(ABN 53 090 772 222)
Financial Report
For the year ended 30 June 2008
Lindian Resources Limited
Corporate Directory
Directors
Reginald N Gillard
Gregory L Smith
Patrick J Flint
Gavin J Argyle
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Company Secretary
Paul Jurman
Registered and Administrative
Office
Ground Floor
30 Ledgar Road
Balcatta WA 6021
Telephone:
Facsimile:
(61 8) 9345 2478
(61 8) 9240 2406
Principal Place of Business
Ground Floor
30 Ledgar Road
Balcatta Western Australia 6021
Share Registry
Computershare Investor Services Pty Ltd
Level 2, 45 St George’s Terrace
Perth WA 6000
Solicitors
Auditors
Steinepreis Paganin
Level 4, 16 Milligan Street
Perth WA 6000
RSM Bird Cameron Partners
8 St George’s Terrace
Perth WA 6000
Stock Exchange Listings
Australian Securities Exchange
(Code – LIN & LINO)
Page 1
Lindian Resources Limited
Contents
Review of Operations
Directors’ Report
Statement of Corporate Governance Practices
Auditor’s Independence Declaration
Income Statements
Balance Sheets
Statements of Changes in Equity
Statements of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Mineral Interests Schedule
Additional Shareholder Information
Page Numbers
3-5
6-13
14-21
22
23
24
25-26
27
28-58
59
60-61
62
63-64
Page 2
Lindian Resources Limited
Review of Operations
Exploration
During the year the Company acquired majority interests in the Bafwasende Gold / Diamond Project in the
Democratic Republic of Congo (“DRC”) and the Dinguiraye Iron, PGE and Base Metal Project in Guinea.
The Company also entered into discussions to acquire a majority interest in applications for the Coastal Iron
Project in Guinea. To the Company’s knowledge, due to political issues, no exploration licences were granted
in Guinea during the 2007/08 year. As a result of these political issues in Guinea, the Company is considering
additional project opportunities, including projects prospective for coal and bauxite in Asia and Africa.
Bafwasende Gold / Diamond Project
In October 2007 Lindian Resources Ltd acquired an 80% interest in the Bafwasende Gold / Diamond
Project. The project consists of 44 exploration licences covering approximately 7,000 square kilometres
located 220kms north east of Kisangani (the provincial capital) in Province Orientale in the north east of the
DRC (Figure 1).
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Bafwasende
Bafwasende
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Bafwasende
Bafwasende
Bafwasende
Project
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Project
DRCDRCDRCDRCDRCDRCDRCDRCDRC
Dinguiraye
Dinguiraye
Dinguiraye
Dinguiraye
Dinguiraye
Dinguiraye
Dinguiraye
Dinguiraye
Dinguiraye
Project
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Guinea
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20º
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Figure 1 – Location Map – Bafwasende and Dinguiraye Projects
Geological Setting and Historic Activities
The Bafwasende Gold / Diamond Project is underlain by the Neo Proterozoic sedimentary rocks of the
Lindian Group ranging from mudstone to conglomerates with inter-bedded carbonate.
Page 3
Lindian Resources Limited
Review of Operations
A landsat interpretation has identified 3 main structural directions; WNW, ENE and N-S. The
intersections of these major crustal-scale linears, interpreted as major zones of crustal weakness, represent
prime exploration targets (Figure 2).
Figure 2 – Bafwasende Gold / Diamond Project – Landsat Interpretation
While there are numerous areas of known artisanal alluvial diamond / gold exploitation within the project area,
there is no evidence of any systematic exploration activity. The project area is untested by modern exploration
techniques.
Diamond Potential Joint Venture
In April 2008 the Company entered into a joint venture whereby BRC DiamondCore Ltd (BRC) has the right
to earn a 65% interest in the diamond potential of the project.
The Company is coordinating its initial exploration activities for gold with BRC’s work for diamonds in order
to ensure such work is carried out in the most efficient manner possible.
Dinguiraye Iron and PGE / Base Metal Project
In May 2008 Lindian was granted a Reconnaissance Licence on the Dinguiraye Project which covers 460
square kilometres in the central part of Guinea.
The project has potential to host iron, PGE’s and base metals. During a reconnaissance visit extensive areas of
ferruginous laterites were noted. These laterites consist predominantly of cemented hematitic clasts and lesser
amounts of magnetic and non-magnetic iron pisolites (channel/detritial style mineralisation) interpreted to
cover approximately 30-40% of the project area. Eight grab samples of the lateritic material returned
between 30.98% and 42.94% Fe.
Page 4
Lindian Resources Limited
Review of Operations
The samples also returned some highly anomalous PGE and base metals including: 3 samples with Pt results
exceeding 100ppb up to a maximum of 292ppb (repeat 331ppb, 0.33 g/t Pt), 3 samples with Ni results
exceeding 200ppm up to 293ppm and Cu up to a maximum of 142ppm. High levels of Cr ranging from
3563ppm to 6715ppm are present in most samples.
A landsat interpretation has identifed the main mafic unit, which is the potential host for the magmatic
sulphides. The mafics lie within an interpreted graben on the southern edge of a continental scale ENE
trending lineament (Figure 3). This interpretation has also unravelled the erosional history of the laterites
identifying areas with the highest exploration potential for iron.
Figure 3 – Dinguiraye Project – Landsat Interpretation
Exploration is presently focused on soil geochemistry to identify potential magmatic sulphide mineralisation
and the pitting and sampling of the laterites to gain a better understanding of their iron potential.
Other Activities
The Company entered into discussions during the year to acquire a majority interest in applications for the
Coastal Iron Project in Guinea. The project consists of three licence applications covering approximately
2,500 km2 that contain zones of lateritic (channel and detrital) iron mineralisation. The Company completed a
reconnaissance visit to the project during the year. The granting of the licence applications has been delayed by
political issues in Guinea. To the Company’s knowledge no exploration licences were granted in Guinea
during the 2007/08 year.
The Company has also made an application for a bauxite project in Africa and is currently assesssing other
bauxite and coal project opportunities in Asia and Africa.
Page 5
Lindian Resources Limited
Directors’ Report
Your Directors present their report together with the financial report of Lindian Resources Limited (“the
Company”) and its controlled entities (the “consolidated entity”) for the year ended 30 June 2008 and the auditor’s
report thereon. In order to comply with the provisions of the Corporations Act, the Directors report as follows:
DIRECTORS
The names and details of the Directors in office during or since the end of the financial year are as follows.
Directors were in office for the entire year unless otherwise stated.
Names, qualifications, experience and special responsibilities
Reginald N Gillard BA FCPA FAICD JP - Non-Executive Chairman
(Appointed 30 October 2006)
Reg Gillard has been involved in the resources sector for over 20 years, and is currently focused on corporate
management, corporate governance and the evaluation and acquisition of businesses. He has considerable
experience in acquiring mineral projects (particularly in Africa) and in raising funds for the exploration and
development of such projects. Prior to this Mr Gillard practised as an accountant, during which time he formed and
developed a number of service related businesses. He is a non-executive chairman of Aspen Group Ltd, Caspian
Oil & Gas Limited, Perseus Mining Limited, Eneabba Gas Limited (from 2 August 2005), Tiger Resources Limited
(from 9 December 2005) and he also served as non-executive chairman of Moto Goldmines Limited (ceased 17
August 2005), Lafayette Mining Limited (resigned 20 June 2008), Pioneer Nickel Limited (resigned 13 June 2008)
and Elemental Minerals Limited (resigned 30 June 2008).
Gregory L Smith – BSc, AUSIMM (Managing Director)
(Appointed 30 October 2006)
Mr Smith has a BSc in Geology from Dalhousie University in Canada. He is a Fellow of the Geological
Association of Canada and a Member of the Australasian Institute of Mining and Metallurgy. Mr Smith has 30
years experience gained as an exploration and mining geologist in Canada, Africa, Australia and South East Asia in
both staff and consulting roles. Most recently Mr Smith was exploration manager for Moto Goldmines Ltd on the
Moto Gold Project in the DRC. He is currently also a director of Elemental Minerals Limited (from 30 January
2007).
Patrick J Flint – CA, BCom (Non-Executive Director)
(Appointed 30 October 2006)
Patrick Flint is a chartered accountant with significant experience in the management of publicly listed mineral
exploration companies. He has been involved in numerous capital raisings and project acquisitions. He is also an
executive director of Tiger Resources Limited (from 9 January 2007) and a non-executive director of Erongo
Energy Limited (from 23 November 2006) and Zedex Minerals Limited (from 1 May 2007), and company
secretary of Elemental Minerals Limited and Red Metal Limited (all of which are listed on the Australian Stock
Exchange).
Gavin J Argyle – B.Com, MBA (Non–Executive Director)
(Appointed 23 March 2005)
Mr Gavin Argyle has over 15 years experience in investment banking and stock broking in Australia. Prior to
investment banking, Gavin was a Senior Staff member at Western Mining Corporation Limited. Gavin has served
on the board of numerous Australian and US listed and private companies in executive and non-executive
positions. He is currently a Managing Director of Capital Investment Partners Pty Limited. His qualifications
include a Bachelor of Commerce from the University of Western Australia and an MBA from the Wharton
Business School at the University of Pennsylvania. He was also a director of Biron Apparel Limited (resigned 22
October 2007).
Page 6
Lindian Resources Limited
Directors’ Report
DIRECTORS – continued
Names, qualifications, experience and special responsibilities - continued
COMPANY SECRETARY
Paul Jurman – CPA, B Com
(Appointed 30 October 2006)
Mr Jurman is a CPA with over 10 years experience and has been involved with a diverse range of Australian public
listed companies in company secretarial and financial roles. He is also company secretary of Erongo Energy
Limited, Carnavale Resources Limited, Elemental Minerals Limited and Pan Palladium Limited.
PRINCIPAL ACTIVITIES
The principal activity of the consolidated entity is to the exploration and evaluation of mineral interests.
RESULTS AND DIVIDENDS
The consolidated loss for the year after income tax was $696,472 (2007: $1,830,699). No dividends were paid
during the year and the Directors do not recommend payment of a dividend.
EARNINGS PER SHARE
Basic loss per share for the year was 2.10 cents (2007: 6.22 cents).
REVIEW OF OPERATIONS
A review of operations of the consolidated entity during the year ended 30 June 2008 is provided in the section
headed "Review of Operations" immediately preceding this Directors’ Report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Significant changes in the state of affairs of the consolidated entity during the financial year were as follows:
On 7 February 2008, the Company issued 5,000,000 shares to Corporate & Resource Consultants Pty Ltd
(a director-related entity) and 500,000 options to Mr John Hamilton, as consideration for the acquisition of
80% of the issued capital of Coexco Sprl, pursuant to the terms and conditions of the Bafwasende
Acquisition Agreement. Coexco Sprl owns the rights to the Bafwasende Gold / Diamond Project.
On 28 April 2008, the Company entered into a joint venture with BRC DiamondCore Ltd (BRC) on its
Bafwasende Gold and Diamond project. The joint venture gives BRC the right to earn a 65% interest in
the diamond potential of the project.
On 15 May 2008, the Company announced it had been granted a Reconnaissance Licence (“RGA”) for the
Dinguiraye iron and PGE / base metal project in Guinea, West Africa.
EVENTS SUBSEQUENT TO BALANCE DATE
No matters or circumstances have arisen since the end of the financial year which have significantly affected or
may significantly affect the operations, results or state of affairs of the Company in subsequent financial years.
Page 7
Lindian Resources Limited
Directors’ Report
LIKELY DEVELOPMENTS
The Consolidated Entity remains committed to adding to shareholder wealth through the development of its
mineral interests. The Company continues to review potential project opportunities, being primarily resources
projects located in Africa and Asia.
DIRECTORS’ MEETINGS
The number of meetings of the Directors and the number of meetings attended by each Director during the year
ended 30 June 2008 were:
Directors’ meetings held during
period of office
Directors’ meetings attended
R N Gillard
G L Smith
P J Flint
G J Argyle
4
4
4
4
4
3
4
4
The Company does not have audit, remuneration or nomination committees. Due to the small size of the board all
matters that would be addressed by committees are dealt with by the full board of directors.
DIRECTORS’ INTERESTS
The interests of each Director in the shares and options of the Company at the date of this Report are as follows:
Fully Paid Ordinary Shares
R N Gillard
G L Smith
P J Flint
G J Argyle
810,541
733,952
517,541
-
Options Over
Ordinary
Shares
1,676,103
1,366,976
1,493,603
585,000
Options granted to directors' and officers and analysis of share-based payments granted as remuneration
The Company has not granted any options over unissued ordinary shares during or since the end of the financial
year to any Directors or officers as part of their remuneration.
During or since the end of the financial year, no options over unissued ordinary shares in the Company were
forfeited or exercised by Directors or officers of the Company.
Page 8
Lindian Resources Limited
Directors’ Report
SHARE OPTIONS
As at the date of this report, there are 22,926,879 options over unissued ordinary shares in the Company
outstanding, summarised as follows:
Listed Options:
Unlisted Options:
Unlisted Options:
Unlisted Options:
Unlisted Options:
Unlisted Options:
Unlisted Options:
Number
Exercise Price
$
Expiry Date
17,381,879
495,000
1,000,000
3,000,000
200,000
350,000
500,000
$0.30
$0.20
$0.20
$0.30
$0.30
$0.35
$0.30
31 December 2009
31 December 2010
1 July 2011
15 September 2009
30 September 2010
30 September 2010
31 December 2011
These options do not entitle the holder to participate in any share issue of the Company or any other body
corporate. There are no options to subscribe for shares in any controlled entity.
Options issued during the year were as follows:
• 550,000 unlisted options were issued to employees of the Company.
• 500,000 unlisted options were issued to Mr John Hamilton as part-consideration for the purchase of 80% of
the issued capital of Coexco Sprl, an entity which owns the rights to the Bafwasende Diamond Project in
the Democratic Republic of Congo.
All options were granted during the financial year. No options have been granted since the end of the financial
year.
Shares issued on exercise of options
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of
options as follows (there was no amount unpaid on the shares issued):
Number of
shares
Amount paid on each share
$
55,000
1,625
56,625
0.20
0.30
For details on the valuation of the options issued during the year, including models and assumptions used, please
refer to Note 17. There were no alterations to the terms and conditions of options granted as remuneration since
their grant date.
Page 9
Lindian Resources Limited
Directors’ Report
REMUNERATION REPORT (Audited)
This report outlays the remuneration arrangements in place for the Directors and executives (as defined under
section 300A of the Corporations Act 2001) of Lindian Resources Limited.
It also provides the remuneration disclosures required by paragraphs Aus 25.4 to Aus 25.7.2 of AASB 124
“Related Party Disclosures”, which have been transferred to the Remuneration Report in accordance with
Corporations Regulations and have been audited.
The following were Directors and executives of the Company during or since the end of the financial year.
Non Executive Directors
Mr Reginald Gillard
Mr Patrick Flint
Mr Gavin Argyle
Managing Director
Mr Gregory Smith
Other Senior Management
The term ‘senior management’ is used in this remuneration report to refer to the following persons. Except as
noted the named persons held their current position for the whole of the financial year and since the end of the
financial year:
Paul Jurman – Company Secretary.
Remuneration philosophy
The performance of the company depends upon the quality of the directors and executives. The philosophy of the
company in determining remuneration levels is to:
- set competitive remuneration packages to attract and retain high calibre employees;
- link executive rewards to shareholder value creation; and
- establish appropriate performance hurdles for variable executive remuneration.
Options Issued as part of remuneration for the year ended 30 June 2008
Options are issued to directors and executives as part of their remuneration.
Remuneration structure
In accordance with best practice corporate governance, the structure of remuneration for non-executive Directors
and executive Directors is separate and distinct.
Non-executive Directors’ remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The ASX Listing Rules specify that the aggregate remuneration of non-executive Directors shall be determined
from time to time by the shareholders in general meeting. An amount not exceeding the amount determined is then
divided between the Directors as agreed. The latest determination was at a general meeting on 21 November 2003
when shareholders approved an aggregate remuneration of $150,000 per year.
Each director receives a fee for being a director of the company.
The remuneration of the non-executive Directors for the year ending 30 June 2008 is detailed in Table 1 of this
report.
Page 10
Lindian Resources Limited
Directors’ Report
REMUNERATION REPORT - continued
Executive Directors’ remuneration
Mr Smith is the Managing Director of the Company and is entitled to Director Fees of $100,000 per annum plus
superannuation.
Options issued to Directors and executives
30 June 2008
R N Gillard (i)
G L Smith (i)
P J Flint (i)
G J Argyle
P Jurman
Total
30 June 2007
R N Gillard (ii)
G L Smith (ii)
P J Flint (ii)
G J Argyle
G A Gander
P Jurman
Total
Granted
No.
Granted as
remuneration
$
Remuneration
represented by
options %
Options
Exercised
Options
Lapsed
$
$
-
-
-
-
-
-
-
-
-
-
-
-
350,000
350,000
58,100
58,100
73.0%
-
-
-
-
-
-
-
-
-
-
-
-
-
Granted
No.
Granted as
remuneration
$
Remuneration
represented by
options %
Options
Exercised
Options
Lapsed
$
$
1,000,000
148,000
1,000,000
148,000
1,000,000
148,000
-
-
-
-
-
-
3,000,000
444,000
81.7%
65.9%
79.0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The fair value of the options was calculated using a Black and Scholes model. The following factors and
assumptions were taken into account in determining the fair value of options on the grant date.
Grant Date
Expiry Date
Fair value
per
option
Exercise
price
Price of shares
on valuation
date
Expected
Volatility
(i) 30 November 2007
(ii) 27 October 2006
30 September 2010 16.6 cents
15 September 2009 14.8 cents
35 cents
30 cents
34 cents
30 cents
70%
70%
Risk free
interest
rate
6.75%
5.50%
Dividend
yield
-
-
For details on the valuation of the options, including models and assumptions used, please refer to Note 17. There
were no alterations to the terms and conditions of options granted as remuneration since their grant date.
Page 11
Lindian Resources Limited
Directors’ Report
REMUNERATION REPORT - continued
Table 1 – Director’s and executive remuneration for the year ended 30 June 2008
Short-term
Post
Employment
Share
Based
Payment
Remuneration
represented
by options
Total
Salary &
Fees
Other
Super
Options
$
$
$
$
$
%
40,000
2,220
100,000
2,220
45,000
2,220
31,108
2,220
3,600
9,000
4,050
-
-
-
-
-
45,820
111,220
51,270
33,328
-
-
-
-
20,000
-
1,800
58,100
79,900
73%
236,108
8,880
18,450
58,100
321,538
Short-term
Post
Employment
Share
Based
Payment
Remuneration
represented
by options
Total
Salary &
Fees
Other
Super
Options
$
$
$
$
$
%
30 June 2008
Directors
R N Gillard
G L Smith
P J Flint
G J Argyle
P Jurman
30 June 2007
Directors
R N Gillard (appointed 30 October 2006)
26,667
4,154
2,400
148,000
181,221
81.7%
G L Smith (appointed 30 October 2006)
66,667
4,154
6,000
148,000
224,821
65.9%
P J Flint (appointed 30 October 2006)
32,000
4,154
2,880
148,000
187,034
79.0%
G J Argyle
29,411
5,287
G A Gander (resigned 30 October 2006)
34,750
1,133
-
-
R M Franco (resigned 30 October 2006)
34,750
1,133
900
P Jurman
11,667
-
1,050
-
-
-
-
34,698
35,883
36,783
12,717
-
-
-
-
235,912
20,015
13,230
444,000
713,157
Page 12
Lindian Resources Limited
Directors’ Report
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS
The Company has agreed to indemnify the directors and previous directors of the Company, against all liabilities to
another person that may arise from their position as directors of the Company and its controlled entities, except
where the liability arises out of conduct involving a lack of good faith.
During the financial year the Company agreed to pay an annual insurance premium of $8,880 in respect of
directors’ and officers’ liability and legal expenses’ insurance contracts, for directors, officers and employees of the
Company. 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.
ENVIRONMENTAL REGULATIONS
The Consolidated Entity is aware of its environmental obligations with regards to its exploration activities and
ensures that it complies with all regulations when carrying out any exploration work.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires our auditors, RSM Bird Cameron Partners, to provide the
directors of the Company with an Independence Declaration in relation to the audit of the annual report. This
Independence Declaration is set out on page 22 and forms part of this directors’ report for the year ended 30 June
2008.
Signed in accordance with a resolution of Directors.
G Smith
Managing Director
Perth, 30 September 2008
Page 13
Lindian Resources Limited
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The ASX Listing Rules require listed entities to disclose the extent to which they have followed the best practice
recommendations set by the ASX Corporate Governance Council during the reporting period.
This corporate governance statement summarises the corporate governance practices that have been formally
reviewed and adopted by the Board with a view to ensuring continued investor confidence in the operations of the
Company. A table has been included at the end of this statement detailing the Company’s compliance with the best
practice recommendations.
The Company’s website at www.lindianresources.com.au contains a corporate governance section that includes
copies of the Company’s corporate governance policies.
BOARD OF DIRECTORS
Role of the Board (1.1)
In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies,
practices, management and operations of the Company. It is required to do all things that may be necessary to be
done in order to carry out the objectives of the Company. Without intending to limit this general role of the Board,
the principal functions and responsibilities of the Board include the following:
• To set the strategic direction for the Company and monitor progress of those strategies;
• Establish policies appropriate for the Company;
• Monitor the performance of the Company, the Board and management;
• Approve the business plan and work programmes and budgets;
• Authorise and monitor investment and strategic commitments;
• Review and ratify systems for health, safety and environmental management; risk and internal control;
codes of conduct and regulatory compliance;
• Report to shareholders, including but not limited to, the Financial Statements of the Company; and
• Take responsibility for corporate governance.
Composition of the Board
To add value to the Company the Board has been formed so that it has effective composition, size and commitment
to adequately discharge its responsibilities and duties given its current size and scale of operations.
The names of Directors of the Company in office at the date of this statement are set out in the Directors’ Report.
Information regarding Directors’ experience and responsibilities is included in the Directors’ Report section of the
Annual Report (2.5).
The number of Directors is specified in the Constitution of the Company as a minimum of three up to a maximum
of ten.
The preferred skills and experiences for a Director of the Company include:
• Mineral Resources;
• Corporate and Business Development; and
• Public Company administration.
Page 14
Lindian Resources Limited
CORPORATE GOVERNANCE STATEMENT (continued)
Chairman of the Board
The Chairman of the Board will be a Non-Executive Director and the Chairman will be elected by the Directors.
The Board considers that the Chairman, Mr Reg Gillard is independent (2.2/2.3).
Independent Directors (2.1)
The Board considers that a Director is independent if that Director complies with the following criteria:
• Apart from Director’s fees and shareholding, independent Directors should not have any business dealings
which could materially affect their independent judgment;
• Must not have been in an Executive capacity in the Company in the last 3 years;
• Must not have been in an advisory capacity to the Company in the last 3 years;
• Must not be a significant customer or supplier for the Company;
• Must not be appointed through a special relationship with a board member;
• Must not owe allegiance to a particular group of shareholders which gives rise to a potential conflict of
interest;
• Must not hold conflicting cross Directorships; and
• Must not be a substantial shareholder or a nominee of a substantial shareholder (as defined under section 9
of the Corporations Act).
Using the ASX Best Practice Recommendations on the assessment of the independence of Directors, the Board
considers that of a total of four Directors, two are considered to be independent (Mr Reg Gillard and Mr Patrick
Flint).
Mr Greg Smith is the Managing Director of the Company and is not considered to be independent. However, his
experience and knowledge of the Company makes his contribution to the Board such that it is appropriate for him
to remain on the Board.
Mr Gavin Argyle is a Non-Executive Director of the Company and is not considered to be independent. However,
his experience and knowledge of the Company makes his contribution to the Board such that it is appropriate for
him to remain on the Board.
Retirement and Rotation of Directors
Retirement and rotation of Directors are governed by the Corporations Act 2001 and the Constitution of the
Company. Each year one third Directors must retire and offer themselves for re-election. Any casual vacancy filled
will be subject to shareholder vote at the next Annual General Meeting of the Company.
Independent Professional Advice (2.5)
Each Director has the right to seek independent professional advice at the Company’s expense after consultation
with the Chairman. Once received the advice is to be made immediately available to all board members.
Access to Employees
Directors have the right of access to any employee. Any employee shall report any breach of corporate governance
principles or Company policies to the Executive Director and/or Company Secretary/Financial Controller who shall
remedy the breach. If the breach is not rectified to the satisfaction of the employee, they shall have the right to
report any breach to an independent Director without further reference to senior managers of the Company.
Page 15
Lindian Resources Limited
CORPORATE GOVERNANCE STATEMENT (continued)
Share Ownership
Directors are encouraged to own Company shares.
Board Meetings
The following points identify the frequency of Board Meetings and the extent of reporting from management at the
meetings:
• A minimum of four meetings are to be held per year;
• Other meetings will be held as required, meetings can be held by telephone link; and
•
Information provided to the Board includes all material information on: operations, budgets, cash flows,
funding requirements, shareholder movements, broker activity in the Company’s securities, assets and
liabilities, disposals, financial accounts, external audits, internal controls, risk assessment, new venture
proposals, and health, safety and environmental reports.
The number of Directors’ meetings and the number of meetings attended by each of the Directors of the Company
during the financial year are set out in the Directors’ Report.
Board Performance Review (8.1)
It is the policy of the Board to conduct an evaluation of its performance. Performance is measured by the efficiency
and effectiveness of the designing and implementation of the exploration and development programme, the
enhancement of the Company’s mineral interest portfolio, the maintenance of relationships with joint venture
partners, the securing of required funding and the success of the Company’s exploration and development
activities. Performance evaluation is not based on specific financial indicators such as earnings or dividends as the
Company is at the exploration stage and during this period is expected to incur operating losses.
Board Committees
Audit Committee (4.2)
The Company does not have an audit committee. The Board is of the opinion that due to the nature and size of the
Company, the functions performed by an audit committee can be adequately handled by the full Board.
The Managing Director and the Company Secretary have declared in writing to the Board that the Company’s
financial statements for the year ended 30 June 2008 present a true and fair view, in all material aspects, of the
Company’s financial condition and operational results and are in accordance with relevant accounting standards.
This representation is made by the Managing Director and Company Secretary/Financial Controller prior to the
Director’s approval of the release of the annual and six monthly accounts. This representation is made after enquiry
of, and representation by, appropriate levels of management (4.1).
Nomination Committee (2.4)
The Board of Directors of the Company does not have a nomination committee. The Board is of the opinion that
due to the nature and size of the Company, the functions performed by a nomination committee can be adequately
handled by the full Board.
Page 16
Lindian Resources Limited
CORPORATE GOVERNANCE STATEMENT (continued)
Remuneration Committee (8.1) (9.2) (9.5)
The Company does not have a remuneration committee. The Board is of the opinion that due to the nature and size
of the Company, the functions performed by a remuneration committee can be adequately handled by the full
Board.
The Company’s policy for determining the nature and amount of emoluments of Board members is as follows:
• Remuneration of Executive and Non –Executive Directors is reviewed annually by the Board.
• Remuneration packages are set at levels intended to attract and retain Directors and Executives capable of
managing the Company’s operations and adding value to the Company.
•
For details of remuneration paid to Directors and officers for the financial year please refer to the Directors’ Report
and Note 20 to the Financial Statements.
Risk Management (7.1)
The Company’s risk management policy is designed to provide the framework to identify, assess, monitor and
manage the risks associated with the Company’s business. The Board adopts practices designed to identify
significant areas of business risk and to effectively manage those risks in accordance with the Company’s risk
profile. The risks involved in a resources sector company and the specific uncertainties for the Company continue
to be regularly monitored and the full Board of the Company meets on an annual basis to formally review such
risks. All proposals reviewed by the Board include a consideration of the issues and risks of the proposal. The
potential exposures associated with running the Company have been managed by the Directors and Company
Secretary who have significant broad-ranging industry experience, work together as a team and regularly share
information on current activities.
Where necessary, the Board draws on the expertise of appropriate external consultants to assist in dealing with or
mitigating risk.
The Company’s main areas of risk include:
exploration;
security of tenure;
environment;
•
• new project acquisitions;
•
•
• government policy changes and political risk;
• occupational health and safety;
•
•
financial reporting; and
continuous disclosure obligations.
Additionally, it is the responsibility of the Board to assess the adequacy of the Company’s internal control systems
and that its financial affairs comply with applicable laws and regulations and professional practices.
Regular consideration is given to all these matters by the Board. The Company has in place an internal control
framework to assist the Board in identifying, assessing, monitoring and managing risk.
The Company’s internal control system is monitored by the Board and assessed regularly to ensure effectiveness
and relevance to the Company’s current and future operations. Procedures have been put into place to ensure the
Managing Director and the Company Secretary/Financial Controller state in writing to the Board that the integrity
of the financial statements is founded on a sound system of risk management and internal compliance and control
and that the Company’s risk management and internal compliance and control system is operating efficiently and
effectively. (4.1) (7.2).
Page 17
Lindian Resources Limited
CORPORATE GOVERNANCE STATEMENT (continued)
The Company is not currently of a size to require the formation of committees. The full Board has the
responsibility for the risk management of the Company.
PROMOTION OF ETHICAL AND RESPONSIBLE DECISION-MAKING
Code of Conduct (10.1)
The goal of establishing the Company as a significant resources company is underpinned by its core values of
honesty, integrity, common sense and respect for people. The Company desires to remain a good corporate citizen
and appropriately balance, protect and preserve all stakeholders’ interests.
The Board has adopted a Code of Conduct for Directors and employees of the Company. The Company’s goal of
achieving above average wealth creation for our shareholders should be enhanced by complying with this code of
conduct which provides principles to which Directors and employees should be familiar and to which they are
expected to adhere and advocate (3.1).
The Company does not currently believe it is of a size to warrant the development of formal ethical guidelines
however, the company subscribes to a general Code of Conduct. All Directors, officers and any employees are
required to meet the following standards of ethical behaviour:
• Act honestly, in good faith and in the best interests of the company as a whole.
• Exercise care and diligence in carrying out all duties.
• Recognise and respect the responsibility to shareholders and other stakeholders of the Company.
• Not misuse information, property or position for an improper purpose including for personal gain or to
compete with the company.
• Avoid conflicts of interest and manage conflicts of interest appropriately if the arise.
• Observe the principles of independence in decision making.
• Respect the confidentiality of all confidential information acquired as a result of position and not disclose
such information without authorization.
• Not engage in conduct likely to bring the company into disrepute.
• Observe the spirit and letter of the law and comply with ethical and technical requirements of the
appropriate regulatory bodies.
In addition to the general Code of Conduct all Directors and employees who are members of a professional body
are required to comply with their respective body’s ethical standards. Any breaches of the Code of Conduct should
be reported to the chair in the first instance for notification to the board. Any disciplinary action including formal
warning or dismissal will be decided by the board and where necessary cases may be referred to the appropriate
authorities.
It is the responsibility of the Board to ensure the Company’s performance under this Code and for its regular
review.
Page 18
Lindian Resources Limited
CORPORATE GOVERNANCE STATEMENT (continued)
PROMOTION OF ETHICAL AND RESPONSIBLE DECISION-MAKING (continued)
Trading in Company Securities by Directors, officers and employees
Trading of shares is covered by, amongst other things, the Corporations Act and the ASX Listing Rules. The Board
has established a Securities Trading Policy that establishes strict guidelines as to when a Director, officer or an
employee can deal in Company shares. The policy prohibits trading in the Company’s securities whilst the
Directors, officer or employee is in the possession of price sensitive information.
For details of shares held by Directors and officers please refer to the Directors’ Report and Note 22 to the
Financial Statements (3.2).
SHAREHOLDER COMMUNICATION
The Board aims to ensure that shareholders and investors have equal access to the Company’s information.
The Company has policies and procedures that are designed to ensure compliance with ASX Listing Rule
disclosure requirements and to ensure accountability at a senior management level for that compliance. This
disclosure policy includes processes for the identification of matters that may have a material effect on the price of
the Company’s securities, notifying them to the ASX and posting them on the Company’s website (5.1).
The Company also has a strategy to promote effective communication with shareholders (6.1) and encourage
effective participation at general meetings through a policy of open disclosure to shareholders, regulatory
authorities and the broader community of all material information with respect to the Company’s affairs including,
but not limited to:
• Conflicts of interest and related party transactions;
• Executive remuneration;
• The grant of options and details of Share Option Plans;
• The process for performance evaluation of the Board, its committees, individual Directors and key
managers;
• The link between remuneration paid to Directors and Executives and corporate performance; and
• Shorter, more comprehensible notices of meetings.
The following information is communicated to shareholders:
• Notices of meetings of shareholders;
• All documents that are released to the ASX are made available on the Company’s website; and
• All other information on the Company’s website is updated on an ongoing basis.
Page 19
Lindian Resources Limited
CORPORATE GOVERNANCE STATEMENT (continued)
ASX BEST PRACTICE RECOMMENDATIONS
The table below identifies the ASX Best Practice Recommendations and whether or not the Company has complied
with the recommendations during the reporting period:
Complied
Note
1
2
3
3
3
1.1
2.1
2.2
2.3
2.4
2.5
3.1
3.2
3.3
4.1
4.2
4.3
4.4
4.5
5.1
5.2
6.1
Formalise and disclose the functions reserved to the Board and those
delegated to management.
A majority of the Board should be independent Directors.
The Chairperson should be an independent Director.
The roles of Chairperson and Chief Executive Officer should not be
exercised by the same individual.
The Board should establish a Nomination Committee.
Provide the information indicated in Guide to Reporting on Principle 2.
Establish a code of conduct to guide the Directors, the Chief Executive
Officer (or equivalent), the Chief Financial Officer (or equivalent) and any
other key Executives as to:
3.1.1 the practices necessary to maintain confidence in the Company’s
integrity.
3.2.1 the responsibility of and accountability of individuals for reporting and
investigating of unethical practices.
Disclose the policy concerning trading in Company securities by Directors,
officers and employees.
Provide information indicated in Guide to reporting on Principle 3.
Require the Chief Executive Officer (or equivalent) and the Chief Financial
Officer (or equivalent) to state in writing to the board that Company’s
financial reports present a true and fair view, in all material respects, of the
Company’s financial condition and operational results and are in accordance
with relevant accounting standards.
The Board should establish an Audit Committee.
Structure the Audit Committee so that it consists of:
- Only Non-Executive Directors;
- A majority of independent Directors;
- An independent Chairperson, who is not Chairperson of the Board; and
- At least three members.
The Audit Committee should have a formal charter.
Provide the information indicated in Guide to reporting on Principle 4.
Establish written policies and procedures designed to ensure compliance
with ASX Listing Rule disclosure requirements and to ensure accountability
at a senior management level for the compliance.
Provide the information indicated in Guide to reporting on Principle 5.
Design and disclose a communication strategy to promote effective
communication with shareholders and encourage effective participation at
general meetings.
X
X
X
X
X
X
X
X
X
X
X
X
Page 20
Lindian Resources Limited
CORPORATE GOVERNANCE STATEMENT (continued)
ASX BEST PRACTICE RECOMMENDATIONS
6.2
7.1
7.2
7.3
8.1
9.1
9.2
9.3
9.4
9.5
10.1
Request the external auditor to attend the Annual General Meeting and be
available to answer shareholder questions about the conduct of the audit and
the preparation and content of the Auditors’ Report.
The Board or appropriate Board Committee should establish policies on risk
oversight and management.
The Chief Executive Officer (or equivalent) and the Chief Financial Officer
(or equivalent) should state to the Board in writing that:
7.2.1
the best practice
in accordance with
recommendation 4.1 (the integrity of financial statements) is founded on a
system of risk management and internal compliance and control which
implements the policies adopted by the board.
7.2.2 the Company’s risk management and internal compliance and control
system is operating efficiently in all material respects.
Provide the information indicated in Guide to reporting on Principle 7.
the statement given
Disclose the process for performance evaluation of the board, its committees
and individual Directors, and key Executives and corporate performance.
Provide disclosure in relation to the Company’s remuneration policies to
enable investors to understand
(i) The costs and benefits of these policies; and
(ii) The link between remuneration paid to Directors and key Executives and
corporate performance.
The Board should establish a Remuneration Committee.
Clearly distinguish the structure of Non-Executive Directors’ remuneration
from that of Executives.
Ensure that payment of equity-based Executive remuneration is made in
accordance with thresholds set in plans approved by shareholders.
Provide the information indicated in Guide to reporting on Principle 9.
Establish and disclose a code of conduct to guide compliance with legal and
other obligations to legitimate stakeholders.
X
X
X
X
X
X
X
X
X
4
5
Note 1: Two out of four Directors are not considered to be independent. However, the skills, experience and
knowledge of these two Directors makes their contribution to the Company and the Board such that it is
appropriate for them to remain on the Board.
Note 2: The Board of Directors of the Company does not have a Nomination Committee. The Board is of the
opinion that due to the nature and size of the Company, the functions performed by a Nomination Committee can
be adequately handled by the full Board.
Note 3: The Company does not have an Audit Committee. The Board is of the opinion that due to the nature and
size of the Company, the functions performed by an Audit Committee can be adequately handled by the full Board.
Note 4: The Company does not have a Remuneration Committee. The Board is of the opinion that due to the nature
and size of the Company, the functions performed by a Remuneration Committee can be adequately handled by the
full Board.
Note 5: The issue of options to non-executive directors is considered an appropriate method of providing sufficient
incentive and reward whilst maintaining cash reserves.
Page 21
Lindian Resources Limited
Income Statements
For the Year ended 30 June 2008
Revenue
Finance revenue
Other revenue
Total revenue
Expenses
Administration expense
Depreciation expense
Employee benefits expense
Exploration expenditure written off
Occupancy expense
Foreign exchange loss
Expenses
Loss before related income tax expense
Income tax (expense)/benefit
Net loss attributable to members of the parent
entity
Loss is attributable to :
Lindian Resources Limited
Minority Interest
Consolidated
Company
Notes
2008
$
2007
$
2008
$
2007
$
2
2
3
3
3
5
183,889
-
183,889
(366,615)
(25,043)
(412,829)
(71,503)
(4,371)
-
182,587
116,804
299,391
(1,133,946)
(23,626)
(693,141)
(269,391)
(9,986)
-
183,889
-
183,889
(355,409)
(25,043)
(412,829)
(71,503)
(4,371)
(14,677)
182,587
116,804
299,391
(1,133,796)
(23,626)
(693,141)
(269,391)
(9,986)
-
(880,361)
(2,130,090)
(883,832)
(2,129,940)
(696,472)
(1,830,699)
(699,943)
(1,830,549)
-
-
-
-
(696,472)
(1,830,699)
(699,943)
(1,830,549)
(694,222)
16
(2,250)
-
-
-
-
-
-
(696,472)
(1,830,699)
(699,943)
(1,830,549)
Basic and diluted earnings/(loss) per share
6
(2.10) cents
(6.22) cents
The above income statement should be read in conjunction with the accompanying notes.
Page 23
Lindian Resources Limited
Balance Sheets
As at 30 June 2008
Current Assets
Cash and cash equivalents
Receivables
Total Current Assets
Consolidated
Company
Notes
2008
$
2007
$
2008
$
2007
$
8
9
2,428,436
11,794
3,463,272
40,086
2,425,580
11,774
3,463,211
40,086
2,440,230
3,503,358
2,437,354
3,503,297
Non-Current Assets
Receivables
Other financial assets
Plant and equipment
Mineral interest acquisition, exploration and
development expenditure
9
10
11
12
-
83,203
55,259
-
-
12,807
305,309
586,294
55,259
472
1
12,807
875,703
120,250
51,610
120,250
Total Non-Current Assets
1,014,165
133,057
998,472
133,530
Total Assets
3,454,395
3,636,415
3,435,826
3,636,827
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Option premium reserve
Foreign currency translation reserve
Accumulated losses
Capital and Reserves attributable to equity
holders of Lindian Resources Limited
Minority interest
Total Equity
13
41,098
184,193
41,098
184,193
41,098
184,193
41,098
184,193
41,098
184,193
41,098
184,193
3,413,297
3,452,222
3,394,728
3,452,634
14
15
12,063,317
1,130,200
(29,110)
(9,793,480)
11,526,830
1,024,650
-
(9,099,258)
12,063,317
1,130,200
-
(9,798,789)
11,526,830
1,024,650
-
(9,098,846)
3,370,927
3,452,222
3,394,728
3,452,634
16
42,370
-
-
-
3,413,297
3,452,222
3,394,728
3,452,634
The above balance sheet should be read in conjunction with the accompanying notes.
Page 24
Lindian Resources Limited
Statements of Changes in Equity
For the year ended 30 June 2008
Consolidated
Issued
Capital
Accumulated
Losses
Option
Premium
Reserve
Foreign
Currency
Translation
Reserve
Minority
Equity
Interest
Total Equity
$
$
$
$
$
$
Balance at 30 June 2006
9,651,848
(7,268,559)
1,800
Shares issued during the year
Loss attributable to members of
the parent entity
Share issue expenses
Fair value of options and shares
issued
2,090,239
-
-
(1,830,699)
(215,257)
-
-
-
-
-
-
1,022,850
Balance at 30 June 2007
11,526,830
(9,099,258)
1,024,650
Balance at 1 July 2007
11,526,830
(9,099,258)
1,024,650
Shares issued during the year
536,487
Currency translation differences
Loss attributable to members of
the parent entity
Fair value of options issued
-
-
-
-
-
(694,222)
-
-
-
-
105,550
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,385,089
2,090,239
(1,830,699)
(215,257)
1,022,850
3,452,222
-
3,452,222
44,620
581,107
(29,110)
-
(29,110)
-
-
(2,250)
(696,472)
-
105,550
Balance at 30 June 2008
12,063,317
(9,793,480)
1,130,200
(29,110)
42,370
3,413,297
The above statement in changes in equity should be read in conjunction with the accompanying notes.
Page 25
Lindian Resources Limited
Statements of Changes in Equity
For the year ended 30 June 2008
Company
Issued Capital
Accumulated
Losses
Option
Premium
Reserve
Total Equity
$
$
$
$
Balance at 30 June 2006
9,651,848
(7,268,297)
1,800
2,385,351
Shares issued during the year
Loss attributable to members of the
parent entity
Share issue expenses
Fair value of options and shares
issued
2,090,239
-
-
(1,830,549)
(215,257)
-
-
-
-
-
-
2,090,239
(1,830,549)
(215,257)
1,022,850
1,022,850
Balance at 30 June 2007
11,526,830
(9,098,846)
1,024,650
3,452,634
Balance at 1 July 2007
11,526,830
(9,098,846)
1,024,650
3,452,634
Shares issued during the year
Loss attributable to members of the
parent entity
Fair value of options issued
536,487
-
(699,943)
-
-
-
-
536,487
(699,943)
-
105,550
105,550
Balance at 30 June 2008
12,063,317
(9,798,789)
1,130,200
3,394,728
The above statement in changes in equity should be read in conjunction with the accompanying notes.
Page 26
Lindian Resources Limited
Cash Flow Statement
For the year ended 30 June 2008
Cash Flows from Operating Activities
Receipts from customers
Cash payments in the course of operations
Interest received
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
-
(689,917)
183,889
37,251
(616,001)
182,587
-
(678,589)
183,889
37,251
(615,851)
182,587
Net Cash used in Operating Activities
21 (a)
(506,028)
(396,163)
(494,700)
(396,013)
Cash Flows from Investing Activities
Payments for exploration and development expenditure
Payments for property, plant and equipment
Proceeds on disposal of property, plant and equipment
Payments for purchase of subsidiary
Advances to controlled entities
Security deposit
(389,598)
(67,494)
-
-
-
(83,203)
(149,641)
(13,996)
148,053
-
-
-
(122,864)
(67,494)
-
(44,444)
(319,616)
-
(149,641)
(13,996)
148,053
-
-
-
Net Cash used in Investing Activities
(540,295)
(15,584)
(554,418)
(15,584)
Cash Flows from Financing Activities
Proceeds from share issues
Proceeds from exercise of options
Share issue expenses
-
11,487
-
1,759,089
-
(215,257)
-
11,487
-
1,759,089
-
(215,257)
Net Cash provided by Financing Activities
11,487
1,543,832
11,487
1,543,832
Net Increase in Cash Held
Cash and cash equivalents at the beginning of the financial
year
Cash and cash equivalents at the end of the Financial
Year
8
(1,034,836)
1,132,085
(1,037,631)
1,132,235
3,463,272
2,331,187
3,463,211
2,330,976
2,428,436
3,463,272
2,425,580
3,463,211
The above cash flow statement should be read in conjunction with the accompanying notes
Page 27
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This financial report includes the consolidated financial statements and notes of Lindian Resources Limited and
controlled entities (‘Consolidated Group’ or ‘Group’), and the separate financial statements and notes of Lindian
Resources Limited as an individual parent entity (‘Parent Entity’ or ‘Company’).
Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards (including the Australian Accounting
Interpretations) and complies with other requirements of the law. The financial report has also been prepared on a
historical cost basis.
The financial report is presented in Australian dollars. The company is a listed public company, incorporated in
Australia and operating in Australia.
The company is a listed public company, incorporated and domiciled in Australia and operating in Australia and
Africa.
Statement of compliance
The financial report was authorised for issue on 30 September 2008
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(IFRS).
Basis of Consolidation
The consolidated financial statements comprise the financial statements of Lindian Resources Limited and its
subsidiaries as at 30 June each year.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Control exists where the company has
the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Significant accounting judgments, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the next annual reporting period are:
Exploration and evaluation expenditure
The Board of Directors determines when an area of interest should be abandoned. When a decision is made that an
area of interest is not commercially viable, all costs that have been capitalised in respect of that area of interest are
written off. The Directors’ decision is made after considering the likelihood of finding commercially viable
reserves.
Page 28
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Significant accounting judgments, estimates and assumptions - continued
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using a Black and Scholes
model.
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with
an original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
Trade and other receivables
Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount less an
allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence
that the Group will not be able to collect the debts. Bad debts are written off when identified.
Foreign currency transactions and balances
The functional and presentation currency of the Company is Australian dollars.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange ruling at the balance sheet date.
All differences in the consolidated financial report are taken to the income statement.
The functional currencies of the overseas subsidiary is as follows:
Africa
United States Dollar (USD)
As at the reporting date, the assets and liabilities of these overseas subsidiaries are translated into the presentation
currency of the Company at the rate of exchange ruling at the balance sheet date and the income statements are
translated at the weighted average exchange rates for the period.
The exchange differences on the retranslation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity is recognised in the income
statement.
Page 29
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Taxes
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Page 30
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
•
•
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item
as applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.
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.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
Property, Plant and Equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Computer hardware – 33%
Field Equipment – 33%
Motor Vehicles – 33%
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment 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 an asset that does not generate largely independent cash inflows, recoverable amount is determined for the
cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its
fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
Page 31
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Mineral interest acquisition, exploration and development expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
(a)
(b)
the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its
sale; or
exploration and evaluation activities in the area of interest have not at the reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or in
relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and
amortisation of assets used in exploration and evaluation activities. General and administrative costs are only
included in the measurement of exploration and evaluation costs where they are related directly to operational
activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being
no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any).
Where an impairment loss subsequently reverses, the carrying 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 previous
years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.
Impairment testing
The carrying amount of the consolidated entity assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. Where such an indication exists, a formal
assessment of recoverable amount is then made and where this is in excess of carrying amount, the asset is written
down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value
of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a
pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks
specific to the asset. Any resulting impairment loss is recognised immediately in the income statement.
Page 32
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Impairment testing - continued
Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there
has been a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only to
the extent that the assets’ carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been recognised.
Payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services.
Provisions
Provisions are recognised when the consolidated entity has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Employee Benefits
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the reporting date are recognised in other payables in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
Contributions are made by the consolidated entity to superannuation funds as stipulated by statutory requirements
and are charged as expenses when incurred.
Share-based payment transactions
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the Company’s best estimate of the number of equity
instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions
being met as the effect of these conditions is included in the determination of fair value at grant date. The income
statement charge or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any modification that increases the total fair value of the
share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
Page 33
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Share-based payment transactions - continued
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award
are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
Issued Capital
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.
Earnings per Share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution
of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares, adjusted for any bonus element.
Segment Reporting
Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and
expenses where a reasonable basis of allocation exists.
Segment assets include all assets used by a segment and consist principally of cash, receivables, property, plant and
equipment net of accumulated depreciation and mineral interest acquisitions, exploration and development
expenditure. Whilst most such assets can be directly attributed to individual segments, the carrying amount of
certain assets used jointly by two or more segments is allocated to the segments on a reasonable basis. Segment
liabilities consist principally of accounts payable, employee entitlements, accrued expenses, provisions and
borrowings. Segment assets and liabilities do not include deferred income taxes.
Where segment revenues and expenses include transfers between segments, these are at the same rates which would
apply to parties outside the consolidated entity on an arm’s length basis. These transfers are eliminated on
consolidation.
Page 34
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Australian accounting standards and amendments issued but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2008 reporting periods. The Group's and the parent entity's assessment of the impact of new standards and
interpretations that may affect the Group is set out below.
(i) AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from
AASB 8
AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or after 1 January 2009.
AASB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of
a 'management approach' to reporting on financial performance. The information being reported will be based
on what the key decision makers use internally for evaluating segment performance and deciding how to
allocate resources to operating segments. The Group has not yet decided when to adopt AASB 8.
Application of AASB 8 may result in different segments, segment results and different types of information
being reported in the segment note of the financial report. However, at this stage, it is not expected to affect
any of the amounts recognised in the financial statements.
(ii) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards
arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations
1 & 12]
The revised AASB 123 is applicable to annual reporting periods commencing on or after 1 January 2009. It
has removed the option to expense all borrowing costs and - when adopted - will require the capitalisation
of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset.
There will be no impact on the financial report of the Group, as the Group does not have any borrowings (or
already capitalises borrowing costs relating to qualifying assets).
(iii) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian
Accounting Standards arising from AASB 101
A revised AASB 101 was issued in September 2007 and is applicable for annual reporting periods beginning
on or after 1 January 2009. It requires the presentation of a statement of comprehensive income and makes
changes to the statement of changes in equity, but will not affect any of the amounts recognised in the financial
statements. If an entity has made a prior period adjustment or has reclassified items in the financial statements,
it will need to disclose a third balance sheet (statement of financial position), this one being as at the beginning
of the comparative period. The Group intends to apply the revised standard from 1 July 2009.
Page 35
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
2. REVENUE AND EXPENSES
Finance Revenue
Other income
Gain on sale of assets
3. EXPENSES
Loss before income tax has been determined after:
Expenses
Depreciation of plant and equipment
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
183,889
182,587
183,889
182,587
-
-
-
37,251
79,553
116,804
-
-
-
37,251
79,553
116,804
25,043
23,626
25,043
23,626
Exploration expenditure written off
71,503
269,391
71,503
269,391
Employee benefits expense
Director salaries, fees and superannuation
Share based payments expense
Employee salaries, fees and superannuation
Other share based payments
Corporate advisory fee
4. AUDITORS’ REMUNERATION
Amounts received or due and receivable by RSM Bird
Cameron Partners for:
- An audit or review of the financial report of the entity
and any other entity in the consolidated group
- Other services
166,108
88,700
158,021
412,829
236,425
444,000
12,716
693,141
166,108
88,700
158,021
63,911
444,000
185,230
412,829
693,141
-
790,000
-
790,000
17,000
-
17,000
15,000
14,640
29,640
17,000
-
17,000
15,000
14,640
29,640
Page 36
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
5.
INCOME TAX EXPENSE
(a) The prima facie tax benefit at 30% on loss is
reconciled to the income tax provided in the
financial statements as follows:
Loss
Prima facie income tax benefit @ 30%
Non-deductible (Other deductible) expenses
Deferred tax asset not brought to account
Income tax benefit reported in the consolidated
income statement
Income tax recognised directly in equity
The following current and deferred amounts were charged
directly to equity during the period:
Current tax:
Share-issue expenses
(b) The potential deferred tax asset arising from tax
losses and temporary differences have not been
recognised as an asset because recovery of tax losses
is not yet considered sufficiently probable.
Australian tax losses
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
(696,472)
(208,942)
(4,986)
213,928
(1,830,699)
(549,210)
373,195
176,015
(699,943)
(209,983)
(4,986)
214,969
(1,830,549)
(549,165)
373,195
175,970
-
-
-
-
-
-
215,257
215,257
-
-
215,257
215,257
2,376,940
2,189,573
2,376,940
2,189,573
The Group has tax losses arising in Australia of $7,923,133 (2007: $7,298,577) that are available for offset against future
taxable profits of the companies in which the losses arose.
The potential deferred tax asset will only be obtained if:
(a) the relevant Company derives future assessable income of a nature and an amount sufficient to enable the benefit to be
realised,
b) the relevant Company continues to comply with the conditions for deductibility imposed by the Law including the
continuity of ownership and same business tests; and
(c) no changes in tax legislation adversely affect the relevant Company and/or consolidated entity in realising the benefit.
Page 37
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
6. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit/(loss) for the year attributable to
ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during
the year.
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
The net loss and weighted average number of ordinary shares
used in the calculation of basic earnings per share is as follows:
Net loss
Weighted average number of ordinary shares used in the
calculation of basic earnings per share
Consolidated
2008
cents
(2.10)
(2.10)
2007
cents
(6.22)
(6.22)
2008
$
(696,472)
2007
$
(1,830,699)
2008
Number
2007
Number
33,060,497
29,416,266
The Company’s potential ordinary shares, being its options granted, are not considered dilutive as the conversion of these
options would result in a decrease in the net loss per share.
Page 38
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
7. SEGMENT INFORMATION
Business segments (Primary Segment)
Revenue
Operating revenue
Other external revenue
Total segment revenue
Results
Operating loss before income tax
Income tax expense
Net loss
Non-Cash Expenses
Depreciation
Non-cash expenses other than depreciation
Assets
Segment assets
Non-current assets acquired
Liabilities
Segment liabilities
Technology
Technology
2008
$
2007
$
Mineral
Exploration
2008
$
Mineral
Exploration
2007
$
Consolidated
Consolidated
2008
$
2007
$
-
-
-
-
-
-
-
-
-
116,804
-
116,804
-
183,889
183,889
-
182,587
182,587
116,804
699,472
1,713,895
22,438
-
25,043
88,700
1,189
444,000
-
183,889
183,889
699,472
-
699,472
25,043
88,700
116,804
182,587
299,391
1,830,699
-
1,830,699
23,626
444,000
-
-
-
3,454,395
1,004,174
3,636,415
134,246
3,454,395
1,004,174
3,636,415
134,246
41,098
184,193
41,098
184,193
Australia
Australia
2008
$
2007
$
Democratic
Republic of
Congo
2008
$
Democratic
Republic of
Congo
2007
$
Consolidated
Consolidated
2008
$
2007
$
Business segments (Secondary Segment)
Segment revenue
Segment assets
183,889
299,391
-
-
183,889
299,391
2,849,060
3,503,358
605,335
133,057
3,454,395
3,636,415
Page 39
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
8. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term deposits
- Cash at bank earns interest at floating rates based on
daily bank deposit rates.
in money market
(i) Reconciliation to Cash Flow Statement:
For the purposes of the cash flow statement, cash and cash
equivalents comprise cash on hand and at bank and
instruments, net of
investments
outstanding bank overdrafts.
Cash and cash equivalents as shown in the cash flow
statement is reconciled to the related items in the balance
sheet as follows:
Cash and cash equivalents
9. RECEIVABLES
Current
Trade and other receivables
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
124,111
320,399
121,255
320,338
2,304,325
3,142,873
2,304,325
3,142,873
2,428,436
3,463,272
2,425,580
3,463,211
2,428,436
3,463,272
2,425,580
3,463,211
11,794
40,086
11,774
40,086
Trade and other receivables are non-interest bearing and are
generally on 30 day terms. An allowance for doubtful debts
is made when there is objective evidence that a trade
receivable
the
allowance/impairment loss has been measured as the
difference between the carrying amount of the trade
receivables and the estimated future cash flows expected to
be received from the relevant debtors.
impaired. The
amount
of
is
Non-current
Loan to controlled entities
Loans have been made to subsidiaries. The loans are interest
free, unsecured and repayable only when the borrower’s cash
flow permits.
-
-
305,309
472
Page 40
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
-
83,203
83,203
-
-
-
586,294
-
586,294
1
-
1
Notes
Place of
Incorporation
Consolidated
Entity Interest
2008
%
Consolidated
Entity Interest
2007
%
Australia
Australia
100
100
Democratic
Republic of Congo
80
-
10. OTHER FINANCIAL ASSETS (Non-Current)
Investment in subsidiaries – unlisted shares at cost
(refer 10 (a))
Security deposits
(a) Particulars in relation to subsidiaries
Name of subsidiary
Parent Entity
Lindian Resources Limited
Subsidiaries
(i) Lindian Resources Guinea Pty Ltd (previously
Virtualplus Australia Pty Ltd)
(ii) Congolese Exploration Company Sprl (“Coexco”) (refer
Note 21(b))
.
Page 41
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
11. PLANT AND EQUIPMENT
Plant and equipment - at cost
Accumulated depreciation
Total plant and equipment net book value
Reconciliation:
Balance at the beginning of the year
Additions
Disposals
Depreciation
Carrying amount at the end of the year
12. MINERAL INTEREST ACQUISITION,
EXPLORATION AND DEVELOPMENT
EXPENDITURE
Balance at the beginning of the year
Purchase price for mineral interests
Expenditure incurred during the period
Costs written-off
Translation difference movement
Carried forward
The expenditure above relates principally to the exploration
and evaluation phase. The ultimate recoupment of this
expenditure is dependent upon the successful development
and commercial exploitation, or alternatively, sale of the
respective areas of interest.
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
81,491
(26,232)
55,259
13,996
(1,189)
12,807
81,491
(26,232)
55,259
13,996
(1,189)
12,807
12,807
67,495
-
(25,043)
55,259
90,938
13,996
(68,501)
(23,626)
12,807
12,807
67,495
-
(25,043)
55,259
90,938
13,996
(68,501)
(23,626)
12,807
120,250
586,294
350,385
(151,024)
(30,202)
-
240,000
149,641
(269,391)
-
120,250
-
82,384
(151,024)
-
-
240,000
149,641
(269,391)
-
875,703
120,250
51,610
120,250
Page 42
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
13. TRADE AND OTHER PAYABLES
Current
Trade creditors
Accrued expenses
Terms and conditions relating to the above financial
instruments:
- Trade and other creditors are non-interest bearing
and are normally settled on 30 day terms.
14. ISSUED CAPITAL
(a) Issued and paid-up share capital
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
8,680
32,418
41,098
40,776
143,417
184,193
8,680
32,418
41,098
40,776
143,417
184,193
37,878,022 (2007: 32,771,397) ordinary shares, fully paid
12,063,317 11,526,830 12,063,317 11,526,830
Fully paid ordinary shares carry one vote per share and
carry the right to dividends.
Movements in Ordinary Shares:
Balance at the beginning of the year
32,771,397 25,803,934 11,526,830
9,651,848
Number
Number
$
$
Issue of shares pursuant to funds raised in prospectus
Issue of shares for acquisition of 80% of the share capital in
Coexco Sprl (i)
Issue of shares for acquisition of Tshikapa Diamond Project
Issue of shares for identification of Tshikapa Diamond
Project
Options converted to shares during year
Transaction costs on share issue
Balance at the end of the year
-
5,316,000
-
1,594,800
5,000,000
-
525,000
-
-
400,000
-
1,250,000
-
-
120,000
375,000
56,625
1,463
11,487
439
-
-
-
(215,257)
37,828,022 32,771,397 12,063,317 11,526,830
(i) Shares were issued at a deemed price of 10.5 cents for the acquisition of 80% of the share capital of Coexco Sprl, and the
right to acquire the remaining 20%.
Page 43
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
14. ISSUED CAPITAL – continued
(b) Share Options
Options to subscribe for ordinary shares in the Company have been granted as follows:
Exercise
Period
Exercise
Price
Note
Opening
Balance
1 July 2007
Options
Issued
2007/08
Options
Exercised/
Cancelled/
Expired
2007/08
Closing
Balance
30 June 2008
On or before 31 December 2010
On or before 1 July 2011
On or before 15 September 2009
On or before 31 December 2009
On or before 30 September 2010
On or before 30 September 2010
On or before 31 December 2011
(i)
(ii)
(iii)
Number
Number
Number
$0.20
$0.20
$0.30
$0.30
$0.30
$0.35
$0.30
550,000
1,000,000
3,000,000
17,383,504
-
-
-
21,933,504
-
-
-
-
200,000
350,000
500,000
1,050,000
(55,000)
-
-
(1,625)
-
-
-
(56,625)
Number
495,000
1,000,000
3,000,000
17,381,879
200,000
350,000
500,000
22,926,879
(i) 200,000 options were issued to employees, exercisable at 30 cents after 1 April 2008 and before 30 September 2010.
(ii) 350,000 options were issued to employees, exercisable at 35 cents after 1 May 2008 and before 30 September 2010.
(iii) 500,000 options were issued to one of the vendors of Coexco Sprl, exercisable at 30 cents before 31 December 2011.
(c)
Terms and conditions of contributed equity
Ordinary Shares:
Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the Company, 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. Ordinary
shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Page 44
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
15. RESERVES
Option Premium Reserve
Balance at beginning of period
Fair value of options issued
Balance at end of period
The option premium reserve is used to accumulate proceeds
received from the issuing of options and accumulate the
value of options issued in consideration for services
rendered.
Nature and purpose of reserves
Option Premium Reserve
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
1,024,650
105,550
1,800
1,022,850
1,024,650
105,550
1,800
1,022,850
1,130,200
1,024,650
1,130,200
1,024,650
The option premium reserve is used to record the fair value of options issued but not exercised.
Foreign Currency Translation Reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the reporting
entity.
16. MINORITY INTEREST
Interest in:
Share capital
Accumulated losses
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
44,620
(2,250)
42,370
-
-
-
-
-
-
-
-
-
Page 45
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
17. SHARE-BASED PAYMENTS
The Company makes share based payments to consultants and / or service providers from time to time, not under any specific
plan. The Company also may issue options to directors of the parent entity. Specific shareholder approval is obtained for any
share based payments to directors of the parent entity.
The expense recognised in the income statement in relation to share-based payments is disclosed in Note 2.
The following table illustrates the number and weighted average exercise prices of and movements in share options issued
during the year:
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
2008
Number of
options
5,550,000
550,000
-
2008 Weighted
average
exercise price
27 cents
33 cents
-
(55,000)
20 cents
-
6,045,000
6,045,000
-
28 cents
2007
Number of
options
550,000
5,000,000
2007 Weighted
average
exercise price
20 cents
28 cents
-
-
-
5,550,000
5,550,000
-
-
-
27 cents
The fair value of the equity-settled share options is estimated as at the date of grant using a binomial model taking into
account the terms and conditions upon which the options were granted. The fair value of shares issued is calculated by
reference to the market value of the shares trading on the Australian Stock Exchange on or around the date of grant.
The following table lists the inputs to the model used for the years ended 30 June 2008 and 30 June 2007:
Volatility (%) – range
Risk-free interest rate (%) – range
Expected life of option (years)
Exercise price (cents)
Weighted average share price at grant date (cents)
2008
70%
6.75%
2 to 3 years
20-30
10.5
2007
70%
5.5%
3 to 5 years
20-30
32
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not
necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.
Other share based payments, not under any plans are as follows:
•
•
5,000,000 shares were issued to Corporate and Resource Consultants Pty Ltd at a deemed issue price of 10.5 cents each
as part consideration for the acquisition of 80% of the issued capital of Coexco Sprl.
500,000 options were issued to John Hamilton as part consideration for the acquisition of 80% of the issued capital of
Coexco Sprl. The options are exercisable at 30 cents each on or before 31 December 2011 (valued at 3.4 cents (total
$16,850)
The outstanding balance as at 30 June 2008 is shown in Note 14(b).
Page 46
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
18. FINANCIAL INSTRUMENTS
Overview
The Company and Group have exposure to the following risks from their use of financial instruments:
- credit risk
- liquidity risk
- market risk
This note presents information about the Company’s and Group’s exposure to each of the above risks, their objectives, policies
and processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Management monitors and manages the financial risks relating to the operations of the group through regular reviews of the
risks.
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Assets
Total Liabilities
(a)
Credit Risk
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
8
9
10
2,428,436
11,794
83,203
2,523,433
3,463,272
40,086
-
2,425,580
316,611
-
3,463,211
40,558
-
3,503,358
2,742,191
3,503,769
13
41,098
184,193
41,098
184,193
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and investment securities. For the
Company it arises from receivables due from subsidiaries.
(i) Receivables
As the Group operates in the mineral exploration sector, it does not have trade receivables and therefore is not exposed to
credit risk in relation to trade receivables.
The Company and Group have established an allowance for impairment that represents their estimate of incurred losses in
respect of other receivables and investments. The main components of this allowance are a specific loss component that relates
to individually significant exposures. The management does not expect any counterparty to fail to meet its obligations.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure.
Page 47
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
18. FINANCIAL INSTRUMENTS - continued
(b)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation.
The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash
flows.
Due to the nature of the Group’s activities and the present lack of operating revenue, the Company has to raise additional
capital from time to time in order to fund its exploration activities. The decision on how and when the Company will raise
future capital will depend on market conditions existing at that time and the level of forecast activity and expenditure.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of
between six and twelve months, including the servicing of financial obligations; this excludes the potential impact of extreme
circumstances that cannot reasonably be predicted, such as natural disasters.
(c)
Market Risk
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 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.
(i) Currency risk
The consolidated entity is exposed to foreign exchange rate arising from various currency exposures, primarily with respect to
the US dollar.
Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a
currency that is not the company’s functional currency. The risk is measured using sensitivity analysis.
The following significant exchange rates applied during the year:
Notes
Average rate
Reporting date spot rate
2008
$
2007
$
2008
$
2007
$
United States Dollar
0.89
-
0.96
-
The consolidated entity’s exposure to foreign currency risk at the reporting date was as follows:
Total Assets
Total Liabilities
Notes
30 June 2008
30 June 2007
Consolidated Company Consolidated Company
USD
$
483,016
-
USD
$
-
293,100
USD
$
-
-
USD
$
-
-
Page 48
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
18. FINANCIAL INSTRUMENTS - continued
Foreign currency risk sensitivity analysis
At 30 June, the effect on loss and equity as a result of changes in the value of the Australian Dollar to the foreign currencies,
with all other variables remaining constant is as follows:
Total Assets
Total Liabilities
(ii) Interest Risk
2007
2008
Changes in Equity with a
Changes in Equity with a
+/- 10% in AUD to USD
+/- 10% in AUD to USD
Consolidated Company Consolidated Company
$
464
-
$
-
281
$
$
-
-
-
-
The Group’s exposure to the risk of changes in market interest rate relates primarily to the Group’s cash and cash equivalents.
The Group and Company did not have any fixed rate instruments at balance date
At the reporting date the interest rate profile of the Company’s and the Group’s interest-bearing financial instruments:
Variable rate Instruments at call
Financial assets
Financial liabilities
Consolidated
Carrying Amount
2008
$
2007
$
Company
Carrying Amount
2007
$
2008
$
2,428,436
-
2,428,436
3,463,272
-
3,463,272
2,425,580
-
2,425,580
3,463,211
-
3,463,211
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group
does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model.
Therefore a change in interest rates at the reporting date would not affect profit or loss.
Page 49
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
18. FINANCIAL INSTRUMENTS - continued
The following table summarises interest rate risk for the consolidated entity, together with effective interest rates as at balance
date.
Consolidation
2008
Financial Assets:
Current:
Cash at bank
Receivables
Non current:
Deposit
Total Financial Assets
Financial Liabilities:
Current:
Accounts payable
Total Financial Liabilities
2007
Financial Assets:
Current:
Cash at bank
Receivables
Total Financial Assets
Financial Liabilities:
Current:
Accounts payable
Total Financial Liabilities
Weighted
average effective
interest rate
Floating interest
rate
Non-interest
bearing
$
$
6.45%
2,428,436
-
-
2,428,436
-
-
-
11,794
83,203
94,997
41,098
41,098
Floating interest
rate
$
Non-interest
Bearing
$
5.76%
3,463,272
-
3,463,272
-
-
-
40,086
40,086
184,193
184,193
Total
$
2,428,436
11,794
83,203
2,523,433
41,098
41,098
Total
$
3,463,272
40,086
3,503,358
184,193
184,193
Page 50
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
18. FINANCIAL INSTRUMENTS - continued
Company
2008
Financial Assets:
Current:
Cash at bank
Receivables
Total Financial Assets
Financial Liabilities:
Current:
Accounts payable
Total Financial Liabilities
2007
Financial Assets:
Current:
Cash at bank
Receivables
Total Financial Assets
Financial Liabilities:
Current:
Accounts payable
Total Financial Liabilities
Weighted
average effective
interest rate
Floating interest
rate
Non-interest
bearing
$
$
6.45%
2,425,580
-
2,425,580
-
-
-
316,611
316,611
41,098
41,098
Floating interest
rate
$
Non-interest
Bearing
$
5.76%
3,463,211
-
3,463,211
-
-
-
40,558
40,558
184,193
184,193
Total
$
2,425,580
316,611
2,742,191
41,098
41,098
Total
$
3,463,211
40,558
3,503,769
184,193
184,193
(iii) Cash flow sensitivity analysis for variable rate instruments
Consolidated
At 30 June 2008, if interest rates had changed by 10% during the entire year with all other variables held constant, loss for the
year and equity would have been $15,785 lower/higher, mainly as a result of lower/higher interest income from cash and cash
equivalents.
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short term and long term
Australian dollar interest rates. A 10% increase sensitivity would move short term interest rates at 30 June 2008 from around
6.45% to 7.10% (10% decrease: 5.80%) representing a 65 basis points shift. This would represent two to three increases
which is reasonably possible in the current environment.
Based on the sensitivity analysis only interest revenue from variable rate deposits and cash balances are impacted resulting in a
decrease or increase in overall income.
Page 51
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
18. FINANCIAL INSTRUMENTS - continued
Company
At 30 June 2008, if interest rates had changed by 10% during the entire year with all other variables held constant, loss for the
year and equity would have been $15,785 lower/higher, mainly as a result of lower/higher interest income from cash and cash
equivalents.
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short term and long term
Australian dollar interest rates. A 10% increase sensitivity would move short term interest rates at 30 June 2008 from around
6.45% to 7.10% (10% decrease : 5.80%) representing a 65 basis points shift. This would represent two to three increases
which is reasonably possible in the current environment.
Based on the sensitivity analysis only interest revenue from variable rate deposits and cash balances are impacted resulting in a
decrease or increase in overall income.
The Company does not have any material risk exposure to any single debtor or group of debtors.
(d)
Net fair values
For assets and other liabilities, the net fair value approximates their carrying value. No financial assets and financial liabilities
are readily traded on organised markets in standardised form. The Company has no financial assets where carrying amount
exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the balance
sheet and in the notes to and forming part of the financial statements.
(e)
Capital Management
Management controls the capital of the Group in order to ensure that the Group can fund its operations on an efficient and
timely basis and continue as a going concern.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s cash projections up to twelve months in the
future and any associated financial risks. Management will adjust the Group’s capital structure in response to changes in
these risks and in the market.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
Page 52
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
19. COMMITMENTS
(a) Exploration expenditure commitments
For those mineral concessions where the consolidated entity is not the titleholder, the earning of equity interest is by incurring
exploration expenditure of specified amounts by certain dates. Where the consolidated entity or its joint venture partners are
the concession holder, renewal will be subject to satisfying the relevant authority as to the adequacy of exploration programs
by comparison to work programs submitted at the time of grant of the concession. It is estimated that the consolidated entity is
required to make the following outlays to satisfy joint venture and exploration permit conditions. These commitments are
subject to variation dependent upon matters such as the results of exploration on the mineral concessions.
Within one year
One year or later and not later than five years
Later than five years
20. CONTINGENT LIABILITIES
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
276,406
1,559,844
-
824,694
1,164,782
-
260,000
1,520,000
-
824,694
1,164,782
-
1,836,250
1,989,476
1,780,000
1,989,476
There were no contingent liabilities of the consolidated entity not provided for in the financial statements at 30 June
2008.
Notes
Consolidated
Company
2008
$
2007
$
2008
$
2007
$
21. STATEMENTS OF CASH FLOWS
(a) Reconciliation of the loss to net cash used in
operating activities
Loss after income tax
Add back non-cash items:
Depreciation
Foreign currency loss/(gain)
Non-cash share option expenditure
Gain on sale of property, plant and equipment
Exploration costs written-off
Change in assets and liabilities:
Decrease/(increase) in receivables
(Decrease)/increase in payables
Net cash used in operating activities
(696,472)
(1,830,699)
(699,943)
(1,830,549)
25,043
-
88,700
-
71,503
23,626
-
1,234,000
(79,553)
269,391
25,043
14,780
88,700
-
71,503
23,626
-
1,234,000
(79,553)
269,391
28,292
(23,094)
(2,821)
(10,107)
276
4,941
(2,821)
(10,107)
(506,028)
(396,163)
(494,700)
(396,013)
Page 53
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
21. STATEMENTS OF CASH FLOWS - continued
(b) Acquisition of controlled entities
On 7 February 2008 shareholder approval was granted for the Company to acquire 80% of the
issued capital in Coexco Sprl, with the right to acquire the remaining 20% at a later date. The initial
purchase consideration comprised:
- the issue of 5 million ordinary shares at 10.5 cents each;
- the issue of 0.5 million options (exercisable at 30 cents each on or before 31 December 2011) at a
deemed price of 3.4 cents each; and
- cash consideration of $44,444.
The purchase price was allocated as follows:
Purchase consideration – fair value of securities to be granted at the date of exercise of the option to
acquire Coexco
Cash consideration
Assets and liabilities acquired at acquisition date:
Exploration and evaluation expenditure – fair value of mineral properties acquired
Total
The cash outflow on acquisition is as follows:
Net cash acquired with subsidiary
Cash paid
Net cash outflow
CONSOLIDATED
$
541,850
44,444
586,294
586,294
586,294
-
(44,444)
(44,444)
The assets and liabilities arising from the acquisition are recognised at fair value which is equal to their carrying value at
acquisition date.
Operations of acquired controlled entities
Coexco has an interest in the Bafwasende Gold and Diamond project, consisting of 43 exploration licenses and one exploration
license application covering a total area of approximately 7,000 square kilometres located 220kms north east of Kisangani (a
major regional centre) in Province Orientale in the north east of the Democratic Republic of Congo.
(c) Non-Cash Financing and Investing Activities
.
Purchase consideration paid for the purchase of Coexco sprl included the issue of shares and options. Refer note (b) above for
further information.
Page 54
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
22. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Key Management Personnel
The following were key management personnel of the consolidated entity at any time during the reporting period and unless
otherwise indicated were key management personnel for the entire period:
Non Executive Directors
Mr Reginald Gillard
Mr Patrick Flint
Mr Gavin Argyle
Senior Managers
Mr Paul Jurman
Managing Director
Mr Gregory Smith
(b) Loans to key management personnel and their related parties
There were no loans outstanding at the reporting date to key management personnel and their related parties.
(c) Compensation options: Granted and vested during the year (Consolidated)
30 June 2008
Senior Manager
Vested
Number
Granted
Number
Grant Date
Fair Value
per option at
grant date
$
Exercise price
per option
$
First
Exercise
Date
$
Last Exercise
Date
$
P Jurman
350,000
350,000
07-02-08
58,100
0.35
01-5-08
30-09-10
Total
350,000
350,000
During the prior financial year options were granted as equity compensation benefits to certain key management personnel. All
options vested at grant date. The options were issued free of charge. Each option entitles the holder to subscribe for one fully
paid share in the entity at an exercise price of 20 cents. The contractual life of each option granted is three years.
30 June 2007
Directors
Vested
Number
Granted
Number
Grant Date
Fair Value
per option at
grant date
$
Exercise price
per option
$
First
Exercise
Date
$
Last Exercise
Date
$
R N Gillard
G L Smith
P J Flint
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
27-10-06
27-10-06
27-10-06
0.148
0.148
0.148
0.30
0.30
0.30
27-10-06
27-10-06
27-10-06
15-09-09
15-09-09
15-09-09
Total
3,000,000
3,000,000
(d) Shares issued on Exercise of Compensation Options (Consolidated)
No shares were issued during the year on exercise of compensation options.
Page 55
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
22. DIRECTOR AND EXECUTIVE DISCLOSURES - continued
(e) Option holdings of Key Management Personnel (Consolidated)
Balance at
beginning
of period
30 June 2008
Directors
Granted as
remuneration
Options
exercised
Net change
Other (i)
Balance at
end of period
Total
Exercisable
Not
Exercisable
Vested as at 30 June 2008
R N Gillard (i)
1,676,103
G L Smith (ii)
1,366,976
P J Flint (i)
1,493,603
G J Argyle (iii)
585,000
-
-
-
-
Senior managers
P Jurman
-
350,000
5,121,682
350,000
-
-
-
-
-
-
-
-
-
-
-
-
1,676,103
1,676,103
1,676,103
1,366,976
1,366,976
1,366,976
1,493,603
1,493,603
1,493,603
585,000
585,000
585,000
350,000
350,000
350,000
5,471,682
5,471,682
5,471,682
-
-
-
-
-
-
Balance at
beginning
of period
Granted as
remuneration
Options
exercised
Net change
Other (i-iv)
Balance at
end
of period
Vested as at 30 June 2007
Total
Exercisable
Not
Exercisable
30 June 2007
Directors
R N Gillard (i)
G L Smith (ii)
P J Flint (i)
-
-
-
1,000,000
1,000,000
1,000,000
G J Argyle (iii)
330,000
G A Gander (iv)
R M Franco (iv)
Senior managers
P Jurman
-
-
-
-
-
-
-
330,000
3,000,000
-
-
-
-
-
-
-
-
676,103
1,676,103
1,676,103
1,676,103
366,976
1,366,976
1,366,976
1,366,976
493,603
1,493,603
1,493,603
1,493,603
255,000
585,000
585,000
585,000
-
-
-
-
-
-
-
-
-
-
-
-
1,791,682
5,121,682
5,121,682
5,121,682
-
-
-
-
-
-
-
-
(i)
(ii)
(iii)
(iv)
Mr Gillard and Mr Flint each received 270,833 options due to their interest in Corporate & Resource Consultants Pty
Ltd, an entity that received 1,000,000 unlisted options for the identification of the Tshikapa Diamond project. The
balance of the options issued was due to their participation in the non-renounceable entitlements issue of one option for
every two shares held.
Mr Smith participated in the non-renounceable entitlements issue of one option for every two shares held.
Mr Argyle received 255,000 options due to his interest in Capital Investment Partners Pty Ltd, an entity that provided
corporate advisory services during the year.
Mr Franco and Mr Gander resigned as directors during the year
Page 56
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
22. DIRECTOR AND EXECUTIVE DISCLOSURES - continued
(f) Number of shares held by Key Management Personnel
30 June 2008
Directors
R N Gillard (i)
G L Smith
P J Flint (i)
G J Argyle
Senior managers
P Jurman
30 June 2007
Directors
R N Gillard (i)
G L Smith (ii)
P J Flint (i)
G J Argyle
G A Gander (iii)
R M Franco (iii)
Senior managers
P Jurman
Balance
01 July 2007
Granted as
remuneration
On Exercise of
Options
Net Change Other
Balance
30 June 2008
Ord
Ord
Ord
Ord
Ord
810,541
733,952
517,541
-
-
2,062,034
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
810,541
733,952
517,541
-
-
2,062,034
Balance
01 July 2006
Granted as
remuneration
On Exercise of
Options
Net Change Other
Balance
30 June 2007
Ord
Ord
Ord
Ord
Ord
-
-
-
-
300,000
1,815,473
-
2,115,473
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
810,541
733,952
517,541
-
-
-
-
810,541
733,952
517,541
-
300,000
1,815,473
-
2,062,034
4,177,507
(i) Mr Gillard and Mr Flint each received 338,541 shares due to their interest in Corporate & Resource Consultants
Pty Ltd, an entity that received 1,250,000 shares for the identification of the Tshikapa Diamond project. The balance
was held by Mr Gillard and Mr Flint directly or through director-related entities prior to their appointment as
directors.
(ii) Mr Smith held shares directly or through director-related entities prior to his appointment as a director.
(iii) Mr Franco and Mr Gander resigned as directors during the year. The amounts shown as held at 30 June 2007 are
the number of shares held as of their resignation date.
Page 57
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2008
22. DIRECTOR AND EXECUTIVE DISCLOSURES (continued)
(g) Other transactions with Key Management Personnel and their related parties
A number of key management persons, or their related parties, hold positions in other entities that result in them having
control or significant influence over the financial or operating policies of those entities. These are listed below:
Corporate Consultants Pty Ltd (“CCPL”) provides accounting, administrative and company secretarial services on commercial
terms. Total amounts paid to CCPL were $24,870 during the reporting period. Mr Gillard and Mr Flint are directors of and
have a beneficial interest in CCPL.
Ledgar Road Partnership charges rent at commercial rates, totalling $4,370 for the period. Mr Gillard has a beneficial interest
in the Ledgar Road Partnership.
Corporate & Resource Consultants Pty Ltd (“CRCPL”) received 5,000,000 shares at 10.5 cents during the financial year in
consideration for the purchase of Coexco Sprl. The options were valued based on the Black & Scholes pricing model (refer
Note 17). Mr Gillard and Mr Flint are directors of and have a beneficial interest in (but do not control) CRCPL.
All transactions above were completed at arms length.
Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the
consolidated entity since the end of the previous financial year and there were no material contracts involving Directors’
interests subsisting at year-end.
(h) Transactions with Related Parties - Subsidiaries
Wholly Owned Consolidated Entity
The Company incurs exploration expenditure on behalf of the subsidiaries. Investments in and loans to wholly owned
subsidiaries are disclosed in Note 10.
Transactions between related parties are on normal commercial terms and conditions unless otherwise stated.
23. EVENTS OCCURRING AFTER THE REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which have significantly affected or may
significantly affect the operations, results or state of affairs of the Company in subsequent financial years.
Page 58
Lindian Resources Limited
Directors’ Declaration
30 June 2008
In the opinion of the Directors of Lindian Resources Limited ("the Company"):
(a) The financial statements and the notes and the additional disclosures included in the directors’ report
designated as audited of the Company and of the consolidated entity are in accordance with the
Corporations Act 2001, including:
(i)
Giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30
June 2008 and of their performance for the period ended that date; and
(ii)
Complying with Accounting Standards and Corporations Regulations 2001; and
b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
c) This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial period ended 30 June 2008.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act
2001.
On behalf of the Directors
G Smith
Managing Director
Dated at Perth, 30 September 2008
Page 59
Lindian Resources Limited
Mineral Concession Interests
TENEMENT DIRECTORY
Mineral tenements held at 16 September 2008 are as follows:
Project
Tenement Reference
Company Interest %
Status / Comment
Dinguiraye Iron and PGE /
base metal project in Guinea,
Africa.
Bafwasende
Diamond Project
Gold
and
Reconnaissance Licence (“RGA”)
96%
Granted 8/5/2008
PR6013 – PR6016
PR6018 – PR6036
PR6887 – PR6896
PR6897
PR6898 – PR6906
PR6909
80%
80%
80%
80%
80%
80%
Granted 30/1/2007
Granted 30/1/2007
Granted 19/6/2007
Pending
Granted 19/6/2007
Granted 19/6/2007
Page 62
Lindian Resources Limited
Additional Shareholder Information
The shareholder information set out below was applicable as at 16 September 2008.
Distribution of Holders of Equity Securities
Size of
Holding
Ordinary
Shares
Options
(LINO)
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
493
517
154
197
44
1,405
86
163
29
105
32
415
The number of shareholdings comprising less than a marketable parcel was 970.
Voting Rights
The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands every person
present who is a member or representative of a member shall have one vote and on a poll, every member present in
person or by proxy or by attorney or duly authorised representative shall have one vote for each share held. None
of the options has any voting rights.
Twenty Largest Shareholders as at 16 September 2008
ANZ Nominees Limited
Corporate & Resource Consultants Pty Ltd
Mr Michael Robert Franco + Mr Robert Mario Franco + Miss Laura Michelle
Franco
Eagle River Holdings Pty Ltd
Shah Nominees Pty Ltd
Stevsand Investments Pty Ltd
Crestline Investments Pty Ltd
NEFCO Nominees Pty Ltd
Manikato Financial Services Pty Ltd
Mr Alfonso Di Lanzo
Mr John Francis Corr
Mikado Corporation Pty Ltd
Dr Todd Andrew Silbert
Mr David Argyle
National Nominees Limited
Masters Sprl
Mr Mario Giosue Franco + Mrs Immacolata Franco
Mr Alexander Terrence Christianopoulos
Mr Brian Joseph Glynn
Economist Holdings Pty Ltd
Number of
Shares
9,672,423
4,557,292
% Held
25.57
12.04
1,500,000
900,000
800,000
660,000
600,952
600,000
581,640
566,000
500,000
500,000
500,000
417,411
410,000
400,000
315,473
311,000
300,000
279,000
3.97
2.38
2.11
1.74
1.59
1.59
1.54
1.50
1.32
1.32
1.32
1.10
1.08
1.06
0.83
0.82
0.79
0.74
24,371,191
64.41
Page 63
Lindian Resources Limited
Additional Shareholder Information
Twenty Largest Optionholders as at 16 September 2008
Options Expiring 31 December 2009 (ASX code: LINO)
ANZ Nominees Limited
Mr Michael Robert Franco + Mr Robert Mario Franco + Miss Laura Michelle
Franco
Clodene Pty Ltd
Mr Nathan Vadala
Corporate & Resource Consultants Pty Ltd
Mr David Argyle
Elawena Nominees Pty Ltd
Crestline Investments Pty Ltd
NEFCO Nominees Pty Ltd
Manikato Financial Services Pty Ltd
Mr Michael John Fennell
Mr Gavin John Argyle
Mr John Francis Corr
Ms Pao-Yu Chou
Dr Georg Schnura
Masters Sprl
Mr Robert Vadala + Mrs Suzanne Vadala
Mr David Leone
Mr Alfonso Di Lanzo
Mr Mario Giosue Franco + Mrs Immacolata Franco
Number of
Options
% Held
4,109,794
23.64
750,000
735,709
678,358
625,000
542,428
491,250
300,476
300,000
290,820
263,000
255,000
250,000
234,321
220,000
200,000
198,000
173,500
157,737
150,000
4.31
4.23
3.90
3.60
3.12
2.83
1.73
1.73
1.67
1.51
1.47
1.44
1.35
1.27
1.15
1.14
1.00
0.91
0.86
10,925,393
62.86
Unquoted Options
Unquoted options on issue at 16 September 2008 were as follows:
Refer
Note
1
2
3
4
5
6
Number of
Options
495,000
1,000,000
3,000,000
200,000
350,000
500,000
Exercise Price
Exercise Periods/ Expiry Dates
20 cents
20 cents
30 cents
30 cents
35 cents
30 cents
On or before 31 December 2010
On or before 1 July 2011
On or before 15 September 2009
On or before 30 September 2010
On or before 30 September 2010
On or before 31 December 2011
Number of
Holders
4
1
3
1
1
1
The names of the holders of 20% or more options in these unquoted securities are listed below:
Note
Name
Number of Options Held % of Options Held
1
2
3
3
3
4
5
6
Gavin Argyle
Corporate & Resource Consultants Pty Ltd
Gregory Smith
Reginald Gillard
Patrick Flint
Guy Scherrer
Paul Jurman
John V Hamilton
330,000
1,000,000
1,000,000
1,000,000
1,000,000
200,000
350,000
500,000
66.67
100
33.33
33.33
33.33
100
100
100
Page 64