates and gold contained in stockpiled ore as determined by production records. The cost of work-in-progress includes the cost of direct materials, labour, and variable and fixed overheads relating to mining activities and is valued at the lower of cost and net realisable value less costs to sell.
(g) Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method less appropriate allowances for estimated irrecoverable amounts.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and balances and deposits with banks which mature within three months of the date of deposit and have an insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts.
(i) Impairment
The carrying amounts of assets, other than inventories, deferred tax assets and financial assets, are reviewed at each financial reporting date to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. Impairment losses are recognised in profit or loss in the statement of comprehensive income.
The recoverable amount is the greater of the asset's net selling price and its value in use. In assessing value in use, 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 an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
(j) Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.
(k) Borrowings and borrowing costs
All loans and borrowings are initially recognised at the fair value of the consideration received net of direct issue costs associated with the borrowing. Financing charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis and are expensed as incurred. The interest component of finance lease payments is recognised in profit or loss in the statement of comprehensive income so as to give a constant periodic rate of interest on the outstanding liability.
Interest on borrowings relating to the financing of capital projects under construction is capitalised during the construction phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalisation ceases when the asset is substantially complete and ready for use.
(l) Leases
Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Assets acquired by way of finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses.
In calculating the present value of the minimum lease payments, the discount rate is the interest rate implicit in the lease, if this is practicable to determine; if not, the Group's incremental borrowing rate is used.
Payments made under operating leases are recognised in profit or loss in the statement of comprehensive income on a straight-line basis over the term of the lease.
(m) Revenue
Revenue is recognised at the fair value of the consideration received or receivable to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Gold sales are recognised when the significant risks and rewards of ownership are transferred to the buyer. Amounts are recorded net of value added tax, rebates and discounts.
(n) Retirement benefit costs
Obligations for contributions to defined contribution plans are recognised as an expense in profit or loss in the statement of comprehensive income as incurred.
(o) Income tax
Current tax is provided based on the results for the period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
(p) Functional and presentation currency
The consolidated financial statements have been presented with United Kingdom Sterling as the presentation currency as the Company is incorporated in Jersey with Sterling denominated shares which are traded on AIM, a market operated by the London Stock Exchange.
The functional currency of the subsidiaries RAGM and SEREM is considered to be Malaysian Ringgit, as the major part of financing and expenses in relation to mining activities, overheads and corporation tax are in Malaysian Ringgit.
(q) Foreign currency translation
Foreign exchange differences arising on the settlement of items at rates different from those at which they were initially recorded are recognised in profit or loss in the statement of comprehensive income in the period in which they arise.
Subsidiaries are considered as financially, economically and organisationally autonomous foreign entities. Their reporting currencies are the respective local currencies. Assets and liabilities of foreign subsidiaries are translated to United Kingdom Sterling at the rate of exchange ruling at the financial reporting date. Revenue and expenses are translated at the average exchange rates for the year. All resulting translation differences are included in other comprehensive income.
The closing rates used in the translation of foreign currency assets and liabilities are as follows:
United Kingdom Malaysian Sterling 1.00 Ringgit 5.4674 (2013: 4.8537)
The average rate used in translation of foreign currency income and expenses during the year is as follows:
United Kingdom 1.00 Malaysian Ringgit Sterling 5.2771 (2013: 4.8340) (r) Financial assets and liabilities
Financial assets and liabilities are recognised in the statement of financial position when the Group has become a party to the contractual provisions of the instrument.
-- Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
-- Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
-- Debt instruments
Interest bearing bank loans are initially measured at fair value (proceeds received, net of direct issue costs), and are subsequently measured at amortised cost, using the effective interest rate method.
-- Compound financial instruments
Compound financial instruments issued by the Group comprise convertible loan notes that can be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value.
The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
The interest expense on the liability component is calculated by applying the effective interest method. This is obtained by calculating the present value of future cash flows at a market rate for a loan without the convertible component. The difference between the effective interest rate and the interest paid is added to the carrying amount of the convertible loan note.
Interest, dividends, losses and gains relating to the financial liability are recognised in profit or loss. Distributions to the equity holders are recognised in equity, net of attributable taxation.
-- Investments in subsidiaries
Investments held by the Parent Company in subsidiaries are held at cost less impairment.
-- Financial guarantee contract liabilities
Financial guarantee contract liabilities are measured initially at their fair values and subsequently measured at the higher of the amount of the obligation, as determined in accordance with IAS37 and the amount initially recognised less, where appropriate, cumulative amortisation.
(s) Deferred stripping costs
Stripping costs incurred during the production phase to remove waste ore are deferred to the statement of financial position and charged to operating costs on the basis of the average life of the mine stripping ratio.
The average stripping ratio is calculated as the number of cubic metres of waste material removed per tonne of ore mined. The average stripping ratio over the life of the mine is revised annually in the light of additional knowledge and change in estimates.
(t) Environment protection, rehabilitation and closure costs
Provision is made for close down, restoration and for environment clean up costs, where there is a legal or constructive obligation to do so and when it is quantifiable. Any provision is reviewed on an annual basis for any changes in cost estimates or lives of operations.
(u) Judgements in applying accounting policies and sources of estimation uncertainty
Certain amounts included in the financial statements involve the use of judgement and/or estimation. These are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience. However, judgements and estimations regarding the future are a key source of uncertainty and actual results may differ from the amounts included in the financial statements.
The key areas are summarised below:
(i) Other intangible assets and mining development expenditure
The recoverability of other intangible assets and mining development expenditure, including exploration costs, is assessed based on a judgement about the likely economic feasibility of the projects.
(ii) Carrying values of property, plant and equipment
The Group periodically makes judgements as to whether its property, plant and equipment may have been impaired, based on internal and external factors. Any impairment is based on estimates of future cash flows.
(iii) Recognition of deferred tax assets
The determination of deferred tax assets relating to carried forward taxable losses against future taxable profits is set out in Note 19.
(iv) Environment protection, rehabilitation and closure costs
Such provisions require a judgement on likely future obligations, based on assessment of technical, legal and economic factors. The ultimate cost of such items is uncertain and cost estimates can vary in response to many factors, including changes to the relevant legal requirements and the life of mine.
(v) Going concern
The financial statements have been prepared on the going concern basis which assumes that the Company will continue in operational existence for the foreseeable future having adequate funds to repay its obligations.
The directors have made judgements in their assessment of the going concern position of the Company and Group, including the funding requirements to restart production at Raub, the timing of cash outflows on the Group's borrowings, and the expected operational results of the Raub plant.
The directors' assessment of the going concern position of the company is detailed at note 2(a).
3. Investment in Subsidiaries Company 2014 GBP Cost and net book value At 30(th) June 2012 19,141,581 Additions - corporate guarantee for RM104,080,036 bank facility granted to RAGM 142,029 Additions - corporate guarantee for USD6,000,000 bank facility granted to RAGM 17,020 Written Off - corporate guarantee for RM169,000,000 bank facility granted to RAGM (89,243) Amortisation of corporate guarantees (28,202) At 30(th) June 2013 19,183,185 ------------- Amortisation of corporate guarantees (27,926) ------------- At 30(th) June 2014 19,155,259 -------------
The Company has issued a corporate guarantee to Bank Kerjasama Rakyat Malaysia Berhad and a corporate guarantee to Alkhair International Islamic Bank Berhad for bank facilities granted to RAGM (Notes 11 and 23). The corporate guarantees are amortised over the expected life of the loans.
The Company's investment in RAGM is GBP12,379,549 and its investment in SEREM is GBP6,775,710.
Subsidiary Companies
The consolidated financial statements include the following subsidiary companies held at 30(th) June 2014:
Subsidiary companies Nature Place Ordinary and country of incorporation of business of business shares owned Raub Australian Gold Mining Sdn. Bhd. Gold mining ("RAGM") and exploration Malaysia 100% (Malaysia) Exploration and the holding of exploration S.E.R.E.M Malaysia and mining Sdn. Bhd. ("SEREM") rights Malaysia 100% (Malaysia) 4. Property, Plant and Equipment Furniture, Plant fittings Assets and Motor and Mining Leasehold under equipment Buildings vehicles equipment Renovation Assets land construction Total Group GBP GBP GBP GBP GBP GBP GBP GBP GBP Cost At 1(st) July 2012 3,154,712 458,263 560,110 409,569 203,554 18,509,734 100,393 28,359,415 51,755,750 Currency translation difference 82,350 11,962 14,621 10,652 5,314 483,174 2,621 740,288 1,350,982 Additions 14,183 375 - 18,909 - 853,734 - 3,867,225 4,754,426 Disposals - - (140,707) - - - - - (140,707) At 30(th) June 2013 3,251,245 470,600 434,024 439,130 208,868 19,846,642 103,014 32,966,928 57,720,451 Currency translation difference (364,943) (55,239) (48,422) (50,364) (21,030) (2,227,730) (11,563) (3,700,442) (6,479,733) Additions 23,802 - 119,328 5,722 10,342 112,033 - 1,704,876 1,976,103 Written off - - - (69,201) - - - - (69,201) Transfer - - - - - 30,971,362 - (30,971,362) - At 30(th) June 2014 2,910,104 415,361 504,930 325,287 198,180 48,702,307 91,451 - 53,147,620 ========== ========== =========== =========== =========== ============ =========== ============= ============ Furniture, Plant fittings Leasehold Assets Total and Motor and Mining land under equipment Buildings vehicles equipment Renovation Assets construction Group GBP GBP GBP GBP GBP GBP GBP GBP GBP Accumulated depreciation At 1(st) July 2012 2,489,993 318,669 238,228 163,338 68,937 3,519,490 50,197 - 6,848,852 Currency translation difference 64,795 8,025 5,863 4,088 1,714 84,706 1,268 - 170,459 Charge for the year 48,978 72,268 87,662 37,660 20,972 1,765,585 10,343 - 2,043,468 Disposals - - (42,212) - - - - - (42,212) At 30(th) June 2013 2,603,766 398,962 289,541 205,086 91,623 5,369,781 61,808 - 9,020,567 Currency translation difference (293,604) (49,363) (35,384) (22,979) (10,437) (651,867) (7,267) - (1,070,901) Charge for the year 34,443 42,669 91,341 34,546 20,500 1,487,848 9,475 - 1,720,822 Written off - - - (63,643) - - - - (63,643) At 30(th) June 2014 2,344,605 392,268 345,498 153,010 101,686 6,205,762 64,016 - 9,606,845 ========== ========== ========= =========== =========== ============= ============= ============== =================== Net book value at 30(th) June 2014 565,499 23,093 159,432 172,277 96,494 42,496,545 27,435 - 43,540,775 Net book value at 30(th) June 2013 647,479 71,638 144,483 234,044 117,245 14,476,861 41,206 32,966,928 48,699,884 ========== ========== ========= =========== =========== ============= ============= ============== ===================
Assets under construction refer to the additional expansion construction works in progress for the Carbon-In-Leach plant which was transferred to gold production plant on completion in June 2014. Included in additions to assets under construction for the year are capitalised borrowing costs amounting to GBPNil (2013: GBP223,519). The rate of capitalisation is 0% (2013: 7.9%).
Included in property, plant and equipment are motor vehicles acquired under hire purchase agreements with a net book value of GBP150,412 (2013: GBP138,773).
Leasehold land is land owned by SEREM which relates to the mining certificate MC511 area.
The Company does not hold any property, plant and equipment of significant value.
5. Other Intangible Assets - Mining Reserves and Resources SEREM RAGM Group GBP GBP GBP Cost At 1(st) July 2012 , 30(th) June 2013 and 30(th) June 2014 7,300,483 10,077,995 17,378,478 ============ ============= ============= Amortisation At 1(st) July 2012 - 2,113,341 2,113,341 Charge for the year - 853,867 853,867 At 30(th) June 2013 - 2,967,208 2,967,208 Charge for the year - 758,322 758,322 At 30(th) June 2014 - 3,725,530 3,725,530 ============ ============= ============= Net book value 15,265 At 30(th) June 2014 7,300,483 6,352,465 13,652,948 ============ ============= ============= At 30(th) June 2013 7,300,483 7,110,787 14,411,270 ============ ============= =============
Other intangible assets comprise mineral properties including mining licences and rights.
The Group's mining assets were valued by independent experts prior to the acquisition of the subsidiaries on 17(th) June 2005 and these valuations were considered to be relevant and unimpaired at the financial reporting date. The valuation was based upon the defined reserves, resources and the Group's prospecting interests. Valuation techniques most relevant to the asset type, as considered by the independent valuer, were applied and included discounted cash flows for the defined reserves, comparable transaction method for the inferred resources and the Geoscience Factor method for mineral titles. The gold price used for the discounted cash flow calculation of the reserves at the time of the original valuation was US$ 420 per ounce. The Group has used a gold price of US$ 1,200 per ounce in the impairment assessment for the current year.
No revenue has been generated in SEREM in the financial years ended 30(th) June 2014 and 30(th) June 2013 from its mineral reserves. Hence, there is no amortisation of mining reserves and resources for SEREM. Management expects this asset to generate a return. This is evident from the Group's efforts in drilling and further exploring on the SEREM tenements. Hence, no impairment is required.
The current profile and amount of gold reserves and resources are disclosed in the Chairman's Statement.
6. Mining Development Expenditure SEREM RAGM Group GBP GBP GBP Cost At 30(th) June 2012 2,261,751 7,195,770 9,457,521 Currency translation difference 59,040 187,837 246,877 Additions 141,970 11,711 153,681 ---------- ----------- ------------ At 30(th) June 2013 2,462,761 7,395,318 9,858,079 Currency translation difference (276,371) (830,103) (1,106,474) Additions 81,168 455,991 537,159 ---------- ----------- ------------ At 30(th) June 2014 2,267,558 7,021,206 9,288,764 ========== =========== ============ Amortisation At 30(th) June 2012 - 1,147,885 1,147,885 Currency translation difference - 26,974 26,974 Charge for the year - 736,833 736,833 ---------- ----------- ------------ At 30(th) June 2013 - 1,911,692 1,911,692 Currency translation difference - (226,447) (226,447) Charge for the year - 340,882 340,882 At 30(th) June 2014 - 2,026,127 2,026,127 ========== =========== ============ Net book value At 30(th) June 2014 2,267,558 4,995,079 7,262,637 ========== =========== ============ At 30(th) June 2013 2,462,761 5,483,626 7,946,387 ========== =========== ============
Mining development expenditure principally comprises exploration related costs incurred for the Raub and Tersang project areas. No revenue has been generated in SEREM in the financial years ended 30(th) June 2014 and 30(th) June 2013. Hence, there has been no amortisation of mining development expenditure for SEREM. The directors are of the view that future gold production activities will be sufficiently economically viable to offset the mining development expenditure capitalised in the financial statements.
7. Inventories Group 2014 2013 GBP GBP Spare parts and consumables 553,383 895,347 Ore stockpiles 2,713,302 2,942,331 Work-in-progress 429,007 470,008 Finished goods 32,518 27,466 3,728,210 4,335,152 ========== ==========
Despite the commencement of mining operations during the year ended 30(th) June 2009, the level of deferred stripping relating to the mining operations at Raub has not been significant to date and consequently, no deferred stripping adjustment has been made during the years ended 30(th) June 2014 or 30(th) June 2013.
8. Other receivables Group Company 2014 2013 2014 2013 GBP GBP GBP GBP Other receivables 433,176 810,027 100 100 Deposits 472,083 359,955 - - Prepayments 43,645 - - - Amounts due from subsidiaries - - 17,630,261 16,430,261 948,904 1,169,982 17,630,361 16,430,361 ======== ========== =========== ===========
The amounts due from subsidiaries are unsecured, interest free and repayable on demand.
9. Cash and Cash Equivalents Group Company 2014 2013 2014 2013 GBP GBP GBP GBP Cash at bank and in hand 247,038 264,659 14,082 60,302 ======== ======== ======= =======
A fixed deposit of GBP159,855 (2013 : GBP157,873) with a licensed bank has not been included in cash and cash equivalents as it had a maturity exceeding three months at inception. It has been reported in short term investments. The deposit is pledged to financial institutions, for bank guarantees issued on behalf of RAGM in favour of the Malaysian Director General of Customs and Tenaga Nasional Berhad.
10. Trade and Other Payables Group Company 2014 2013 2014 2013 GBP GBP GBP GBP Trade payables 10,788,886 8,189,557 638,125 85,133 Other payables and accrued expenses 2,719,454 3,053,540 607,124 821,398 Amounts due to subsidiaries - - 3,867,745 3,449,798 ----------- ----------- ---------- ---------- 13,508,340 11,243,097 5,112,994 4,356,329 Less : non-current portion (540,000) (480,000) (540,000) (480,000) 12,968,340 10,763,097 4,572,994 3,876,329 =========== =========== ========== ==========
Included in other payables and accrued expenses are accrued preference dividends of GBP540,000 (2013: GBP480,000). The amounts are not deemed payable within 12 months of the financial reporting date.
The amounts due to subsidiaries are unsecured, interest free and repayable on demand.
Included in other payables of the Company is GBP587,833 (2013: GBP273,109) payable to directors of the Company. These amounts are unsecured, interest free and payable on demand.
11. Borrowings Group Company 2014 2013 2014 2013 GBP GBP GBP GBP Bank loans 18,451,783 23,335,543 - - Preference shares - debt portion (Note 13) 664,000 664,000 664,000 664,000 Convertible loan notes - debt portion (Note 11) 1,176,072 - 1,176,072 - Corporate guarantees issued to financial institution for bank facilities granted to a subsidiary - - 111,242 139,168 Hire purchase obligations 208,094 180,315 - - 20,499,949 24,179,858 1,951,314 803,168 Less : current portion (19,684,733) (3,427,937) (1,176,072) - 815,216 20,751,921 775,242 803,168 ============= ============== ============ ========
Bank loans
Summary of facilities
In September 2012, RAGM refinanced earlier bank loans taken from Bank Kerjasama Rakyat Malaysia Berhad "Bank Rakyat" with a facility providing for an amount of up to RM124,000,000 with the same financier. A total of RM104,080,036 (GBP20,887,442) has been utilised to refinance the loans. The new loan is secured by way of a debenture over all the assets and undertakings of RAGM, a third party charge over a property owned by a company under common control and corporate guarantees provided by the parent company
During the year ended 30(th) June 2012, RAGM obtained a bank loan of USD 6,000,000 (GBP3,523,608, 2013: GBP3,945,292) with Alkhair International Islamic Bank Berhad "Alkhair" repayable within one year of the first drawdown. This loan was refinanced with the same provider in December 2012.
The Alkhair bank loan is secured by way of a debenture ranking after Bank Rakyat and undertakings of RAGM, a third party legal charge over a property owned by a company under common control and corporate guarantees provided by the parent company.
The Alkhair bank loan is subject to interest at a rate of 2.75% above the Financier's 3 months cost of funds, which was 4.91% (2013: 4.88%) and is repayable over 48 months commencing from the date of disbursement with a 24 month grace period.
Classification of borrowings
At 30th June 2014, the Group was overdue on scheduled repayments for the Bank Rakyat facility relating to the instalments due for April and May 2014. Also at 30th June 2014, The Group did not meet the required Finance Service Cover Ratio on the Alkhair bank loan, and consequently the borrowings from both banks are presented as current liabilities at the year end, in accordance with IAS 1 "Presentation of Financial Statements".
Management had a verbal agreement from both banks on these matters prior to the year end as they were in negotiations with both banks and a third bank on refinancing via a club deal, and consider there to be no legal breach in the financial covenants on the loans. The presentation in these financial statements as current liabilities represents the accounting treatment to comply with IAS 1 "Presentation of Financial Statements".
Under the agreements reached since 30 June 2014, the classification of the loans total of GBP18,451,783 shown in the current liabilities above would have comprised a total of GBP2,015,765 due within one year and a balance of GBP16,436,018 being repayable between 2 to 5 years
Capital repayments on both the borrowings from Bank Rakyat and Alkhair were due to commence in December 2014. RAGM has obtained extensions for commencement of repayments on both facilities initially to March 2015, then a further extension to June 2015. Bank Rakyat have recently agreed an additional extension to November 2015, and management expect a similar extension to be agreed with Alkhair (note 27).
Borrowings are summarised as follows:
Effective Within interest Within Within more rate Within one two than per one - two - five five annum year years years years Total Group % GBP GBP GBP GBP GBP At 30(th) June 2014 Bank loans 8.97 18,451,783 - - - 18,451,783 Convertible loan notes 6.17 1,176,072 - - - 1,176,072 Preference shares 6.17 - - 664,000 - 664,000 Hire purchase obligations 3.07 56,878 56,878 85,194 9,144 208,094 19,684,733 56,878 749,194 9,144 20,499,949 =========== ========== =========== ================= ============== At 30(th) June 2013 Bank loans 8.77 3,382,502 4,708,899 14,131,368 1,112,774 23,335,543 Preference shares 6.17 - - 664,000 - 664,000 Hire purchase obligations 3.15 45,435 44,048 90,832 - 180,315 3,427,937 4,752,947 14,886,200 1,112,774 24,179,858 =========== ========== =========== ================= ==============
Convertible loan notes
Group and Company 2014 GBP 1,200,000 convertible redeemable unsecured loan notes 1,200,000 Less transaction costs (14,706) Amortisation of transaction costs 7,353 ---------- 1,192,647 Amount classified as equity (54,054) Accrued interest 37,479 Carrying amount at year end 1,176,072 ==========
On 23(rd) December 2013, the Company issued 1,200,000 convertible redeemable unsecured loan notes. The loan notes bear interest at 6% per annum, unless they are converted, in which case interest is nil.
The notes were repayable within one year of the date of issue. Subsequent to the reporting date, the Company has agreed an extension of the maturity date to 23(rd) June 2015 (note 27).
Upon redemption of the loan notes by the Company, whether at maturity or earlier, the note holders are entitled to receive an additional payment equal to the number of loan notes divided by 0.12 and multiplied by 3 pence. If all the loan notes are redeemed and not converted, this would lead to an additional payment of GBP300,000.
Hire purchase obligations
Group 2014 2013 GBP GBP Repayable within one year 68,112 58,963 Repayable between one and five years 178,967 161,227 247,079 220,190 Finance charges and interest allocated to future accounting periods (38,985) (39,875) 208,094 180,315 Included in liabilities falling due within one year (56,878) (45,435) Included in liabilities falling due more than one year 151,216 134,880 ========= =========
Hire purchase agreements are subject to fixed interest rates ranging from 2.29% to 3.65% (2013: 2.65% to 3.65%) per annum.
12. Provision for restoration Group 2014 2013 GBP GBP At 1(st) July 822,986 - Adjustment to provision - 797,699 Currency translation difference (92,377) - Unwinding of discount on provision 23,160 25,287 At 30(th) June 753,769 822,986 ========= ========
Provision for restoration of the mine site at Raub is based on management's best estimate of the present value of future costs required. The estimates are based on assumptions such as the extent and cost of required rehabilitation activities. These uncertainties may result in the actual future expenses being different from the amounts currently provided.
The cost of restoration was discounted to its present value at 1 July 2012 using an annual discount rate of 3.27%. The unwinding of the discount is recognised in the statement of comprehensive income in finance cost over the period to which expenditure is expected to be incurred, being five years. The provision is reviewed annually for changes in cost estimates or the life of operations.
13. Share Capital and Stated Capital Account (a) Share Capital Group & Company 2014 2013 GBP GBP Authorised Unlimited ordinary shares - - of GBPNil par value each - - ===== ===== Allotted, called up and fully paid 85,986,550 (2013: 85,986,550) - - ordinary shares of GBPNil par value each 2,000,000 (2013: 2,000,000) - - preference shares of GBPNil par value each - - ===== =====
The authorised share capital of the Company at 30(th) June 2014 is an unlimited number of shares of no par value designated as ordinary shares and an unlimited number of shares of no par value designated as preference shares.
The Company has one class of ordinary shares which carry no right to fixed income.
2,560,000 redeemable, convertible 6% preference shares were issued at GBP0.50 per share on 27(th) May 2005. As at 30(th) June 2014 and 30(th) June 2013, there were 2,000,000 preference shares in issue.
The preference shares carry no right to vote save in certain limited circumstances including where the Company proposes to reduce its capital, wind itself up or dispose of the whole of its property and business. Payment of dividends is subject to Jersey Companies Law, the availability of distributable profits and the discretion of the Board. Redemption price equals issue price of preference shares plus all dividends accrued at Redemption Date.
The preference shares may be converted into ordinary shares at the option of the holder. The rate of conversion is determined by application of a formula that could result in every 4 preference shares being converted into 5 ordinary shares.
The preference shares are redeemable at the option of the Company either in cash or through the issue of ordinary shares to the preference share holder. The number of ordinary shares issued is determined by application of a formula that could result in the issue of 5 ordinary shares for every 4 preference shares. The Company does not expect to redeem further preference shares within two years of the financial reporting date.
(b) Stated Capital Account Group & Company 2014 2013 GBP GBP At 1st July 40,897,957 40,897,957 Additions - - At 30(th) June 40,897,957 40,897,957 =========== =========== 14. Segmental Information
Currently the business has one business segment comprising the production and sale of gold doré bars in Malaysia. Accordingly, no analysis of segment revenues or results of net assets has been presented.
During the years ended 30(th) June 2014 and 2013, the Group generated all its revenues from gold sales to a single customer in Australia, to whom it ships all its gold doré bars for refining. For the year ended 30(th) June 2014 revenues of GBP16.5 million arose from these sales of gold (2013 : GBP22.8 million)
15. (Loss)/Profit From Operations
(Loss)/Profit from operations for the year is arrived at after charging/(crediting) the following:
Group Company 2014 2013 2014 2013 Cost of sales GBP GBP GBP GBP Costs of production 11,238,171 10,788,609 - - Depreciation of property, plant and equipment 1,522,291 1,815,190 - - Operating & administrative expenses Depreciation of property, plant and equipment 198,531 228,278 153 152 Audit fees 84,687 84,509 61,000 58,650 Amortisation of mining development expenditure 340,882 736,833 - - Amortisation of other intangible assets 758,322 853,867 - - Key management personnel compensation 684,815 896,129 465,333 467,111 896,129 Rental of premises 126,094 140,157 - - Rental of property, plant and equipment 472,437 7,051 - - Loss on fixed assets written off 8,053 - Profit on disposal of fixed assets - (12,812) - - =========== ========================= ========= ========= 16. Employees Group Company 2014 2013 2014 2013 GBP GBP GBP GBP Wages and salaries 1,971,295 2,581,142 465,333 467,111 Social security costs 18,201 22,072 - - Other pension costs 163,470 187,206 - - 2,152,966 2,790,420 465,333 467,111 ========== ========== ======== ========
The average monthly number of employees during the year was as follows:-
Group Company 2014 2013 2014 2013 Administration 55 34 2 2 Production 196 259 - - 251 293 2 2 ===== ===== ===== ===== 17. Financial (Costs) / Income Group Company 2014 2013 2014 2013 Finance costs: GBP GBP GBP GBP Bank loan interest 1,654,464 1,704,662 - - Other financial charges 555,199 744,453 37,895 336 Amortisation of transaction costs 59,022 35,590 - - Preference dividends 60,000 60,000 60,000 60,000 2,328,685 2,544,705 97,895 60,336 ========== ========== ======= ======= Financial income: GBP GBP GBP GBP Interest income 3,528 5,660 18 32 3,528 5,660 18 32 ====== ============ ==== ==== Net financial loss (2,325,157) (2,539,045) (97,877) (60,304) ============ ============ ========= ========= 18. Income Tax Expense
The Company is subject to Jersey income tax at a rate of 0% (2013: 0%). The Company's subsidiary RAGM had Pioneer tax status which allows an 85% tax exemption on statutory income for a period of 5 years commencing 1(st) April 2009. Thus the effective tax rate is 3.75% (2013: 3.75%). The Pioneer tax status expired on 31(st) March 2014 and no extension was granted to the subsidiary. Income tax for the financial year is derived by using the Malaysian tax rate of 25% (2013: 25%).
Tax reconciliation:
Group 2014 2013 GBP GBP (Loss)/Profit before taxation (4,289,644) 2,550,737 ============ ============= Income tax using Malaysian tax rate (1,072,411) 637,684 Disallowed expenses 1,087,010 1,450,523 Tax exempt under Pioneer Status (54,835) (1,404,850) Effect of timing difference on mining allowance and capital allowance 59,186 (434,287) Under-provision in prior year (2,251) (10,527) Taxation charge 16,699 238,543 ============ ============= 19. Deferred Taxation
No deferred tax asset has been recognised in respect of the following items:
Group 2014 2013 GBP GBP Unabsorbed capital allowance and mining Allowance 31,071 34,999 Unutilised tax losses 4,415,841 4,976,029 4,446,912 5,011,028 ========== ==========
One of the Company's subsidiaries, RAGM previously received a confirmation from the Malaysian Industrial Development Authority, the government's principal agency for the promotion and coordination of industrial development in Malaysia, that RAGM's Raub Tailings Project is entitled to "Pioneer Status". Under the Pioneer Status scheme, RAGM was entitled to 85% tax exemption on its statutory income from the project for a period of 5 years commencing on the day that production reaches 30% of its planned capacity. Production from the tailings operations began in February 2009. RAGM's production reached 30% of its planned capacity in April 2009, and the Pioneer period expired on 31(st) March 2014.
The unutilised tax losses do not expire under the Malaysian tax legislation but cannot be offset against taxable profits during the 'Pioneer' period. As a result of uncertainty of recoverability of these taxable losses, a deferred tax asset has not been recognised at 30(th) June 2013 or 30(th) June 2014. If there is a substantial change in shareholders (more than 50%), the unutilised tax losses will not be available to RAGM.
20. (Loss)/Earnings Per Share
The basic earnings per share for the year is a loss of 5.01p (2013: earnings of 2.69p ). The calculation of the basic earnings per share is based on the loss for the year of GBP4,306,343 (2013: profit of GBP2,312,194). The weighted average number of shares in issue during the year was 85,986,550 (2013: 85,986,550 shares).
Conversion of the preference shares is considered to be non-dilutive in both 2013 and 2014.
Basic and diluted (loss)/earnings 2014 2013 per share GBP GBP (Loss)/Earnings used in calculation (4,306,343) 2,312,194 ------------ ----------- Weighted average number of ordinary shares 85,986,550 85,986,550 ------------ ----------- Basic and diluted (loss)/earnings per share (5.01p) 2.69p ============ =========== 21. Capital Commitments Group 2014 2013 GBP GBP Authorised and contracted for 4,074,109 4,814,839 ========== ==========
The above amounts at 30(th) June 2014 and 2013 relate to a commitment for the expansion of the Carbon-in-Leach Plant (CIL).
22. Key Management Personnel Compensation Group Company 2014 2013 2014 2013 GBP GBP GBP GBP Short term benefits 684,815 896,129 465,333 467,111 ======== ======== ======== ========
Key management personnel comprise directors and individuals having authority and responsibility for planning, directing and controlling all activities of the entity either directly or indirectly.
Directors' emoluments of the Company are as follows:-
Directors' emoluments 2014 2013 GBP GBP Company Dato' Sri Andrew Tai Yeow Kam 250,000 250,000 Mr. Timothy Patrick Watson 165,333 167,111 Dato' Mohamed Moiz Bin JM Ali Moiz 25,000 25,000 Dr.Yves Fernand Marcel Cheze 25,000 25,000 -------- -------- 465,333 467,111 ======== ========
Dato' Sri Andrew Tai Yeow Kam also receives GBP6,822 (2013 : GBP7,447) of director fees from Raub Australian Gold Mining Sdn Bhd, a subsidiary of the Company.
There is no share option scheme, long term incentive plan or awards in place. The Company does not make contributions to any pension scheme for directors or key management.
23. Related Party Transactions
As a result of Dato' Sri Andrew Tai Yeow Kam's 99.9% interest in Akay Holdings Sdn. Bhd. and 70% interest in Akay Venture Sdn. Bhd and the substantial shareholding of Akay Holdings Sdn. Bhd. and Akay Venture Sdn. Bhd. in the Company and Dato' Mohamed Moiz Bin JM Ali Moiz's substantial shareholding in the Company, the following are considered related party transactions:
(a) On 31(st) July 2013, Raub Australian Gold Mining Sdn Bhd ("RAGM") was granted by Akay Holdings Sdn. Bhd. a registered permit to undertake mining activities on the 1669 Mining Lease for a period of one year expiring on 30(th) July 2014. Provided that RAGM does not breach the terms of the permit, Akay Holdings Sdn. Bhd. will grant an annual extension of the permit until expiry of the 1669 Mining Lease on 31(st) December 2038. The Group pays Akay Holdings Sdn. Bhd. GBP1,829 annually under this agreement to permit the Group to carry out gold mining activity at Raub, Pahang. The Directors are confident that the permit will be renewed once it expires.
(b) On 9(th) July 2013, RAGM was granted by Akay Holdings Sdn Bhd an unregistered Permit To Mine to undertake mining activities on Mining Certificate No. PL 533 for a period of one year expiring on 8(th) July 2014. During the year, RAGM paid GBP24,676 (2013: GBP291,812) to Akay Holdings Sdn Bhd as royalties for mining oxide.
(c) RAGM had obtained an Islamic financing facility for up to RM124 million (GBP24.9million) ("Refinancing Facility") from its existing financier, Bank Kerjasama Rakyat Malaysia Berhad ("Bank Rakyat") to refinance its three existing financing facilities with Bank Rakyat ("Existing Facilities"). On 28(th) September 2012, RAGM, Peninsular Gold Limited and Akay Holdings Sdn Bhd entered into a supplemental agreement ("Supplemental Agreement") to vary the previous agreement entered into whereby RAGM had agreed to pay Akay an annual fee for creating a charge in favour of Bank Rakyat. Under the Supplemental Agreement, the annual fee payable to Akay was reduced from RM2.35 million (GBP429,820) to RM1.7 million (GBP310,934). This is disclosed in Note 11 to the financial statements.
(d) The Company issued a corporate guarantee in favour of Bank Kerjasama Rakyat Malaysia Berhad to enable RAGM to secure the RM124 million facilities as disclosed in Note 11 to the financial statements.
(e) RAGM had obtained an Islamic financing facility for up to USD6million (GBP3.95million) ("New Facility") from its existing financier, Alkhair International Islamic Bank Berhad ("Alkhair Bank") to refinance its existing one year working capital facility with Alkhair Bank ("Alkhair's Existing Facility"). On 7(th) December 2012, RAGM, Peninsular Gold Limited and Akay Holdings Sdn Bhd entered into an agreement whereby RAGM agrees to pay Akay an annual fee of RM260,000 (GBP47,555) for creating a charge which is required to be provided under the New Facility in favour of Alkhair Bank. This is disclosed in Note 11 to the financial statements.
(f) On 7(th) December 2012, the Company issued a corporate guarantee in favour of Alkhair Bank to enable RAGM to secure the USD6 million refinancing facility as disclosed under Note 11 to the financial statements.
(g) As at 30(th) June 2014, there is an amount of GBP587,833 (2013: GBP273,109) owing to the directors of Peninsular Gold Limited, as disclosed in Note 10. This relates to unpaid directors' fees and expenses. The amounts are interest free and unsecured.
24. Financial Risk Management
The Group's activities expose it to a variety of financial risks, including the effects of changes in commodity prices, exchange rates, interest rates, credit and liquidity risks. The Board reviews and agrees policies for managing each of these risks. The Group does not currently have a policy of using financial derivatives to mitigate these risks. The following information is presented in order to assist users of the financial statements in assessing the extent of risk related to financial instruments.
2014 2013 GBP GBP Financial assets, at amortised cost Cash and cash equivalents 247,038 264,659 Fixed deposit 159,855 157,873 Other receivables 948,904 1,169,982 1,355,797 1,592,514 =========== =========== Financial liabilities, at amortised cost Trade and other payables 13,508,340 11,243,097 Hire purchase creditors 208,094 180,315 Tax payable 128,997 297,334 Bank loans (current) 18,451,783 3,382,502 Convertible loan notes 1,176,072 - (current) Other long-term liabilities 664,000 20,617,041 ----------- ----------- 34,137,286 35,720,289 =========== ===========
Fair value of financial assets and liabilities
Fair value is defined as the amount at which the financial instruments could be exchanged in a current transaction between knowledgeable, willing parties in an arms-length transaction, other than a forced sale or liquidation. Management consider that the carrying amounts of the financial assets and liabilities approximate to their estimated fair values.
Commodity price risk
The Group is subject to commodity price risk. Management does not consider it necessary to mitigate this risk. At 30(th) June 2014, the spot price of gold was USD 1,315 per ounce (2013: USD 1,192 per ounce).
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis to ensure that the Group only deals with well established counterparties, including international banks and reputable third parties. At the reporting date, the main areas of significant concentration of credit risk include cash and cash equivalents and prepaid capital costs within other receivables.
Interest rate risk
The Group is mainly exposed to interest rate risk through the variable rate loans and holding of cash and cash equivalents. The Group adopts a practice to periodically seek for alternative facilities, which provide competitive interest rates to finance and/or refinance its working capital requirements.
The Group finances its operations via equity fundraising and bank loans bearing a margin of 2% per annum above the lender's base financing rate, currently 6.60% and loans bearing a margin of 2.75% per annum above the lender's 3 months cost of funds, which is 4.91% at year end. Hire purchase arrangements are subject to fixed interest rates ranging from 2.65% to 3.65% per annum. The Group has not entered into interest rate swap arrangements to mitigate interest rate risk.
If interest rates had been 1% higher/lower and all other variables were held constant, the impact would be as follows:
Group Company 2014 2013 2014 2013 GBP GBP GBP GBP Increase or decrease in (loss)/profit 184,518 233,355 - -
Liquidity risk
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by management to finance the Group's operations and to mitigate the effects of fluctuations in cash flows. The maturity profile of the undiscounted financial liabilities expected to be settled in cash, is disclosed below:
Group Within Within Within Within one-two two-five more one year years years than Total five years GBP GBP GBP GBP GBP At 30(th) June 2014 Bank loans 22,297,758 - - - 22,297,758 Convertible loan notes 1,246,636 - - - 1,246,636 Hire purchase obligations 68,112 68,112 100,193 10,662 247,079 Trade and other payables 12,968,340 - 540,000 - 13,508,340 ----------- ---------- ----------- ------------------- --------------- 36,580,846 68,112 640,193 10,662 37,299,813 =========== At 30(th) June 2013 Bank loans 4,961,709 5,569,727 16,709,182 1,139,006 28,379,624 Hire purchase obligations 58,963 58,963 102,264 - 220,190 Trade and other payables 10,763,097 - 480,000 - 11,243,097 ----------- ---------- ----------- ------------------- --------------- 15,783,769 5,628,690 17,291,446 1,139,006 39,842,911 ===========
Under the agreements reached since 30(th) June 2014, the liquidity profile of the bank loans would differ as described in note 11.
Despite the recent uncertainty and shortage of funds in the financial markets, the Group has nonetheless raised both debt and equity funding when required.
Exchange rate risk
The Group undertakes certain transactions denominated in foreign currencies, namely Malaysian Ringgit, US Dollars and Australian Dollars and is therefore exposed to exchange rate risk associated with a fluctuation in the relative values of these currencies.
Exchange rate risk is mitigated to the extent considered necessary by the Board of Directors, through holding the relevant currencies.
The carrying amount of the Group's currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
Assets Liabilities 2014 2013 2014 2013 GBP GBP GBP GBP GB Pounds Sterling 14,182 60,402 3,196,564 1,709,699 US Dollars 17,461 147,021 611,107 74,686 Australian Dollars 3,896 74,747 248,081 286,454 Malaysian Ringgit 1,296,794 1,310,344 30,063,780 33,352,116
The following table illustrates the Group's sensitivity to the fluctuation of the major currencies in which it transacts. A 10% movement against United Kingdom Sterling has been applied to each currency in the table above, representing management's assessment of a reasonably possible change in foreign currency rates, and all other variables were held constant:
Malaysian Ringgit currency impact 2014 2013 GBP GBP Profit and loss - Strengthened against GBP (2,876,699) (3,204,177) - Weakened against GBP 2,876,699 3,204,177 Other comprehensive income - Strengthened against GBP - - - Weakened against GBP - -
The Group does not enter into forward exchange contracts to hedge its foreign currency exposure. However, the Board keeps this policy under review.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders subject to maintaining sufficient financial flexibility to undertake its investment plans. The Group monitors capital on the basis of the debt to adjusted capital ratio.
Adjusted capital of the Group is summarised as follows:
2014 2013 GBP GBP Short-term investments (159,855) (157,873) Cash and cash equivalents (247,038) (264,659) Borrowings 20,499,949 24,179,858 Total equity 34,649,312 40,441,932 ----------- Adjusted capital 54,742,368 64,199,258 Gearing ratio (debt / adjusted capital) 37.4% 37.7% 25. Recent Accounting Pronouncements
The financial statements have been drawn up on the basis of accounting Standards, Interpretations and amendments effective or early adopted at the beginning of the accounting period on 1st July 2013.
Management have concluded that there are no relevant Standards or Interpretation in issue that are not yet adopted that will have a significant impact on the financial statements, other than the following:
IFRS 9 - "Financial Instruments"
The standard makes substantial changes to the recognition and measurement of financial assets and liabilities and de-recognition of financial assets.
There will only be three categories of financial assets whereby financial assets are recognised at either fair value through profit or loss, fair value through other comprehensive income or measured at amortised cost. On adoption of the standard, the Group will have to re-determine the classification of its financial assets based on the business model for each category of financial asset. This is not considered likely to give rise to any significant adjustments.
Financial liabilities of the Group are expected to continue to be recognised at amortised cost.
IFRS 9 has not yet been endorsed by the European Union and no date has been set for its implementation, though it is included on the current European Financial Reporting Advisory Group IFRS endorsement status report.
IFRS 15 - "Revenue from contracts with customers"
The directors have considered the impact of the above standard and concluded that adoption would have no impact on the Group's current policy for revenue recognition.
The standard is effective for annual periods commencing on or after 1(st) January 2017.
26. Non-cash transactions
During the year ended 30th June 2013, the Group has made a provision for site restoration for GBP797,699, and capitalised a restoration asset of equivalent value.
27. Events after the reporting date
In August 2014, the Group was notified of additional operational requirements at Raub by the Malaysian environmental authorities, which they sought to attach to the current environmental consent which governs operations at Raub. In particular, the authorities requested changes relating to the location of RAGM's tailings storage facilities, which would require significant changes to its tailings management plan.
The discussions with the relevant environmental authorities have just recently been concluded and the Group has been informed that the original environmental permit conditions remain unchanged. Hence the matter has now been resolved and cleared the way for gold production to be resumed at the Raub mine.
On 2(nd) December 2014, the Group issued an announcement to AIM that the production facility at Raub was being placed into a temporary care and maintenance period, and the shares of the Company were requested to be suspended from trading on the AIM market, while the Group reviewed its financing and working capital requirements.
Since this announcement, the Group has arranged an extension of its convertible loan notes of GBP1.2 million, which were due to mature on 24(th) December 2014. The loan notes were extended until 23(rd) June 2015. The terms of the loan notes are included in note 11. The Company is currently seeking a further extension of the loan notes.
In December 2014, the Group negotiated an extension of capital repayments on its borrowing facilities with Bank Rakyat Kerjasama Malaysia Bhd. and with Alkhair International Islamic Bank Bhd. ("the Banks"), which were due to commence in December 2014. An initial extension on both facilities was made to March 2015, with a further extension then agreed to June 2015. Bank Rakyat has now agreed an additional deferral to November 2015. Management expect a similar extension to be granted by Alkhair.
On 23(rd) January 2015, the Group raised GBP1.8 million through the issue of convertible loan notes, to meet the Group's immediate working capital requirements and to assist with work to re-start the production facility at Raub. The loan notes are repayable in a single instalment one year from the date of issue, unless the Company elects to redeem them earlier. Interest is payable at 6% on maturity, unless the loan notes are converted, in which case interest payable is nil. The noteholder has the option to convert the loan notes to ordinary shares in the Company at the amount of the loan notes divided by a conversion factor of 0.10. The right to convert is conditional on the noteholder making an additional payment to the company of 2.5 pence for each ordinary share. If all notes were converted, this would result in a payment to the Company of GBP450,000. The Company also has the right to redeem the loan notes either at maturity or earlier, which would require a payment of 2.5 pence for the amount of loan notes divided by a conversion factor of 0.10. If all notes are redeemed by the Company, this would result in a payment to the noteholder of GBP450,000. In the event that the Company is not able to repay the loan notes on the maturity date, the maturity date will be extended to a date not later than 31 July 2016. During the extended maturity period, interest will be payable at 10% on the original principal and the interest accrued to the original maturity date.
In June 2015, the Group is seeking additional funding of up to GBP4 million and is currently in discussions with several potential investors. These discussions are advanced and letters of interest have been received for potential investment in the Company.
Management consider that the cost of re-starting production at Raub will be approximately GBP520,000. Following the re-commencement of production, operations at Raub are expected to be cash positive. Work to restart the Raub operations will take place in late June and early July 2015.
The funding to be raised in June 2015 is expected to be sufficient to meet the restart costs at Raub, and the working capital requirements of the Group, including commencement of capital repayments on the bank finance facilities with Bank Rakyat Kerjasama Malaysia Bhd. and with Alkhair International Islamic Bank Bhd. until the cashflow from the Raub operations has been re-established.
This information is provided by RNS
The company news service from the London Stock Exchange
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