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
END
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