KalNorth Gold Mines Limited and Controlled Entities
ACN 100 405 954
Annual Report
For the year ended 30 June 2022
CONTENTS
Corporate Directory
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
1
2
9
10
11
12
13
14
29
30
KalNorth Gold Mines Limited and Controlled Entities
ed and Controlled Entities For the year ended 30 June 2014
CORPORATE DIRECTORY
For the year ended 30 June 2022
Directors
Jiajun Hu (Executive Chairman)
Yuanguang Yang (Non-Executive Director)
Xiaojing Wang (Non-Executive Director)
Company
Secretary
Jiajun Hu
Registered Office
and Principal
Place of Business
Level 2, Suite 9
389 Oxford Street
Mount Hawthorn, Western Australia 6016
Share Registry
Auditor
Advanced Share Registry Limited
110 Stirling Highway
Perth WA 6009
BDO (Audit) WA Pty Ltd
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Company Website www.kalnorthgoldmines.com
KalNorth Gold Mines Limited delisted from the Australian Securities Exchange (ASX) in August 2022 but
remains a Disclosing Entity as defined by section 111AC of the Corporations Act 2001. The Company’s
securities do not trade on any stock exchange at present. As a Disclosing Entity, it is subject to a continuous
disclosure regime under section 675 of the Corporations Act.
1
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ REPORT
The Directors of KalNorth Gold Mines Limited (“the Company”) present their financial report on the
consolidated entity, being the company and its controlled entities, for the financial year ended 30 June 2022.
As at the date of this report, the Company is a Disclosing Entity (refer to the preceding page for details) but
its securities are not listed for trading on any stock exchange.
Directors
The names of directors in office at any time during or since the end of the financial year are listed hereunder.
Directors have been in office from the start of the financial year to the date of this report unless otherwise
stated.
Jiajun Hu
Yuanguang Yang
Xiaojing Wang
Executive Chairman
Non-executive Director
Non-executive Director
Information on Directors
JIAJUN HU
Executive Chairman & Company Secretary
Mr. Jiajun Hu acts as Regional Business Executive of Cross-Strait Common Development Fund Co., Ltd
(hereinafter referred to as “Cross-Strait”). Cross-Strait, with its global headquarters in Hong Kong, is one of
the largest shareholders in the Company.
He is responsible for supervision and administration of Cross-Strait’s investment projects in Oceania and
reports directly to the managing director of Cross-Strait and has gained significant experience in international
investment, financial accounting, commercial contract negotiation and contract dispute negotiation through
corporate transactions in North America, Africa, Asia and Oceania.
He has a Bachelor’s Degree in Commerce in 2008 from the Australian National University majoring in finance
and accounting. Mr. Hu has specialized knowledge of the financial transactions market and investment capital
market and is familiar with Chinese business and capital market operation. Mr. Hu is fluent in both English
and Chinese.
Mr Hu has held no other directorships of other public companies within the last three years.
Interest in shares and options: Nil
YUANGUANG YANG
Non-Executive Director
Mr. Yang is a Hong Kong CPA (practising) and currently operates a CPA firm in Hong Kong with business
focus in markets of Hong Kong, Mainland China, Australia and New Zealand. Mr. Yang is also a Chartered
Accountant in Australia and New Zealand.
He has over 20 years’ experience in audit and assurance, global tax planning, corporate advisory, family
business and M & A business and also worked with the Industrial and Commercial Bank of China for several
years before running his CPA business.
Mr Yang resides in Hong Kong and is an authorised officer of South Victory Global Limited, a major
shareholder in the Company.
Mr. Yang has held no other directorships of other public companies within the last three years.
Interest in shares and options: 2,375,300 shares
- 2 -
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ REPORT
Information on Directors (cont’d)
XIAOJING WANG (REBECCA)
Non-Executive Director
Mrs Wang holds a Bachelor of Applied Finance, from Macquarie University, NSW and is currently the Finance
Manager for a Sydney based private company.
Mrs Wang has held no other directorships of other public companies within the last three years.
Interest in shares and options: Nil
Principal Activities
The consolidated entity’s principal activity during the year consisted of evaluation of new mineral exploration
opportunities. The consolidated entity will use its exploration expertise and long history and experience in
gold exploration in the Goldfields area to target greenfield exploration.
The Company divested its remaining exploration assets in the year ended 30 June 2021. During this year
ended 30 June 2022, the Company negotiated and completed an early settlement of deferred sale proceeds
from the Lindsay project sale entered into in the previous financial year, as well as divesting its Kalgoorlie
land and building located at 224 & 226 Dungan Street for $400,000 in cash consideration.
Operating Results and Financial Performance
The operating loss after income tax of the consolidated entity for the year ended 30 June 2022 was $310,171
(2021 profit: $12,208,461).
As at 30 June 2022 the Company had $15,418,782 (2021: $15,036,283) in cash reserves and term deposits
at bank and an aggregate liability of $95,371 (2021: $1,896,480).
At 30 June 2022, the consolidated entity had net assets of $15,339,931 (2021: $15,650,102).
Significant Changes in the State of Affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year,
other than the early settlement of deferred sale proceeds.
Dividends Paid or Recommended
The Directors do not recommend the payment of a dividend and no dividends have been paid or declared
since the end of the last financial year.
Significant Events after the Reporting Date
KalNorth Gold Mines Limited delisted from the Australian Securities Exchange (ASX) in August 2022 but
remains a Disclosing Entity as defined by section 111AC of the Corporations Act 2001.
Other than the above, no matter or circumstance has arisen which has significantly affected, or may
significantly affect, the operations of the consolidated entity.
Likely Developments and Expected Results
As noted earlier in this report, the consolidated entity plans to use its exploration expertise and long history
and experience in gold exploration in the Goldfields area of Western Australia to target greenfield exploration.
- 3 -
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ REPORT
Environmental regulation
The consolidated entity was subject to environmental regulation in respect of its exploration activities, until
the disposal of all its projects during the last financial year.
The directors of the consolidated entity are not aware of any breach of environmental legislation for the year
under review.
Meetings of Directors
During the financial year, one meeting of Directors was held. Attendances by each Director during the year
were as follows:
Jiajun Hu
Yuanguang Yang
Xiaojing Wang
Directors’ Meetings
Number of meetings
eligible to attend
Number
attended
1
1
1
1
1
1
No Audit or Remuneration Committee meetings were held in the year, with all matters dealt with by the Board
as a whole. In addition, matters of Board business have been resolved by circular resolutions of Directors,
which are a record of decisions made at a number of informal meetings of the Directors held to control,
implement and monitor the Company’s activities throughout the period.
Options
At the date of this report, there were no unissued ordinary shares of KalNorth Gold Mines Limited under
option (2021: Nil).
During the year ended 30 June 2022 and to the date of this report, no shares were issued on the exercise of
options (2021: nil).
Risk Management
The Board is responsible for ensuring that risks and opportunities are identified in a timely manner and that
activities are aligned with the risks and opportunities identified by the Board.
The consolidated entity believes that it is crucial for all Board members to be a part of this process and, as
such, the Board has not established a separate risk management committee but considers these matters at
Board meetings.
The Board has a number of mechanisms in place to ensure that management’s objectives and activities are
aligned with the risks identified by the Board. These include Board approval of a strategic plan which
encompasses strategy statements designed to meet stakeholders needs and manage business risk, and
implementation of Board approved operating plans and budgets and the monitoring thereof.
Key Management Personnel Remuneration
This section outlines the remuneration arrangements in place for Directors and executives of the consolidated
entity.
The following were Key Management Personnel of the Company during or since the end of the financial year:
Jiajun Hu
Yuanguang Yang
Xiaojing Wang
Executive Chairman
Non-Executive Director
Non-Executive Director
Remuneration Policy
The remuneration policy of KalNorth Gold Mines Limited has been designed to align Director and executive
objectives with shareholder and business objectives by providing a fixed remuneration component and
- 4 -
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ REPORT
Key Management Personnel Remuneration (cont’d)
offering specific long-term incentives based on key performance areas affecting the consolidated entity’s
ability to attract and retain the best Directors and executives to run and manage the consolidated entity.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior
executives of the consolidated entity is as follows:
The remuneration policy setting out the terms and conditions for executive directors and other senior
executives was developed by the Board. All executives receive a base salary (which is based on factors
such as the length of service and experience) and superannuation. The Board reviews executive packages
annually by reference to the consolidated entity’s performance, executive performance, and comparable
information from industry sectors and other listed companies in similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses, and options. The policy is
designed to attract the highest calibre of executives and reward them for performance that results in long-
term growth in shareholder wealth.
All remuneration paid to Directors and executives is valued at the cost to the consolidated entity and
expensed.
Executives are also entitled to participate in the employee share and option arrangements. Shares given to
Directors and executives are valued as the difference between the market price of those shares and the
amount paid by the Director or executive. Options are valued using the Black-Scholes methodology.
Performance-Based Remuneration
The consolidated entity currently has no compulsory performance-based remuneration component built into
Director and executive remuneration packages. However, performance-based bonuses may be awarded
from time to time at the discretion of the Board, and this will be dependent on individual performance linked
to the consolidated entity’s strategic objectives for that period.
In the current year, no bonuses were paid or declared.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract
and retain Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The Board considers the fees paid to non-executive Directors of comparable companies when undertaking
the annual review process. Independent advice is obtained when considered necessary to confirm that
remuneration is in line with market practice. Each Director may receive a fee for being a Director of the
Company.
Non-executive Directors may also receive options or performance rights (subject to shareholder approval) as
it is considered an appropriate method of providing sufficient reward whilst maintaining cash reserves.
Relationship between Remuneration Policy and Consolidated Entity Performance
The remuneration policy has been tailored to increase goal congruence between shareholders and Directors
and executives. From time to time, this is facilitated through the issue of options to the majority of directors
and executives to encourage the alignment of personal and shareholder interests. The consolidated entity
believes this policy will be effective in increasing shareholder wealth.
- 5 -
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ REPORT
Key Management Personnel Remuneration (cont’d)
Key management personnel service agreements
Details of the key conditions of service agreements for key management personnel in place at the date of
this report are as follows:
Commencement
Date
11/01/2017
Notice Period
Base Salary
One month
Base Salary
$70,000
Termination
Payments
Provided
-
Jiajun Hu – Executive
Chairman
There are no other agreements with key management personnel.
Voting and comments made at the Company's 2021 Annual General Meeting ('AGM')
At the 2021 AGM held on 7 December 2021, over 99% of the votes received supported the adoption of the
remuneration report for the year ended 30 June 2021. The Company did not receive any specific feedback
at the AGM regarding its remuneration practices.
Remuneration Details
(a)
Key management personnel compensation:
2022
Short-term benefits
Post-employment benefits
Name
Directors
Jiajun Hu
Yuanguang Yang
Xiaojing Wang
Total
Salary and fees
$
Annual Leave
Entitlements1
$
Superannuation
Total
$
$
70,000
30,000
30,000
130,000
6,043
-
-
6,043
7,000
-
3,000
83,043
30,000
33,000
10,000
146,043
2021
Short-term benefits
Post-employment benefits
Name
Salary and
fees
$
Cash Bonus
$
Annual Leave
Entitlements1
$
Superannuation
Total
$
$
Directors
Jiajun Hu
Yuanguang Yang
Xiaojing Wang
Lionel Liew
70,000
30,000
30,000
20,000
50,000
-
-
-
5,896
-
-
-
11,650
-
2,850
-
137,547
30,000
32,850
20,000
Total
150,000
50,000
5,896
14,500
220,397
1 The amounts disclosed in this column represent the increase in the associated provisions.
Share-based payment compensation
To ensure that the consolidated entity has appropriate mechanisms to continue to attract and retain the
services of Directors and Executives of a high calibre, the consolidated entity has a policy of issuing options
that are exercisable in the future at a certain fixed price.
- 6 -
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ REPORT
Key Management Personnel Remuneration (cont’d)
No options were granted to Directors or key management personnel during the year ended 30 June 2022
(2021: nil).
Key management personnel shareholdings
The number of ordinary shares in KalNorth Gold Mines Limited held by each key management personnel of the
consolidated entity during the financial year is as follows:
2022
Directors
Jiajun Hu
Yuanguang Yang
Xiaojing Wang
Total
2021
Directors
Jiajun Hu
Yuanguang Yang
Xiaojing Wang
Lionel Liew
Total
Balance
1 July 2021
Granted as
Remuneration
Net Change
Other
Balance
30 June 2022
-
2,375,300
-
2,375,300
-
-
-
-
-
-
-
-
-
2,375,300
-
2,375,300
Balance
1 July 2020
Granted as
Remuneration
Net Change
Other
Balance
30 June 2021
-
2,375,300
-
NA
2,375,300
-
-
-
-
-
-
-
-
-
-
-
2,375,300
-
NA
2,375,300
Key management personnel option holdings
No options were granted or held by key management personnel in the current or prior year.
Loans to key management personnel and their related parties
There were no loans outstanding at the reporting date (30 June 2021: Nil) to key management personnel and
their related parties.
Other transactions with KMPs
During the year ended 30 June 2021, Jiajun Hu extended additional loans of $71,000 to the Company for
working capital purposes, bringing the total amount lent to $261,000. The Company made repayment of
$41,000 in September 2020 and a final repayment of $220,000, including accrued interest at 8% pa in June
2021. Refer to Note 12 Borrowing for more details.
There were no other transactions with KMPs for the year ended 30 June 2022.
Use of Remuneration Consultants
The Company did not use any remuneration consultants during the year.
The earnings of the consolidated entity for the five years to 30 June 2022 are summarised below:
Sales revenue
EBITDA
EBIT
Profit / (Loss) after income
tax
2022
$
2021
$
-
-
12,410,885
(310,171)
(310,171)
12,410,885
(310,171) 12,208,461
2020
$
-
(858,670)
(859,137)
(900,355)
2019
$
-
(823,513)
(825,373)
(825,373)
2018
$
-
(235,792)
(251,999)
(357,446)
- 7 -
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ REPORT
Key Management Personnel Remuneration (cont’d)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Total dividends declared (cents per
share)
Basic earnings / (loss) per share
(cents per share)
1Shares last traded on ASX in August 2020
2022
2021
2020
2019
2018
0.0131
0.0131
0.007
0.008
0.006
-
-
-
-
-
(0.03)
1.38
(0.10)
(0.09)
(0.04)
Indemnification and Insurance of Officers and Auditors
The Company’s Constitution requires it to indemnify Directors and officers of any entity within the
consolidated entity against liabilities incurred to third parties and against costs and expenses incurred in
defending civil or criminal proceedings, except in certain circumstances. An indemnity is also provided to the
Company’s auditors under the terms of their engagement. Directors and officers of the consolidated entity
have been insured against all liabilities and expenses arising as a result of work performed in their respective
capacities, to the extent permitted by law. The insurance premium relates to:
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or
criminal and whatever the outcome;
other liabilities that may arise from their position, with the exception of conduct involving a wilful
breach of duty or improper use of information or position to gain a personal advantage.
Proceedings on Behalf of Company
No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings. The Company was not a party to any such proceedings
during the year.
Non-Audit Services
There have been no non-audit services provided by the consolidated entity’s auditor during the year.
Auditor’s Independence Declaration
The auditor, BDO Audit (WA) Pty Ltd, has provided the Board of Directors with an independence declaration
in accordance with section 307C of the Corporations Act 2001 and this is set out on the following page.
The Report of Directors is signed pursuant to section 298(2) (a) of the Corporations Act 2001 in accordance
with a resolution of the Board of Directors.
Jiajun Hu
Executive Chairman
Dated at Perth 26 October 2022
- 8 -
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF KALNORTH GOLD MINES
LIMITED
As lead auditor of KalNorth Gold Mines Limited for the year ended 30 June 2022, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of KalNorth Gold Mines limited and the entities it controlled during the
period.
Neil Smith
Director
BDO Audit (WA) Pty Ltd
Perth, 26 October 2022
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
9
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2022
Other income
Reduction in rehabilitation obligation
Gain on sale of mineral tenements
Gain on sale of property, plant and equipment
Director and corporate employee costs
Professional fees and consultants
Listing and registry fees
Exploration costs
Interest expense
Other expenses
(Loss) / Profit before income tax
Income tax expense
(Loss) / Profit after income tax for the year
Note
2022
$
2021
$
3
11
4
22,614
-
88,066
94,447
(158,301)
(186,743)
(27,556)
-
-
(142,697)
(310,171)
-
(310,171)
84,760
1,095,566
12,156,009
-
(288,034)
(66,956)
(37,997)
(428,191)
(86,424)
(220,272)
12,208,461
-
84,760
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Revaluation of available for sale asset
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive (loss) / income for the year
(310,171)
12,208,461
(Loss) / Earnings per share for the year attributable to the members
of KalNorth Gold Mines Limited:
Basic and diluted (loss) / earnings per share (cents)
16
(0.03)
1.37
The accompanying notes form an integral part of these financial statements.
10
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Other assets
Available for sale assets
Total Current Assets
Non-Current Assets
Other receivables
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Accumulated losses
TOTAL EQUITY
Note
2022
$
2021
$
18(b)
5
6
9
12,418,782
9,020
3,007,500
-
15,435,302
15,036,283
925,926
7,500
290,865
16,260,574
5
10
-
-
1,286,008
1,286,008
15,435,302
17,546,582
95,371
95,371
1,896,480
1,896,480
95,371
1,896,480
15,339,931
15,650,102
12
13
92,438,807
(77,098,875)
92,438,807
(76,788,705)
15,339,931
15,650,102
The accompanying notes form an integral part of these financial statements.
11
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
2021
As at 1 July 2020
Profit after income tax for the year
Total comprehensive loss for the year, net of tax
Issued
Capital
$
Accumulated
Losses
$
Total
Equity
$
92,438,807
(88,997,166)
3,441,641
-
-
12,208,461
12,208,461
12,208,461
12,208,461
As at 30 June 2021
92,438,807
(76,788,705)
15,650,102
2021
As at 1 July 2021
Loss after income tax for the year
Total comprehensive profit for the year, net of tax
Issued
Capital
$
Accumulated
Losses
$
Total
Equity
$
92,438,807
(76,788,705)
15,650,102
-
-
(310,171)
(310,171)
(310,171)
(310,171)
As at 30 June 2022
92,438,807
(77,098,875)
15,339,931
The accompanying notes form an integral part of these financial statements.
12
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payment for exploration and evaluation (expensed)
Government grant received
Interest received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Acquisition of tenements
Proceeds from sale of tenements
Cost associated with tenement sale
Net GST paid on sale of tenements
Net proceeds from sale of property, plant and equipment
Net funds placed on term deposit
Net cash (used in) / from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Interest on borrowings paid
Net cash from financing activities
Note
2022
$
-
(532,238)
(683)
-
22,614
-
(510,307)
18(a)
2021
$
9,600
(682,898)
(459,438)
75,071
89
(4,912)
(1,062,488)
-
2,400,000
(169,055)
(1,746,591)
385,312
(3,000,000)
(2,130,334)
(5,317,399)
22,763,687
(475,778)
-
-
16,970,510
-
-
-
-
5,721,000
(6,479,448)
(117,561)
668,447
Net (decrease) / increase in cash held
(2,640,641)
15,032,013
Cash and cash equivalents at the beginning of the financial year
Foreign exchange movements
15,036,283
23,140
4,270
-
Cash and cash equivalents at the end of the financial year
18(b)
12,418,782
15,036,283
The accompanying notes form an integral part of these financial statements.
13
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Notes to the Consolidated Financial Statements
Note 1: Statement of Significant Accounting Policies
The financial statements cover KalNorth Gold Mines Limited (“KalNorth”, “Company”) as a consolidated entity
consisting of KalNorth Gold Mines Limited and the entities it controlled at the end of, or during, the year. The
financial statements are presented in Australian dollars, which is KalNorth's functional and presentation
currency.
The financial report was authorised for issue on 26 October 2022 by the Board of Directors.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the
Corporations Act 2001, as appropriate for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value
through profit or loss, investment properties, certain classes of property, plant and equipment and derivative
financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the consolidated entity's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in note 2.
New and amended standards issued but not yet mandatory
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June
2022. The Company has not yet assessed the impact of these new or amended Accounting Standards and
Interpretations.
New or amended standards adopted by the Company
The Company has not adopted any new or amended standards during the year ended 30 June 2022.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in Note 24.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of KalNorth
Gold Mines Limited ('company' or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the
year then ended. KalNorth Gold Mines Limited and its subsidiaries together are referred to in these financial
statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities
of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
consolidated entity. They are de-consolidated from the date that control ceases.
14
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Notes to the Consolidated Financial Statements
Note 1: Statement of Significant Accounting Policies (cont’d)
Principles of consolidation (cont’d)
Intercompany transactions, balances and unrealised gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in profit or loss.
Operating Segments
Operating segments are presented using the 'management approach', where the information presented is
on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The
CODM is responsible for the allocation of resources to operating segments and assessing their performance.
Income tax
The income tax expense (income) for the year comprises current income tax expense (income) and deferred
tax expense (income).
Current income tax expense charged to the profit of loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets)
are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of profit or
loss when the tax related to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also
result where amounts have been fully expensed but future tax deductions are available. No deferred income
tax will be recognised from the initial recognition of an asset or liability, excluding a business combination,
where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantially enacted at reporting
date. Their measurement also reflects the manner in which management expects to recover or settle the
carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax
asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
15
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Notes to the Consolidated Financial Statements
Note 1: Statement of Significant Accounting Policies (cont’d)
Income tax (cont’d)
Current tax assets and liabilities are offset where a largely enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred
tax assets and liabilities related to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
Mining tenements and exploration and evaluation expenditure
Mining tenements and exploration and evaluation expenditure are carried at cost, less accumulated
impairment losses.
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a stage
that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs
in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon
the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of
the mining permits. Such costs have been determined using estimates of future costs, current legal
requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect
of employees' services up to the reporting date and are measured at the amounts expected to be paid when
the liabilities are settled.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
Property
Freehold land and buildings are measured on the cost basis less depreciation and impairment losses.
16
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Notes to the Consolidated Financial Statements
Note 1: Statement of Significant Accounting Policies (cont’d)
Property, plant and equipment (cont’d)
Plant and equipment
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of
the expected net cash flows that will be received from the assets employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in determining recoverable amounts.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to
the statement of comprehensive income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding
freehold land, is depreciated on a straight-line basis over the useful lives to the consolidated entity
commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of fixed asset
Plant and equipment
Motor vehicles
IT assets
Depreciation rate
10-33%
25%
33%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the statement of comprehensive income or loss. When revalued assets are
sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after
the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-
current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
17
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Notes to the Consolidated Financial Statements
Note 1: Statement of Significant Accounting Policies (cont’d)
Impairment of non-financial assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in
use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the comprehensive statement of income.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount
of the asset is reduced to its recoverable amount. An impairment loss is recognised in profit or loss
immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated
as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased
carrying amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised in profit or
loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the
impairment loss is treated as a revaluation increase.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts.
Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in
the ordinary course of business. Receivables expected to be collected within 12 months of the end of the
reporting period are classified as current assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any provision for impairment.
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain
unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts
normally paid within 30 days of recognition of the liability.
Provision for restoration
Long term environmental obligations are based on the Group’s environmental management plans in
compliance with current environmental and regulatory requirements. Full provision is made based on the
value of the estimated cost restoring the environmental disturbance that has occurred up to the reporting
date. The restoration provision relates to exploration and evaluation expenditure and rehabilitation relating to
the exploration and mining lease.
The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in
legislation, technology or other circumstances.
18
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Notes to the Consolidated Financial Statements
Note 1: Statement of Significant Accounting Policies (cont’d)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method. Where there is
an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans
or borrowings are classified as non-current.
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in
the statement of financial position are shown inclusive of GST. Cash flows are presented in the cash flow
statement on a gross basis, except for the GST component of investing and financing activities, which are
disclosed as operating cash flows.
Revenue Recognition
Interest income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly
attributable to the issue of new shares or options for the acquisition of a business are not included in the cost
of the acquisition as part of the purchase consideration.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the consolidated
entity, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
Finance costs
Finance costs are expensed in the period in which they are incurred.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
19
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 2: Critical accounting estimates and judgments
The Directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the group.
As a result of the disposal of all mineral assets and other non-current assets during the reporting period and
the prior period, there are no aspects of the Company’s assets, liabilities and activities during the period that
require critical accounting estimates and judgments.
Note 3: Other income
2022
2021
Interest received
Government grants
Rental income
Note 4: Income tax
$
$
22,614
-
-
22,614
89
75,071
9,600
84,760
(a) Numerical reconciliation between income tax expense and the profit / (loss) before income tax
(Loss) / Profit before income tax
Income tax (benefit) / expense at 25% (FY 2021 – 26%)
Tax effect of permanent differences
Tax effect of temporary differences
Tax effect of deduction for tax losses not previously recognised
Other deferred tax assets not recognised
Income tax expense / benefit reported in the statement of
comprehensive income
(b)
Unrecognised deferred tax balances
2022
$
2021
$
(310,171)
12,208,461
(77,543)
-
(10,812)
-
88,355
3,174,200
(8,989)
1,083,756
(4,248,968)
-
-
-
Tax losses attributable to members of the tax consolidated
group – revenue
Potential tax benefit at 25%
63,942,288
15,985,572
64,169,904
16,042,476
A deferred tax asset attributable to income tax losses has not been recognised at reporting date as the
probability criteria disclosed in Note 1 (Income Tax) is not satisfied and such benefit will only be available if the
conditions of deductibility also disclosed in Note 1 (Income Tax) are satisfied.
For the purposes of taxation, KalNorth Gold Mines Limited and its 100% owned Australian subsidiaries are a
tax consolidated group. The head entity of the tax consolidated group is KalNorth Gold Mines Limited. The
group has not entered into a tax sharing agreement.
Note 5: Other receivables
Current
Sale proceeds receivable within 12 months
Less: discount
Net present value of sales proceeds receivable
Interest receivable from term deposit
2022
$
-
-
-
9,020
9,020
2021
$
1,000,000
(74,074)
925,926
-
925,926
20
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 5: Other receivables (cont’d)
Non-current
Sale proceeds receivable after 12 months
Less: discount
Net present value
2022
$
2021
$
-
-
-
1,500,000
(213,992)
1,286,008
During the reporting period, the $2.5 million receivables (gross before discount) in relation to the Lindsay Project
sale as at 30 June 2021 were fully settled for $2.4 million.
Note 6: Other assets
Current
Credit card facility - security deposit
Term deposit at bank
Note 7: Property, plant and equipment
Land and buildings
At cost
Accumulated depreciation
Reclassify to available for sale asset (refer to Note 9)
Total written down value
Note 8: Exploration and evaluation expenditure
Cost
Reconciliation
Balance at beginning of year
Exploration expenditure incurred
Exploration expenditure immediately expensed (i)
Write-off of expenditure on disposal of tenements
Balance at end of year
2022
$
2021
$
7,500
3,000,000
3,007,500
7,500
-
-
2022
$
-
-
-
-
-
2022
$
2021
$
380,866
(90,001)
(290,865)
-
-
2021
$
-
5,259,651
424,067
(424,067)
(5,259,651)
-
-
-
-
-
-
-
(i) During the year ended 30 June 2021, the Company incurred exploration expenditure costs which were
immediately expensed as their recoverability was uncertain. All previously capitalised exploration and
evaluation expenditure was written off in the period as the consolidated entity disposed the Lindsay’s and
Kurnalpi projects.
Note 9: Available for sale assets
Current
Property at 224 & 226 Dungan Street, Kalgoorlie
2022
$
2021
$
-
-
290,865
290,865
A contract for the sale of the property in Kalgoorlie was entered into on 19 July 2021 and completion and
settlement took place on 9 September 2021. As an active program for this disposal was entered into prior
to the preceding year-end, the asset was reclassified to ‘Available for Sale’ from Property, Plant and
Equipment in the preceding financial period.
21
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 10: Trade and other payables
Current
Trade payables (i)
GST and other taxes payable (ii)
Sundry payables and accrued expenses
Provision for annual leave
2022
$
2021
$
27,997
(4,029)
39,014
32,390
95,372
19,784
1,754,838
95,512
26,347
1,896,481
(i) There are no amounts included within these balances that are not expected to be settled within the
next 12 months. The average credit terms for services received by the Group are 30 days from invoice
date and are non-interest bearing; (ii) Includes $1,763,688 net GST collected for the sale of Kurnalpi
project and paid to the ATO post year-end and withholding tax on interest paid to lenders of $7,014.
Note 11: Restoration provision
Non-current
Restoration provision (i)
(i) The provision movement for the year is as follows:
Carrying amount at the start of the year
Movement during the year
Carrying amount at the end of the year
2022
$
2022
$
2021
$
-
2021
$
1,095,566
(1,095,566)
-
-
-
-
-
During the year ended 30 June 2021, the restoration provision was reversed following the sale of all
mineral assets.
Note 12: Contributed equity
2022
$
2021
$
894,240,060 fully paid ordinary shares (2021: 894,240,060)
92,438,807
92,438,807
Movements in ordinary shares on issue for the year:
Balance 30 June 2021
Balance 30 June 2022
Ordinary shares
No. of
shares
Paid up
capital
$
894,240,060
92,438,807
894,240,060
92,438,807
Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the
consolidated entity, to participate in the proceeds from the sale of all surplus assets in proportion to the
number of and amounts paid up on shares held.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
22
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 12: Contributed equity (cont’d)
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain
an optimum capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce
debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company
was seen as value adding relative to the current company's share price at the time of the investment. The
consolidated entity is not actively pursuing additional investments in the short term as it continues to
integrate and grow its existing businesses in order to maximise synergies.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial year.
Note 13: Accumulated Losses
Accumulated losses at the beginning of the year
(Loss) / Profit for the year
Accumulated losses at the end of the year
Note 14: Key management personnel compensation
2022
$
2021
$
(76,679,568)
(310,171)
(77,098,875)
(88,997,166)
12,317,598
(76,679,568)
Refer to the Key Management Personnel Remuneration section contained in the Directors’ Report for details
of the remuneration paid to each member of the consolidated entity’s key management personnel for the year
ended 30 June 2022.
The totals of remuneration paid to key management personnel of the consolidated entity during the year are as
follows:
Short-term employee benefits
Post-employment benefits
Note 15: Related party transactions
2022
$
2021
$
136,043
10,000
146,043
205,896
14,500
220,396
All transactions were made on normal commercial terms and conditions and at market rates.
Transactions:
During the financial year, other than remuneration paid or payable to key management personnel, the Company
had no other related party transactions (2021: no related party transactions).
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Accrued Directors’ bonus
2022
$
-
2021
$
50,000
23
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 15: Related party transactions (cont’d)
Loans to/from related parties
During the year ended 30 June 2021, the Company drew down a $71,000 loan from Chairman, Jiajun Hu for
working capital purposes. The total loan amount, including interest payable, was fully repaid during the same
year.
Apart from the above, there were no other loans to or from related parties at the current and previous reporting
date.
Note 16: (Loss) / Profit per share
a) Basic (loss) / profit per share
(Loss) / Profit after income tax
2022
$
2021
$
(310,171)
12,208,461
Weighted average number of ordinary shares on issue during the year used
as the denominator in calculating basic loss per share
894,240,060
894,240,060
Diluted loss per share is the same as basic loss per share as there are no securities to be classified as
dilutive potential ordinary shares on issue.
Note 17: Auditors’ remuneration
Remuneration of the auditor for:
- audit and review of financial reports - BDO Audit (WA) Pty Ltd
- other services – audit of tenement expenditure report - BDO Audit (WA)
Pty Ltd
Note 18: Cash flow information
a) Reconciliation of the net profit / (loss) after income tax to the net cash
flows from operating activities:
Net (loss) / profit for the year
Non-cash items included in net profit / (loss):
Sale of tenements
Loan interest accrued
Rehabilitation provision
Other receivables – net present value
Others
Changes in assets and liabilities:
(Increase) / decrease in trade and other receivables
Increase in trade and other creditors
2022
$
2021
$
51,078
49,120
-
51,078
1,288
50,408
2022
$
2021
$
(310,171)
12,208,461
-
-
-
-
33,120
(12,156,009)
57,530
(1,095,566)
288,067
178,962
(1,801,109)
1,567,853
(2,204,567)
1,660,633
Net cash outflow from operating activities
(510,307)
(1,062,488)
b) Reconciliation of cash
Cash balance comprises:
- Cash at bank and on hand
c) Non-Cash Financing and Investing Activities
12,418,782
15,036,283
There were no non-cash financing and investing activities for the year ended 30 June 2022 and 2021.
24
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 19: Commitments
The consolidated entity has no commitments as a result of the disposal of all its mineral exploration assets
during the year.
Note 20: Controlled entities
Subsidiaries of KalNorth Gold Mines Limited:
Shannon Resources Pty Ltd
Lusitan Prospecting Pty Ltd
Country of
Incorporation
Percentage Owned (%)
2021
2022
Australia
Australia
100
100
100
100
There was no income earned and no expenses incurred by these entities for the year end 30 June 2022 (2021:
nil).
Note 21: Segment information
Identification of reportable operating segments
The consolidated entity is organised into two operating segments: mine development and mineral
exploration, both within Australia.
30 June 2022
Revenue
Other income
Gain on sale of mineral tenements
Gain on sale of property, plant and equipment
Total income
EBITDA
Profit / (Loss) before income tax
Income tax benefit
Mineral
Exploration
Admin
Total
consolidated
group
$
22,614
88,066
94,447
205,127
$
22,614
-
94,447
117,061
(398,237)
(310,171)
(398,237)
(310,171)
-
-
$
-
88,066
-
88,066
88,066
88,066
-
Profit / (Loss) after income tax
88,066
(398,237)
(310,171)
Assets
Unallocated assets:
Cash and cash equivalents
Other receivables
Other current assets
-
9,020
-
12,418,782
-
3,007,500
12,418,782
9,020
7,500
Total assets
9,020
15,426,282
15,435,302
Liabilities
Segment liabilities
Trade and other payables
(1,764,371)
1,668,999
(95,371)
Total liabilities
(1,764,371)
1,668,999
(95,371)
25
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 21: Segment information (cont’d)
30 June 2021
Revenue
Other income
Gain on sale of mineral tenements
Total income
EBITDA
Reduction in rehab provision
Impairment of exploration
expenditure
Finance costs
Mine
development
Mineral
Exploration
Admin
$
$
-
12,156,009
12,156,009
-
-
-
$
84,760
-
84,760
Total
consolidated
group
$
84,760
12,156,009
12,240,769
-
1,095,566
11,731,942
-
(528,499)
-
11,203,444
1,095,566
-
-
(4,125)
-
-
(86,424)
(4,125)
(86,424)
Profit / (Loss) before income tax
1,095,566
11,727,818
(614,923)
12,208,461
Income tax benefit
-
-
-
-
Profit / (Loss) after income tax
1,095,566
11,727,818
(614,923)
12,208,461
30 June 2021
Assets
Unallocated assets:
Cash and cash equivalents
Other receivables
Other current assets
Available for sale assets
Total assets
Liabilities
Segment liabilities
Trade and other payables
Total liabilities
Mine
development
Mineral
Exploration
Admin
Total
consolidated
group
-
-
-
-
-
-
-
-
2,211,934
-
-
15,036,286
-
7,500
290,865
15,036,286
2,211,934
7,500
290,865
2,211,934
15,334,648
17,546,582
(1,764,371)
(132,110)
(1,896,480)
(1,764,371)
(132,110)
(1,896,480)
Note 22: Financial risk management objectives and policies
The consolidated entity’s principal financial instruments comprise cash and short-term deposits.
The main purpose of these financial instruments is to finance the consolidated entity’s operations. The
Consolidated entity has various other financial assets and liabilities such as receivables and payables, which
arise directly from its operations.
The main risks arising from the consolidated entity’s financial instruments are interest rate risks, commodity
price risks, and, indirectly, foreign exchange risk. Other minor risks have been summarised below. The Board
reviews and agrees on policies for managing each of these risks.
(a)
Interest rate risk
The consolidated entity’s exposure to market interest rate relates primarily to the consolidated entity’s cash and
short-term deposits. All other financial assets in the form of receivables and payables are non-interest bearing.
The consolidated entity does not engage in any hedging or derivative transactions to manage interest rate risk.
The following tables set out the carrying amount by maturity of the consolidated entity’s exposure to interest
rate risk and the effective weighted interest rate for each class of these financial instruments
26
KalNorth Gold Mines Limited and Controlled Entities
Note 22: Financial risk management objectives and policies (cont’d)
For the year ended 30 June 2022
Weighted
average
interest
Rate
%
0.005%
0.82%
Weighted
average
interest
Rate
%
0.005%
-
Floating interest
rate
$
Fixed interest
maturing 1 year or
less
$
12,418,782
-
12,418,782
-
3,000,000
3,000,000
Floating interest
rate
$
Fixed interest
maturing 1 year or
less
$
15,036,283
15,036,283
-
-
-
-
-
-
30 June 2022
Cash at bank
Other assets (term deposit)
Total assets
30 June 2021
Cash at bank
Total assets
Interest bearing liabilities
Total liabilities
Interest rate sensitivity analysis – cash at bank
At 30 June 2022, if interest rates had changed by 1% during the entire year with all other variables held
constant, profit for the year and equity would have been $262,568 higher/lower (2021: $17,062), mainly as a
result of higher/lower interest income from cash and cash equivalents.
(b) Credit risk
The maximum exposure to credit risk at reporting date on financial assets of the consolidated entity is the
carrying amount, net of any provisions for doubtful debts, as disclosed in the statement of financial position
and notes to the financial statements.
(c) Liquidity risk
The consolidated entity manages liquidity risk by monitoring forecast and actual cash flows and ensuring
that adequate reserves and borrowing facilities are available to meet its financial obligations as they fall
due.
The table below details the Group’s expected maturity for its financial liabilities. These have been drawn
based on undiscounted contractual maturities of the financial liabilities based on the earliest date on which
the Group can be required to pay.
30 June 2022
Financial liabilities due
for payment
Trade and other payables
30 June 2021
Financial liabilities due
for payment
Trade and other payables
Less than 12
months
$
12 months
or more
$
Total
$
(95,371)
(95,371)
(1,896,480)
(1,896,480)
27
-
-
-
-
(95,371)
(95,371)
(1,896,480)
(1,896,480)
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
Note 22: Financial risk management objectives and policies (cont’d)
(d)
Foreign exchange risk
The Company is exposed to fluctuations in foreign currencies arising from financial asset denominated in a
currency other than the functional currency of the Group.
The main currency exposure is to the United States dollars through maintaining a cash balance in United
States dollars.
The Company’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian
dollars was as follows:
Cash and cash equivalents
(e) Net fair value of financial assets and liabilities
2022
$
2021
$
2,023,139
-
The carrying amounts of financial instruments included in the statement of financial position approximate their
fair values due to their short terms of maturity, except other receivables (Note 5) which has been discounted to
net present value.
Note 23: Contingent liabilities and contingent assets
There are no contingent liabilities or assets at the reporting date or arising since.
Note 24: Parent Information
As referred to in Note 20, the consolidated entity comprises KalNorth Gold Mines Limited, the parent entity and
two wholly-owned subsidiaries. The Parent entity disclosures are not materially different to the consolidated
entity’s disclosures in the Statement of Financial Position and the Statement of Profit or Loss and Other
Comprehensive Income. In addition, there are:
a) no guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
b) no contingent liabilities of the parent entity as at the reporting date.
c) no contractual commitments by the parent entity for the acquisition of property, plant and equipment
as at the reporting date.
Note 25: Events subsequent to reporting date
On 24 August 2022, the Company was delisted from the Australian Securities Exchange.
Other than the above, there are no matters or circumstances that have arisen which have significantly
affected, or may significantly affect, the operations of the consolidated entity subsequent to year end.
28
KalNorth Gold Mines Limited and Controlled Entities
For the year ended 30 June 2022
DIRECTORS’ DECLARATION
In the opinion of the Directors of KalNorth Gold Mines Limited (the ‘Company’):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:
i.
ii.
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2022 and
of its performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable; and
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
b.
c.
This declaration is signed in accordance with a resolution of the Board of Directors.
On behalf of the Directors:
Jiajun Hu
Executive Chairman
Dated at Perth 26 October 2022
29
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of KalNorth Gold Mines Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of KalNorth Gold Mines Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of KalNorth Gold Mines Limited, is in accordance with
the Corporations Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Other information
The directors are responsible for the other information. The other information obtained at the date of
this auditor’s report is information included in the directors report, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
30
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf
This description forms part of our auditor’s report.
BDO Audit (WA) Pty Ltd
Neil Smith
Director
Perth, 26 October 2022
31