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Royal GoldA N N U A L R E P O R T 2 0 1 5 H I G H L I G H T S C H A I R M A N ’ S S T A T E M E N T O P E R A T I O N S R E PO R T F I N A N C I A L R E V I E W T H E B O A R D D I R EC T O R S ’ R E PO R T S T R A T E G I C R E PO R T I N D E P E N D E N T A U D I T O R ’ S R E PO R T T O T H E M E MB E R S O F G O L D P L A T P L C 3 5 9 1 9 2 4 2 6 2 9 3 2 C O N SO L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S A N D O T H E R C O M P R E H E N S I V E I N C O M E 3 4 C O N SO L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N C O N SO L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y 3 0 J U N E 2 0 1 5 C O N SO L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y 3 0 J U N E 2 0 1 4 C O N SO L I D A T E D S T A T E M E N T O F C A S H F L O W S C O M P A N Y S T A T E M E N T O F F I N A N C I A L P O S I T I O N C O M P A N Y S T A T E M E N T O F C H A N G E S I N E Q U I T Y C O M P A N Y S T A T E M E N T O F C A S H F L O W S N O T E S T O T H E C O N SO L I D A T E D F I N A N C I A L S T A T E M E N T S C O M P A N Y I NF O R M A T I O N 3 5 3 6 3 7 3 8 3 9 4 0 4 1 4 2 8 0 H I G H L I G H T S l Focussed on growth of market-leading gold recovery operations in South Africa and Ghana, with additional upside available from mining and exploration portfolio l Produced 30,524 ounces of gold (2014: 30,977 ounces) with 21,181 ounces sold (2014: 26,216 ounces) for own account and 3,723 ounces (2014: 1,731 ounces) transferred to client metal accounts l Successfully secured alternative refiners and processors to process stock build-up and mitigate single refiner risk following inability of Rand Refinery to process material, which impacted operations and cash-flow for the year l Elution capacity significantly increased at Gold Recovery (Pty) Limited SA and plans to increase capacity further at both South Africa and Ghana to optimise recovery operations l Kilimapesa Gold Mine in Kenya on-track to achieve operational break-even with plans to double production in FY2016 following capital improvements l Established dedicated “strategic sourcing” team to identify quality material for processing at gold recovery operations l Trial project underway to assess opportunities to diversify into prospective Platinum Group Metals market l Focussed on expanding gold recovery operations to build profitability Goldplat plc – Annual Report and Accounts 2015 3 4 Goldplat plc – Annual Report and Accounts 2015 c h a i r m a n ’ s s t a t e m e n t Goldplat plc – Annual Report and Accounts 2015 5 In my last C hairman’s Statement I noted that the gold price during the year ended 30 June 2013 averaged approximately $1,600/oz, which had reduced to $1,300 in the year ended 30 June 2014. During the year under review it was only above $1,300/oz for a few we eks, and for most of the year it was around $1,200/oz. I t is currently below $1,150/oz. To combat these price reductions Goldplat has instituted many cost saving initiatives, the two most important of which are improved utilisation of cyanide, the biggest element of our cost, and increased elution capacity to enable us to produce bullion from concentrates previously processed externally. To achieve the maximum reduction in cyanide costs, we have changed from solid to liquid cyanide, which in turn has required the construction of a new liquid cyanide plant. That has now be en completed and our first delivery of liquid cyanide was in C H A I R M A N ’S S T A T E M E N T Our portfolio of assets consists of our gold recovery operations in South Africa and Ghana, a gold mine in Kenya and exploration projects in Ghana and Burkina Faso. Once again I have to report an extremely September 2015. challenging year for the whole of the gold mining industry, with Goldplat suffering along with both major and junior gold companies. I n Goldplat’s case, the inability of Rand Refinery to process our concentrates has substantially increased our difficulties. Management has, however, continued to take action to reduce costs, improve efficiency and enable us to eliminate reliance on third party processing. We have reached the point where I believe that all this hard work will give improved performance in future. Goldplat remains the leading African company recovering gold from by-products, and the directors intend to build on that advantage and expand the recovery business. Increased elution capacity in South Africa has be en achieved by improving utilisation of the existing plant in Benoni through installation of a new electric boiler, with a further increase in capacity planned once the first 4-tonne elution plant, which was acquired during the year, is installed and commissioned during October 2015. This will enable us to process material which we have had to stockpile over a long period, and is expected to lead to a rapid improvement in cash flow. I t is worth emphasising that the new plant described above, and many other new and improved items of processing plant, have be en financed from internal 6 Goldplat plc – Annual Report and Accounts 2015 resources, without recourse to new equity capital, and without taking up loan or debt finance. I had envisaged standing down as C hairman at the forthcoming Annual General Me eting and handing over to Gerard Kisbey Gre en. I n the event, Gerard has successfully taken over the reins as Chief Executive Officer, so that he is prevented by corporate governance rules from also being Chairman. I have agre ed to remain as C hairman for up to another 12 months, and we are instituting a formal process to identify my successor. Finally I would like to record my thanks to the executives, management and the whole workforce for their efforts on behalf of Goldplat through this difficult period. B M C H A I R M A N Goldplat plc – Annual Report and Accounts 2015 7 8 Goldplat plc – Annual Report and Accounts 2015 o p e r a t i o n s r e p o r t Goldplat plc – Annual Report and Accounts 2015 9 O P E R A T I O N S R E P O R T losses. During this period Goldplat has worked on initiatives to address these issues: Firstly to securing an alternative processor; secondly to building relationships with alternative bullion refiners; and thirdly, to increasing capacity and capabilities to process as much of this material as possible in-house and thereby to mitigate risk and retain more of the This is my inaugural statement as Goldplat’s CEO value chain internally. having accepted this role in February, 2015. During FY 2015 the C ompany has be en challenged by the ne ed to replace or upgrade significant infrastructure in an environment where cashflow has be en severely hampered by low gold prices and operational challenges with respect to refiners and processors of certain materials. I am pleased to report that by identifying these challenges and formulating strategies to deal with them, FY 2015 has be en a year during which we have laid the foundations for a turnaround of the C ompany and a return to operational robustness and profitability. We have made significant progress in identifying alternative refiners and processors, completed or made progress on essential capital projects across our portfolio, all funded internally and have implemented numerous cost-cutting and efficiency initiatives which have improved the operational and financial flexibility of the Company. Whilst our cash generative gold recovery businesses remain our primary focus, having produced 28,246 ounces of gold in FY 2015 (FY 2014: 29,814 ounces) from our South African and Ghanaian operations (GPL and GRG respectively), we continue the development of our Kilimapesa Gold Mine in Kenya, which accounted for circa 2,300 ounces of gold production in FY 2015 (FY 2014: 1,160 ounces). S I G N I F I C A N T C H A L L E N G E S P R E S E N T E D B Y T H I R D PA R T Y P R O C E S S I N G A N D R E F I N I N G D I F F I C U LT I E S As noted by our Chairman, over the past twelve months, Goldplat’s main refiner, Rand Refinery, has be en unable to process large amounts of material (primarily ashes, carbons and certain concentrates) for the C ompany from our two gold recovery operations as it had done previously. This has led to a build-up of stocks and a cessation of material supply from many clients and in turn to a reduction in cash-flow and to operating Goldplat has, through another refining company, Aurubis Refinery in Germany, filled a five-month pipeline with backlog material from both GPL and GRG, which is now being processed and is cash- flow generative. To increase internal capacity to process material, throughput from the existing two 1-tonne elution columns at GPL has be en increased from 3 tonnes per day to 5 tonnes per day by the installation of a new electric boiler. To further increase the internal elution capacity the first of thre e 4-tonne elution columns acquired during the year is currently being installed and is scheduled to be commissioned during October 2015. This will increase elution throughput capacity to over eight tonnes per day. As of June 2015, Rand Refinery started to process small amounts of the backlog materials and has worked closely with Goldplat to find mutually beneficial ways to work together, an extremely positive development. I am confident that with the above measures in place we will process all of the backlog material by December 2015 and will have significantly reduced the single refiner risk that affected the FY 2015 operational and financial performance. “ F Y 2 0 1 5 H A S B E E N A Y E A R D U R I N G W H I C H W E H A V E L A I D T H E F O U N D A T I O N S F O R A T U R N A R O U N D O F T H E C O M P A N Y & A R E T U R N T O O P E R A T I O N A L R O B U S T N E S S & P R O F I T A B I L I T Y ” 10 Goldplat plc – Annual Report and Accounts 2015 G O L D P R O D U C T I O N A N D S A L E S The table below provides a summary of gold production and sales for FY 2015. During the year overall production was 30,524 ounces (FY 2014: 30,977 ounces) and actual gold sales were 24,904 ounces (FY 2014: 28,216 ounces). Gold sold for own account was 21,181 ounces (FY 2014: 26,485 ounces) and that transferred to clients was 3,723 ounces (FY 2014: 1,713 ounces). The difference betwe en the gold produced and gold sold (5,621 ounces) is locked up in concentrate stocks which gives an indication of the build-up during the year, primarily due to the issues relating to the inability of Rand Refinery to accept and process certain products. “ W H I L S T O U R C A S H G E N E R A T I V E G O L D R E C O V E R Y B U S I N E S S E S R EM A I N O U R P R IM A R Y F O C U S , H A V I N G P R O D U C E D 2 8 , 2 4 6 O U N C E S O F G O L D I N F Y 2 0 1 5 F Y 2 0 1 4 : 2 9 , 8 1 4 O U N C E S F R O M O U R S O U T H A F R I C A N A N D G H A N A I A N O P E R A T I O N S G P L A N D G R G R E S P E C T I V E L Y , W E C O N T I N U E T H E D E V E L O PM E N T O F O U R K I L IM A P E S A G O L D M I N E I N K E NY A , W H I C H A C C O U N T E D F O R C I R C A 2 , 3 0 0 O U N C E S O F G O L D P R O D U C T I O N I N F Y 2 0 1 5 F Y 2 0 1 4 : 1 , 1 6 0 O U N C E S . ” Go ldpla t Pl c C on so lidated 2015 Total KG 2015 Total OZ 2014 Total KG 2014 Total OZ To tal Gold Product ion G O L D R E C O V E R Y G H A N A K I L I M A P E S A G O L D G O L D P L AT R E C O V E R Y To tal Ow n gold s old G O L D R E C O V E R Y G H A N A K I L I M A P E S A G O L D G O L D P L AT R E C O V E R Y To tal Meta l Tran sfe rs to C lien ts G O L D P L AT R E C O V E R Y To tal To tal S old/t ran sfe rred G O L D R E C O V E R Y G H A N A K I L I M A P E S A G O L D G O L D P L AT R E C O V E R Y To tal 19 0 71 6 8 8 94 9 8 0 6 4 514 6 5 8 116 116 8 0 6 4 6 3 0 7 74 6 , 111 2 , 2 7 8 2 2 , 13 5 3 0 , 524 2 , 5 7 8 2 , 0 7 3 16 , 5 3 0 21 , 181 3 , 7 2 3 3 , 7 2 3 2 , 5 7 8 2 , 0 7 3 2 0 , 2 5 3 24 , 9 0 4 4 2 7 3 6 5 0 0 5 3 6 3 9 3 2 9 4 0 3 8 2 5 5 4 5 4 3 9 3 2 9 4 5 6 8 7 8 13 , 7 3 9 1 , 16 3 16 , 0 75 3 0 , 9 7 7 12 , 6 2 3 919 12 , 94 3 2 6 , 4 8 5 1 , 7 31 1 , 7 31 , 12 , 6 2 3 919 14 , 6 74 2 8 , 216 Goldplat plc – Annual Report and Accounts 2015 11 O P E R A T I O N S R E P O R T the past year in upgrading infrastructure, reducing costs and improving efficiencies of the recovery business. G O L D P L A T ’ S R E C O V E R Y O P E R A T I O N S Goldplat recovers precious metals (primarily gold and silver but also Platinum Group Metals ‘PGM’s’) from by-products of the mining industry and gains its competitive advantage from a combination of the diversity and flexibility of processing circuits which make possible the recovery of metals and concentrates from these by-product materials, Increasing competition and difficult market conditions dictated that increased focus be placed on the procurement of source material for the various work streams. A dedicated “strategic sourcing” team was established during the year and the benefits arising from this decision are already apparent. A number of existing contracts have already be en successfully re-negotiated, contracts have be en entered into with new clients and new business opportunities have be en identified which will be investigated and potentially implemented in FY 2016. the strategic geographic locations of the Group’s During FY 2015, for reasons already discussed, plants and the extensive depth of knowledge and we identified the ne ed to optimise and expand experience of a long-standing team. Goldplat sources by-products including course and fine carbon, wo odchips, rubber and ste el mill liners, grease, concentrate bags as well as coarse tailings and rock dumps and also assists in plant clean-up operations. These materials typically present an environmental risk and cost to producers but can be turned to a source of additional gold / revenue when processed by Goldplat. Clients include most of the significant gold producers, an increasing number of PGM producers and a number of refineries requiring the processing of concentrate materials prior to final refining as bullion. G O L D P L AT R E C O V E R Y ( P T Y) L I M I T E D - S O U T H A F R I C A ( ‘ G P L ’ ) GPL is a well-established operation based near Johannesburg, South Africa, serving clients within South Africa as a Responsible Gold Producer fulfilling the requirements as set out by the London Bullion Market Association. The C ompany’s facilities include wash-plants, crushing, milling, CIL, eluting and smelting as well as spiralling and shotblasting. During FY 2015 GPL produced a total of 22,135 ounces of gold (FY 2014: 16,075 ounces) of which 16,530 ounces (FY 2014: 12,943 ounces) was for own account and 3,723 ounces (FY 2014: 1,731 our elution capacity to facilitate the production of additional gold bullion, rather than concentrates, where third party refining partners are ne eded. As a first step we entered into a short term toll-eluting arrangement with a third party. We then successfully doubled the in-house elution throughput of the existing two 1-tonne capacity columns to process 3 tonnes of carbon per day (versus 1.5 tonne per day previously) by introducing a number of operational and engine ering efficiencies. The acquisition and installation of a new electric boiler enabled a further increase in elution throughput to 5 tonnes per day. In addition to this we acquired thre e 4-tonne elution columns and associated ancillary equipment from DRD Gold, the first of which is expected to be installed at GPL and commissioned by end-October 2015. This should allow for throughput capacity of 8 tonnes per day at this operation. Decisions remain to be taken as to the timing and location of the installation of the remaining two 4-tonne elution columns with one likely to be moved to the Ghanaian operation during FY 2016. During FY 2015, GPL terminated its contract with Central Rand Gold as the risk-reward was no longer viable. The amounts of ore produced under this contract remained minimal and this ore has be en replaced with ore from other sources. ounces) was transferred to clients’ metal accounts, A number of projects were initiated at GPL during the balance being in unprocessed concentrates. FY 2015, all internally funded, to improve Considerable progress has be en made at GPL over operational efficiencies, improve profitability and 12 Goldplat plc – Annual Report and Accounts 2015 flexibility, upgrade, repair or replace equipment and Refinery to recover silver and gold, and in-turn infrastructure as required and to comply with Goldplat will be paid treatment and refining regulatory requirements. Many of these projects charges. The high grade circuit at GPL will be were completed during the year under review, some dedicated to processing the material under this have be en completed subsequent to the FY 2015 contract for an initial two months and it will take year end and some are ongoing. a further four months to complete the elutions for this project. Material previously planned to be GPL underto ok and continues with various initiatives processed through the high grade circuit will now to upgrade its rotary kilns to reduce electrical be processed through the low grade circuit. This is consumption and improve the quality of ash produced, which will enable enhanced gold a positive indicator of the future potential of our working relationship with Rand Refinery and also recoveries and ensure ongoing environmental demonstrates the operational flexibility of the compliance. The new liquid cyanide storage facility was various circuits at GPL and the benefits of the low grade mill replacement and other capital initiatives. commissioned and the first delivery of liquid cyanide In terms of new revenue streams, a trial project is has be en made by a local South African supplier (as underway to assess opportunities to diversify into reported 22 September 2015). This local prospective PGM’s. Procurement contracts with procurement will allow us to further reduce our cost PGM producers are being negotiated and sources in addition to the considerable savings achieved of material currently being investigated. We remain since automation was implemented in 2013. extremely optimistic about the growth opportunities Construction of a new wo odchip wash plant which began during FY 2015 was completed and commissioned in August 2015. This has allowed for an available within the platinum industry and lo ok forward to updating shareholders on these developments in due course. additional 2kg of gold production per month from Various work streams are underway with respect to the extensive existing wo od chip stockpiles. the current stock dam including the definition of a JORC compliant resource, designing a process system for the re-treatment of this resource and establishing a new tailings facility. We expect to appoint a consultant during the second quarter of FY 2016 to quantify the resource. Encouraging results have be en received from test work by a local South African University to develop a new process to retreat the current stock dam and improve overall recovery. The university is undertaking further desktop studies and we lo ok forward to updating the market on this progress during the next financial year. Once these work streams have be en completed the C ompany will decide whether to expedite an economic assessment study with a view to potentially starting the re-treatment of this resource during FY 2016. The low-grade circuit mill was replaced and commissioned in mid-September 2015. This new mill has the same capacity as the original mill but will enable more continuous operation by reducing the extensive and unplanned maintenance required to ke ep the original mill operational. A new pumping station has be en commissioned at the tailings retreatment carbon-in-leach (‘CIL’) plant to increase the volume of material to be pumped to the tailings facility. This process improvement will have a positive impact allowing for an additional 0.5-1kg of gold production per month from the existing residue streams. Whilst Rand Refinery has not be en able to accept and process certain material during FY 2015, it has now begun accepting batches of ashes again, albeit in limited quantities and on an ad-hoc basis. Subsequent to FY 2015 year-end Goldplat has entered into a contract with Rand Refinery (reported on 4 September 2015) which will se e us toll-process a large batch of by-product material for Rand Goldplat plc – Annual Report and Accounts 2015 13 O P E R A T I O N S R E P O R T G O L D R E C O V E R Y G H A N A L I M I T E D ( ‘ G R G ’ ) – G H A N A GRG’s gold recovery operation, which has a tax fre e status until 2016 and a favourable tax rate thereafter, is located in the fre e port of Tema in Ghana. At the start of FY 2015 processing operations at our plant in Tema consisted of two primary sections: one comprising spirals and an incinerator section which recover gold from high grade fine carbon and rubber mill liners, and the other a CIL section, which primarily processed artisanal tailings. An additional revenue stream was derived from the toll treatment of material through Endeavour Resources. During FY 2015 GRG produced 6,111 ounces of gold (FY 2014: 13,739 ounces) of which 2,578 ounces were sold (FY 2014: 12,623 ounces), the balance being unprocessed concentrates. As can be se en, there was a significant reduction in production as well as a large build-up of stock. During the year the CIL operation was terminated as tailings deposition was no longer possible on the confined tailings facility which had run out of capacity. Furthermore, the toll treatment contract was put on hold to allow Endeavour and GRG to comply with certain regulatory requirements, and the remaining spiralling and incineration business was severely hampered by knock-on effects of Rand Refinery issues experienced in South Africa. As a result, operations at GRG were reduced to a very low level at one point during the year with backlog material building up and little new material being procured, resulting in a material impact on the operation’s production and profitability in FY 2015. De-construction of the CIL plant was started during the year with a view to moving the plant to the Kilimapesa Mine in Kenya during FY 2016. This will fre e up space on the Tema site to allow for possible expansion of the spiralling and incinerator circuits and for the new initiatives described below. The viability of retreatment of the tailings facility, either by GRG or by third parties was investigated but due to the low grade of the material this was determined to be sub-economic. Subsequent to these investigations work was undertaken to design the final rehabilitation of the tailings facility which is planned for FY 2016. In order to improve operational efficiencies and recoveries at GRG, and to increase the in-house elution capacity as discussed earlier in this report, it is planned for one of the thre e 4-tonne elution columns acquired during FY 2015 to be moved from GPL and installed at GRG by the end of October 2016. This will reduce the overall turnaround time for processing of GRG’s client material and maximise bullion production. Significant opportunities have be en identified within Ghana to source ste el mill liners for treatment. Capital has be en approved and work has begun on the procurement and construction of a shotblast facility in South Africa which will be shipped to and installed at GRG during the second quarter of FY 2016. The toll processing agre ement with Endeavour Resources is scheduled to be reinstated during FY 2016 as a short-term source of revenue for GRG. In spite of operational difficulties, our client base remains stable and GRG is once again receiving new material from its existing clients, as well as from new sources and the strategic sourcing team remains focussed on sourcing additional material. A particular focus is to find more international material that can be imported to GRG. With processes in place to: alleviate the backlog stock issue; increase elution capacity on-site by the end October 2016; introduce a mill liner revenue stream; resume the delivery of material from existing clients; and focus on procuring new clients and sources of material, GRG’s business should return to operational profitability during FY 2016. 14 Goldplat plc – Annual Report and Accounts 2015 B U R KI N A FA S O : M I D A S G O L D S A R L ( ‘ M I D A S ’ ) Previously mining has taken place at a quicker rate As part of our longer-term growth strategy for production, a lack of flexibility and an inability to expanding our gold recovery reach in Africa, mine selectively. During the year a new mining Goldplat has pursued an opportunity in Burkina plan for Kilimapesa was put into operation which Faso in West Africa to establish the current gold entails primarily on-re ef development with low than re ef development resulting in erratic recovery business model in the region. With this in mind, a subsidiary company called Midas Gold SARL (‘Midas’) was created and a potential site was acquired in Dano in west Burkina Faso. The Environmental Study for the site in Dano was completed at the end of August 2013 and the Government of Burkina Faso awarded Midas an operating licence which covers artisanal semi- mechanised gold mining and gold reprocessing of by-products. The Board continues to believe that Burkina Faso has potential to expand and build a sustainable gold recovery business but due to the significant challenges presented across all operations during FY 2015, no work was done to further explore this opportunity. We will report grade ore being stock-piled for later processing, waste rock being hand-sorted and the remaining high grade ore being processed. This has resulted in an improvement in performance. During FY 2014, the cross-cut accessed by the lowest level (Adit D), was abandoned due to po or and unsafe ground conditions. During the FY 2015 a new adit was established and developed towards the cross cut. Subsequent to FY 2015 year-end the new Adit D intersected the cross-cut beyond the po or ground and it is currently being made safe and prepared for re ef access development during FY 2016. Once this development is completed, a new mining block will be opened up betwe en Adit Bull and Adit D levels and will provide the production flexibility required. on progress or developments in due course with Teng-Teng is an area on our exploration licence a decision regarding the future of this project which was developed historically by previous owners expected to be taken during FY 2016. G O L D P L AT M I N I N G A N D E X P LO R AT I O N Kilimapesa Gold (‘Kilimapesa’) is a small producing gold mine in South Western Kenya. The mine is located in the historically productive Migori before being closed and allowed to flo od. The decline shaft and re ef drives were de-watered towards the end of FY 2015 and re-equipping is being completed during FY 2016. This will allow access to areas for on-re ef exploration of previously reported high grade areas and potential future mining. Archaean Gre enstone Belt in western Kenya and it During the year the limited capacity of the tailings has a mineral resource of 8,715,291 tonnes at 2.40 facility became a significant constraint and a new g/t gold for 671,446 oz gold at a cut-off of 1 g/t. dam was excavated on the existing site to provide Gold ore is currently mined from the Kilimapesa Hill area with additional material being sourced from an additional 6-9 months of capacity. This limited capacity highlights the ne ed to move to a new site. artisanal tailings to date. Gold production for FY New sites for a tailings deposition facility as well as 2015 was 2,278 ounces (FY 2014: 1,163 ounces) a new processing plant and camp were identified with 2,073 ounces (FY 2014: 919 ounces) being sold during FY 2015 with the tailings deposition area during the year. Kilimapesa is currently producing at being acquired and leases being signed for the a rate of around 2,700 ounces of gold per annum processing facility and camp sites. The new area is and is working towards operational break-even. The very well situated relative to the existing Kilimapesa operation includes an exploration permit as well mine, Teng-Teng, our existing borehole, as well as as a mining licence which covers the Kilimapesa to a well-prepared road and the grid power. The Hill area. Mining is carried out using conventional, Company is in the process of finalising administrative labour-intensive methods with ore-processing processes including all requisite permitting and comprising crushing, milling, a CIL circuit, elution and community forums to allow us to proce ed with the bullion production. project. The aim would be to double production Goldplat plc – Annual Report and Accounts 2015 15 to around 6,000 ounces per annum with ore being processed through a new gold plant. With access to capital for the proposed project constrained and the GRG CIL plant becoming available, an interim step is likely to be the moving of this CIL plant to the site in Kenya. Plans will be announced when finalised. Discussions with third parties with a view to a corporate deal are ongoing, but in the current market no discussions have yet progressed to a significant stage. The strategy for Kilimapesa remains that of becoming profitable and management will continually re-assess progress towards this goal. O T H E R E X P LO R AT I O N P R O J E C T S We maintain interests in two gre enfield gold exploration projects which have a total JORC compliant exploration mineral resource of 3,940,000 tonnes at 2.05g/t gold for approximately 259,000 oz gold; the 29 sq km Anumso Gold Exploration licence in the Ashanti region in Ghana and the 246 sq km N yieme project in the Birimian Gre enstone Belt in southern Burkina Faso. As previously noted, no capital expenditure is being attributed to these and we continue to evaluate opportunities to realise value or monetise these projects either through joint ventures of trade sales at no cost to Goldplat. 16 Goldplat plc – Annual Report and Accounts 2015 O U T LO O K short-term basis. With strategic sourcing a priority, we are confident of the ongoing procurement During the course of FY 2015 Goldplat experienced of material for these operations. The shotblast extreme challenges to both recovery operations plant will be moved to GRG and is planned to be primarily as a consequence of the Rand Refinery commissioned before December 2015 and sources of issues. Measures have be en put into place to mill liners have already be en identified. N umerous mitigate the single refinery risk going forward and high level discussions are being held with parties to process all backlog stocks by December 2015. The identified to assist in the expansion of business within increase in elution throughput and planned capacity the West African region as well as elsewhere in the increases during FY 2016 is not only assisting in world using GRG as a hub. Discussions are also the processing of backlog stocks but will allow ongoing with various parties regarding the future significantly increased profitability through in-house of our exploration project in Ghana, Anumso and processing of material previously processed by third progress is expected on this front during FY 2016. parties. With GPL having returned to profitability in the second half of FY 2015, and this forecast At Kilimapesa, increasing tailings capacity is critical to continue through FY 2016; GRG returning to to the ongoing processing through the current profitability at the end of FY 2015, and expected treatment plant. The plans regarding potential JV to improve during FY 2016; and progress towards partners, expanded production and the new plant eliminating losses at Kilimapesa expected to continue and tailings facility are ongoing and the market will during FY 2016, the outlo ok for FY 2016 is positive. be informed as to progress during the course of the Notwithstanding the problems experienced and the year. significantly constrained cash flow, GPL managed to I would like to take this opportunity to thank our complete numerous capital projects without the ne ed Goldplat employe es, advisers, fellow directors and to raise external financing. C apital projects are shareholders for their support as we continue to rigidly planned, strictly managed and prioritised build Goldplat as a leading gold recovery and to provide best returns on capital invested. Major production company in Africa and back to ongoing and planned projects include the profitability in the near-term. installation of a weighbridge on-site which should result in significant savings; rotary kiln refurbishments and upgrades; elution plant installation and commissioning. GRG is once again profitable with operations now restricted to spiralling and incinerating with the potential to re-commence toll treatment on a - G E R A R D K I S B E Y - G R E E N C H I E F E X E C U T I V E O F F I C E R Goldplat plc – Annual Report and Accounts 2015 17 18 Goldplat plc – Annual Report and Accounts 2015 f i n a n c i a l r e v i e w Goldplat plc – Annual Report and Accounts 2015 19 F I N A N C I A L R E V I E W We faced yet another year of two halves. During the first half of the year we suffered a loss from operating activities of £827,000 Sterling for the Group. The second half was substantially better We have se en a substantial deterioration in exchange rates in operating currencies, at subsidiary level, compared to both the US Dollar and the British Pound. The average gold price for the year was USD 1,229 per ounce compared to an average price of USD 1,286 per ounce for the previous year. In South Africa, Ghana and Kenya, the companies benefitted from the higher average gold price per kilogram in local currency terms. with the South African recovery business performing Profitability in Sterling terms were adversely affected well and the Kenyan operation continuing to reduce by the strong British Pound in relation to these losses. Unfortunately the Ghana operations operating currencies; continued to perform po orly. • The Ghana Cedi deteriorated from GHS 5.50 to The Group reported an operating loss for the full GHS 6.95/GBP year of £711,000 (2014: Profit £153,000), which highlights the strong recovery in the second half. • The South African Rand from ZAR 18.06 to ZAR The loss from operating activities after finance costs 19.78/GBP for the year was £675,000 (2014: Loss £248,000) Revenues declined from £21,020,000 to £16,628,000 whilst operating at a low gold price throughout the year. Gold sold of 24,904 ounces compared to 28,216 ounces in 2014. C ost of sales reduced by 18% from £19,202,000 to £15,660,000. Administrative expenses remained substantially the same. We continue to control cost throughout the Group. Considerable inventories of material were accumulated because Rand Refinery was unable to process large amounts of concentrate material. This together with the fact that sales in Ghana decreased to 2,578 ounces from 12,623 ounces in the 2014 financial year had the most significant impact on the Groups’ results. The increase of our elution capability, expected to be commissioned in October 2015, together with the fact that an export solution has be en found will assist to reduce inventory levels going forward, for both the South African and the Ghana subsidiary. Precious metals inventory for the group increased from £3,144,000 to £6,115,000. Dore bar sales generated sufficient cash to service all liabilities. C ash resources decreased from £1,455,000 as at 30 June 2014 to £630,000 for the year under review. I t is expected that cash balances will increase as capital projects are completed, production increases and inventories reduced. • The Kenyan Shilling from KES 151 to KES 158/GBP As mentioned in the CEO’s report a decision was made to terminate the contract with C entral Rand Gold. As a result we had a once off write down of development cost in the amount of £121,000. G O L D P L AT R E C O V E R Y ( P T Y) L I M I T E D – S O U T H A F R I C A ( “ G P L ” ) Goldplat’s recovery operation in South Africa had another profitable year returning a nett profit of £965,000 (2014: £654,000). Capital expenditure of £801,000 (2014: £577,000) was incurred. The liquid cyanide capital project vote was closed in June 2015. The first delivery of sodium cyanide was made during September 2015. C onsiderable savings will be made by purchasing liquid cyanide versus briquettes. The wash plant which was completed in August 2015 and the low grade mill which was completed during September 2015, has increased production. Further production ounces were added in September 2015 by improving the pumping system at the tailings reprocessing plant, which scavenges residual gold from our other CIL processes. 20 Goldplat plc – Annual Report and Accounts 2015 Additional personnel, employed • £50,000 on refurbishing the mill decreased to 6,111 ounces for to complete the abovementioned ends for the underground circuit 2015 compared to 13,739 ounces capital projects, have be en to maintain current operations. in 2014. reduced during the first part of the 2016 financial year. In addition we were able to reduce the number of personnel in G O L D R E C O V E R Y G H A N A bullion and effectively GRG’s Unlike the South African Operation, GRG does not smelt general and expect this process L I M I T E D – cash flow was reduced to a to be completed by the end of G H A N A – ( “ G R G ” ) trickle. October 2015. The cash position excluding cash deposits at the end of the year was £424,000 (2014: £640,000). Increased elution frequencies towards the end of the year improved cash flow and profitability. A 4 tonne elution column will be completed and commissioned in October 2015 and cash flow will return to normality. GRG’s gold recovery operation, The increased elution capacity in which has a tax fre e status until South Africa will benefit Ghana 2016, has had a dismal year. directly. GPL will process GRG’s GRG reported a loss from material to bullion in the new 4 tonne elution column. Assistance operating activities of £641,000 rendered by GPL to GRG, compared to an operating profit towards the end of the year of £813,000 in 2014. During the under review, enabled GRG to year under review £544,000 was become cash positive. The cash lost during the first half which from material exported illustrates a strong recovery during the second half of the material to Aurubis in Germany is expected to flow through in Q2 financial year. The effects of the 2016. The company’s cash flow Further capital expenditure deterioration of the Ghana C edi is expected to return to normal planned for the South African in relation to the British Pound levels by December 2015. operation at this time is and the reduction in ounces £532,000. produced is the main causes for It is expected that the CIL their po or performance. (Carbon-in-Leach) Plant in Tema • £320,000 to complete the 4 Operating results for GRG will be moved to Kilimapesa and tonne elution project; after finance cost resulted in a therefore there was no reason to • £86,000 to be expended on £1,056,000). year under review. loss of £311,000 (2014: profit write down any assets during the finalisation of the low grade mill upgrade and the improvements The companies’ exit from the to the residue section mentioned artisanal tailings processing before; • £22,000 to be expended on a new weighbridge which will business impacted operations negatively, however, the major contributor to the losses incurred was the fact that the company save approximately £40,000 per could not deliver its product to annum; • £54,000 on forklifts which should save in excess £26,000 per annum; Rand Refinery due to capacity constraints at the refinery. Clients were reluctant to deliver further product until a remedy was found which exacerbated the problem. As a result produced ounces Goldplat plc – Annual Report and Accounts 2015 21 F I N A N C I A L R E V I E W K I L I M A P E S A G O L D ( P T Y) L I M I T E D – K E N YA – ( “ K I L I M A P E S A ” ) The Kilimapesa Gold project in Kenya continued to reduce its losses and reported an operating loss of £389,000 (2014: loss of £611,000). Losses after finance cost were £753,000 compared to a loss £713,000 in 2014. Kilimapesa substantially increased sold gold to 2,073 ounces for the year under review compared to 919 ounces during the 2014 financial period. Plant capacity constraints still continue to impact Kilimapesa growth potential. I t is expected that the acquisition of the Ghana CIL (Carbon-in-Leach) plant will increase the production capacity. The capital expenditure to be incurred for the relocation and construction of the plant will be in the region of £775,000, which ideally should be financed by a joint venture partner. During the year under review thre e portions of land were secured. Two long term leases were entered into to facilitate the new plant area and another for the new Adit D. A further £215,000 was expended on the acquisition of 18.723 ha of land which will serve as a final tailings deposition site for the proposed new plant facility. C O N T I N G E N C I E S The directors have delayed the above mentioned relocation of the Ghana plant to Kilimapesa, mainly because of amounts claimed by the Kenya Revenue Authority as being due. The directors believe that, in their opinion, the claims are grossly overstated. Should these claims not be resolved satisfactory it may affect our investment decision regarding the Kilimapesa Project. O U T LO O K The outlo ok for the financial year 2016 is positive and has be en dealt with in detail in the Chairman’s and CEO’s reports. - I V I S A G I E F I N A N C E D I R E C T O R 22 Goldplat plc – Annual Report and Accounts 2015 Goldplat plc – Annual Report and Accounts 2015 Goldplat plc – Annual Report and Accounts 2015 Goldplat plc – Annual Report and Accounts 2015 23 the board b r I a N M o r I t Z Non - e xecu tiv e Chairman and eastern europe, the Middle east, Far east, Central asia and North america. after returning to South africa as a Managing director with Standard bank in 2009, Gerard left the banking industry and joined Peterstow aquapower, a mining technology brian is a Chartered accountant and former Senior Partner of development company, as Ceo in 2011, before accepting a Grant thornton, London. he formed Grant thornton’s Capital position in 2012 with aurigin resources Inc., a privately owned Markets team, which floated over 100 companies on aIM under toronto-based gold exploration company with assets in ethiopia his chairmanship. In 1995 he retired to concentrate on bringing and tanzania, as President and Ceo. new companies to the market as a director. he focuses on mining companies, primarily in africa, and was formerly Chairman of african Platinum PLC and Metal bulletin PLC as well as currently being Chairman of several junior mining companies. brian is I a N V I S a G I e a member of the audit and remuneration committe es of the Finance director Ian is a chartered accountant who has worked in senior positions in the mining industry since 1990. a South african citizen he trained as a Chartered accountant with KPMG in its Pretoria office. having gained post-qualifying experience with KPMG he moved into a mining environment in 1990 when he joined Consolidated Modderfontein Mines Limited as Financial Manager, and Goldplat recovery in March 1997 as Financial director. Ian has be en a director of Goldplat plc since listing. Company and is responsible for corporate governance issues and compliance with aIM. G e r a r d K I S b e Y - G r e e N Chief e xe cut i ve officer Gerard has built an expansive care er in the mining and related financial industry, spanning over 28 years. after graduating as a Mining engine er in South africa in 1987, he gained extensive experience working in various management positions for a number of the larger South african mining companies, including rand Mines Group and the gold division of anglo american Corporation. during this time he worked on gold, platinum and coal mines primarily in South africa and also in Germany and australia. Gerard subsequently spent 17 years in the financial markets, including five years as a mining equity analyst and 12 years in mining corporate finance. he has worked in South africa and the UK for banks including JPMorganChase, Investec and Standard bank. Gerard has extensive experience in IPos, capital raisings, M&a transactions and deals covering a great diversity of commodities and geographic locations. he also has experience in nomad and broker and advisory roles. he has worked extensively in africa, particularly South africa, Western 24 Goldplat plc – Annual Report and Accounts 2015 h a N S I e V a N V r e d e N Chi ef o pe rating officer an experienced metallurgist with over 15 years in the mining industry. Prior to joining Goldplat he worked at several angloGold ashanti (‘anglo’) operations in South africa, including Savuka, Mponeng and Kopanang Gold Plants, and Sunrise dam Gold Mine in Western australia. during his time as Plant Manager and Production Metallurgist at Kopanang Gold Plant he successfully converted the operation from re ef to waste rock and implemented various initiatives to increase production capabilities and improve recoveries. In addition, at thre e other anglo processing plants he gained certification and re-certification of the International Cyanide Management Institute (ICMI). during his time at anglo (1999-2013) he was also responsible for health and safety, production planning and execution, projects, metallurgical accounting, security and operational staff. he holds a bachelors degre e in engine ering (Chemical: Mineral Processing) from the University of Stellenbosch. N I G e L W Y a t t N o n- exe cut ive dire ctor Nigel is a graduate of the Camborne Scho ol of Mines. he has held senior positions in a number of mining and engine ering companies, primarily in Southern africa. he was the group marketing director of a de be ers group subsidiary supplying specialised materials, engine ering and technology to the industrial and mining sectors, and commercial director of dunlop Industrial Products (Pty) Limited, South africa. In 2006, he was appointed as Ceo of Chromex Mining Plc, an aIM company mining chrome in South africa. after listing the company and bringing the company to early production, he resigned in order to se ek and develop other early stage mining projects. t h e b o a r d 25 Goldplat plc – Annual Report and Accounts 2015 dIreCtorS’ rePort F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5 the directors present their report together with the audited P o L I t I C a L d o N a t I o N S financial statements of the Group for the year ended 30 June 2015. there were no political donations during the year (2014: £Nil). a review of the business and risks and uncertainties is included in the Strategic report. r e S U L t S C o r P o r a t e G o V e r N a N C e S t a t e M e N t the board has established an audit committe e and a remuneration committe e with formally delegated duties and the Group reports a pre-tax loss of £675,000 (2014: loss responsibilities. £248,000) and an after tax loss of £892,000 (2014: £356,000). M a J o r e V e N t S a F t e r t h e b a L a N C e S h e e t d a t e the following events occurred after the balance she et date and are further discussed in note 38 to these financial statements: • On 22 July 2015 8 million share options were granted to G Kisbey-Gre en and 3 million share options were granted to h van Vreden. d I V I d e N d S No dividend is proposed in respect of the year ended 30 June 2015 (2014: £nil per share). during the year the audit committe e consisted of b M Moritz and N Wyatt. the audit committe e has responsibility for ensuring that the financial performance, position and prospects of the Company are properly monitored and reported on, for me eting with the auditor and discussing their reports on the accounts and the Company’s financial controls and for recommending the appointment of auditors. the remuneration and terms and conditions of appointment of non-executive directors are set by the board. No director may participate in any discussions or decisions regarding his own remuneration. d I r e C t o r S the following directors served during the period: G K I S b e Y - G r e e N (Chief executive officer) b M M o r I t Z I V I S a G I e N G W Yat t (Non-executive Chairman) (Finance director) (Non-executive director) J h Va N V r e d e N (Chief operating officer) 26 Goldplat plc – Annual Report and Accounts 2015 d I r e C t o r S ’ I N t e r e S t S the beneficial interests of the directors holding office on 30 June 2015 in the issued share capital of the Company were as follows: 3 0 J U N e 2 015 3 0 J U N e 2 014 N U M b e r o F P e r C e N ta G e o F N U M b e r o F P e r C e N ta G e o F o r d I N a r Y S h a r e S I S S U e d S h a r e o r d I N a r Y S h a r e S I S S U e d S h a r e b M Moritz o F 1P e a C h 2,550,000 C a P I ta L 1.51% o F 1P e a C h 2,550,000 C a P I ta L 1.51% Since 30 June 2015, b M Moritz has purchased a further 900,000 ordinary shares of 1p each and is now interested in 3,450,000 ordinary shares representing 2.06% of the issued ordinary share capital. No other director had a beneficial interest in the share capital of the Company. d i r e c t o r s ’ r e p o r t d I r e C t o r S ’ r e M U N e r a t I o N a N d S e r V I C e C o N t r a C t S details of directors’ emoluments including share based payments are disclosed in note 10 to these financial statements. G Kisbey-Gre en b M Moritz I Visagie N G Wyatt J h Van Vreden S a L a r I e S £ ‘ 0 0 0 F e e S £ ‘ 0 0 0 ot h e r £ ‘ 0 0 0 62 - 128 - 101 291 - 40 - 25 - 65 - - - - 13 13 tota L £ ‘ 0 0 0 62 40 128 25 114 369 d I r e C t o r S ’ I N d e M N I t I e S the Company maintains directors’ and officers’ liability insurance providing appropriate cover for any legal action brought against its directors and/or officers. G o I N G C o N C e r N the directors adopt the going concern basis in preparing these financial statements. this is further explained in note 2 to the financial statements. e M P L o Y e e S the directors have a participative management style with frequent direct contact betwe en junior and senior employe es. a two-way flow of information and fe edback is maintained through formal and informal me etings covering Group performance. the Group is an equal employment opportunity employer. 27 Goldplat plc – Annual Report and Accounts 2015 S t a t e M e N t o F d I r e C t o r S ’ r e S P o N S I b I L I t I e S S t a t e M e N t o F d I S C L o S U r e t o a U d I t o r the directors are responsible for preparing the directors’ report So far as the directors are aware: and the financial statements in accordance with applicable law and regulations. • there is no relevant audit information of which the Group’s and Company’s auditor is unaware; and Company law requires the directors to prepare financial statements for each financial year. Under that law the directors • all the Directors have taken steps that they ought to have have elected to prepare the financial statements in accordance taken to make themselves aware of any relevant audit with International Financial reporting Standards (“IFrSs”) as information and to establish that the auditors are aware of that adopted by the european Union. the financial statements are information. required by law to give a true and fair view of the state of affairs of the Company and the Group of the Group’s profit or loss for that year. a U d I t o r In preparing these financial statements, the directors are Chantrey Vellacott dFK LLP merged its practice with Mo ore required to: • select suitable accounting policies and then apply them consistently; Stephens LLP with effect from 1 May 2015 and now practises under the name of Mo ore Stephens LLP. a resolution to re-appoint Mo ore Stephens LLP as auditor will be proposed at the annual General Me eting. • make judgements and estimates that are reasonable and by order of the board prudent; • state whether the financial statements comply with IFRS as adopted by the european Union; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business b Moritz director 2 october 2015 the directors are responsible for ke eping adequate accounting records that are sufficient to show and explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies act 2006. they are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. the directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 28 Goldplat plc – Annual Report and Accounts 2015 StrateGIC rePort F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5 s t r a t e g i c r e p o r t the directors present their Strategic report for the year ended 30 June 2015. r e V I e W o F b U S I N e S S a N d F I N a N C I a L P e r F o r M a N C e the Strategic report is a statutory requirement under the Information on the financial position of the Group is set Companies act 2006 (Strategic report and directors’ out in the Financial report and the annexed financial report) regulations 2013 and is intended to provide fair statements. and balanced information that enables the directors to be satisfied that they have complied with s172 of the details of the operations are set out in the operations Companies act 2006 which sets out the directors’ duty to report. promote the success of the Company. P r I N C I P a L a C t I V I t Y the board regularly reviews the risks to which the Group is exposed and ensures through its me etings and regular reporting that these risks are minimised as far as possible. the Group’s business is based in africa and comprises the production of gold and other precious metals, by r I S K S a N d U N C e r t a I N t I e S processing by-products of the mining industry as well as mining itself. the principal risks and uncertainties facing the Group at this stage in its development are: the Group’s primary operating base is situated near benoni on the east rand goldfield in South africa. as well as producing gold, silver and platinum group metals P U R c H A s i N g R i s k the main business of the Group, the recovery of gold from the by-products of the mining industry, support for from by-products of the mining industry, requires such by- other Group operating subsidiary companies is provided products to be available for purchase by the Group and from benoni. this business is 74% owned in compliance prices which allow profitable processing by the Group. as with South african black economic empowerment mining companies become more efficient both the volumes legislation. Gold is also produced in Ghana at the of available materials and their precious metal content Group’s site in the fre e port of tema. may be reduced. the Group mines gold at the Kilimapesa mine near Lolgorien in Kenya, and is se eking ways to expand the Group mitigates this risk by its flexibility in the types of material it processes. It has also be en in the forefront production from this mine of producing “responsible Gold” which gives it a competitive advantage over its competitors. the group also has exploration projects in Ghana and burkina Faso which are not being developed at present. 29 Goldplat plc – Annual Report and Accounts 2015 P R i c E R i s k the gold and precious metals produced by the Group are sold E N v i R O N m E N T A l R i s k exploration and development of a project can be adversely at world prices which may fluctuate substantially according to affected by environmental legislation and the unforese en results supply and demand, and are not directly related to the cost of of environmental studies carried out during evaluation of a production. project. once a project is in production unforese en events can the Group se eks to mitigate this risk in part by adjusting the price it pays for materials for processing. the Group’s is responsible for rehabilitation at all its operations. give rise to environmental liabilities. E x P l O R A T i O N R i s k the Group’s business includes mineral exploration and evaluation F i N A N c i N g & l i q U i D i T Y R i s k the Company may ne ed to finance expansion through the equity which are speculative activities and there is no certainty that markets and in future to obtain finance for project development. the Group will be successful in the definition of economic mineral there is no certainty such funds will be available when ne eded. deposits, or that it will proce ed to the development of any of its projects or otherwise realise their value. this risk is mitigated for Goldplat in so far as its primary the Group aims to mitigate this risk when evaluating new business opportunities by targeting areas of potential where there is at least some historical drilling or geological data available. activities are cash generative. P O l i T i c A l R i s k all countries carry political risk that can lead to interruption of activity. Politically stable countries can have enhanced environmental and social permitting risks, risks of strikes and R E s O U R c E R i s k all mineral projects have risk associated with defined grade and changes to taxation whereas less developed countries can have in addition, risks associated with changes to the legal continuity. Mineral reserves and resources will be calculated by framework, civil unrest and government expropriation of assets. the Group in accordance with accepted industry standards and codes but are always subject to uncertainties in the underlying assumptions which include geological projection and commodity price assumptions. D E v E l O P m E N T R i s k delays in permitting, financing and commissioning a project P A R T N E R R i s k In South africa, black economic empowerment legislation requires historically disadvantaged South africans to have a minimum 26% interest in all mining and exploration projects. the Group can be adversely affected if joint venture partners are unable or unwilling to perform their obligations or fund their may result in delays to the Group me eting production targets. share of future developments. It is possible that other countries Changes in commodity prices can affect the economic viability where the Group operates may introduce similar legislation. of mining projects and affect decisions on continuing exploration activity. m i N i N g A N D P R O c E s s i N g T E c H N i c A l R i s k Notwithstanding the completion of metallurgical testwork, test mining and pilot studies indicating the technical viability of a mining operation, variations in mineralogy, mineral continuity, ground stability, ground water conditions and other geological F i N A N c i A l i N s T R U m E N T s details of risks associated with the Group’s financial instruments are given in Note 33 to the financial statements. the Company does not utilise any complex financial instruments. i N T E R N A l c O N T R O l s A N D R i s k m A N A g E m E N T the directors are responsible for the Group’s system of internal conditions may still render a mining and processing operation financial control. although no system of internal financial control economically or technically non-viable. can provide absolute assurance against material misstatement or loss, the Group’s system is designed to provide reasonable the Group has a small team of mining professionals experienced assurance that problems are identified on a timely basis and in geological evaluation, exploration, financing and development dealt with appropriately. of mining projects. to mitigate development risk the Group supplements this from time to time with engagement of external In carrying out their responsibilities the directors have put in expert consultants and contractors. place a framework of controls to ensure as far as possible that ongoing financial performance is monitored in a timely manner, that corrective action is taken and that risk is identified as early as practically possible, and they have reviewed the effectiveness of internal financial control. 30 Goldplat plc – Annual Report and Accounts 2015 the board, subject to delegated authority, reviews regulatory issues, capital investment, property sales and purchases, additional borrowing facilities, guarante es and insurance arrangements. B R i B E R Y R i s k the Group has adopted an anti-corruption policy and whistle blowing policy under the bribery act 2010. Notwithstanding this, the Company may be held liable for offences under that act committed by its employe es or subcontractors whether or not the Company or the directors have knowledge of the commission of such offences. F O R w A R D l O O k i N g s T A T E m E N T s this annual report contains certain forward lo oking statements that have be en made by the directors in go od faith based on the information available at the time of the approval of the annual report. by their nature, such forward lo oking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. actual results may differ from those expressed in such statements. Gerard Kisbey-Gre en Ceo 2 october 2015 s t r a t e g i c r e p o r t 31 Goldplat plc – Annual Report and Accounts 2015 INdePeNdeNt aUdItor’S rePort to the MeMberS oF GoLdPLat PLC We have audited the financial statements of Goldplat Plc for the year ended 30 June 2015 which comprise the consolidated statement of profit or loss and other comprehensive income, the S C o P e o F t h e a U d I t o F t h e F I N a N C I a L S t a t e M e N t S consolidated and company statements of financial position, the a description of the scope of an audit of financial statements is consolidated and company statements of changes in equity, the provided on the Financial reporting Council’s web-site at consolidated and company statements of cash flows and the www.frc.org.uk/auditscopeukprivate. related notes. the financial reporting framework that has be en applied in their preparation is applicable law and International Financial reporting Standards (IFrS) as adopted by the european Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies o P I N I o N o N F I N a N C I a L S t a t e M e N t S act 2006. In our opinion the financial statements: this report is made solely to the company’s members, as a body, • give a true and fair view of the state of the group’s and of the in accordance with Chapter 3 of Part 16 of the Companies act parent company’s affairs as at 30 June 2015 and of the group’s 2006. our audit work has be en undertaken so that we might loss for the year then ended; state to the, company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. • have be en properly prepared in accordance with IFRS as to the fullest extent permitted by law, we do not accept or adopted by the european Union; and assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this • have be en prepared in accordance with the requirements of report, or for the opinions we have formed. the Companies act 2006. r e S P e C t I V e r e S P o N S I b I L I t I e S o F d I r e C t o r S a N d a U d I t o r S as explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on auditing (UK and Ireland). those standards require us to comply with the auditing Practices board’s (aPbs) ethical Standards for auditors. 32 Goldplat plc – Annual Report and Accounts 2015 o P I N I o N o N o t h e r M a t t e r S P r e S C r I b e d b Y t h e C o M P a N I e S a C t 2 0 0 6 In our opinion, the information given in the strategic report and directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements. M a t t e r S o N W h I C h W e a r e r e q U I r e d t o r e P o r t b Y e x C e P t I o N We have nothing to report in respect of the following where, under the Companies act 2006 we are required to report to you if, in our opinion: • adequate accounting records have not be en kept by the parent company, or returns adequate for our audit have not be en received from branches not visited by us; or • the parent company financial statements are not in agre ement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Gareth JoNeS (Senior Statutory auditor) for and on behalf of Moore StePheNS LLP Chartered accountants and Statutory auditor London 2 october 2015 a u d i t o r ’ s r e p o r t 33 Goldplat plc – Annual Report and Accounts 2015 ConsoliDateD statement of profit or loss anD other Comprehensive inCome F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5 Co ntinuing operations rev enue Cost of sales gross profit administrative expenses results from operating aCtivities finance income finance costs net fin anCe Costs results from operating aCtivities after finanCe Costs Write off development cost of discontinued south african mining operations los s b efo re tax taxation loss for the year los s attributable to: owners of the Company non-controlling interests los s fo r the year notes 7 11 12 13 2015 £’000 16,628 (15,660) 968 (1,679) (711) 843 (807) 36 (675) (121) (796) (96) (892) (1,143) 251 (892) 2014 £’000 21,020 (19,202) 1,818 (1,665) 153 429 (830) (401) (248) – (248) (108) (356) (527) 171 (356) other Comprehensive inCome items that may be reclassified subsequently to profit or loss: exchange translation other Comprehensive expense for the year (860) (860) (3,613) (3,613) total Comprehensive expense for the y ear (1,752) (3,969) total Comprehensive inCome attributable to: owners of the Company non-controlling interests total Comprehensive expense for the y ear ear nin gs per share – Continuing operations (2,003) 251 (1,752) (4,140) 171 (3,969) basic earnings per share (pence) 25 (0.53) (0.21) 34 the notes on pages 42 to 79 are an integral part of these consolidated financial statements. Goldplat plc – Annual Report and Accounts 2015 ConsoliDateD statement of finanCial position as sets property, plant and equipment intangible assets pre-production expenditure proce eds from sale of shares in subsidiary non-current cash deposits no n- Current assets inventories trade and other receivables Cash and cash equivalents Current assets total assets equity share capital share premium exchange reserve retained earnings equity attributable to oWners of the Company non-controlling interests total eq uity liab ilities obligations under finance leases interest bearing borrowings provisions Deferred tax liabilities no n- Current liabilities obligations under finance leases interest bearing borrowings taxation trade and other payables Current liabilities total liabilities total eq uity anD liabilities A s A T 3 0 J U N E 2 0 1 5 notes 14 15 16 17 18 21 22 23 24 24 26 27 29 30 26 27 31 2015 £’000 4,449 7,033 2,136 1,357 233 2014 £’000 4,202 7,194 2,457 1,448 202 15,208 15,503 7,727 3,305 630 11,662 5,088 4,786 1,455 11,329 26,870 26,832 1,685 11,498 (6,707) 9,868 16,344 1,893 18,237 199 56 121 459 835 120 104 18 1,685 11,498 (5,847) 11,011 18,347 1,642 19,989 106 – 129 430 665 169 – 27 7,556 7,798 5,982 6,178 8,633 6,843 26,870 26,832 the financial statements of goldplat plc, company number 05340664, were approved by the board of Directors and authorised for issue on 2 october 2015. they were signed on its behalf by: ian visagie, Director the notes on pages 42 to 79 are an integral part of these consolidated financial statements. 35 financial statementsGoldplat plc – Annual Report and Accounts 2015 ConsoliDateD statement of Changes in equity A s A T 3 0 J U N E 2 0 1 5 attributable to owners of the company share share exchange reta ined non- controlling capital premium reserve earnings total interests £’000 £’000 £’000 £’000 £’000 £’000 total equi ty £’000 balance at 1 July 2014 1,685 11,498 (5,847) 11,011 18,347 1,642 19,989 total Comprehensive in Com e for the year loss total other comprehensive income total Comprehensive in Com e for the year – – – – – – – (1,143) (1,143) 251 (892) (860) – (860) – (860) (860) (1,143) (2,003) 251 (1,752) tran saCtions With oWners of the Company reCogniseD DireCtly in equity Co ntributions by anD Distributions to oWners of the Company share based payment transactions total Contributions by anD Distributions to oW ners of the Com pany balanCe at 30 June 2015 – – – – – – – – – – – – – – 1,685 11,498 (6,707) 9,868 16,344 1,893 18,237 . 36 the notes on pages 42 to 79 are an integral part of these consolidated financial statements. Goldplat plc – Annual Report and Accounts 2015 ConsoliDateD statement of Changes in equity ( c O N T i N U E D ) attributa ble to owners of the company share share exchange reta ined non- controlling Capital premi um reserve earnings total interests £’000 £’000 £’000 £’000 £’000 £’000 total equi ty £’000 balance at 1 July 2013 1,684 11,494 (2,234) 11,711 22,655 1,525 24,180 total Comprehensive in Com e for the year loss total other comprehensive income total Comprehensive in Com e for the year – – – – – – – (527) (527) 171 (356) (3,613) – (3,613) – (3,613) (3,613) (527) (4,140) 171 (3,969) tran saCtions With oWners of the Company reCogniseD DireCtly in equity Contributions by anD Distr ibutions to oWners of the Company issue of ordinary shares Dividends share based payment transactions total Contributions by anD Distr ibutions to oW ners of the Company 1 – – 1 4 – – 4 Chan ges in oWnership interests in subsiDiaries non-controlling interests in subsidiary dividend total transaCtions With – oW ners of the Company 1 – 4 – – – – – – – (201) 5 (201) 28 28 (173) (168) – – – – 5 (201) 28 (168) – – (54) (54) (173) (168) (54) (222) balan Ce at 30 June 2014 1,685 11,498 (5,847) 11,011 18,347 1,642 19,989 the notes on pages 42 to 79 are an integral part of these consolidated financial statements. 37 financial statementsGoldplat plc – Annual Report and Accounts 2015 ConsoliDateD statement of Cash floWs F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5 notes 2015 £’000 2014 £’000 Cash floWs from operating aCtivities (loss)/profit for the period adjustments for: Depreciation amortisation loss on sale of property, plant and equipment equity–settled share–based payment transactions foreign exchange differences Changes in: – inventories – trade and other receivables – trade and other payables – provisions Cash generateD from operating aCtivities finance income finance cost taxes paid net Cash from operating aCtivities Cash floWs from investing aCtivities proce eds from sale of property, plant and equipment enhancement of exploration and development asset acquisition of property, plant and equipment pre–production expenditure non–current cash deposit net Cash useD in investing aCtivities Cash floWs from finanCing aCtivities Dividends paid proce eds from interest bearing borrowings payment of finance lease liabilities net Cash floWs from finanCing aCtivities (832) 390 189 148 – (172) (277) (2,639) 1,481 1,574 (8) 131 843 (679) (76) 219 24 (92) (909) – (31) (1,008) – 160 (196) (36) 153 393 28 35 28 (1,238) (601) (651) (27) 1,970 (5) 686 429 (832) 187 470 27 (50) (510) (242) (202) (977) (201) – (199) (400) 32.1 32.2 net DeCrease in Cash anD Cash equivalents (825) (907) Cash and cash equivalents at 1 July 1,455 2,362 Cash anD Cash equivalents at 30 June 23 630 1,455 38 the notes on pages 42 to 79 are an integral part of these consolidated financial statements. Goldplat plc – Annual Report and Accounts 2015 Company statement of finanCial position as sets loans to subsidiary companies investments no n– Current assets trade and other receivables Cash and cash equivalents Current assets total assets equity share capital share premium retained earnings equity attributable to oWners of the Company non–controlling interests total eq uity liab ilities trade and other payables Current liabilities total liabilities A s A T 3 0 J U N E 2 0 1 5 notes 19 20 22 23 24 31 2015 £’000 4,470 9,425 13,895 420 15 435 2014 £’000 7,561 6,425 13,986 271 95 366 14,330 14,352 1,685 11,498 1,074 14,257 1,685 11,498 1,150 14,333 – – 14,257 14,333 73 73 73 19 19 19 total eq uity anD liabilities 14,330 14,352 the financial statements of goldplat plc, company number 05340664, were approved by the board of Directors and authorised for issue on 2 october 2015. they were signed on its behalf by: ian visagie, Director the notes on pages 42 to 79 are an integral part of these consolidated financial statements. 39 financial statementsGoldplat plc – Annual Report and Accounts 2015 Company statement of Changes in equity F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5 attributa ble to owners of the Company share capital £ ‘000 share reta ined premi um £ ‘000 deficit £ ‘000 total equi ty £ ‘000 balance at 1 July 2013 1,684 11,494 1,479 14,657 total Comprehensive inCome for the perioD loss total other comprehensive income total Comprehensive inCome for the perioD tran saCtions With oWners of the Company reCogniseD DireCtly in equity Co ntributions by anD Distributions to oW ners of the Company issue of ordinary shares Dividends own shares acquired share based payment transactions total Contributions by anD Distr ibutions to oW ners of the Company – – – 1 – – – 1 – – – 4 – – – 4 (156) – (156) – (201) – 28 (173) (156) – (156) 5 (201) – 28 (168) balanCe at 30 June 2014 1,685 11,498 1,150 14,333 balance at 1 July 2014 1,685 11,498 1,150 14,333 total Comprehensive inCome for the perioD loss total other comprehensive income total Comprehensive inCome for the perioD tran saCtions With oWners of the Company reCogniseD DireCtly in equity Co ntributions by anD Distr ibutions to oWners of the Company Dividends own shares acquired share based payment transactions total Co ntributions by anD Distributions to oWners of the Company – – – – – – – – – – – – – – (76) – (76) – – – – (76) – (76) – – – – balan Ce at 30 June 2015 1,685 11,498 1,074 14,257 40 the notes on pages 42 to 79 are an integral part of these consolidated financial statements. Goldplat plc – Annual Report and Accounts 2015 Company statement of Cash floWs F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 5 notes 2015 £’000 2014 £’000 Cash floWs from operating aCtivities loss for the period adjustments for: equity–settled share–based payment transactions Changes in: – trade and other receivables – trade and other payables Cash (useD in)/from operating aCtivities interest received interest paid net Cash useD in operating aCtivities Cash floWs from finanCing aCtivities equity dividends paid proce eds from issue of share capital loans with subsidiary net Cash floWs from finanCing aCtivities net DeCrease in Cash anD Cash equivalents Cash and cash equivalents at 1 July Cash anD Cash equivalents at 30 June 23 (70) – (70) (149) 54 (165) – (6) (171) – – 91 91 (80) 95 15 (125) 28 (97) (221) (61) (379) – (31) (410) (201) – 365 164 (246) 341 95 the notes on pages 42 to 79 are an integral part of these consolidated financial statements. 41 financial statementsGoldplat plc – Annual Report and Accounts 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 . R EpO RTIN g ENTIT y goldplat plc (the ‘Company’) is a company domiciled in England and Wales. The address of the Company’s registered office is 55 gower Stre et, London, WC1E 6HQ. The group primarily operates as a producer of precious metals on the African continent. 2 . gO IN g CO N CER N The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman’s Statement. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in these financial statements. The financial statements include the Company’s objectives, policies and processes for managing its capital; its financial risk management objectives, details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. The Company has sufficient reserves of raw materials and ongoing contracts with its current suppliers. The Company has a secure market for its precious metal products which are sold at market related prices which are above production costs. The Directors believe that this performance will be sustainable for the ensuing year and therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements. 3 . BASIS O F pR EpAR ATIO N ( a ) Sta t e m e n t of co m p li a n ce The consolidated financial statements have be en prepared in accordance with International Financial Reporting Standards (‘IFRSs’) as issued by the International Accounting Standards Board (‘IASB’) and as adopted by the European Union. The Company’s individual profit and loss account has be en omitted from the group’s annual financial statements having taken advantage of the exemption not to disclose under Section 408(3) of the Companies Act 2006. The Company’s comprehensive loss for the year ended 30 June 2015 was £76,000 (2014: loss £156,000). ( b ) B a s i s of m e a s u re m e n t The consolidated financial statements have be en prepared on the historical cost basis. ( c ) Fu n c t i o n a l a n d p re s e n ta t i o n a l cu r re n cy The Company’s main functional currency is considered to be the US Dollar (“USD”). Due to operational spread of activities the pound Sterling, South African Rand, Kenyan Shilling and ghana Cedi are also of importance. The presentational currency is the pound Sterling. 42 FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 3 . BASIS O F pR EpAR ATIO N ( CO NTINUED ) ( d ) U s e of e s t im a t e s a n d j u d g e m e n t s The preparation of the consolidated financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in the period of revision and future periods of the revision if it affects both current and future periods. Critical estimates and assumptions that have the most significant effect on the amounts recognised in the consolidated financial statements and/or have a significant risk of resulting in a material adjustment within the next financial year are as follows: • • Carrying value of go odwill – Notes 4(a)(i) and 15 Capitalisation of pre-production expenditure – Notes 4(e)(iii) and 16 Accounting entries are made in accordance with the accounting policies detailed below. 4 . SIgNIFICANT ACCO UNTIN g pO LICIES The accounting policies set out below have be en applied consistently to all periods presented in these consolidated financial statements, and have be en applied consistently by group entities. ( a ) B a s i s of co n s o lid a t i o n ( i ) B u s in e s s co m bin a t i o n s Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the group takes into consideration potential voting rights that currently are exercisable. The group measures go odwill at the acquisition date as: • • • • the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquire e; plus if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquire e; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase price is recognised immediately in profit or loss. 43 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are recognised in profit or loss. Transaction costs, other than those associated with the issue of debt or equity securities, that the group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss. When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquire e’s employe es (acquire e’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquire e’s awards and the extent to which the replacement awards relate to past and/or future service. ( i i ) S u b s id i a r i e s Subsidiaries are entities controlled by the group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. ( i i i ) Lo s s of co n t ro l On the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investe e or as an available-for-sale financial asset depending on the level of influence retained. ( i v ) Tra n s a c t i o n s e limin a t e d o n co n s o lid a t i o n Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. ( b ) Fo re i g n cu r re n cy ( i ) Fo re i g n cu r re n cy t r a n s a c t i o n s Assets and liabilities denominated in foreign currencies are translated at the closing rate at the balance she et date. Income and expense items are translated at an average rate for the year. All differences are charged to the statement of profit or loss and other comprehensive income. 44 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) ( i i ) Fo re i g n o p e r a t i o n s The assets and liabilities of foreign operations, including go odwill and the fair value adjustments arising on acquisition, are translated to gBp at exchange rates at the reporting date. The income and expenses of foreign operations, are translated to gBp at exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income, and presented in the exchange reserve in equity. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportion of the translation difference is allocated to non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the forese eable future, foreign currency gains and losses arising from such item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income, and presented in the exchange reserve in equity. go odwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operation and translated at the closing rates. ( c ) Fin a n ci a l in s t r u m e n t s ( i ) N o n - d e r i v a t i v e fin a n ci a l a s s et s The group initially recognises loans and receivables on the date that they are originated. All other financial assets are recognised initially on the trade date, which is the date that the group becomes a party to the contractual provisions of the instrument. The group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the group is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group’s non-derivative financial assets comprise loans and receivables. 45 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) Lo a n s a n d re ce i v a bl e s Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. A provision is established when there is objective evidence that the group will not be able to collect all amounts due. The amount of any provision is recognised in the consolidated statement of profit or loss and other comprehensive income. Loans and receivables comprise trade and other receivables. Ca s h a n d ca s h e q ui v a l e n t s Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of thre e months or less. Bank overdrafts that are repayable on demand and form part of the group’s cash management are included as a component of cash and cash equivalents for the purposes of the statement of cash flows. ( i i ) N o n - d e r i v a t i v e fin a n ci a l li a bili t i e s The group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the group becomes a party to the contractual provisions of the instrument. The group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. Other financial liabilities comprise loans and borrowings, finance lease obligations, and trade and other payables. Bank overdrafts that are repayable on demand and form an integral part of the group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. ( i i i ) Sh a re ca p i ta l O rd in a r y s h a re s Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. 46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) Re p u rch a s e a n d re i s s u e of s h a re ca p i ta l ( t re a s u r y s h a re s ) When share capital recognised as equity is repurchased, the amount of consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in share premium. ( d ) pro p e r t y , p l a n t a n d e q uip m e n t ( i ) Re co g ni t i o n a n d m e a s u re m e n t Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of the mining asset includes the costs of dismantling and removing the items and restoring the site on which they are located. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference betwe en the net proce eds from disposal and the carrying amount of the item) is recognised in profit or loss. ( i i ) S u b s e q u e n t co s t s Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the group. Ongoing repairs and maintenance is expensed as incurred. ( i i i ) D e p re ci a t i o n Items of property, plant and equipment are depreciated on a straight-line basis in profit or loss over the estimated useful lives of each component. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the group will obtain ownership by the end of the lease term. Fre ehold land is not depreciated. Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use. 47 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows: • • • • • • • • leasehold land buildings plant and equipment motor vehicles office equipment insurance spares lease period 20 years 10 years 5 years 6 years 10 years environmental assets life of mine pre-production expenditure 10 years from date of commencement of production Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. ( e ) In ta n g i bl e a s s et s ( i ) g o o d w ill go odwill that arises on the acquisition of subsidiaries is presented with intangible assets. For the measurement of go odwill at initial recognition, se e note 4(a)(i). S u b s e q u e n t m e a s u re m e n t go odwill is measured at cost less accumulated impairment losses. ( i i ) M inin g r i g ht s , ex p l o ra t i o n a n d d ev e l o p m e n t Mining rights, exploration and development includes rights in production, development and exploration phase properties. The amount capitalised represents fair value at the time acquired, plus enhancement expenditure at cost. Mining rights comprise production phase properties and are amortised over the estimated life of the mine. Impairment of mining rights in production phase properties is considered based on expected future cash flows and estimates of recoverable minerals. Rights associated with development and exploration phase properties are not amortised until such time as the underlying property is converted to the production phase. Rights associated with exploration and development properties are individually evaluated for impairment based on exploration results. ( i i i ) Pre - p ro d u c t i o n ex p e n d i t u re Pre-production expenditure, including evaluation costs, incurred on mines to establish or expand productive capacity, or to support and maintain that productive capacity are capitalised. Capitalisation ceases when the mine is in a condition necessary to operate as intended by management. 48 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) ( i v ) S u b s e q u e n t ex p e n d i t u re Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated go odwill and brands, is recognised in profit or loss as incurred. ( v ) A m o r t i s a t i o n Except for go odwill, intangible assets are amortised on a straight-line basis in profit or loss over their estimated useful lives, from the date that they are available for use. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Amortisation is included within administrative expenses in the statement of profit or loss and other comprehensive income. ( f ) Le a s e d a s s et s Leases in terms of which the group assumes substantially all of the risks and rewards of ownership are classified as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and are not recognised in the group’s statement of financial position. ( g ) Inv e n to r i e s Consumable stores and raw materials are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average basis and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Bullion on hand, gold and platinum represents production on hand after the smelting process, gold contained in the elution process, gold loaded carbon the in carbon-in-leach (“CIL”) and carbon-in-pulp (“CIP”) processes, gravity concentrates, platinum group metals (“pgM”) concentrates and any form of precious metal in process where the quantum of the contained metal can be accurately determined. It is valued at the average production cost for the year, including amortisation and depreciation. 49 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) Broken ore represents blasted ore, underground or on stockpile, and are measured at the lower of cost and net realisable value. The cost of broken ore is based on production costs and other costs incurred in bringing them to their existing location and condition. ( h ) Im p a ir m e n t The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each balance she et date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (“CGU”) exce eds its recoverable amount. Impairment losses are recognised in the group statement of profit or loss and other comprehensive income. go odwill is assessed annually for possible impairment. Impairment losses relating to go odwill are not reversed. ( i ) Em p l oye e b e n efi t s Sh a re - b a s e d p a y m e n t t ra n s a c t i o n s Equity-settled share-based payments are measured at fair value (excluding the impact of any non-market vesting conditions) at the date of grant. 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 and adjusted for the effect of non market-based vesting conditions. Fair value is measured by use of the Black Scholes model. The expected life used in the model has be en adjusted, based on management’s best estimate, for the effects of non-transferability, exercised restrictions and behavioural considerations. ( j ) prov i s i o n s A provision is recognised in the statement of financial position if, as a result of a past event, the group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Env iro nm e n ta l o bli g a t i o n In accordance with the group’s environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognised when the land is contaminated. The estimated long-term environmental obligations, comprising rehabilitation and mine closure, are based on the group’s environmental management plans in compliance with current environmental and regulatory requirements. The amounts disclosed in the financial statements as environmental assets and obligations include rehabilitation. 50 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 4 . SIgNIFICANT ACCO UNTIN g pO LICIES ( CO NTINUED ) The cost of rehabilitation projects undertaken, which has be en included in the provision estimate, are charged to the provision as incurred. The cost of current programs to prevent and control future liabilities are charged to the group statement of profit or loss and other comprehensive income as incurred. ( k ) Rev e n u e Revenue from the sale of precious metals is recognised in the statement of profit or loss and other comprehensive income when the significant risks and rewards of ownership have be en transferred to the buyer excluding sales taxes. ( l ) Fin a n ce in co m e a n d fin a n ce co s t s Interest income is accrued on a time basis, by reference to the principal outstanding and the applicable effective interest rate. Finance costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on funds invested and foreign exchange gains and losses that are recognised in the group statement of profit or loss and other comprehensive income. The finance expense component of finance lease payments is recognised in the group statement of profit or loss and other comprehensive income using the effective interest rate method. ( m ) Ta xa t i o n Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the group statement of profit or loss and other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance she et date and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance she et liability method, providing for temporary differences betwe en the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. ( n ) S e g m e n t re p o r t in g Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 51 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 5 . NEW STANDAR DS AND INTER pR ETATIO N S N OT y ET AD O pTED Standards, Amendments to published Standards and Interpretations issued but not yet effective Certain standards, amendments to published standards and interpretations have be en issued that are mandatory for accounting periods beginning on or after 1 July 2014 or later periods, but which the group has not early adopted. The directors consider that the effect of Standards, amendments to published Standards and Interpretations issued but not yet effective, on the presentation of its financial statements will not be material. 6 . O pER ATIN g S EgM ENTS For each segment, the group’s CEO (the chief operating decision maker) reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the group’s reportable segment. • Recovery operations. Includes the recovery of precious metals from metallurgical challenging materials and the processing of ore, sourced from other mining operations. These products often represent an environmental challenge to the primary producer and are processed in a responsible manner by the company. • Mining and exploration. Includes assets held for commercial exploitation of precious metals and exploration assets held where the commercial viability of the ore resource has not yet be en evaluated or is in the process of evaluation. • Administration. Includes activities conducted by holding companies in relation to the group and its subsidiaries. There are varying levels of integration betwe en the thre e reportable segments. This integration includes the sale of precious metals from the ghana recovery operation to the South African recovery operation, and the supply of go ods and services by the South African subsidiary to all group operations. Inter-segment pricing is determined on an arm’s length basis. Information regarding the results of each reportable segment is included below. performance is measured based on segment profit before tax, as included in the internal management reports that are viewed by the group’s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. 52 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 6 . O pER ATIN g S EgM ENTS ( CO NTINUED ) Information about reportable segments: Fo r t h e ye a r e n d e d 3 0 J u n e 2 015 External revenues Inter-segment revenues TOTAL R Ev ENUES Interest expense Depreciation and amortisation Reportable segment profit/(loss) before tax Taxation Reportable segment assets Capital expenditure Reportable segment liabilities Fo r t h e ye a r e n d e d 3 0 J u n e 2 014 External revenues Inter-segment revenues TOTAL R Ev ENUES Interest expense Depreciation and amortisation Reportable segment profit/(loss) before tax Taxation Reportable segment assets Capital expenditure Reportable segment liabilities Re cov e r y M inin g a n d Ad mini s - O p e ra t i o n s ex p l o ra t i o n £ ’ 0 0 0 £ ’ 0 0 0 t r a t i o n £ ’ 0 0 0 Re co n cil - i a t i o n to Gro u p fi g u re s £ ’ 0 0 0 gro u p £ ’ 0 0 0 15,037 1,805 16,842 (31) 313 873 (96) 14,546 753 8,292 1,591 – 1,591 – 266 (933) – 6,099 488 4,515 – – – – – (550) – – 16,628 (1,805) (1,805) – 16,628 – – (65) – (31) 579 (675) (96) 28,542 (22,317) 26,870 – – 4,969 (9,143) 1,241 8,633 Re cov e r y M inin g a n d Ad mini s - O p e ra t i o n s ex p l o ra t i o n £ ’ 0 0 0 £ ’ 0 0 0 t r a t i o n £ ’ 0 0 0 20,284 325 20,609 (54) 393 1,796 (82) 18,022 924 6,383 736 – 736 – 28 – – – – – (714) (1,330) – 1,703 61 377 (26) 7,107 – 83 Re co n cil - i a t i o n to Gro u p fi g u re s £ ’ 0 0 0 gro u p £ ’ 0 0 0 – 21,020 (325) (325) – 21,020 – – – – – – – (54) 421 (248) (108) 26,832 985 6,843 53 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 6 . O pER ATIN g S EgM ENTS ( CO NTINUED ) g e o g ra p hi ca l info r m a t i o n The Recovery Operations, Mining and Exploration and Administration segments are managed on a worldwide basis, but operate mines on the African continent. In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the geographical location of the assets. Rev e n u e Revenues are primarily derived from dore bars and product delivered in concentrate form to a local South African refinery in Johannesburg. N o n - cu r re n t a s s et s Non-current assets are primarily based on the African continent. M a j o r cu s to m e r The major customer to the group is a local South African refinery in Johannesburg. Revenues from this customer presents 91% (2014: 97%) of the recovery operations revenues and 100% (2014: 86%) of the mining and exploration revenues. 7 . R Ev ENUE Sales of precious metals – Recovery operations Sales of precious metals – Mining and exploration processing fe es charged to customers 8 . Ex pEN S ES By N ATUR E Employe e benefit expense Depreciation and amortisation expense Equity-settled share-based payment transactions Auditor’s remuneration – Audit fe e Directors’ remuneration Loss on disposal of property, plant and equipment 2 015 £ ’ 0 0 0 14,883 1,591 154 16,628 2 015 £ ’ 0 0 0 3,756 579 – 135 369 148 2 014 £ ’ 0 0 0 19,937 736 347 21,020 2 014 £ ’ 0 0 0 3,263 421 28 70 429 35 N o t e s 9 14 , 15 , 16 10 Auditor’s remuneration in respect of the Company amounted to £32,000 (2014: £32,000). Of this amount, £32,000 (2014: £32,000) was in relation to audit services and £nil (2014: £nil) for tax advice. 54 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 9 . pERSO NNEL Ex pEN S ES Wages and salaries performance based payments National insurance and unemployment fund Skills development levy Medical aid contributions group life contributions provident funds The average number of employe es (including directors) during the period was: Directors Administrative personnel production personnel 10 . DIR ECTO RS ’ EMO LUM ENTS 2 015 Wages and salaries Fe es Other benefits 2 014 Wages and salaries Fe es Other benefits 2 015 £ ’ 0 0 0 3,454 112 40 28 27 43 52 2 014 £ ’ 0 0 0 2,915 154 20 37 43 48 46 3,756 3,263 2 015 2 014 4 32 316 352 5 27 368 400 N o n - E x e cu t i v e ex e cu t i v e £ ‘ 0 0 0 £ ‘ 0 0 0 To ta l £ ‘ 0 0 0 291 – 13 304 – 65 – 65 N o n - 291 65 13 369 E x e cu t i v e ex e cu t i v e £ ‘ 0 0 0 £ ‘ 0 0 0 To ta l £ ‘ 0 0 0 354 – 14 368 – 61 – 61 354 61 14 429 55 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 10 . DIR ECTO RS ’ EMO LUM ENTS ( CO NTINUED ) Emoluments disclosed above include the following amounts paid to the highest director: Emoluments for qualifying services Key m a n a g e m e n t 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 128 128 Apart from the Directors, the emoluments paid to key management personnel amounted to £522,000 (2014: £637,000). 11 . FIN AN CE IN COM E AND FIN AN CE COSTS Re co g ni s e d in p rofi t o r l o s s Interest income on cash balances held Foreign exchange gains FIN AN CE IN COM E Interest expense on utilisation of overdraft facility Interest on finance leases Interest on environmental liability Foreign exchange loss Other FIN AN CE COSTS NET FIN AN CE COSTS R ECO gNIS ED IN pR O FIT O R LOS S 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 11 832 843 (14) (16) – (777) – (807) 36 29 400 429 (6) (27) 2 (776) (23) (830) (401) The above finance income and finance costs include the following interest income and expense in respect of assets (liabilities) not measured at fair value through profit or loss: – Total interest income on financial assets – Total interest expense on financial liabilities 11 (30) 29 (33) 56 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 12 . W R ITE O FF DEv ELO pM ENT COST O F DISCO NTINUED SO UTH AFR ICAN M ININ g O p ER ATIO N Write off CRg development 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 121 – The contract with and the mining activity at Central Rand Gold has be en terminated as the risk-reward was no longer viable. The development cost capitalised on the operations at Central Rand Gold were written-off. This contract represents a discontinued activity in South Africa but the group continues gold production in that country and mining in Kenya. 13 . TA x ATIO N Cu r re n t ta x ex p e n s e TA x R ECO gNIS ED IN pR O FIT O R LOS S CUR R ENT TA x Ex p EN S E Current period Adjustment for prior years Secondary tax on dividends paid from South Africa DEFER R ED TA x Ex p EN S E Origination and reversal of temporary differences Increase/(Reduction) in tax rate TOTAL TA x Ex pEN S E Reconciliation of effective tax rate (Loss) for the year Total tax expense profit excluding tax Tax using the Company’s domestic tax rate of 20.75% (2014: 22.50%) Effects of: Expenses not deductible for tax purposes Effect of lower tax levied on overseas subsidiaries Tax losses carried forward Secondary tax on dividends paid from South Africa 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 36 – – 36 60 – 60 96 32 – 25 57 51 – 51 108 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 (892) 96 (796) (165) 7 (132) 386 – 96 (356) 108 (248) (56) (69) (238) 446 25 108 None of the components of other comprehensive income have a tax impact. The tax charge arises in South Africa where group relief is not available from other jurisdictions. 57 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 14 . pR O p ERT y , pLANT AND EQ UIpM ENT Fre e h o ld / l e a s e h o ld pl a n t a n d M o to r O ffi ce l a n d B uild in g s e q uip m e n t v e hi cl e s e q uip m e n t £ ‘ 0 0 0 £ ‘ 0 0 0 £ ‘ 0 0 0 £ ‘ 0 0 0 £ ‘ 0 0 0 Env iro n - m e n ta l a s s et £ ‘ 0 0 0 Co s t Balance at 1 July 2013 323 Additions Disposals Effect of movements in exchange rates – – (83) BALAN CE AT 3 0 JUNE 2 014 240 Balance at 1 July 2014 Additions Disposals Effect of movements in exchange rates 240 221 – (35) BALAN CE AT 3 0 JUNE 2 015 426 D e p re ci a t i o n Balance at 1 July 2013 Depreciation charge for the year Disposals Reversal of amortisation Effect of movements in exchange rates BALAN CE AT 3 0 JUNE 2 014 Balance at 1 July 2014 Depreciation charge for the year Disposals Reversal of amortisation Effect of movements in exchange rates BALAN CE AT 3 0 JUNE 2 015 8 – – – (3) 5 5 – – – (1) 4 529 30 (4) (115) 440 4,558 1,187 430 (40) 183 (23) (911) 4,037 (219) 1,128 440 4,037 1,128 1 (5) (39) 397 906 (247) 19 – (307) 4,389 (79) 1,068 114 1,165 435 19 (1) – (23) 109 246 (23) – (236) 1,152 119 (16) – (81) 457 109 1,152 457 18 (2) – (8) 117 252 (78) – (88) 1,238 109 – – (31) 535 77 31 (21) (13) 74 74 2 – (7) 69 35 9 (5) – (7) 32 32 8 – – (2) 38 58 To ta l £ ‘ 0 0 0 6,765 693 (107) (1,356) 5,995 5,995 1,149 (252) (472) 6,420 91 19 (19) (15) 76 76 – – (5) 71 91 1,848 – – (38) (15) 38 393 (45) (38) (365) 1,793 38 1,793 3 – – (2) 39 390 (80) – (132) 1,971 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 14 . pR O p ERT y , pLANT AND EQ UIpM ENT ( CO NTINUED ) Fre e h o ld / l e a s e h o ld pl a n t a n d M o to r O ffi ce l a n d B uild in g s e q uip m e n t v e hi cl e s e q uip m e n t £ ‘ 0 0 0 £ ‘ 0 0 0 £ ‘ 0 0 0 £ ‘ 0 0 0 £ ‘ 0 0 0 Env iro n - m e n ta l a s s et £ ‘ 0 0 0 Ca r r y in g a m o u n t s At 30 June 2013 At 30 June 2014 At 30 June 2015 Le a s e d p l a n t a n d e q uip m e n t 315 235 422 415 331 280 3,393 2,885 3,151 752 671 533 42 42 31 – 38 32 To ta l £ ‘ 0 0 0 4,917 4,202 4,449 The group leases plant and equipment under a number of finance lease agre ements. The leased equipment secures lease obligations. At 30 June 2015 the net carrying amount of leased plant and equipment was £314,000 (2014: £347,000). During the year, the group acquired leased assets of £240,000 (2014: £183,000) (se e note 26 and 31.2). 59 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 15 . INTAN gIB LE AS S ETS Cost Balance at 1 July 2013 Additions Effect of movements in exchange rates BALAN CE AT 3 0 JUNE 2 014 COST Balance at 1 July 2014 Additions Effect of movements in exchange rates BALAN CE AT 3 0 JUNE 2 015 A MO RTISATIO N AND I M pAIR M ENT LOS S ES Balance at 1 July 2013 Amortisation for the year Impairment transfer from pre-production Effect of movements in exchange rates BALAN CE AT 3 0 JUNE 2 014 A MO RTISATIO N AND I M pAIR M ENT LOS S ES Balance at 1 July 2014 Amortisation for the year Impairment transfer from pre-production Effect of movements in exchange rates BALAN CE AT 3 0 JUNE 2 015 CAR RyIN g A MO UNTS Balance at 30 June 2013 Balance at 30 June 2014 Balance at 30 June 2015 E x p l o ra t i o n M inin g a n d g o o d w ill r i g ht s d ev e l o p m e n t £ ‘ 0 0 0 £ ‘ 0 0 0 £ ‘ 0 0 0 5,631 – – 5,631 5,631 – – 5,631 – – – – – – – – – – 918 – (342) 576 576 – (107) 469 – – – – – – – – – – 2,459 50 (742) 1,767 1,767 92 (209) 1,650 270 28 806 (324) 780 780 29 – (92) 717 To ta l £ ‘ 0 0 0 9,008 50 (1,084) 7,974 7,974 92 (316) 7,750 270 28 806 (324) 780 780 29 – (92) 717 5,631 5,631 5,631 918 576 469 2,189 987 933 8,738 7,194 7,033 go odwill relates to the investment held in gold Mineral Resources Limited and is supported by the ongoing gold recovery operations in South Africa and ghana and the Kilimapesa mine in Kenya. The exploration and development rights relate to exploration and mining licenses in Burkina Faso and ghana, and the mining rights to the Kilimapesa mine in Kenya. 60 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 16 . PR E - PR O DU CTIO N Ex PENDITUR E Co s t Balance at beginning of year Expenditure incurred Transfers to intangible assets Effect of movement in exchange rates Balance at end of year A MO RTISATIO N AND I M pAIR M ENT LOS S ES Balance at 1 July Amortisation for year Impairment for the year Impairment transfer to intangible assets Effect of movement in exchange rates Balance at end of year CAR RyIN g A MO UNTS At beginning of year At end of year 2 015 £ ’ 0 0 0 4,172 – – – 2 014 £ ’ 0 0 0 3,930 242 – – 4,172 4,172 1,715 160 – – 161 2,036 2,457 2,136 2,317 – – (806) 204 1,715 1,613 2,457 The group has capitalised all expenditure incurred on the Kilimapesa gold mining project, the Nyieme gold mining project and the Anumso gold mining project whilst the mines are in the development phase. 17 . pR O CEEDS FR OM SALE O F SH AR ES IN SUB SIDI ARy Consideration due on sale of 15% and 11% of the issued share capital of goldplat Recovery (pty) Limited: Balance at beginning of year Consideration due on 11% share capital Received from dividends Effect of movement in exchange rates Balance at end of year 2 015 £ ’ 0 0 0 1,448 – – (91) 1,357 2 014 £ ’ 0 0 0 1,960 – (54) (458) 1,448 The proce eds from sale of shares in goldplat Recovery (pty) Limited, in compliance with Black Economic Empowerment legislation in South Africa, are recoverable from future dividends. They have be en included at historical cost due to the uncertainty surrounding the variables required to calculate this asset at amortised cost. The directors consider that this reflects the most accurate measurement of the asset. 61 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 18 . N O N - CUR R ENT CASH DEPOSITS gro u p Non-current cash deposit 19 . LOAN S TO SUB SIDI ARy COM pANIES 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 233 202 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 Funds advanced to gold Mineral Resources Limited 4,470 7,561 Interest is charged at 2% above LIBOR on the monthly outstanding balances. This interest was waived for the year ended 30 June 2015 (2014: £Nil as waived). On 30 June 2015 £3,000,000 of the loan was capitalised as investment. Loans to subsidiary companies are unsecured. 2 0 . IN v ESTM ENTS Investment in gold Mineral Resources Limited 2 015 £ ’ 0 0 0 2 014 £ ’ 0 0 0 9,425 6,425 On 30 June 2015 £3,000,000 of the loan to gold Mineral Resources Limited was capitalised as an investment. Details of the Company’s significant subsidiaries are outlined in note 37. 21 . IN v ENTO R IES Consumable stores Raw materials precious metals on hand and in process Broken ore 2 015 £ ’ 0 0 0 1,009 516 6,115 87 7,727 2 014 £ ’ 0 0 0 1,372 572 3,144 – 5,088 62 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 22 . TR ADE AND OTHER R ECEIvAB LES gro u p Trade receivables Other receivables Co m p a ny Other receivables The group and Company’s exposure to credit and currency risk is disclosed in note 33. 23 . CASH AND CASH EQ UIvALENTS gro u p Bank balances Cash and cash equivalents in the statement of cash flows Co m p a ny Bank balances Cash and cash equivalents in the statement of cash flows 2 015 £ ’ 0 0 0 2,447 858 3,305 2 015 £ ’ 0 0 0 420 420 2 015 £ ‘ 0 0 0 630 630 2 015 £ ‘ 0 0 0 15 15 2 014 £ ’ 0 0 0 3,826 960 4,786 2 014 £ ’ 0 0 0 271 271 2 014 £ ‘ 0 0 0 1,455 1,455 2 014 £ ‘ 0 0 0 95 95 63 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINuED) 24 . CApITAL AND r ES Erv ES Sh a re ca p i ta l a n d s h a re p re mi u m On issue at 1 July Issued for cash Issued in connection with settlement of liabilities On issue at 30 June – fully paid Authorised – par value £0.01 N u m b e r of o rd in a r y Sh a re s 2 015 2 014 168,441,000 168,370,000 – – – 71,000 168,441,000 168,441,000 1,000,000,000 1,000,000,000 Issued share capital includes 1,000,000 (2014 : 1,000,000) ordinary shares of £0.01 each held in treasury. Balance at 1 July Share issues B a l a n ce a t 3 0 J u n e O rd in a r y s h a re s O rd in a r y s h a re ca p i ta l 2 015 £ ‘ 0 0 0 1,685 – 1,685 2 014 £ ‘ 0 0 0 1,684 1 1,685 All shares rank equally with regard to the Company’s residual assets. The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at me etings of the Company. In respect of the Company’s shares that are held by the Group, all rights are suspended until those shares are reissued. Di v id e n d s A dividend of nil per ordinary share is proposed in respect of the year ended 30 June 2015 (2014: nil). E xch a n g e re s e r v e The exchange reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations. 64 FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 25 . EAr NIN GS pEr SH Ar E B a s i c e a r nin g s p e r s h a re The calculation of basic earnings per share at 30 June 2015 was based on the loss attributable to ordinary shareholders of £892,000 (2014: loss £356,000), and a weighted average number of ordinary shares outstanding of 168,441,000 (2014: 168,408,126), calculated as follows: profi t a t t r i b u ta bl e to o rd in a r y s h a re h o ld e rs 2 015 2 014 Co n t in uin g o p e ra t i o n s Co n t in uin g o p e ra t i o n s £ ‘ 0 0 0 £ ‘ 0 0 0 Loss attributable to ordinary shareholders (892) (356) We i g ht e d a v e ra g e n u m b e r of o rd in a r y s h a re s Issued ordinary shares at 1 July Effect of shares issued 2 015 2 014 168,441,000 168,370,000 – 38,126 Weighted average number of ordinary shares at 30 June 168,441,000 168,408,126 26 . O B LIGATIO N S uNDEr FIN AN CE LEAS ES N O N - Cur r ENT LI AB ILITIES Finance lease liabilities Cur r ENT LI AB ILITIES Current portion of finance lease liabilities 2 015 £ ‘ 0 0 0 2 014 £ ‘ 0 0 0 199 106 120 169 65 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 26 . O B LIGATIO N S uNDEr FIN AN CE LEAS ES ( CO NTINuED ) Terms and conditions of outstanding leases were as follows: 2 015 Finance lease liabilities Total interest-bearing liabilities 2 014 Finance lease liabilities Total interest-bearing liabilities Fin a n ce l e a s e li a bili t i e s Finance lease liabilities are payable as follows: 2 015 Less than one year Betwe en one and five years N o min a l in t e re s t Ye a r of Cu r re n cy ra t e m a t u r i t y ZAr 9% 2015/16 N o min a l in t e re s t Ye a r of Cu r re n cy ra t e m a t u r i t y ZAr 9% 2015/16 Fa ce Ca r r y in g v a lu e £ ’ 0 0 0 a m o u n t £ ‘ 0 0 0 319 319 319 319 Fa ce Ca r r y in g v a lu e £ ’ 0 0 0 a m o u n t £ ‘ 0 0 0 275 275 275 275 Fu t u re minim u m l e a s e p a y m e n t s £ ’ 0 0 0 127 200 327 pre s e n t v a lu e of minim u m l e a s e In t e re s t £ ’ 0 0 0 p a y m e n t s £ ’ 0 0 0 7 1 8 120 199 319 66 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 26 . O B LIGATIO N S uNDEr FIN AN CE LEAS ES ( CO NTINuED ) 2 014 Less than one year Betwe en one and five years Fu t u re minim u m l e a s e pre s e n t v a lu e of minim u m l e a s e p a y m e n t s In t e re s t p a y m e n t s £ ’ 0 0 0 £ ’ 0 0 0 £ ’ 0 0 0 187 114 301 18 8 26 169 106 275 The average lease term is 2 years. For the year ended 30 June 2015, the average effective borrowing rate was 9% (2014: 9%). Interest rates are variable over the lease term and vary according to the South African prime interest rate. The Group’s obligations under finance leases are secured over the leased assets. 27 . INTEr EST B EAr IN G B O r r OW IN GS N O N - Cur r ENT LI AB ILITIES Interest bearing borrowings Cur r ENT LI AB ILITIES Interest bearing borrowings 2 015 £ ‘ 0 0 0 2 014 £ ‘ 0 0 0 56 104 – – Terms and conditions of outstanding borrowings were as follows: 2 015 Interest bearing borrowings Total interest-bearing liabilities N o min a l in t e re s t Ye a r of Cu r re n cy ra t e m a t u r i t y ZAr 9.25% 2015/16 Fa ce Ca r r y in g v a lu e £ ’ 0 0 0 a m o u n t £ ‘ 0 0 0 160 160 160 160 67 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 27 . INTEr EST B EAr IN G B O r r OW IN GS ( CO NTINuED ) Interest bearing borrowings are payable as follows: 2 015 Less than one year Betwe en one and five years 28 . SH Ar E O pTIO N S re co n cili a t i o n of o u t s ta n d in g s h a re o p t i o n s Outstanding at 1 July Granted during the year Lapsed – will not vest Exercised during the year Outstanding at 30 June Fu t u re minim u m l e a s e pre s e n t v a lu e of minim u m l e a s e p a y m e n t s In t e re s t p a y m e n t s £ ’ 0 0 0 £ ’ 0 0 0 £ ’ 0 0 0 114 57 171 10 1 11 104 56 160 2 015 2 014 N u m b e r of E x e rci s e N u m b e r of E x e rci s e o p t i o n s p r i ce o p t i o n s p r i ce 7,500,000 1,000,000 21,200,000 6p – – – 10p (13,700,000) 10p – 8,500,000 7,500,000 The weighted average exercise price of the exercisable options is £0.1103 (2014: £0.1135). On 1 September 2014 the Company issued 1,000,000 share options to key management. The fair value of these options has be en independently calculated using the Black Scholes model using the following assumptions: risk fre e interest rate Expected volatility – 1.51% – 58.61% Expected dividend yield – 0% Life of the option – 4 years The weighted average remaining contractual life of the options outstanding at the balance she et date is 3 years 45 days. 68 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 2 9 . pr Ov ISIO N S Env iro nm e n ta l o bli g a t i o n Balance at 1 July provisions made during the year unwind of discount Effect of foreign exchange movements Non-current Current 2 015 £ ‘ 0 0 0 2 014 £ ‘ 0 0 0 129 – – (8) 121 121 – 121 134 19 (2) (22) 129 129 – 129 The provision relates to a requirement to rehabilitate the land owned in South Africa upon cessation of the mining lease. 3 0 . DEFEr r ED TA x ATIO N Balance at 1 July Current charge – temporary difference – change in tax rate Effect of foreign exchange movements Comprising: Capital allowances prepayments 2 015 £ ‘ 0 0 0 2 014 £ ‘ 0 0 0 430 60 – (31) 459 533 (74) 459 459 48 – (77) 430 495 (65) 430 69 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 31 . Tr ADE AND OTHEr pAYAB LES Gro u p Trade payables Accrued expenses Co m p a ny Trade payables Accrued expenses 2 015 £ ‘ 0 0 0 1,860 5,696 7,556 2 014 £ ‘ 0 0 0 2,248 3,734 5,982 2 015 £ ‘ 0 0 0 2 014 £ ‘ 0 0 0 73 – 73 19 – 19 Accrued expenses substantially relate to precious metals on hand and in process (note 21). The Group’s and Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 33. 32 . N OTES TO THE CASH FLOW STATEM ENT 32 . 1 Fin a n cin g co s t As per statement of profit or loss and other comprehensive income Adjust for: Interest on environmental liability (note 29) Adjust for: unrealised exchange loss 32 . 2 Acq ui s i t i o n of p ro p e r t y , p l a n t a n d e q uip m e n t Additions for the year Adjust for: Additions acquired on hire purchase (note 14) 70 2 015 £ ‘ 0 0 0 2 014 £ ‘ 0 0 0 (807) – 128 (679) 2 015 £ ‘ 0 0 0 (1,149) 240 (909) (830) (2) – (832) 2 014 £ ‘ 0 0 0 (693) 183 (510) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 33 . FIN AN CI AL IN STr uM ENTS Fin a n ci a l r i s k m a n a g e m e n t The Group’s and Company’s operations expose it to a variety of financial risks. Exposure to credit, interest rate and currency risks arises in the normal course of the Group’s and Company’s business. The Group and Company has in place a risk management programme that se eks to limit the adverse effect of such risks on its financial performance which is provided below. Cre d i t r i s k Credit risk is the risk of financial loss to the Group or Company if a customer or counterparty to a financial instrument fails to me et its contractual obligations. Management has a credit policy in place of and the exposure to credit risk is monitored on an ongoing basis. The Group primarily deals with reputable mining houses and is unlikely to suffer any losses from this risk. E x p o s u re to cre d i t r i s k The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows. Gro u p Trade and other receivables Cash and cash equivalents Co m p a ny Cash and cash equivalents Li q uid i t y r i s k Ca r r y in g a m o u n t 2 015 £ ‘ 0 0 0 3,305 863 4,168 2 014 £ ‘ 0 0 0 4,786 1,657 6,443 Ca r r y in g a m o u n t 2 014 2 015 £ ‘ 0 0 0 £ ‘ 0 0 0 15 95 Liquidity risk is the risk that the Group or Company will encounter difficulty in me eting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group reviews its facilities regularly to ensure it has adequate funds for operations and expansion plans. 71 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 33 . FIN AN CI AL IN STr uM ENTS ( CO NTINuED ) The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agre ements. Tr a d e p a ya bl e s a n d a ccr u e d ex p e n s e s 2 015 Ca r r y in g Co n t ra c t u a l 2 m o n t h s a m o u n t ca s h fl ow s £ ’ 0 0 0 £ ’ 0 0 0 o r l e s s £ ’ 0 0 0 2 - 12 m o n t h s £ ’ 0 0 0 1 - 2 ye a rs £ ’ 0 0 0 N o n - d e r i v a t i v e fin a n ci a l li a bili t i e s Finance lease liabilities Interest bearing borrowings 319 160 (327) (171) (20) (17) (100) (87) Trade payables and accrued expenses 7,556 (7,556) (2,680) (4,876) Bank overdraft – – – – (207) (67) – – 8,035 (8,054) (2,717) (5,063) (274) 2 014 N o n - d e r i v a t i v e fin a n ci a l li a bili t i e s Finance lease liabilities Trade payables and accrued expenses Bank overdraft Ca r r y in g Co n t ra c t u a l 2 m o n t h s a m o u n t ca s h fl ow s £ ’ 0 0 0 £ ’ 0 0 0 o r l e s s £ ’ 0 0 0 2 - 12 m o n t h s £ ’ 0 0 0 1 - 2 ye a rs £ ’ 0 0 0 275 5,982 – (301) (5,982) – (31) (156) (114) (2,948) (3,034) – – – – 6,257 (6,283) (2,979) (3,190) (114) 72 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 33 . FIN AN CI AL IN STr uM ENTS ( CO NTINuED ) Co m p a ny 2 015 N o n - d e r i v a t i v e fin a n ci a l li a bili t i e s Trade payables 2 014 N o n - d e r i v a t i v e fin a n ci a l li a bili t i e s Trade payables M a r ket r i s k Ca r r y in g Co n t ra c t u a l 2 m o n t h s a m o u n t ca s h fl ow s £ ’ 0 0 0 £ ’ 0 0 0 o r l e s s £ ’ 0 0 0 2 - 12 m o n t h s £ ’ 0 0 0 1 - 2 ye a rs £ ’ 0 0 0 73 73 (73) (73) (73) (73) – – – – Ca r r y in g Co n t ra c t u a l 2 m o n t h s a m o u n t ca s h fl ow s £ ’ 0 0 0 £ ’ 0 0 0 o r l e s s £ ’ 0 0 0 2 - 12 m o n t h s £ ’ 0 0 0 1 - 2 ye a rs £ ’ 0 0 0 19 19 (19) (19) (19) (19) – – – – Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s and Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Due to the nature of the Group’s operations, it is mainly exposed to the following risks: • • fluctuations in the price of gold; and exchange rate risk at its operations 73 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 33 . FIN AN CI AL IN STr UM ENTS ( CO NTINUED ) The following applied to the financial years presented in these financial statements: 2015 Gold price – USD/oz rand/USD exchange rate GBP/USD exchange rate GHC/USD exchange rate Kshs/USD exchange rate 2014 Gold price – USD/oz rand/USD exchange rate GBP/USD exchange rate GHC/USD exchange rate Kshs/USD exchange rate Sensitivity analysis The Group has applied the following assumptions in its sensitivity analysis: 2015 Gold price – USD/oz rand/USD exchange rate GBP/USD exchange rate GHC/USD exchange rate Kshs/USD exchange rate Equivalent rand price per kilogram Equivalent GBP price per kilogram Equivalent GHC price per kilogram Equivalent Kshs price per kilogram High Low Average 1,342 12.60 1.46 4.45 100.87 1,144 10.52 1.72 3.20 87.75 1,229 11.40 1.58 3.54 92.49 High Low Average 1,420 11.39 1.71 3.20 87.95 1,195 9.54 1.48 1.99 82.25 1,286 10.39 1.63 2.46 88.03 High case Low case scenari o scenario 1,342 13.00 1.50 4.50 105.00 560,797 28,759 194,122 1,144 10.00 1.80 3.00 83.00 367,683 20,427 110,305 4,529,511 3,051,773 74 FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 33 . FIN AN CI AL IN STr UM ENTS ( CO NTINUED ) 2014 Gold price – USD/oz rand/USD exchange rate GBP/USD exchange rate GHC/USD exchange rate Kshs/USD exchange rate Equivalent rand price per kilogram Equivalent GBP price per kilogram Equivalent GHC price per kilogram Equivalent Kshs price per kilogram The Group’s sensitivity to market risk High case Low case scenari o scenario 1,400 11.50 1.80 4.20 92.00 517,626 26,477 189,046 1,200 9.50 1.50 3.00 83.00 366,518 25,721 115,743 4,141,010 3,202,210 The following tables illustrate the Group’s sensitivity to these risks based on the above assumptions: 2015 Effect on the results and equity for the year based on these assumptions would have be en: - Gold recovery Ghana Limited - Goldplat recovery (Pty) Limited - Kilimapesa Gold (Pty) Limited 2014 Effect on the results and equity for the year based on these assumptions would have be en: - Gold recovery Ghana Limited - Goldplat recovery (Pty) Limited - Kilimapesa Gold (Pty) Limited Currency risk High case scenari o £’000 Low case scenario £’000 1,083 3,411 382 (586) (2,551) (262) High case scenari o £’000 Low case scenario £’000 8,082 2,229 101 (1,306) (1,595) (884) The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than GBP. The currencies giving rise to this risk are primarily the US Dollar (“USD”), South African rand (“rAND”), Ghanaian Cedi (“GHC”), CFA Franc and the Kenyan Shilling. 75 financial statementsFOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 33 . FIN AN CI AL IN STr UM ENTS ( CO NTINUED ) Interest rate risk The Group generally adopts a policy of ensuring that its exposure to changes in interest rates is on a floating rate basis. Fair values The fair values of financial instruments such as interest-bearing loans and borrowings, finance lease liabilities, trade and other receivables/payables are substantially identical to carrying amounts reflected in the statement of financial position. Capital management The Group’s objective when managing capital is to safeguard its accumulated capital in order to provide an adequate return to shareholders by maintaining a sufficient level of funds, in order to support continued production and maintenance at the processing plants and to acquire, explore and develop other precious and base metal deposits in Africa. The Group considers its capital to be shareholders’ equity which comprises share capital and retained earnings, which at 30 June 2015 totalled £23,051,000 (2014 £24,194,000). 34 . CAPITAL COM M ITM ENTS There were no capital commitments as at 30 June 2015 (2014: £nil). 35 . CO NTIN GEN CIES The Kenyan revenue Authority has conducted a preliminary enquiry on the tax affairs of Kilimapesa Gold (Pty) Limited which may result in additional tax liabilities. Her Majesty’s revenue and Customs in the UK have raised a VAT assessment on the parent company of £147,762. The company is in the process of an appeal against this. In both cases the directors remain confident of a favourable outcome. 76 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 3 6 . r ELATED PArTIES Other than the waiver of intercompany interest, transactions with related parties take place on terms no more favourable than transactions with unrelated parties. Other related party transactions Transactions with Group companies The Group’s subsidiary Gold Mineral resources Limited had the following related party transactions and balances: GOLDPLAT PLC – Loans and borrowings – Trade and other payables KILIM APESA GOLD (PTy) LIMITED – Loans and borrowings NyIEM E GOLD SArL – Loans and borrowings ANUMSO GOLD – Loans and borrowings M IDAS GOLD – Loans and borrowings GOLDPLAT rECOVEry (PTy) – Loans and borrowings 2015 £’000 (4,470) (336) 2014 £’000 (7,561) – 2,153 2,570 1,022 1,042 67 62 356 402 (34) (34) 77 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 3 6 . r ELATED PArTIES ( CO NTINUED ) The Group’s subsidiary Goldplat recovery (Pty) Limited had the following related party transactions and balances: KILIM APESA GOLD (PTy) LIMITED – Trade and other receivables – Go ods, equipment and services supplied GOLD rECOVEry GHANA LIMITED – Trade and other receivables – Go ods, equipment and services supplied – Purchase of precious metals – Trade and other payables GOLD M INErAL rESOUrCES LIMITED – Trade and other receivables ANUMSO GOLD LIMITED – Trade and other receivables – Go ods, equipment and services supplied 2015 £’000 464 330 231 196 (1,805) (1) – 34 4 4 2014 £’000 169 397 25 144 (338) (1) 15 34 – 5 The carrying value of these assets approximates to their fair value and require no impairment. The Group’s subsidiary, Gold recovery Ghana Limited had the following related party transactions and balances in addition to those already noted: NyIEM E GOLD SAr L – Trade and other receivables – Go ods, equipment and services supplied KILIM APESA GOLD (PTy) LIMITED – Trade and other receivables 2015 £’000 2014 £’000 28 34 1 – – – The Group’s subsidiary Anumso Gold Limited had the following related party transactions and balances in addition to those already noted: GOLD rECOVEry GHANA LIMITED – Trade and other receivables – Trade and other payables 78 2015 £’000 2014 £’000 – 3 – – NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 3 6 . r ELATED PArTIES ( CO NTINUED ) The Group’s subsidiary Midas Gold had the following related party transactions and balances in addition to those already noted: NyIEM E GOLD SArL – Trade and other receivables – Trade and other payables Other transactions 2015 £’000 2014 £’000 8 (8) – – The Group’s subsidiary Gold Mineral resources had the following related party transactions and balances in addition to those already noted: DIrECTO rS – Trade and other payables 37 . Gr O UP ENTITIES Significant subsidiaries DIrECTLy 2015 £’000 2014 £’000 (90) – Activity incorporation 2015 2014 Country of Ow nership interest Gold Mineral resources Limited Holding company Guernsey 100% 100% INDIrECTLy Gold recovery Ghana Limited Kilimapesa Gold (Pty) Limited Anumso Gold Limited Nyieme Gold SArL Goldplat recovery (Pty) Limited Midas Gold 38. SUBS EqUENT EVENTS Gold recovery Mining minerals Mining minerals Mining minerals Gold recovery Gold recovery Ghana Kenya Ghana Burkina Faso South Africa Burkina Faso 100% 100% 100% 100% 74% 100% 100% 100% 100% 100% 74% 100% On 22 July 2015, 8 million share options were granted to Gerard Kisbey-Gre en, Chief Executive Officer and 3 million share options to Hansie van Vreden, Chief Operating Officer of the Company to subscribe for new ordinary shares of 1p each in the Company (the “Options”). The Options have an exercise price of 3.125p per share representing a premium of approximately 67% to the closing mid-market price of 1.875p on 22 July 2015. The Options will vest as to one third immediately, one third on 1 July 2016 and one third on 1 July 2017. The exercise period of the Options is betwe en 1 and 5 years from the vesting date. 79 financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(CONTINUED)FOR THE YEAR ENDED 30 JUNE 2015Goldplat plc – Annual Report and Accounts 2015 COMPANY INFORMATION DIReCTO Rs : Gerard Kisbey-Gre en Chief executive Officer Brian Moritz Ian Visagie Hansie Van Vreden Nigel Wyatt Non-executive Chairman Finance Director Chief Operating Officer Non-executive Director COM PANY seCReTARY stephen Ronaldson 55 Gower stre et London WC1e 6HQ COM PANY NuMBeR: 05340664 ReGIsTeReD OFFICe: 55 Gower stre et London WC1e 6HQ NOM INATeD ADVIseR AND jO INT B ROK eR: s P Angel Corporate Finance LLP Prince Frederick House 35-39 Maddox stre et London W1s 2PP jO INT B ROK eR: sO LICITO Rs: ReGIsTR ARs: FINANCIAL PuBLIC ReLATIONs: AuDITORs : VsA Capital Limited New Liverpo ol House 15-17 eldon stre et London eC2M 7LD Ronaldsons solicitors 55 Gower stre et London WC1e 6HQ share Registrars Limited suite e, First Flo or 9 Lion and Lamb Yard Farnham surrey Gu9 7LL st. Brides Partners Limited 3 st Michael’s Alley London eC3V 9Ds Mo ore stephens LLP 150 Aldersgate stre et London eC1A 4AB WeBsITe: www.goldplat.com 80 Goldplat plc – Annual Report and Accounts 2015 FOR THE YEAR ENDED 30 JUNE 2015 Goldplat plc – Annual Report and Accounts 2015 81 d e s i g n e d b y s t . b r i d e s p a r t n e r s A N N U A L R E P O R T 2 0 1 5 W W W . G O L D P L A T . C O M
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