DGO Gold Limited
(formerly Drummond Gold Limited)
ABN 96 124 562 849
Annual Report for the financial year ended 30 June 2015
1
TABLE OF CONTENTS
Directors’ report
Auditor’s independence declaration
Independent auditors’ report
Directors’ declaration
Consolidated statement of profit and loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
3
14
15
17
18
19
20
21
22
2
Directors’ report
The Directors of DGO Gold Limited (“the Company”, “DGO”) submit herewith the annual report of DGO Gold Limited
and its subsidiary Yandan Gold Mines Pty Ltd (“Consolidated Entity” or “Group”) for the financial year ended 30 June
2015. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
Information about Directors and the Company Secretary
The names and particulars of the Directors and the Company Secretary of the Company during or since the end of the
financial year are:
Mr. Eduard Eshuys BSc, FAusIMM, FAICD (Executive Chairman)
Eduard, aged 70 is a geologist with several decades of exploration experience in Australia. His successes as Joseph
Gutnick’s exploration director are well known. In the late 1980s and early 1990s he led the teams that discovered the
Plutonic, Bronzewing and Jundee gold deposits, and the Cawse Nickel Deposit. He has also had involvement in the
Maggie Hays and Mariners nickel discoveries in the 1970’s. More recently he was the Managing Director and CEO of St
Barbara Limited from July 2004 to March 2009. During this time St Barbara Limited grew substantially as a gold
producer.
During the past three years Mr. Eduard Eshuys has also serviced as director of Apex Minerals NL(Receivers and
Managers Appointed)(In Liquidation) from 19 April 2012 to date.
Mr. Eduard Eshuys joined the Company on 15 July 2010 as Executive Chairman with responsibility for the corporate
governance, exploration activities, administration, board conduct and leadership. As Chairman he will ensure that the
Company maintains a well-balanced, suitably qualified, focused and motivated management team working for the
benefit of all shareholders. Mr. Eduard Eshuys is a member of the Remuneration and Nomination Committee.
Mr. Brice K. Mutton BSc (Appl Geology) UNSW, FAusIMM, FAIG, MSEG (Former Non-Executive Director resigned
20 July 2015)
Brice, aged 64, is a geologist with over 30 years’ experience in the resources industry, from exploration to mining and
corporate management. Brice gained 20 years’ experience in a range of positions with MIM Group Holdings. He was
Chief Geologist at Hilton and Mount Isa Mines from 1988 to 1992. He was Executive Assistant to the CEO, MIM
Holdings from 1992 to 1994, Deputy General Manager, MIM Petroleum Exploration 1995 to 1996 and General Manager
Exploration Support MIM Exploration from 1996 to 1998. During this time he represented MIM and industry
associations nationally and internationally. In between periods with MIM from 1979 to 1983 he worked on major mining
and civil engineering projects in Australasia with Snowy Mountains Engineering Corporation and Golder Associates. He
was Managing Director of Giants Reef Mining from 1998 to 2000. More recently he has consulted to the resources
industry through Brice Mutton & Associates. During the past three years Mr. Brice Mutton has also serviced as Non-
Executive Director Cusesta Coal Limited (27 September 2003 to date) and Non-Executive Director Apex Minerals
Limited (Receivers and Managers Appointed)(In Liquidation) from 19 April 2012 to 30 April 2014.
Mr. Brice K. Mutton was appointed as Executive Director Exploration from 5 April 2007 until 31 May 2008. He provided
consulting services as Exploration Manager from 1 June 2008 to 12 September 2008, becoming a Non-Executive
Director on the 13 September 2008. Mr. B. K. Mutton from 1 August 2014 is the registered Senior Site Executive (SSE)
for the company’s Mining Leases and exploration tenements, and responsible for the management of the field
operations at its Mt Coolon base. Brice was a member of the Remuneration and Nomination Committee and Audit
Committees and a non-executive director until 20 July 2015.
Mr. Ross C. Hutton B. Eng (Min), MAusIMM (Non-Executive Director)
Ross, aged 67, is a Mining Engineer with over 45 years’ experience in the minerals industry ranging from mining to
project management in technical and executive management roles. He has worked in corporate and consultative roles
managing activities from feasibility studies to operations both in Australia and internationally. He was appointed Non-
Executive Director on 5 April 2007. Hutton is the Chairman of the Audit Committee and Remuneration and Nomination
Committee.
During the past three years Mr. Ross C. Hutton has also serviced as Non-Executive Director Kagara Limited (in
Liquidation) from 2003 to date, Non-Executive Director Apex Minerals Limited (Receivers and Managers Appointed)(In
Liquidation) (in Liquidation) from 19 April 2012 to 3 December 2012 and Non-Executive Director Mungana Goldmines
Limited from 17 July 2009 to 24 October 2014.
Mr. Michael J. Ilett BBus(Accy), GradDipAdvAcctg, GradDipCorpGov, MBA, ACIS, CPA, CA (Director, Company
Secretary and Chief Financial Officer)
Michael, aged 49, is a Chartered Accountant and a member of Chartered Institute of Company Secretaries in Australia.
In 2003, Mr. Michael J. Ilett was awarded the MBA Medallion from the Queensland University of Technology and in
2004 was awarded the J. S. Goffage Prize from Chartered Secretaries Australia Limited. Michael has over 25 years’
3
commercial experience and was the former Company Secretary and Chief Financial Officer for Gold Aura Limited and
Union Resources Limited. He has provided a key role in the listing of exploration companies on the ASX, capital
raisings, corporate governance, administration and the duel listing of an Australian public company on the Alternative
Investment Market (AIM). Michael Ilett was appointed as a Director and a member of the Remuneration and Nomination
Committee and Audit Committees on 20 July 2015.
The above named directors held office during the whole of the financial year and since the end of the financial year
except for:-
Mr. Brice K. Mutton – resigned on 20 July 2015
Mr. Michael J. Ilett – appointed on 20 July 2015
Principal activities
The Consolidated Entity’s principle activities in the course of the financial year were to consider a number of
opportunities to acquire or joint venture exploration tenements with particular emphasis on gold, copper and zinc
exploration.
The Consolidated Entity made tenement applications for gold located in sediment hosted gold deposits (SHGD) based
on research undertaken by the Company with CODES at the University of Tasmania. The research has focused on
identifying districts in which SHGD’s could occur in rocks in Australia that are of comparable geologic age to those of
SHGD elsewhere in the world.
During the financial year, the Company sold its former wholly owned subsidiary Mt Coolon Gold Mines Pty Ltd that held
the exploration tenements in the Drummond Basin. Details of the sale of Mt Coolon Gold Mines Pty Ltd are contained in
note 7 and note 22 to the financial statements.
Operating Results
The net loss from operations of the Consolidated Entity for the year ended 30 June 2015 was $977,306 (2014: net loss
$4,632,510). The net loss from continuing operations of the Consolidated Entity for the year ended 30 June 2015 was
$741,521 (2014: net loss from continuing operations $346,363).
Review of Operations
The Board has deliberated on the future direction of the Company and decided that in line with its current financial
capacity and technical and corporate skills the Company would be best served by focusing on greenfield exploration in
particular for gold in SHDG. This strategy has been facilitated by the sale of the Drummond Basin gold assets during the
year.
The Company has formulated the following greenfield exploration strategy:-
Use sediment hosted gold deposit analogues of world class gold deposits and the peak ages of gold
deposition to target Australian sedimentary basins based on CODES, UTAS research;
Endeavour to acquire or joint venture exploration areas targeted;
Research and review past exploration data for the target area acquired or joint ventured;
Use that research to identify drill ready targets: and
Develop exploration priorities determined by the identification of drill targets.
To guide exploration the Company has engaged CODES at the UTAS to conduct research into the formation and
location of sediment host gold deposits in Australia based on analogues of the world class sediment hosted gold
deposits elsewhere in the world. The research has focused on identifying districts in which SHGD’s could occur in rocks
in Australia that are of comparable geologic age to those of SHGD elsewhere in the world.
The objective is to establish a number of high priority target areas base on the UTAS research and follow this up with
the evaluation of open file past exploration data, other research data, geophysical and geochemical surveys by
government agencies and others. This work should lead to the possible definition of drill targets to at least confirm the
prospectivty of the sedimentary rocks for the occurrence of sediment hosted gold mineralisation. The Company
believes that no other Australian gold exploration has this approach to exploration.
Even though the Company is seeking to mitigate its risk through its greenflield exploration strategy there are a number
of business risks that are commonly associated with exploration companies including the identified material business
risks of tenement title risk, exploration and evaluation risk, and external environmental risks.
The Company has made applications for tenements in sediment hosted gold deposits (SHGD) based on targets
identified by CODES at the University of Tasmania. There is a risk that the title to the tenements may not be granted or
that the title may be subject to unregistered prior agreements or affected by undetected defects. The Company has
engaged experience tenement consultants to help mitigate this risk.
4
After a tenement is granted there is a risk that the Company may be unable to find economically viable resources or
reserves. The ability of the Company to make an economic return on its tenements is dependent upon many factors
including the Company’s ability to develop resources and reserves, ability to finance fund exploration costs, adherence
to regulatory, statutory, environmental and indigenous heritage obligations and ability to obtain a return on the disposal
or development of the tenements. The Company is relaying on the judgement and experience of its Board and
consultants and the research undertaken through UTAS to mitigate the exploration and environmental risks.
There are many external environmental risks beyond the control of the Company that may affect the ability of the
Company to develop its tenements. These factors include commodity prices, the ability to attract project partners and
competent personal as well as changes to government and environmental requirements. These external environmental
risks may affect the timing and amount of future funding that the Company can attract to support its exploration
activities.
Target areas
Ten high priority targets areas (refer figure 1 bellow) have been identified by CODES which include sedimentary rocks
of one of the above geological ages and in which favorable geological structures have been identified by past geological
mapping and airborne geophysical surveys. Exploration tenements have initially been applied for in West ern Australia
and South Australia based on research by the Company at CODES at the University of Tasmania.
Figure 1: Ten priority areas identified by the University of Tasmania.
Western Australia
Exploration tenements have been applied for in the Mt Edwards, Ora Banda and Black Flag areas of the Eastern
Goldfields near Kalgoorlie (refer figure 2 below). Subsequent to the applications having been made open file data held
by the Department of Minerals & Energy has been reviewed collated and found that gold mineralisation has been
intersected in shallow drilling in rocks overlying Black Flag Group sediments which are the target for sediment hosted
gold. Further research of these areas and surrounding areas is continuing.
5
Figure 2: Tenement Applications, Mt Edwards, Ora Banda and Black Flag Eastern Goldfields Western Australia
6
South Australia
Exploration tenements have been applied for at Mt Barker to the east of Adelaide and at Dawson to the north east of
Adelaide. Data compilation of past exploration activity is underway as identified in figure 3 below.
Figure 3: Tenement Application Mount Barker South Australia
Elsewhere in Australia
Other regions targeted by CODES which host favorable sedimentary basins for the formation and location of sediment
by the hosted gold mineralisation have been identified in Queensland, Tasmania and Western Australia.
Changes in state of affairs
During the financial year, the Consolidated Entity disposed of its subsidiary Mt Coolon Gold Mines Pty Ltd that held
tenements in the Drummond Basin. Details of the disposal are contained in the notes 7 and 22 of the financial
statements. As the result of the disposal of Mt Coolon Gold Mines Pty Ltd the consolidated entity holds 50 million
shares in GBM Resources Limited which are held as an available for sale asset.
On 19 December 2014 the Company also completed a share placement of a total of 60,000,000 fully paid ordinary
shares at an issue price of $0.003 (0.3 cents) per share to the directors or their nominees as approved by shareholders
at the Annual General Meeting held on 20 November 2014.
Other than above there was no significant change in the state of the affairs of the consolidated entity during the financial
year.
Subsequent Events
On 13 July 2015 the Company acquired 212,766 Talisman Mining Limited shares for a total consideration of $100,000.
On 17 September 2015 the shareholders at the General Meeting of Shareholders approved the consolidation of the
Company’s ordinary shares on a 100:1 basis and had taken effect for trading on a deferred settlement basis on 21
September 2015
7
On 17 September 2015 the shareholders at the General Meeting of Shareholders approved the placement of 140,000
fully paid ordinary shares (on a post consolidation basis) at an issue price of $0.30 per share to Resource Surveys Pty,
a related party of Mr Eduard Eshuys and 75,000 fully paid ordinary shares (on a post consolidation basis) at an issue
price of $0.30 per share to Sheratan Pty Ltd, a related party of Mr Ross Hutton.
On 21 September 2015 the Company changed its name from Drummond Gold Limited to DGO Gold Limited effective
on 21 September 2015..
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the financial
year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of
those operations, or the state of affairs of the consolidated entity in future financial years
Other than the above, there has been not been any mater or circumstance occurring subsequent to the end of the
financial year that has significantly affected or may significantly affect the operations of the consolidated entity, the
results of those operations, or the state of affairs of the consolidated entity in future financial year.
Future developments
The Company is in the process of evaluating the extensive research work undertaken with Codes at UTAS to identify
target areas and will make further applications for tenements should land be available and or acquire the land from
others or seek joint ventures with the exploration tenement holder to build up a portfolio of targets and prospects which
have the potential for the discovery of sediment hosted gold deposits.
Health and Safety Policy
The Company is committed to developing a culture which supports the health and safety of all employees, contractors,
customers and communities associated with its business and operations.
Environmental regulations
Until the time the tenement applications are grated, the Company is not subject to any particular and significant
environmental regulation under the law of the Commonwealth or of a state or Territory. So far as the Directors are
aware, there have been no material breaches of the Group’s licenses and all exploration activities have been
undertaken in compliance with the relevant environmental regulations.
Dividends
No dividends have been paid or proposed since the start of the financial year, and the Directors do not recommend the
payment of a dividend in respect of the financial year.
Shares under option or issued on exercise of options
There were no options on issue at the date of this report.
Indemnification of Directors and Officers
During the financial year, the Company paid a premium in respect of Directors’ and Officers’ Insurance insuring the
Directors and Officers of the Company against a liability incurred as a Director and Officer to the extent permitted by the
Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The
Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an Officer or auditor of the Company or of any related body corporate against a
liability incurred by such an Officer or auditor.
Directors’ meetings
The following table sets out the number of Board of Directors’ Meetings (excluding four Directors’ Meetings requiring
circulating resolutions), Remuneration & Nomination Committee Meetings and Audit Committee Meetings held during
the financial year and attendance at such meeting by each Director and member of the committee.
Directors
Mr. E. Eshuys (i)
Mr. B. K. Mutton (ii)
Mr. R. C. Hutton
Board of Directors
Remuneration
& Nomination
Committee
Audit Committee
Held
14
13
10
Attended
14
14
14
Held
1
1
1
Attended
1
1
1
Held
N.A
2
2
Attended
N.A
2
2
8
(i) Mr. E. Eshuys is not a member of the Audit Committee.
(ii) Mr. B. K. Mutton resigned as a director on 20 July 2015.
Directors’ shareholdings
The following table sets out each Director’s direct and indirect interest and relevant interest in fully paid ordinary shares
in the Company as at the date of this report:
Directors
Mr. E. Eshuys
Mr. B. K. Mutton (ii)
Mr. R. C. Hutton (iii)
Mr. M. J. Ilett (iv)
Fully paid
ordinary shares
Number
66,327,322
20,138,947
31,467,205
1,284,627
Mt Coolon Mines
Trust holding (i)
Total shares held
(beneficial interest)
Relevant
Interest
-
66,327,322
66,327,322
1,046,270
2,098,134
21,185,217
20,138,947
33,565,339
38,442,420
-
1,284,627
1,284,627
(i)
The Mt Coolon Gold Mines Trust (MCGMT) holds 6,975,215 fully paid ordinary shares in the Company. These indirect holdings represent
the beneficial interest of approximately 15% and 30% respectively that Mr. B. K. Mutton and Mr. R. C. Hutton hold in the MCGMT.
(ii) Mr. B. K. Mutton resigned his directorship on 20 July 2015. Brice has approximately a 15% beneficial interest (but not a relevant) interest in
the MCGMT.
(iii) Mr. R. C. Hutton has a relevant interest in all the fully paid ordinary shares held by the MCGMT as he holds approximately a 30% beneficial
interest in the MCGMT.
(iv) Mr. M. J. Ilett is an alternate director for Mr. R. C. Hutton and was appointed as a director on 20 July 2015.
Remuneration report
The Remuneration Report, which forms part of the Directors’ Report, sets out the information about the remuneration of
the Group’s key management personnel and relevant Group executives for the financial year ended 30 June 2015. The
term key management personnel relates to those persons having the authority and responsibility for planning, directing
and controlling the activities of the consolidated entity directly or indirectly including any director (whether executive or
otherwise) of the consolidated entity. The prescribed details for each person covered by this remuneration report are
detailed below under the following headings:-
A. Key management personnel and relevant group executives’ details
B. Remuneration policy for key management personnel
C. Relationship between remuneration policy and company performance
D. Remuneration of the key management personnel and relevant group executives
E. Key terms of employment contracts
A.
Key management and relevant group executives’ details
The following persons acted as directors of the Company during or since the end of the financial year:
Mr. E. Eshuys (Executive Chairman) appointed on15 July 2010;
Mr. R. C. Hutton (Non-Executive Director) appointed on 5 April 2007;
Mr. B. K. Mutton (Non-Executive Director) appointed on 5 April 2007 and was Exploration Manager until 12
September 2008. He became a Non-Executive Director on 13 September 2008 and resigned on 20 July 2015.
Mr. M. J. Ilett (Company Secretary and Chief Financial Officer) who was appointed on 5 April 2007 and
appointed as Director on 20 July 2015.
Mr. R. C. Hutton who retires by rotation will be eligible to be re-elected as a Director at the next Annual General
Meeting. Mr. M. J. Ilett’s appointment as a Director will be put to the shareholder at the next Annual General Meeting.
B.
Remuneration policy for key management personnel
The Board of Directors is responsible for determining and reviewing compensation arrangements for key management
personnel. The Remuneration and Nomination Committee makes recommendations to the Board on performance and
remuneration of the key management personnel.
Executive Remuneration
Contracts for services for the executive members of the key management personnel are reviewed on a regular basis to
ensure that they properly reflect the duties and responsibilities of the individuals concerned. The executive
remuneration is based on a number of factors including length of service, relevant market conditions, knowledge and
industry experience, organisational experience, performance of the Company and competitive factors within the
industry. There is no guaranteed pay increases included in senior executives' contracts. The executives are not
entitled to any retirement benefits other than those provided for under the key terms of the employment contracts as
outlined below.
9
The Company has formulated a set of criteria for the performance review of the key executives. During the financial
year, the Remuneration and Nomination Committee held a performance review for the Chairman, Non-Executive
Directors and key executives and recommendations were made to and adopted by the Board. The senior executive
consisting of Mr. E. Eshuys and Mr. M. J. Ilett have the opportunity to participate in executive decision making and make
regular reports to the Board. The senior executives have an understanding of the Company’s financial position,
strategies, operations and risk management policies and an undertaking of their respective rights, duties,
responsibilities, and the roles of board and senior executives.
Directors
The Directors’ Fees are reviewed on a regular basis against industry benchmarks. The Directors received no equity-
based payments during the year. Other than compulsory payments made under the superannuation guarantee
legislation there have been no retirement benefits provided to the Directors.
C. Relationship between remuneration policy and company performance
The performance of the Company is considered in setting remuneration policy. DGO Gold Limited’s performance in the
exploration industry will be dependent upon the Company meeting the following corporate objectives:-
conducting exploration that discovers major gold and base metal deposits;
seeking long term cash flow and profitability through the development of its tenements; and
actively pursuing acquisition opportunities in the Drummond Basin and elsewhere.
The table below sets out summary information about the Consolidated Entity’s earning and movements in shareholders
wealth for the five years to 30 June 2015:
Description
30 June 2015
30 June 2014
30 June 2013
30 June 2012
30 June 2011
Interest revenue and other income
Loss for the year from continuing
operations
Loss for the year from
discontinued operations
Net loss before tax
Net (loss)/profit after tax
Share price at start of year
Share price at end of year
Share-based payments
Interim dividend
Final dividend
Return of capital
Basic profit/(loss) per share (ii)
Diluted profit/(loss) per share (ii)
3,299
4,346
358,973
1,061,452
202,731
(741,521)
(346,363)
-
-
-
(235,785)
(977,306)
(977,306)
0.2 cents
0.2 cents
-
-
-
-
(20 cents)
(20 cents)
(4,286,147)
(4,636,316)
(4,632,510)
0.3 cents
0.2 cents
100,000
-
-
-
(122 cents)
(122 cents)
-
(5,581,860)
(5,103,895)
0.8 cents
0.3 cents
-
-
-
-
(217 cents)
(217 cents)
-
(261,783)
1,454,859
5.5 cents
0.8 cents
34,070
-
-
-
62 cents
62 cents
-
(3,470,981)
(3,047,503)
4.8 cents
5.5 cents
405,582
-
-
-
(139 cents)
(139 cents)
(i) DGO Gold Limited was admitted to the official list of the ASX on 21 December 2007 and this share price reflects price on quotation.
(ii) The calculation of the basic loss per share has been made on the basis of the 100:1 share consolidation that was approved by shareholders
on 17 September 2015.
D. Remuneration of directors and senior management
The following table provides information about the remuneration of the Consolidated Entity’s directors and senior
management during the 30 June 2015 year:
Short-term employee benefits
Salary
& fees
$
Bonus
$
Non-
monetary
$
Other
$
Post-
employment
benefits
Super-
annuation
$
Other long-
term
employee
benefits
Share-
based
payment
Total
$
$
$
137,500
45,000
45,000
-
-
-
-
-
-
-
-
-
-
12,350
-
4,024
107,800
5,275
5,344
-
-
-
-
-
-
-
-
-
149,850
50,275
54,368
107,800
2015
Executive chairman
Mr. E. Eshuys (i),
Non-executive directors
Mr. R. C. Hutton (i)
Mr. B. K. Mutton (i), (ii)
Company secretary
Mr. M. J. Ilett (iii)
(i)
The amount described in “ Salary and fees” includes Directors’ Fees and Salary excludes a total of $160,000 owing to Mr. E. Eshuys, Mr.
B. K. Mutton and Mr. R. C. Hutton from the previous financial year which was paid during the year ended 30 June 2015.
(ii) The amount disclosed in “Short term employee benefits – other” for Mr. B. K. Mutton of $4,024 Mr B. K. Mutton’s consulting fees were paid
to his company Brice Mutton & Associates Pty Ltd.
(iii) The amount disclosed in “Short term employee benefits – other” column represents consulting fees of $107,800 (net of Goods and
Services Tax). Mr. M. J. Ilett’s consulting fees were paid to his company Kaus Australis Pty Ltd.
10
The following table provides information about the remuneration of the Consolidated Entity’s directors and senior
management during the 30 June 2014 year:
2014
Executive chairman
Mr. E. Eshuys (i), (ii)
Non-executive directors
Mr. R. C. Hutton (i), (ii)
Mr. B. K. Mutton (i), (ii), (iii)
Company secretary
Mr. M. J. Ilett (iv)
Salary
& fees
$
92,500
33,750
33,750
-
Short-term employee benefits
Bonus
$
Non-
monetary
$
Other
$
Post-
employment
benefits
Super-
annuation
$
Other long-
term
employee
benefits
Share-
based
payment
Total
$
$
$
-
-
-
-
-
-
-
-
20,000
-
126,350
110,862
-
-
-
-
-
-
-
-
37,500
150,000
11,250
11,250
45,000
171,350
-
110,862
(i)
The amount described in “Share-based payment” represents part payment of the Chairman’s salary and Director’s fees for the 2015
financial year in the form of DGO Gold Limited shares in lieu of cash consideration.
(ii) The amount described in “ Salary and fees” includes Directors’ Fees and Salary totalling $160,000 owing to Mr. E. Eshuys, Mr. B. K.
Mutton and Mr. R. C. Hutton which has been accrued and not paid as at 30 June 2014.
(iii) The amount disclosed in “Short term employee benefits – other” for Mr. B. K. Mutton of $126,350 Mr B. K. Mutton’s consulting fees were
paid to his company Brice Mutton & Associates Pty Ltd.
(iv) The amount disclosed in “Short term employee benefits – other” column represents consulting fees of $110,862 (net of Goods and
Services Tax). Mr. M. J. Ilett’s consulting fees were paid to his company Kaus Australis Pty Ltd.
Bonus and share-based payments granted as compensation for the current financial year
There were no bonuses or share based payments granted a compensation for the current financial year.
Key management personnel equity holdings
Fully paid ordinary shares of DGO Gold Limited held directly or indirectly at end of financial year:
Balance
at beginning of year
Granted as
compensation
(iii)
Received
on exercise
of options
Net other
change
Balance
at the end of
the year
Relevant
interest
No.
No.
No.
No.
No.
No.
31,327,322
11,185,217
18,565,339
1,284,627
10,493,989
4,935,217
12,315,339
1,284,627
-
-
-
-
20,833,333
6,250,000
6,250,000
-
-
-
-
-
-
-
-
-
35,000,000
10,000,000
66,327,322
21,185,217
66,327,322
20,138,947
15,000,000
33,565,339
38,442,420
-
-
-
-
-
1,284,627
1,284,627
31,327,322
11,185,217
18,565,339
1,284,627
31,327,322
10,138,947
23,442,420
1,284,627
Balance
held
nominall
y
No.
-
-
-
-
-
-
-
-
2015
Mr. E. Eshuys (i)
Mr. B. K. Mutton (i), (ii)
Mr. R. C. Hutton (i), (ii),
(iii)
Mr. M. J. Ilett
2014
Mr. E. Eshuys
Mr. B. K. Mutton
Mr. R. C. Hutton
Mr. M. J. Ilett
(i) On 19 December 2014 the Company issued a total of 60,000,000 fully paid ordinary shares at an issue price of $0.003 (0.3 cents) per share
to the directors or their nominees as approved pursuant to a meeting of shareholders.
(ii) Mt Coolon Holdings Pty Ltd (MCGMT) holds 6,975,215 shares in the Company. Included in the balance of the shareholdings at the end of
the year for Mr. B. K. Mutton, Mr. R. C. Hutton are their relevant interests in 6,975,215 shares held indirectly through the MCGMT.
(iii) Mr. R. Hutton holds a 30 per cent beneficial interest in MCGMT. The relevant interest for Mr. R. C. Hutton includes the total of 6,975,215
shares (2014: 6,975,215) held indirectly through the MCGMT.
E. Key terms of employment contracts
Contracts for services of key management personnel and relevant executives
Remuneration and other terms of employment for the Directors and other key management personnel are formalised in
service agreements. The contractual arrangements contain certain provisions typically found in contracts of this nature.
Mr. E. Eshuys
The Company has entered into an agreement with Mr. E. Eshuys pursuant to which Mr. E. Eshuys has agreed to act in
the capacity as an Executive Chairman and provided geological services to the Company. The key terms of the
agreement are as follows:-
Annual Fee of $150,000 per annum plus superannuation obligations under the superannuation guarantee up
until 31 March 2015.
Annual Fee of $100,000 per annum plus superannuation obligations under the superannuation guarantee
commencing 1 April 2015.
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent.
Annual leave accrued on equivalent of being employed one week per month and long service leave
entitlement provided in accordance with the National Employment Standards;
11
Termination due to resignation: Mr. E. Eshuys is required to provide one (1) month’s notice and be paid the
equivalent of one (1) month’s fees for the provision of geological services together with accrued leave;
Termination due to company notice: The Company is required to provide three ( 3) month’s notice and make a
payment equivalent of three (3) month’s fee for the provision of geological services in lieu of notice together
with accrued leave; and
Termination due to change in control: In the event that a party acquires more than 50% of the Company and
Mr. E. Eshuys is terminated, he shall be entitled total remuneration payable in respect of the equivalent of one
(1) month’s fees for the provision of geological services together with accrued leave.
Mr. B. K. Mutton
The Company has entered into an agreement with Mr. B. K. Mutton pursuant to which Mr. B. K. Mutton has agreed to
act in the capacity as a Non-Executive Director of the Company. The key terms of the agreement are as follows:-
Annual Director’s Fees: $45,000 per annum plus superannuation obligations under the superannuation
guarantee payable on a monthly basis for the provision of services as a Non Executive Director up until 20 July
2015.
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent.
Consulting Fees: $175 per hour (exclusive of GST) for each hour worked and invoiced on projects approved by
the Board, other than for work that forms part of his Director’s duty, to a maximum amount of $5,000 per month
(excluding GST) unless otherwise agreed by the Company;
Termination due to resignation: Mr. B. K. Mutton is required to provide one (1) month’s notice and be paid one
(1) month’s Director’s Fees during this notice period;
Termination due to company notice: The Company is required to provide three (3) month’s notice and make a
payment of four (4) month’s Director’s Fees in lieu of notice; and
Termination due to change in control: In the event that a party acquires more than 50% of the Company and
Mr. B. K. Mutton is terminated, he shall be entitled total remuneration payable in respect of four (4) months’
Directors’ fees.
Mr. R. C. Hutton
The Company has entered into an agreement with Mr. R. C. Hutton pursuant to which Mr. R. C. Hutton has agreed to
act in the capacity as a Non-Executive Director of the Company. The key terms of the agreement are as follows:-
Annual Director’s Fees: $45,000 per annum plus superannuation obligations under the superannuation
guarantee payable on a monthly basis for the provision of services as a Non Executive Director.
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent;
Consulting Fees: $175 per hour (exclusive of GST) for each hour worked and invoiced on projects approved by
the Board, other than for work that forms part of his Director’s duty, to a maximum amount of $5,000 per month
(excluding GST) unless otherwise agreed by the Company;
Termination due to resignation: Mr. R. C. Hutton is required to provide one (1) month’s notice and be paid one
(1) month’s Director’s Fees during this notice period;
Termination due to company notice: The Company is required to provide three (3) month’s notice and make a
payment of four (4) month’s Director’s Fees in lieu of notice; and
Termination due to change in control: In the event that a party acquires more than 50% of the Company and
Mr. R. C. Hutton is terminated, he shall be entitled total remuneration payable in respect of four (4) months’
Directors’ fees.
Mr. M. J. Ilett
The Company has entered into an agreement with Kaus Australis Pty Ltd dated 1 July 2010 pursuant to which Mr. M. J.
Ilett has agreed to provide certain consultancy services to the Company and be appointed as the Company Secretary.
The key terms of the agreement are as follows:-
Annual Director’s Fees: $45,000 per annum plus superannuation obligations under the superannuation guarantee
payable on a monthly basis for the provision of services as a Director effective from 20 July 2015;
Consulting fee: Hourly rate of $175 per hour (exclusive of GST);
Outgoings: Provision to reimburse Kaus Australis Pty Ltd for all reasonable and necessary expenses incurred by
it or Mr. M. J. Ilett in the performance of the services under the agreement;
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent;
No annual leave or long service leave accrued;
Termination due to Company notice: The Company is required to provide three (3) month’s notice and make a
payment equal to the invoices for services provided in the preceding three (3) months prior to the date of the
company notice event; and
Termination due to change in control: In the event that a party acquires more than 50% of the Company and the
services of Kaus Australis Pty Ltd is terminated, Kaus Australis Pty Ltd shall be entitled total remuneration
payable in respect of three (3) months’ invoice equal to the invoices for services provided in the preceding three
(3) months prior to the date of the change in control event.
End of audited remuneration report
12
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in note 28 to the financial statements.
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person
or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 28 to the financial statements do not compromise
the external auditor’s independence, based on advice received from the Audit Committee, for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor, and
none of the services undermine the general principles relating to auditor independence as set out in Code of
Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional &
Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the company, acting as advocate for the company or jointly sharing economic
risks and rewards.
Auditor’s independence declaration
The auditor’s independence declaration is included on page 14 of the Annual Report.
The directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298 (2) of the
Corporations Act 2001.
On behalf of the Directors
Eduard Eshuys
Executive Chairman
Brisbane, 30 September 2015
13
The Board of Directors
DGO Gold Limited (formerly Drummond Gold Limited)
27 General Macarthur Place
Redbank Qld 4301
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Riverside Centre
Level 25
123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia
Tel: +61 7 3308 7000
Fax: +61 (0) 3308 7001
www.deloitte.com.au
30 September 2015
Dear Board Members
DGO Gold Limited (formerly Drummond Gold Limited)
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of DGO Gold Limited (formerly Drummond Gold Limited).
As lead audit partner for the audit of the financial statements of DGO Gold Limited for the financial year
ended 30 June 2015, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Stephen Tarling
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited.
14
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Riverside Centre
Level 25
123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia
Tel: +61 7 3308 7000
Fax: +61 (0) 3308 7001
www.deloitte.com.au
Independent Auditor’s Report
to the Members of DGO Gold Limited
(formerly Drummond Gold Limited)
Report on the Financial Report
We have audited the accompanying financial report of DGO Gold Limited (formerly Drummond Gold
Limited), which comprises the consolidated statement of financial position as at 30 June 2015, the
consolidated statement of profit and loss and other comprehensive income, the consolidated statement of
cash flows and the consolidated statement of changes in equity for the year ended on that date, notes
comprising a summary of significant accounting policies and other explanatory information, and the
directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at the
year’s end or from time to time during the financial year as set out on pages 17 to 44.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 3,
the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the consolidated financial statements comply with International Financial Reporting
Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control, relevant to the company’s preparation of the
financial report that gives a true and fair view, in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation
of the financial report.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
15
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Auditor’s Independence Declaration
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001. We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of DGO Gold Limited, would be in the same terms if given to the directors as at
the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report DGO Gold Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of
its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the consolidated financial statements also comply with International Financial Reporting Standards as
disclosed in Note 3.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 12 of the directors’ report for the year
ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of
the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion the Remuneration Report of DGO Gold Limited for the year ended 30 June 2015, complies
with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
Stephen Tarling
Partner
Chartered Accountants
Brisbane, 30 September 2015
16
Directors’ declaration
The Directors declare that:
a)
b)
c)
d)
in the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable;
in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the
financial position and performance of the consolidated entity;
In the director’s opinion, the financial statements and notes thereto are in accordance with International
Financial Reporting Standards issued by the International Accounting Standards Board as stated in note 3 in
the financial statements; and
the Directors have been given declarations required by s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Eduard Eshuys
Executive Chairman
Brisbane, 30 September 2015
17
Consolidated statement of profit and loss and other comprehensive income
for the financial year ended 30 June 2015
Note
Year ended
30/06/15
$
Year ended
30/06/14
$
3,299
-
3,254
455
(19,201)
(19,009)
(109,500)
(140,969)
(208,173)
(197,968)
-
(50,000)
-
(15,492)
(34,681)
(75,614)
(98,611)
(29,366)
(91,406)
(7,561)
-
(1,147)
(741,521)
-
(350,169)
3,806
(741,521)
(346,363)
(235,785)
(4,286,147)
(977,306)
(4,632,510)
(300,000)
(300,000)
-
-
-
(1,277,306)
-
(4,632,510)
(20)
(20)
(15)
(15)
(122)
(122)
(90)
(90)
11
22(a)
12
6
7
18
18
18
18
Continuing operations
Interest income
Other income
Operating lease rental expenses:
Minimum lease payments
Depreciation expenses
Employee benefit expenses
Directors’ fees
Consultants and contractor expenses
Administration expenses
Loss on sale of fixed asset
Impairment - consideration receivable
Impairment - exploration and evaluation expenditure
Loss before tax from continuing operations
Income tax benefit
Loss for the year from continuing operations
Discontinued operations
Loss for the year from discontinued operations
LOSS FOR THE YEAR
Other comprehensive income
Available for sale financial assets
Income tax on other items of other comprehensive income
Total comprehensive loss for the year
From continuing and discontinued operations
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
From continuing operations
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Notes to the financial statements are included on pages 22 to 44.
18
Consolidated statement of financial position
as at 30 June 2015
Current assets
Cash and cash balances
Current tax assets
Trade and other receivables
Other financial assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Notes to the financial statements are included on pages 22 to 44.
Note
Year ended
30/06/15
$
Year ended
30/06/14
$
8
6
9
10
9
11
12
13
14
14
15
16
17
457,246
-
25,027
850,000
1,332,273
241,700
271,784
12,948
-
526,432
-
62,047
-
62,047
371,183
245,907
2,000,000
2,617,080
1,394,320
3,143,522
164,794
7,877
172,671
343,656
7,877
351,533
-
-
471,054
471,054
172,671
822,587
1,221,649
2,320,935
20,204,243
652
(18,983,246)
1,221,649
20,026,223
300,652
(18,005,940)
2,320,935
19
Consolidated statement of changes in equity
for the financial year ended 30 June 2015
Fully paid
ordinary
shares
Option
premium
reserve
Consolidated
$
$
Balance at 1 July 2013
Issue of shares
Loss for the year
19,581,001
445,222
-
300,652
-
-
Total comprehensive loss for
the year
-
-
Balance at 30 June 2014
20,026,223
300,652
Balance at 1 July 2014
20,026,223
300,652
Issue of shares
Available for sale financial
assets
Loss for the year
178,020
-
-
-
-
-
-
Share
revaluation
reserve
$
-
-
-
-
-
-
-
(300,000)
Accumulated
Losses
Total
$
$
(13,373,430)
-
(4,632,510)
6,508.223
445,222
(4,632,510)
(4,632,510)
(4,632,510)
(18,005,940)
2,320,935
(18,005,940)
2,320,935
-
-
178,020
(300,000)
-
(977,306)
(977,306)
(300,000)
(977,306)
(1,277,306)
Balance at 30 June 2015
20,204,243
300,652
(300,000)
(18,983,246)
1,221,649
Notes to the financial statements are included on pages 22 to 44.
20
Consolidated statement of cash flows
for the financial year ended 30 June 2015
Cash flows from operating activities
Payments to suppliers and employees
Interest and other costs of finance paid
Income tax refund relating to eligible research and development activities
Net cash (used)/generated by operating activities
Year ended
30/06/15
$
Year ended
30/06/14
$
(780,342)
(201)
268,770
(511,773)
(337,704)
(590)
398,780
60,486
Note
23
Cash flows from investing activities
Interest received
Proceeds from property, plant and equipment
Proceeds on disposal of subsidiary
Refunds of deposits
Payments for exploration and evaluation activities
Net cash generated/(used) by investing activities
Cash flows from financing activities
Proceeds from issues of equity securities
Payment for share issue costs
Net cash generated by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
8, 23
8, 23
Notes to the financial statements are included on pages 22 to 44.
3,299
-
800,000
-
(254,000)
3,663
43,501
10,911
(391,695)
549,299
(333,620)
180,000
(1,980)
380,000
(34,778)
178,020
345,222
215,546
72,088
241,700
169,612
457,246
241,700
21
Notes to the financial statements
for the year ended 30 June 2015
Issued capital
Significant accounting policies
Critical accounting judgements and key sources of estimation uncertainty
Business and geographical segments
Income taxes
1. General information
2. Application of new and revised Accounting Standards
3.
4.
5.
6.
7. Discontinued operation
8.
Cash and cash balances
9.
Trade and other receivables
10. Other financial assets
11. Property, plant and equipment
12. Exploration and evaluation expenditure
13. Trade and other payables
14. Provisions
15.
16. Reserves
17. Accumulated losses
18. Loss per share
19. Dividends
20.
21. Subsidiaries
22. Disposal of a subsidiary
23. Notes to the statement of cash flows
24. Contingent liabilities and contingent assets
25. Financial instruments
26. Key management personnel compensation
27. Related party transactions
28. Parent entity disclosures
29. Remuneration of auditors
30. Events after the reporting date
Unaudited additional ASX and other information as at 12 September 2015
Corporate Directory
Information relating to mining tenements
23
23
26
32
33
33
34
34
34
35
35
36
36
36
37
37
37
38
38
38
39
39
40
41
41
42
43
43
44
44
45
47
22
1. General information
DGO Gold Limited (the Company) is a public company listed on the Australian Securities Exchange (trading under the
code DGO), incorporated in Australia and operating in Queensland. DGO Gold Limited’s registered office and its
principal place of business are as follows:
Registered office
27 General Macarthur Place
Redbank Qld 4301
Principal place of business
27 General Macarthur Place
Redbank Qld 4301
The Groups’ principle activity in the course of the financial year was to consider opportunities to acquire or joint venture
gold exploration tenements with particular emphasis on gold based on research undertaken with the University of
Tasmania on sediment hosted gold deposits in Australia.
2. Application of new and revised Accounting Standards
2.1 Amendments to AASBs and the new Interpretation that are mandatorily effective for the current year
In the current year, the Group has applied a number of amendments to AASBs and a new Interpretation issued by the
Australian Accounting Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or
after 1 July 2014, and therefore relevant for the current year end.
“Amendments
AASB 2012-3
to
–
Australian
Offsetting Financial Assets and Financial
Liabilities.”
Accounting
Standards
‘Amendments to AASB 136 – Recoverable
Amount Disclosures
for Non- Financial
Assets’ and AASB 2013-6 ‘Amendments to
AASB 136 arising from Reduced Disclosure
Requirements’
AASB 2014-1 “Amendments to Australian
Accounting Standards” (Part A. Annual
Improvements 2010-2012 and 2011-2013
Cycles)
The amendments to AASB 132 clarify the requirements relating to the
offset of financial assets and financial liabilities. Specifically, the
amendments clarify the meaning of ‘currently has a legally enforceable
right of set-off’ and ‘simultaneous realisation and settlement’.
The amendments have been applied retrospectively. As the Group does
not have any financial assets and financial liabilities that qualify for
offset, the application of the amendments does not have any material
impact on the disclosures or on the amounts recognised in the Group's
consolidated financial statements.
The amendments to AASB 136 remove the requirement to disclose the
recoverable amount of a cash-generating unit (CGU) to which goodwill
or other intangible assets with indefinite useful lives had been allocated
when there has been no impairment or reversal of impairment of the
related CGU. Furthermore,
introduce additional
disclosure requirements applicable to when the recoverable amount of
an asset or a CGU is measured at fair value less costs of disposal.
These new disclosures include the fair value hierarchy, key assumptions
and valuation techniques used which are in line with the disclosure
required by AASB 13 ‘Fair Value Measurements’ establishes reduced
disclosure requirements for entities preparing general purpose financial
statements under Australian Accounting Standards – Reduced
Disclosure Requirements in relation to disclosure of recoverable amount.
the amendments
The application of these amendments does not have any material
impact.
The Annual
amendments to various AASBs, which are summarised below.
•
Improvements 2010-2012 has made number of
The amendments to AASB 2 (i) change the definitions of ‘vesting
condition’ and ‘market condition’; and (ii) add definitions for
‘service condition’ which were
‘performance condition’ and
previously included within the definition of ‘vesting condition’. The
amendments to AASB 2 are effective for share- based payment
transactions for which the grant date is on or after 1 July 2014.
The amendments to AASB 3 clarify that contingent consideration
that is classified as an asset or a liability should be measured at fair
value at each reporting date, irrespective of whether the contingent
consideration is a financial instrument within the scope of AASB 9
or AASB 139 or a non-financial asset or liability. Changes in fair
value (other than measurement period adjustments) should be
recognised in profit and loss. The amendments to AASB 3 are
effective for business combinations for which the acquisition date is
date is on or after 1 July 2014.
•
23
2.1 Amendments to AASBs and the new Interpretation that are mandatorily effective for the current year
(cont’d)
AASB 2014-1 “Amendments to Australian
Accounting Standards” (Part A. Annual
Improvements 2010-2012 and 2011-2013
Cycles)
•
•
•
•
the economic
The amendments to AASB 8 (i) require an entity to disclose the
judgements made by management in applying the aggregation
criteria to operating segments, including a description of the
operating segments aggregated and
indicators
assessed in determining whether the operating segments have
‘similar economic characteristics’; and (ii) clarify that a reconciliation
of the total of the reportable segments’ assets to the entity’s assets
should only be provided if the segment assets are regularly
provided to the chief operating decision-maker.
The amendments to the basis for conclusions of AASB 13 clarify
that the issue of AASB 13 and consequential amendments to AASB
139 and AASB 9 did not remove the ability to measure short-term
receivables and payables with no stated interest rate at their invoice
amounts without discounting,
is
if
immaterial.
The amendments to AASB 116 and AASB 138 remove perceived
inconsistencies
accumulated
depreciation/amortisation when an item of property, plant and
equipment or an intangible asset is revalued. The amended
standards clarify that the gross carrying amount is adjusted in a
manner consistent with the revaluation of the carrying amount of the
asset and
the
difference between the gross carrying amount and the carrying
amount after taking into account accumulated impairment losses.
The amendments to AASB 124 clarify that a management entity
providing key management personnel services to a reporting entity
is a related party of the reporting entity. Consequently, the reporting
entity should disclose as related party transactions the amounts
incurred for the service paid or payable to the management entity
for the provision of key management personnel services. However,
disclosure of the components of such compensation is not required.
that accumulated depreciation/amortisation
the effect of discounting
accounting
the
for
in
is
The Annual
amendments to various AASBs, which are summarised below:-
•
Improvements 2011-2013 has made number of
The amendments to AASB 3 clarify that the standard does not apply
to the accounting for the formation of all types of joint arrangements
in the financial statements of the joint arrangement itself.
The amendments to AASB 13 clarify that the scope of the portfolio
exception for measuring the fair value of a group of financial assets
and financial liabilities on a net basis includes all contracts that are
within the scope of, and accounted for in accordance with, AASB
139 or AASB 9, even if those contracts do not meet the definitions
of financial assets or financial liabilities within AASB 132.
The amendments to AASB 140 clarify that AASB 140 and AASB 3
are not mutually exclusive and application of both standards may be
required. Consequently, an entity acquiring investment property
must determine whether:
•
•
ASB 2013-9
AASB 1031 “Materiality”
“Amendments
to Australian Accounting
– Conceptual Framework
Standards’
Materiality and Financial Instruments’ (Part
B Materiality) AASB 2014-1 Amendments
to Australian Accounting Standards (Part C
Materiality)
i.
ii.
the property meets the definition of investment property in
terms of AASB 140; and
the
transaction meets
combination under AASB 3.
the definition of a business
The application of these amendments does not have any material impact
on the disclosures or on the amounts recognised in the Group's
consolidated financial statements.
for
the
The revised AASB 1031 is an interim standard that cross-references to
the Preparation and
other Standards and
‘Framework
Presentation of Financial Statements’ (issued December 2013) that
contain guidance on materiality. The AASB is progressively removing
references to AASB 1031 in all Standards and Interpretations. Once all
of these references have been removed, AASB 1031 will be withdrawn.
The adoption of AASB 1031, AASB 2013-9 (Part B) and AASB 2014-1
(Part C) does not have any material impact on the disclosures or the
amounts recognised in the Group's consolidated financial statements.
24
2.2 Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations that were issued but not yet
effective are listed below:-
Standard/Interpretation
Effective for annual reporting
periods beginning on or after
Expected to be initially applied in
the financial year ending
AASB 9 ‘Financial Instruments’, and
the relevant amending standards.
AASB 15 ‘Revenue from Contracts
with Customers’ and AASB 2014-5
Australian
‘Amendments
from
Accounting Standards arising
ASB 15’
to
2014-3
‘Amendments
AASB
to
Australian Accounting Standards –
of
Accounting
Interests in Joint Operations’
Acquisitions
for
2014-4
‘Amendments
AASB
to
Australian Accounting Standards –
Clarification of Acceptable Methods of
Depreciation and Amortisation’
2014-6
AASB
to
Australian Accounting Standards –
Agriculture: Bearer Plants’
‘Amendments
2014-9
‘Amendments
AASB
to
Australian Accounting Standards –
Equity Method in Separate Financial
Statements’
‘Amendments
AASB 2014-10
to
Australian Accounting Standards –
Sale or Contribution of Assets
between an Investor and its Associate
or Joint Venture’
2015-1
‘Amendments
AASB
to
Australian Accounting Standards –
Annual Improvements to Australian
Accounting Standards
2012-2014
Cycle’
2015-2
‘Amendments
AASB
to
Australian Accounting Standards –
Disclosure Initiative: Amendments to
AASB 101’
2015-3
to
:Amendments
AASB
Australian
Accounting Standards
arising from the Withdrawal of AASB
1031 Materiality’
2015-4
‘Amendments
AASB
to
Australian Accounting Standards –
Financial Reporting Requirements for
Australian Groups with a Foreign
Parent’
2015-5
‘Amendments
AASB
to
Australian Accounting Standards –
Investment Entities: Applying
the
Consolidation Exception’
1 January 2018
30 June 2019
1 January 2017
30 June 2019
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 July 2015
30 June 2016
1 July 2015
30 June 2016
1 January 2016
30 June 2017
25
2.2 Standards and Interpretations in issue not yet adopted (cont’d)
At the date of authorisation of the financial statements, the following IASB Standards and IFRIC Interpretations were
also in issue but not yet effective, although Australian equivalent Standards and Interpretations have not yet been
issued.
Effective for annual
reporting periods beginning
on or after
Expected to be initially
applied in the financial
year ending
Standard/Interpretation
None at the time of issue of annual report.
3. Significant accounting policies
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations
Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law.
The financial statements comprise the consolidated financial statements of the Group. For the purpose of preparing the
consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’).
Compliance with A-IFRS ensures that the financial statements and notes of the Group comply with International
Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the Directors on 30 September 2015.
Basis of preparation
The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current
assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All
amounts are presented in Australian dollars, unless otherwise noted.
The following significant accounting policies have been adopted in the preparation and presentation of the financial
report:
(a) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities (including
special purpose entities) controlled by the Company (its subsidiaries) (referred to as ‘the Group’ in these financial
statements). Control is based on whether the investor has power over the investee, exposure, or rights, to
variable returns from its involvement in the investee, and the ability to use its power over the investee to affect
the amount of the returns.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
comprehensive income from the effective date of acquisition or up to the effective date of disposal, as
appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members of the Group. All intra-group transactions, balances, income
and expenses are eliminated in full on consolidation.
(b) Going concern
The financial statements have been prepared on the basis that the Consolidated Entity is a going concern, which
contemplates the continuity of normal business activity and the realisation of assets and the settlement of
liabilities in the normal course of business. The Directors are of the opinion that the basis upon which the
financial statements are prepared is appropriate in the circumstances as the Directors believe that they have
sufficient funds to meet their budgeted activities, liabilities as they fall due and continue planned operations over
the next 12 months as the Consolidated Entity holds available for sale financial assets consisting of 50 million
shares in GBM Resources Limited shares and 212,766 Talisman Mining Limited shares at the date of this report.
26
(c) Business combinations
Under AASB3 Business Combinations, acquisitions of subsidiaries and businesses are accounted for using the
acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the
date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by Group in
exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values
are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below).
All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are
accounted for in accordance with relevant Standards. Changes in the fair value of contingent consideration
classified as equity are not recognised.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity
are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain
or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition
date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where
such treatment would be appropriate if that interest were disposed of.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition
under AASB 3(2008) are recognised at their fair value at the acquisition date, except that:
•
•
•
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognised and measured in accordance with AASB 112 Income Taxes and AASB 119 Employee
Benefits respectively;
liabilities or equity instruments related to the replacement by the Group of an acquiree’s share based
payment awards are measured in accordance with AASB 2 Share-based Payment; and
assets (or disposal groups) that are classified as held for sale in accordanc e with AASB 5 Noncurrent
Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see below), or additional assets or
liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the
acquisition date that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete
information about facts and circumstances that existed as of the acquisition date – and is subject to a maximum
of one year.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition
under AASB 3 ‘Business Combinations’ are recognised at their fair values at the acquisition date, except for non -
current assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-current
Assets Held for Sale and Discontinued Operations’, which are recognised and measured at fair value less costs
to sell.
(d) Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value.
(e) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long
service leave, and sick leave when it is probable that settlement will be required and they are capable of being
measured reliably. Liabilities recognised in respect of short-term employee benefits are measured at their
nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the
estimated future cash outflows to be made by the Group in respect of services provided by employees up to
reporting date.
Defined contribution plans
Contributions to defined contribution superannuation plans are expensed when incurred.
(f) Financial assets
AFS financial assets
Listed shares and listed redeemable notes held by the Group that are traded in an active market are classified as
AFS and are stated at fair value. Investments in unlisted shares that are not traded in an active market but that
27
are also classified as AFS financial assets and stated at fair value (when the directors consider that fair value can
be reliably measured). Gains and losses arising from changes in fair value are recognised in other
comprehensive income and accumulated in the investments revaluation reserve, with the exception of
impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses
on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined
to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is
reclassified to profit or loss.
Investments are recognised and derecognised on trade date where the purchase or sale of an investment is
under a contract whose terms require delivery of the investment within the timeframe established by the market
concerned, and are initially measured at fair value, net of transaction costs except for those financial assets
classified as at fair value through profit or loss which are initially measured at fair value.
Subsequent to initial recognition, investments in subsidiaries are measured at cost in the company financial
statements.
Other financial assets are classified into the following specified categories: financial assets ‘at fair value through
profit or loss’, ‘held-to-maturity investments’, ‘available-for-sale’ financial assets, and ‘loans and receivables’.
The classification depends on the nature and purpose of the financial assets and is determined at the time of
initial recognition.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest rate basis for debt instruments other than those financial assets ‘at
fair value through profit or loss’.
Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss where the financial asset:
has been acquired principally for the purpose of selling in the near future;
is a part of an identified portfolio of financial instruments that the Group manages together and has a
recent actual pattern of short-term profit-taking; or
is a derivative that is not designated and effective as a hedging instrument.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss
recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest
earned on the financial asset.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in
an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost
using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at
each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one
or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of
the investment have been impacted.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the assets
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest
rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with
the exception of trade receivables where the carrying amount is reduced through the use of an allowance
account. When a trade receivable is uncollectable, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying
amount of the allowance account are recognised in profit or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the
extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the
amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale- equity instruments, any subsequent increase in fair value after an impairment
loss is recognised directly in equity.
28
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flow from the asset expire,
or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and
continues to control the transferred asset, the Group recognises a retained interest in the asset and an
associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of
ownership of the transferred financial asset, the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
(g)
Exploration and evaluation assets
An exploration and evaluation asset shall only be recognised in relation to an area of interest if the following
conditions are satisfied:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploitation of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or in relation to, the
areas of interest are continuing.
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in
relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the
area is made. Capitalised exploration and evaluation expenditure is also written off in circumstances where the
Board has made a determination in consideration of external indicators of impairment.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life
of the area according to the rate of depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to that area of interest.
(h)
Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in
profit or loss immediately.
Exploration and evaluation are assessed for impairment when facts and circumstances suggest that the carrying
value of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (or the cash generating unit(s) to which it has been allocated, being no larger
than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying value of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised in the previous years.
29
(i)
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or
asset) to the extent that it is unpaid (or refundable).
The current tax asset is calculated by reference to the estimated Research and Development tax refunds relating
to eligible research and development activities (R&D tax refunds) during the financial year. The Company and
the consolidated entity are expecting to receive research and development tax offset with respect to its research
and development activities.
Deferred tax
Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences
between the tax base of an asset or liability and its carrying amount in the balance sheet. The tax base of an
asset or liability is the amount attributed to that asset or liability for tax purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result of a business combination) which affects neither
taxable income nor accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries, except where the Group is able to control the reversal of the temporary differences and it is
probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising
from deductible temporary differences associated with these investments and interests are only recognised to the
extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when
the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting
date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation
authority and the company/Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the income statement, except when it relates
to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.
(j)
Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and
rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating
leases.
Group as lessee
Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the
present value of the minimum lease payments, each determined at the inception of the lease. The corresponding
liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against
income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance
with the Group’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods
in which they are incurred.
Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in
the period in which they are incurred.
30
(k)
Property, plant and equipment
Land and buildings are measured at an historical cost basis. Depreciation on buildings is charged to profit or loss.
Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less
accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the ac quisition
of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined
by discounting the amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land.
Depreciation is calculated on a straight line basis so as to write off the net cost or other revalued amount of each
asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over
the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The
estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting
period, with the effect of any changes recognised on a prospective basis.
(l)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the
present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received
and the amount of the receivable can be measured reliably.
Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as a provision. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received under it.
(m) Revenue
Revenue is measured at the fair value of the consideration received or receivable.
Dividend and interest revenue
Dividend revenue from investments is recognised when the shareholder’s right to receive payment has been
established.
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of
the financial asset to that asset’s net carrying amount on initial recognition.
(n)
Share-based payments
Equity-settled share-based payments with employees and others providing similar services are measured at the
fair value of the equity instrument at the grant date. Fair value is measured by use of the Black Scholes method.
The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-
line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods
and services received, except where the fair value cannot be estimated reliably, in which case they are measured
at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the
counterparty renders the service.
For cash-settled share-based payments, a liability equal to the portion of the goods or services received is
recognised at the current fair value determined at each reporting date.
(o) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as
part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.
(ii)
31
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising
from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified
as operating cash flows.
(p)
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of
exploration and development activities undertaken, it is probable that an outflow of benefits will be required to
settle the obligation and the provision can be measured reliably. The estimated future obligations include the
costs of restoring the affected exploration and evaluation areas contained in the Group’s tenements.
The provision for future restoration is the best estimate of the present value of the expenditure required to settle
the restoration obligation at the reporting date. Future restoration costs will be reviewed annually and any
changes in the estimate are reflected in the present value of the restoration provision at eac h reporting date.
The initial estimate of restoration and rehabilitation relating to exploration and evaluation assets is capitalised into
the cost of the related asset and is amortised on the same basis as the related asset. Changes in the estimate of
the provision for restoration and rehabilitation are treated in the same way, except that the unwinding of the effect
of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the
related asset.
(q) Government Grants
Government grants are assistance by the government in the form of transfers of resources to the Group in return
for past or future compliance with certain conditions relating to the operating activities of the entity. Government
grants include government assistance where there are no conditions specifically relating to the operating
activities of the Group other than the requirement to operate in certain regions or industry sectors.
Government grants are recognised when there is reasonable assurance that the Group will comply with the
conditions attaching to them and the grants will be received.
4. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in note 3, management is required to make
judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily ap parent from
other sources. The estimates and associated assumptions are based on historical experience and various other factors
that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the
revision and future periods if the revision affects both current and future periods.
The following are the critical judgements (apart from those involving estimations, which are dealt with below), that
management has made in the process of applying the Group’s accounting policies and that have the most significant
effect on the amounts recognised in the financial statements:
Impairment of assets and exploration and evaluation expenditure
The Company determines whether non-current assets should be assessed for impairment based on identified
impairment triggers. At each reporting date management assesses the impairment triggers based on their knowledge
and judgement.
Recoverability of Deferred Tax Assets
Deferred tax assets are not recognised for deductible temporary differences or carried forward tax losses if Directors
consider that it is not probable that the Consolidated Group will be able to utilise those temporary differences until the
Consolidated Entity becomes profitable.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year:
32
Estimate of Useful lives of assets
The estimation of the useful lives of assets has been based on historical experience. In addition, the condition of the
assets is assessed at least once per year and considered against the remaining useful life. Details of the useful lives of
property, plant and equipment are set out in note 9.
5. Business and geographical segments
The Group operates predominately in one business segment being the evaluation and exploration of mineral deposits in
sediment hosted gold deposits in Australia.
6.
Income taxes
Tax (expense)/benefit comprises:
Difference between the estimated and actual refund for the financial year
Total income tax benefit
Year ended
30/06/15
$
Year ended
30/06/14
$
-
-
3,806
3,806
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense
in the financial statements as follows:
Loss from continuing operations
Income tax benefit calculated at 30% (i)
Tax effects of amounts which are not assessable/ (deductible) in calculating
taxable income
Deferred tax assets not brought to account
Difference between the estimated and actual refund for the financial year
Total tax benefit
Year ended
30/06/15
$
(741,521)
222,456
2,676,305
(2,898,761)
-
-
Year ended
30/06/14
$
(350,169)
105,051
464,426
(569,477)
3,806
3,806
(i) The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when
compared with the previous reporting period.
Unrecognised deferred tax balances
The following deferred tax assets have not been brought to account:
-Share issue costs
-Tax losses revenue
Recognised deferred tax assets and liabilities
Deferred tax assets
Tax losses revenue
Accruals
Employee entitlements
Deferred tax liabilities:
Prepayments
Year ended
30/06/15
$
Year ended
30/06/14
$
6,816
5,759,829
5,766,645
24,995
2,842,888
2,867,883
Year ended
30/06/15
$
Year ended
30/06/14
$
(15,311)
16,899
2,363
(67,744)
68,880
2,363
(3,951)
-
(3,499)
-
No deferred tax asset has been recognised as it is not considered pr obable that there will be sufficient future taxable
profits available against which the unused tax losses can be utilised in the foreseeable future. The Company and
consolidated group are not in a tax consolidated group.
33
7. Discontinued operation
a) Disposal of Mount Coolon Tenements
On 10 April 2015, the Company disposed of Mt Coolon Gold Mines Pty Ltd. which carried out exploration activities on
the Mt Coolon Mines Pty Ltd’s tenements held in the Drummond Basin. The proceeds for the sale were greater than the
carrying value of the related net assets and accordingly a gain on disposal is included in the profit and loss for the year
from discontinued operations.
The disposal of the Mt Coolon Gold Mines Pty Ltd is consistent with the Group’s strategic dir ection to acquire new
tenements located in sediment hosted gold deposits in Australia. The disposal was completed on 10 April 2015, on
which date control of the Mt Coolon Tenements passed onto the acquirer. Details of the assets and liabilities disposed
of, and the calculation of the profit and loss on disposal are disclosed in note 22
b) Analysis of loss for the year from discontinued operation
The results of the discontinued operation included in the profit and loss for the year and the previous year ar e set out
below:-
Loss for the year from discontinued operation
Revenue
Impairment losses exploration and evaluation expenditure
Other expenses
Loss before tax
Attributable income tax expense/(benefit)
Less: Gain on disposal of operation (note 22)
Attributable income tax expense
Year ended
30/06/15
$
Year ended
30/06/14
$
115
115
556,305
23,567
579,872
579,757
3,014
582,771
(346,986)
-
(346,986)
647
647
4,285,427
271,060
4,556,487
4,555,840
(269,693)
4,286,147
-
-
-
Loss to the year from discontinued operations (attributable to owners of the
Company)
235,785
4,286,147
c) Cash flow from discontinued operation
Net cash inflow/(outflow) from operating activities
Net cash (outflow) from investing operations
Net cash (outflow)/inflow from financing activities
Net cash (outflows)/inflows
8. Cash and cash balances
Cash at Bank
9. Trade and other receivables
Current
Interest receivable
Prepayments
Goods and services tax receivable
Non-Current
Environmental bonds – mining tenements (i)
34
267,799
(254,001)
(15,580)
(1,782)
(104,736)
(340,517)
445,257
4
Year ended
30/06/15
$
Year ended
30/06/14
$
457,246
241,700
Year ended
30/06/15
$
Year ended
30/06/14
$
-
13,169
11,858
25,027
-
-
25,027
842
11,663
443
12,948
371,183
371,183
384,131
(i) The Environmental Bonds are lodged with the Department of Employment, Economic Development and Innovation
and will not be refundable until the Group has received clearance advice from the Environm ental Protection
Authority at a time when the Group relinquishes its exploration permits or mining leases.
10. Other financial assets
Available for sale investments carried at fair value
Quoted shares to GBM Resources Limited (i)
Year ended
30/06/15
$
Year ended
30/06/14
$
850,000
850,000
-
-
(i) The Company holds 50,000,000 quoted shares in GBM Resources Limited which were acquired as part of the
disposal of Mt Coolon Gold Mines Pty Ltd. The fair value of the shares received was $1,150,000 being 50,000,000
shares received at a market price of 2.3 cents per share at date of receipt. The GBM Resources Limited shares
from part of the total consideration receivable of $2 million (refer note 22a). The Directors have determined that the
fair value of the shares in GBM Resources Limited was $850,000 as at 30 June 2015 which has been based on the
quoted price of the GBM Limited’s shares as at that date. The resulting $300,000 difference between the
consideration and fair value as on acquisition have been recorded in the share valuation reserve. The 50 million
GBM Limited shares are held in voluntary escrow for a period of 12 months until 12 April 2016.
11. Property, plant and equipment
2015 Consolidated
Freehold
land
at cost
Motor
vehicles at
cost
$
$
Leasehold
and freehold
improvemen
ts at cost
$
Furniture
at cost
Other plant and
equipment at
cost
Total
$
$
$
51,668
-
-
(51,668)
127,950
-
-
(31,005)
144,954
-
-
(141,448)
31,525
-
-
(17,855)
341,537
-
-
(198,580)
697,634
-
-
(440,556)
-
-
-
-
-
-
-
96,945
3,506
13,670
142,957
257,078
(63,144)
(10,649)
-
29,883
(43,910)
(94,787)
(9,216)
-
101,320
(2,683)
(16,717)
(2,047)
-
11,084
(7,680)
(277,079)
(19,573)
-
155,894
(140,758)
(451,727)
(41,485)
-
298,181
(195,031)
53,035
823
5,990
2,199
62,047
Balance at 1 July 2014
Additions
Disposals
Derecognised on disposal of
subsidiary
Balance at 30 June 2015
Accumulated depreciation
Balance at 1 July 2014
Depreciation expense (i)
Disposals
Elimination on disposal of a subsidiary
Balance at 30 June 2015
Net book value
As at 30 June 2015
(i)
The deprecation expense is represented by $19,009 from the continuing operations and $22,476 from the discontinued operation.
Balance at 1 July 2013
Additions
Disposals
Balance at 30 June 2014
Accumulated depreciation
Balance at 1 July 2013
Depreciation expense
Disposals
Balance at 30 June 2014
2014 Consolidated
Freehold
land
at cost
Motor
vehicles at
cost
$
$
Leasehold and
freehold
improvements
at cost
$
51,668
-
-
51,668
-
-
-
-
189,314
-
(61,364)
127,950
(63,077)
(14,777)
14,710
(63,144)
144,954
-
-
144,954
(82,598)
(12,189)
-
(94,787)
Furniture
at cost
Other plant and
equipment at
cost
Total
$
31,525
-
-
31,525
(14,278)
(2,439)
-
(16,717)
$
$
343,298
-
(1,761)
341,537
760,759
-
(63,125)
697,634
(240,501)
(38,339)
1,761
(277,079)
(400,454)
(67,744)
16,471
(451,727)
50,167
14,808
64,458
245,907
Net book value
As at 30 June 2014
The following useful lives are used in the calculation of depreciation:
64,806
51,668
Leasehold and freehold improvements
Motor vehicles
Furniture
Other plant and equipment
10 – 40 years
5 –12 years
10 – 20 years
3 – 25 years
35
12. Exploration and evaluation expenditure
Gross carrying amount balance:
Balance at beginning of financial year
Additions
Derecognised on disposal of subsidiary
Balance at end of the financial year
Accumulated write off/impairment:
Balance at beginning of financial year
Amounts written off/impaired
Elimination on disposal of subsidiary
Balance at end of financial year
Net book value at end of financial year (i)
Year ended
30/06/15
$
Year ended
30/06/14
$
16,199,441
165,303
(10,887,653)
5,477,091
15,793,986
405,455
-
16,199,441
(14,199,441)
-
8,722,350
(5,477,091)
(9,914,014)
(4,285,427)
-
(14,199,441)
-
2,000,000
(i) The exploration and evaluation expenditure for the Group represents capitalised costs of exploration areas of
interest carried forward as an asset in accordance with the accounting policy set out in note 3 (g). The ultimate
recoupment of the exploration and evaluation expenditure in respect of the areas of interest carried forward is
dependent upon the discovery of commercially viable reserves and the successful development and exploitation of
the respective areas or alternatively the sale of the underlying areas of interest for at least their carrying value.
Amortisation, in respect to each relevant area of interest is not charged to the income statement until a m ining
operation is ready for commencement or when tenements are relinquished.
13. Trade and other payables
Trade payables (i)
Other – accrued expenses
Other – PAYG payable
Year ended
30/06/15
$
55,181
56,329
53,284
164,794
Year ended
30/06/14
$
86,661
256,777
218
343,656
(i) The average credit period on purchases of goods is 30 days. No interest is charged on the trade payables.
14. Provisions
Current
Employee benefits (i)
Non-current
Provision for rehabilitation expenditure (ii)
Provision for landowner works (iii)
Provision for rehabilitation expenditure (ii)
Balance at beginning of financial year
Disposals of subsidiary during the year
Balance at end of financial year
Provision for landowner works (iii)
Balance at beginning of financial year
Disposal of subsidiary
Balance at end of financial year
36
Year ended
30/06/15
$
Year ended
30/06/14
$
7,877
7,877
-
-
-
7,877
7,877
7,877
396,054
75,000
471,054
478,931
Year ended
30/06/15
$
396,054
(396,054)
-
Year ended
30/06/14
$
396,054
-
396,054
75,000
(75,000)
-
75,000
-
75,000
(i) The Group’s current employee benefits are represented by provisions for annual leave totalling $7,877. The
average number of employees during the current financial year was 1 employee.
(ii) The non current provision for rehabilitation expenditure represents the current value of the Directors’ best estimates
of the future sacrifice of economic benefits required to meet environmental liabilities on the Group’s tenements
based on work conducted by the Queensland Environmental Protection Agency and the Company’s environmental
consultants.
(iii) The non current provision for landowner works represents the present value of the Directors’ best estimates of the
future sacrifice of economic benefits required to meet landowner works relating to the Group’s tenements.
15. Issued capital
Fully paid ordinary shares
2015: 519,021,975 (2014: 459,021,975)
Fully paid ordinary shares
Balance at beginning of financial year
Issue of shares to directors under a private placement (i)
Issue of shares to directors and chairman in lieu of payment
Share issue costs
Balance at end of financial year
Balance as at beginning of the year
Movements
Balance as at the end of the year
Issue shares under private placements
Issue of shares to directors and chairman in lieu of payment
Balance as at the end of the year
Year ended
30/06/15
$
Year ended
30/06/14
$
20,204,243
20,026,223
20,026,223
180,000
-
(1,980)
20,204,243
19,581,001
380,000
100,000
(34,778)
20,026,223
Number of
shares
459,021,975
-
Share
capital $
235,688,642
-
-
60,000,000
-
519,021,975
235,688,642
190,000,000
33,333,333
459,021,975
(i) On 19 December 2014 the Company issued a total of 60,000,000 fully paid ordinary shares at an issue price of
$0.003 (0.3 cents) per share to the directors or their nominees as approved pursuant to a meeting of shareholders.
Other share options on issue as at 30 June 2015
There were no options on issue as at 30 June 2015.
Capital Management
Management controls the capital of the group in order to fund its operations and continue as a going concern. The
consolidated entity does not have any externally imposed capital requirements.
16. Reserves
Share valuation reserve (i)
Option premium reserve (ii)
Year ended
30/06/15
$
(300,000)
300,652
652
Year ended
30/06/14
$
-
300,652
300,652
(i) The Company holds 50,000,000 quoted shares in GBM Resources Limited which were acquired as part of the
disposal of Mt Coolon Gold Mines Pty Ltd. The fair value of the shares received was $1,150,000 being 50,000,000
shares received at a market price of 2.3 cents per share at date of receipt. The Directors have determined that the
fair value of the shares in GBM Resources Limited was $850,000 as at 30 June 2015 which has been based on the
quoted price of the GBM Limited’s shares as at that date. The resulting loss of $300,000 being the difference
between the consideration and fair value as on acquisition have been recorded in the share valuation reserve.
(ii) The option premium reserve is a result of options being provided to directors.
17. Accumulated losses
Balance at beginning of financial year
Net loss attributable to members of the parent entity
Balance at end of financial year
37
Year ended
30/06/15
$
18,005,940
977,306
18,983,246
Year ended
30/06/14
$
13,373,430
4,632,510
18,005,940
18. Loss per share
Basic (loss) per share from continuing and discontinued operations (i)
Total basic (loss) per share
Total diluted (loss)per share
Basic (loss) per share from continuing operations (i)
Total basic (loss) per share
Total diluted (loss)per share
Year ended
30/06/15
Cents
per share
Year ended
30/06/14
Cents
per share
(restated)
(20)
(20)
(15)
(15)
(122)
(122)
(90)
(90)
(i) The calculation of the basic loss per share from continuing and discontinued operations for the year ended 30 June
2015 has been made on the basis of the 100:1 share consolidation that was approved by shareholders on 17
September 2015 (note 30). The change has been applied retrospectively and accordingly, the loss per share for
the year ended 30 June 2014 has been restated.
Basic (loss) per share from continuing and discontinued operations
The net (loss) and weighted average number of ordinary shares used in the calculation of basic (loss) per share from
continuing and discontinued operations are as follows:
Year ended
30/06/15
$
Year ended
30/06/14
$
Net (loss)
(Loss) used in the calculation of basis (loss) per share from continuing operations and
discontinued operations
(997,306)
(4,632,510)
(997.306)
(4,632,510)
Weighted average number of ordinary shares used in the calculation of basic (loss)
per share
Year Ended
30/06/15
No.
Year Ended
30/06/14
No.
(restated)
4,907,480
3,783,644
Basic (loss) per share from continuing operations
The net (loss) and weighted average number of ordinary shares used in the calculation of diluted (loss) per share from
continuing operations are as follows:
Weighted average number of ordinary shares used in the calculation of diluted
(loss) per share
Year Ended
30/06/15
No.
Year Ended
30/06/14
No. (restated)
4,907,480
3,783,644
Year ended
30/06/15
$
Year ended
30/06/14
$
Net (loss)
(Loss) used in the calculation of diluted (loss) per share from continuing operations
(741,521)
(741,521)
(346,363)
(346,363)
19. Dividends
There were no dividends paid or proposed during the current or previous financial year.
20. Information relating to mining tenements
The Department of Natural Resources and Mines (DME) and other government authorities require holders of mining
tenements to pay rent, rates and to meet minimum exploration expenditures. It is noted that the Consolidated Entity can
apply to relinquish its mining tenements at any time thereby extinguishing its obligations to meet its rental obligations
and minimum exploration expenditure on the mining tenements. Moreover, variations to the terms of the current and
future tenement holdings, the granting of new tenements and changes at renewal or expiry, will change the minimum
exploration expenditures relating to the tenements.
38
DME has released Policy No 5/2012 dated October 2012 outlining expectations in relation to exploration permit work
programs pursuant to the Mineral Resources Act 1989 (MRA) which provides the tenement holder with greater flexibility
and time to complete the yearly expenditure commitments over a longer period. This Policy allows the consolidated
entity is able to meet its yearly expenditure in total over three years rather than annually.
The expected outlays which can be extinguished at any time which arise in relation to granted tenements inclusive are
as follows:-
Exploration and evaluation expenditure
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
21. Subsidiaries
Name of entity
Country of incorporation
Parent entity
DGO Gold Limited (i),(iii)
Subsidiaries
Mt Coolon Gold Mines Pty Ltd (ii)
Yandan Gold Mines Pty Ltd (i),(iii)
Australia
Australia
Australia
Year ended
30/06/15
$
Year ended
30/06/14
$
-
-
-
-
660,000
1,248,635
-
1,908,635
Ownership interest
2015
%
-
100
2014
%
100
100
(i) The parent and the subsidiaries are not within a tax consolidated group.
(ii) DGO Gold Limited disposed of its interest in Mt Coolon Gold Mines Pty Ltd on 10 April 2015.
(iii) There are no significant restrictions of the ability of the consolidated entity to use any of the consolidated entity’s
assets to settle the liabilities of the consolidated entity.
22. Disposal of a subsidiary
On 10 April 2015, the Group disposed of Mt Coolon Gold Mines Pty Ltd which carried out exploration of the tenement
held in the Drummond Basin.
(a) Consideration received
Year ended
30/06/15
$
Consideration received in cash and cash equivalents
Consideration received in quoted securities (refer note 10)
1,150,000
50,000
Settlement proceeds receivable (i)
Total consideration received
2,000,000
(i) GBM Resources Limited withheld $50,000 of the total cash consideration on settlement. This amount was
800,000
impaired by the Directors at 30 June 2015 as not deemed recoverable.
(b) Analysis of assets of liabilities over which control was lost
Financial position
Current assets
Trade and other receivables
Total current assets
Non-current assets
Trade and other receivables
Property plant and equipment
Exploration and evaluation expenditure
Total non-current assets
39
Year ended
30/06/15
$
553
553
372,141
142,376
1,608,998
2,123,515
Non-current liabilities
Provisions
Total non-current liabilities
Net assets disposed of
Gain on disposal of subsidiary
Consideration received
Net assets disposed of
Gain on disposal
The gain on disposal is included in the loss for the year from discontinued operations (see note 7)
Net cash inflow on disposal of subsidiary
Consideration received in cash and cash equivalents
Less cash and cash equivalents balances disposed of
Total current assets
23. Notes to the statement of cash flows
Year ended
30/06/15
$
471,054
471,054
1,653,014
2,000,000
1,653,014
346,986
Year ended
30/06/15
$
800,000
-
800,000
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and
investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of
the financial year as shown in the cash flow statement is reconciled to the related items in the statement of financial
position as follows:
Cash and cash equivalents
Year ended
30/06/15
$
457,246
Year ended
30/06/14
$
241,700
Reconciliation of (loss)/profit for the period to net cash flows from operating activities
Net (loss) for the year
Interest income
Depreciation
Loss on sale of asset
Gain on disposal of subsidiary
Impairment consideration receivable GBM Resource Limited
Impairment and write off of non-current-assets
Share based payment expense
Decrease/(increase) in assets:
Trade and other receivables
Prepayments
Income tax benefit receivable
(Decrease)/increase in liabilities:
Trade and other payables
Provisions – employee benefits
Year ended
30/06/15
$
(977,306)
(3,414)
41,485
-
(346,986)
50,000
556,306
-
(12,086)
(1,506)
271,784
(90,050)
-
Year ended
30/06/14
$
(4,632,510)
(3,901)
67,744
7,106
-
4,285,427
100,000
4,483
13,882
125,281
96,707
(3,733)
Net cash from operating activities
(511,773)
60,486
(b) Non cash transactions
During the financial year, the Company received 50,000,000 shares in GBM Resources Ltd at a fair value of 2.3 cents
per share as part of the total consideration received for the sale of Mt Coolon Gold Mines Pty Ltd.
40
24. Contingent liabilities and contingent assets
The Directors are not aware of any contingent liabilities or contingent assets that are likely to have a material effect on
the results of the Group as disclosed in these financial statements.
25. Financial instruments
(a) Financial risk management objectives
The Board monitors and manages the financial risk relating to the operations of the Group. The Group’s activities
include exposure to market risk, fair value interest rate risk, credit risk, liquidity risk and cash flow interest rate risk. The
overall risk management program focuses on the unpredictability of the finance markets and seeks to minimis e the
potential adverse effects on the financial performance. Risk management is carried out under the direction of the Board
of Directors.
(b) Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 3 to the financial statements.
(c) Market price risk
The Group is involved in the exploration and development of mining tenements for base metals including gold and
copper. Revenue associated with metal sales, and the ability to raise funds through equity and debt are dependent upon
the commodity price for resources.
(d) Interest rate risk
There is a limited amount of interest rate risk relating to the cash and cash equivalents that the company holds in
deposits. The Group will be exposed to further interest rate risk if it intends to borrow funds in the future for acquisition
and development.
(e) Credit risk management
The maximum credit risk equals the carrying amount of the financial assets as recognised in the Statement of Financial
Position.
(f) Fair value of financial instruments
The fair values of financial assets and financial liabilities are determined as follows:
the fair value of financial assets and financial liabilities with standard terms and conditions and traded on
active liquid markets are determined with reference to quoted market prices; and
the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined
in accordance with generally accepted pricing models based on discounted cash flow analysis; and
the Directors consider that the carrying amounts of financial assets and financial liabilities recorded at
amortised cost in the financial statements approximate their fair values.
The carrying amounts of financial assets and financial liabilities approximate the fair values.
(g) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, and reserve
borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets, expenditure commitments and liabilities.
(h) Cash flow and interest rate risk
The Group’s income and operating cash flows are not materially exposed to changes in market interest rates.
(i) Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern. The capital structure of the
Group includes equity attributable to equity holders of the parent, comprising of issued capital, reserves and
accumulated losses as disclosed in notes 15, 16 and 17 respectively. The Group operates its exploration and
evaluation activities through its wholly owned subsidiary. None of the Group’s entities are subject to externally imposed
capital requirements. The Group intends to use a variety of capital market issues to meet anticipated funding
requirements. The Group currently has no short-term or long-term borrowings. The Group does not have any unused
credit facilities.
Fair value measurements recognised in the consolidated statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
41
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset
or liability that are not based on observable market data (unobservable inputs).
2015
Level 1
Level 2
Level 3
Total
Available-for-sale financial assets
Quoted securities in GBM Resources Limited
$
850,000
850,000
$
-
-
$
-
-
850,000
850,000
There were no transfers between level 1 and 2 in the period.
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial assets and
liabilities. The tables have been drawn up based on undiscounted cash flows and detail the Group’s exposure to liquidity
and interest rate risk as at 30 June 2015 and 30 June 2014:
2015
Financial assets
Non-interest bearing
Variable interest rate instrument
Financial liabilities
Non-interest bearing
2014
Financial assets
Non-interest bearing
Variable interest rate instrument
Financial liabilities
Non-interest bearing
Weighted
average
effective
interest rate
%
-
1.92
-
Weighted
average
effective
interest rate
%
-
1.69
-
Less than 1
month
1-3 months
3 months to
1 year
1-5 years
5 + years
Total
$
$
-
457,246
457,246
11,858
-
11,858
55,181
55,181
109,613
109,613
$
-
-
-
-
-
$
850,000
-
850,000
-
-
$
-
-
-
-
-
861,856
457,246
1,319,104
164,794
164,794
Less than 1
month
1-3 months
3 months to
1 year
1-5 years
5 + years
Total
$
$
$
$
-
1,285
271,784
371,184
241,700
241,700
1,285
271,784
371,184
183,657
183,657
-
-
160,000
160,000
-
-
$
-
-
-
-
-
644,253
241,700
885,953
343,657
343,657
26. Key management personnel compensation
Short-term employee benefits (i)
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
Year ended
30/06/15
$
339,324
22,969
-
-
-
362,293
Year ended
30/06/14
$
417,212
-
-
-
60,000
477,212
(i) The short term employee benefits includes Directors’ Fees and Salary totalling $160,000 previously owed to Mr. E.
Eshuys, Mr. B. K. Mutton and Mr. R. C. Hutton which was accrued in the 30 June 2014 financial year and paid in
the 30 June 2015 financial year. Further details of the key management personnel compensation can be found in
the Remuneration Report section of the Directors’ Report.
42
27. Related party transactions
(a) Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in the subsidiary are disclosed in note 21 to the financial statements.
(b) Transactions with key management personnel
Key management personnel compensation
The aggregate compensation made to key management personnel are disclosed in note 26 of the financial statements
and details of the compensation made to key management personal has been provided in the Remuneration Report
which forms part of the Directors’ Report. Included in the Remuneration Report includes is a payment of $4,024(net of
GST) for consulting fees to Brice Mutton & Associates Pty Ltd a related party of Mr. Brice Mutton and payment of
$107,800 (net of GST) to Kaus Australis Pty Ltd a related party of Mr. Michael Ilett.
Other related party transactions
From September 2014 Exploration Drill Rigs Pty Ltd, a company related to Mr. Michael Ilett and Mr. Ross Hutton,
provided the Company with a registered office, telephone, electricity and receptionist services for a rental and
management fee totalling $19,200 per annum (levied at a rate of $1,600 per month excluding GST).
28. Parent entity disclosures
The parent entity in the Group is DGO Gold Limited which was incorporated in Brisbane, Australia on 5 April 2007.
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-Current Liabilities
Total Liabilities
Issued capital
Accumulated losses
Option Premium Reserve
Share Valuation Reserve
Total equity
Total equity and liabilities
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive (loss)
43
Year ended
30/06/15
$
1,331,729
62,060
1,393,789
172,672
-
172,672
Year ended
30/06/14
$
250,944
1,727,601
1,978,545
262,975
-
262,975
22,355,957
(21,135,492)
22,177,937
(20,763,019)
300,652
(300,000)
652
300,652
-
300,652
1,221,117
1,715,570
1,393,789
1,978,545
Year ended
30/06/15
$
(372,473)
(300,000)
(672,473)
Year ended
30/06/14
$
(4,630,592)
-
(4,630,592)
29. Remuneration of auditors
Auditor of the parent entity
Audit or review of the financial statements
Related practice of the parent entity auditor
Other non-audit services – tax advice
Other non-audit services – research and development tax related services
The auditor of DGO Gold Limited is Deloitte Touche Tohmatsu.
Year ended
30/06/15
$
Year ended
30/06/14
$
70,000
70,000
82,500
82,500
Year ended
30/06/15
$
Year ended
30/06/14
$
-
-
-
-
13,636
13,636
30. Events after the reporting date
On 13 July 2015 the Company acquired 212,766 Talisman Mining Limited shares for a total consideration of $100,000.
On 17 September 2015 the shareholders at the General Meeting of Shareholders approved the consolidation of the
Company’s ordinary shares on a 100:1 basis and had taken effect for trading on a deferred settlement basis on 21
September 2015
On 17 September 2015 the shareholders at the General Meeting of Shareholders approved the placement of 140,000
fully paid ordinary shares (on a post consolidation basis) at an issue price of $0.30 per share to Resource Surveys Pty,
a related party of Mr Eduard Eshuys and 75,000 fully paid ordinary shares (on a post consolidation basis) at an issue
price of $0.30 per share to Sheratan Pty Ltd, a related party of Mr Ross Hutton.
On 21 September 2015 the Company changed its name from Drummond Gold Limited to DGO Gold Limited effective
on 21 September 2015.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the financial
year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of
those operations, or the state of affairs of the consolidated entity in future financial years
44
Unaudited additional ASX and other information as at 25 September 2015
Number of holders of equity securities
519,021,975fully paid ordinary shares are held by 608 individual shareholders. All issued ordinary shares carry one vote
per share. There is not a market buyback occurring.
Distribution of holders of equity securities
Fully paid
Ordinary
Shares
%
100,001 and Over
507,828,713
97.84
50,001 to 100,000
10,001 to 50,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Holding less than a
marketable parcel
4,671,050
5,387,659
1,072,097
61,082
1,374
0.90
1.04
0.21
0.01
0.00
519,021,975
100.00
449
Twenty largest shareholders of quoted equity securities
Ordinary shareholders
A/C Designation
Fully paid ordinary shares
Number
Percentage
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
RESOURCE SURVEYS PTY LTD
CAIRNGLEN INVESTMENTS PTY LTD
SCINTILLA STRATEGIC INVESTMENTS LIMITED
205,660,000
58,078,698
33,172,464
29,415,483
MR BRICE KENNETH MUTTON & MRS GAI MUTTON
20,120,946
SHERATAN PTY LTD
R & M SUPERANNUATION FUND
15,000,000
ROSS CLIVE HUTTON & MARIE JEAN HUTTON
R & M SUPERANNUATION
RESOURCE SURVEYS PTY LTD
RESOURCE SURVEYS S/F
8,801,204
7,746,624
MR ROSS CLIVE HUTTON & MRS MARIE JEAN HUTTON
7,630,000
MR TREVOR NEIL HAY
MT COOLON HOLDINGS PTY LTD
MT COOLON GOLD MINES
DOUBLE JAY GROUP HOLDINGS PTY LTD
GEE NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
MR DAVID COURTNEY ROBINS
MR TIMOTHY CHARLES WINSPEAR
MRS CHLOE PODGORNIK
TESORO M B PTY LTD
DR PETER KENCH
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR DION LAURENCE MILLER
THE G & T TRUST
MR ALAN BRIEN & MRS MELINDA BRIEN
7,484,599
6,975,215
6,000,000
5,572,936
5,000,000
4,445,600
3,300,000
3,000,000
3,000,000
3,000,000
2,836,786
2,658,000
2,344,196
39.62
11.19
6.39
5.67
3.88
2.89
1.70
1.49
1.47
1.44
1.34
1.16
1.07
0.96
0.86
0.64
0.58
0.58
0.58
0.55
0.51
0.45
Line
item
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
17
17
18
19
20
Total
Balance of register
Grand total
45
441,242,751
77,779,224
85.01
14.99
519,021,975
100.00
Substantial shareholders
Ordinary shareholders
Fully Paid Shares
RESOURCE CAPITAL FUND V L. P.
EDUARD ESHUYS (i)
ROSS HUTTON (i)
CAIRNGLEN INVESTMENTS PTY LTD
SCINTILLA STRATEGIC INVESTMENTS LIMITED
TOTAL
(i)
These are shares in which the Director’s individually hold a relevant interest.
Tenements held
Number
205,660,000
66,327,322
38,442,420
33,172,464
29,415,483
294,159,786
The Company has made application for tenements. However, there were no tenements granted at the date of this
report.
46
Corporate Directory
Directors:
Mr. E. Eshuys (Executive Chairman)
Mr. M. J. Ilett (Director)
Mr. R. C. Hutton (Non-Executive Director)
Company secretary and chief
financial officer
Mr. M. J. Ilett
Registered office and
principal administrative office:
27 General Macarthur Place
Redbank Qld 4301
Share registry:
Auditors:
Lawyers:
P.O. Box 294
Carole Park Qld 4300
Telephone: + 61 7 3381 5368
Facsimile: + 61 7 3381 5363
Link Market Services Limited
Level 15, ANZ Building
324 Queen Street
BRISBANE QLD 4000
Postal Address:
GPO Box 2537
BRISBANE QLD 4001
Telephone: 1300 554 474
Telephone: + 61 2 8280 7454 (overseas)
Facsimile: + 61 2 8280 0303
Deloitte Touche Tohmatsu
Level 25, Riverside Centre
123 Eagle Street
BRISBANE QLD 4000
Telephone: + 61 7 3308 7000
Facsimile: + 61 7 3308 7001
McCullough Robertson Lawyers
Level 11, Central Plaza Two
66 Eagle Street
BRISBANE QLD 4000
Telephone: + 61 7 3233 8888
Facsimile: + 61 7 3229 9949
Stock exchange listings:
DGO Gold Limited shares are quoted on ASX Limited (ASX Code: DGO).
Website:
ABN:
www.dgogold.com.au
96 124 562 849
47