(ABN 53 090 772 222)
Financial Report
For the year ended 30 June 2010
Lindian Resources Limited
Corporate Directory
Directors
Anthony Cunningham
Andrew Philips
Paul Jurman
Non-Executive Chairman
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, LINOA)
Page 1
Lindian Resources Limited
Contents
Review of Operations
Directors’ Report
Statement of Corporate Governance Practices
Auditor’s Independence Declaration
Statement of Comprehensive income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Mineral Interests Schedule
Additional Shareholder Information
Page Numbers
3-5
6-12
13-19
20
21
22
23
24
25-51
52
53-54
55
56-57
Page 2
Lindian Resources Limited
Review of Operations
Exploration
The Company’s main focus during the year was on exploration of the Dinguiraye Pt-Ni-Cu Project located in
Guinea, West Africa. This project has demonstrated excellent potential to host PGE / Ni sulphide
mineralisation and following granting of the initial exploration licence in March 2009 the pace of exploration
has been increased. A second exploration licence was granted in September 2009.
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Bafwasende
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Bafwasende
Bafwasende
Bafwasende
Bafwasende
Project
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DRCDRCDRCDRCDRCDRCDRCDRCDRC
Dinguiraye
Dinguiraye
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Project
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Guinea
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Figure 1 - Location Plan Dinguiraye – Bafwasende Projects
Dinguiraye Pt-Ni-Cu Project (92% interest)
The Project, located at the town of Dinguiraye approximately 400km northeast of Conakry in the central part
of Guinea consists of 2 granted exploration licences covering 705km2. (Figures 2 and 3).
Figure 2 – Location Plan
Figure 3 – Licence Location Plan
Page 3
Lindian Resources Limited
Review of Operations
Exploration
Exploration to date has consisted of remote sensing interpretation, soil geochemistry, airborne magnetics,
reconnaissance geological mapping and drilling. RC drilling was completed during October and November
2009 targeting the Pt, Ni soil geochemical anomalies in Blocks 1, 2 and 3. The drilling completed in Blocks 2
and 3 consisted of 27 RC holes totalling 1,876m. However due to unseasonable rains the proposed dill sites in
Block 1 could not be accessed.
Figure 4 - Dinguiraye Pt, Ni, Co Project – RC Drill Traverses
Results have now been received for all the holes. All holes with the exception of DRC008 contain elevated Pt
results starting from or close to surface. Results greater than 250ppb Pt (0.25 g/t) form a blanket averaging 9m
thick within the ferruginous laterites (Figure 5). Below this, with the exception of drill traverse Block 2
central occurs a partially coincident Ni / Co horizon defined by Ni results exceeding 1000ppm Ni and Co
greater than 500ppm.
Figure 5 - Dinguiraye Pt, Ni, Co Project – Drill Section Block 2 East
The Company has continued to review results of the detailed exploration work completed to date to determine
the optimum way forward for the development of the project. Discussions have commenced with various
parties interested in farming-in to the project by funding the next phase of exploration.
Page 4
Lindian Resources Limited
Review of Operations
Bafwasende Project (80% interest)
The Bafwasende Project consisted 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
Democratic Republic of the Congo.
During the year, the Company disposed of its 80% shareholding in Coexco Sprl for nominal value due to
unfavourable exploration results received to date and the political uncertainty existing in the Democratic
Republic of Congo. Coexco Sprl owned the rights to the Bafwasende Gold / Diamond Project.
Other Activities
In June 2009 the Company issued a prospectus pursuant to a fully underwritten, pro-rata (on the basis of one
option for every three shares held) non-renounceable entitlement issue of options (at a price of one cent each).
The options have an exercise price of 15 cents each and an expiry date of 31 December 2011. The issue
closed on 24 July 2009 and 12,609,341 options were allotted and dispatched on 4 August 2009. The funds
raised were used to contribute to the exploration programme at the Dinguiraye Pt-Ni-Cu project in Guinea.
In October 2009 the Company completed the placement of 5,670,336 shares at 30 cents each to clients of CPS
Securities to raise approximately $1.7 million before costs. The monies raised were used to fund the
exploration programme at the Dinguiraye Project, and in particular the initial 3,000m RC drill programme.
On 19 February 2010 Mr Andrew Philips was appointed as a Non-Executive Director and Mr Greg Smith and
Mr Patrick Flint resigned as Directors.
Scientific or technical information in this report has been prepared under the supervision of Mr Greg Smith, a former
director of the Company and a member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Smith has
sufficient experience which is relevant to the style of mineralisation under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code). Mr Smith consents to the inclusion in this
report of the Information, in the form and context in which it appears.
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 2010 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
Anthony R Cunningham – B.Com (Non–Executive Chairman)
(Appointed 4 March 2009)
Mr Cunningham is currently Managing Director of CPS Securities, an AFSL Licence holder specialising in advice
to retail and wholesale clients. He has been instrumental in raising capital for many exploration companies from
IPO to production and brings over 15 years of mining and stock market experience. Mr Cunningham holds a
Bachelor of Commerce and is in the final year of a Graduate Diploma in Applied Geology.
Andrew Philips – (Non–Executive Director)
(Appointed 19 February 2010)
Mr Philips is a director of Eagle River Holdings Pty Ltd and has an extensive business background involving
several entities over the last 25 years. He has been involved in the management of wholesale and retail businesses
catering to all forms of the market. His experience extends from the management of staff to the key element of
bringing forward an idea, a successful marketing campaign, raising funds and building a substantial business.
Mr Philips’s corporate and investment background expands over 20 years as a shareholder in numerous companies
and a promoter of many. He has been a successful business entrepreneur and brings a wealth of knowledge and
understanding to the Board of Lindian.
Paul Jurman – CPA, B Com (Non–Executive Director)
(Appointed 20 August 2010)
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 and Verus Investments Limited.
Reginald N Gillard BA FCPA FAICD JP – (Former Non-Executive Chairman)
(Resigned 20 August 2010)
Mr 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. He is a non-executive chairman of Aspen Group Ltd, Perseus Mining Limited,
Eneabba Gas Limited, Tiger Resources Limited and Platina Resources Limited (from 2 July 2009) and he also
served as non-executive chairman of Caspian Oil & Gas Limited (resigned 31 August 2010), 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 (Former Managing Director)
(Resigned 19 February 2010)
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. He previously served as a director of Elemental Minerals Limited (from 30 January
2007, resigned 11 March 2009).
Page 6
Lindian Resources Limited
Directors’ Report
DIRECTORS – continued
Names, qualifications, experience and special responsibilities - continued
Patrick J Flint – CA, B.Com (Former Non-Executive Director)
(Resigned 19 February 2010)
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 a
non-executive director of Tiger Resources Limited (from 9 January 2007) and Erongo Energy Limited (from 23
November 2006) and company secretary of Red Metal Limited (all of which are listed on the Australian Stock
Exchange). He previously served as a director of Zedex Minerals Limited (from 1 May 2007, resigned 15 July
2009).
COMPANY SECRETARY
Paul Jurman – CPA, B Com
(Appointed 30 October 2006)
For details relating to Paul Jurman, please refer to the details on Directors above.
PRINCIPAL ACTIVITIES
The principal activity of the consolidated entity is the exploration and evaluation of mineral interests.
RESULTS AND DIVIDENDS
The consolidated loss for the year after income tax was $918,692 (2009: $1,216,774). 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 2.20 cents (2009: 3.14 cents).
REVIEW OF OPERATIONS
A review of operations of the consolidated entity during the year ended 30 June 2010 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:
(cid:190) In June 2009 the Company issued a prospectus pursuant to a fully underwritten, pro-rata (on the basis of
one option for every three shares held) non-renounceable entitlement issue of options (at a price of one cent
each). The issue closed on 24 July 2009 and 12,609,341 options were allotted and dispatched on 4 August
2009.
(cid:190) In October 2009 the Company completed the placement of 5,670,336 shares at 30 cents each to clients of
CPS Securities to raise approximately $1.7 million before costs. The monies raised were used to fund the
exploration programme at the Dinguiraye Project, and in particular the initial 3,000m RC drill programme.
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.
DIRECTORS’ MEETINGS
The number of meetings of the Directors and the number of meetings attended by each Director during the year
ended 30 June 2010 were:
Directors’ meetings held during
period of office
Directors’ meetings attended
R N Gillard
A R Cunningham
A Philips (appointed 19/02/10)
G L Smith (resigned 19/02/10)
P J Flint (resigned 19/02/10)
6
6
2
4
4
6
6
2
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
A R Cunningham
A Philips
P Jurman
450,000
783,000
-
Options Over
Ordinary
Shares
278,250
185,000
450,001
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, 3,000,000 options over unissued ordinary shares in the Company
were forfeited by Directors of the Company. No options were exercised by Directors or officers during or since the
end of the financial year.
Page 8
Lindian Resources Limited
Directors’ Report
SHARE OPTIONS
As at the date of this report, there are 15,119,307 options over unissued ordinary shares in the Company
outstanding, summarised as follows:
Listed Options:
Unlisted Options:
Unlisted Options:
Unlisted Options:
Unlisted Options:
Unlisted Options:
Number
Exercise Price
$
Expiry Date
12,574,307
495,000
1,000,000
200,000
350,000
500,000
$0.15
$0.20
$0.20
$0.30
$0.35
$0.30
31 December 2011
31 December 2010
1 July 2011
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 granted during the financial year are as follows:
•
In July 2009 the Company completed a fully underwritten, pro-rata (on the basis of one option for every
three shares held) non-renounceable entitlement issue of options (at a price of one cent each) to raise
approximately $126,000 before costs. 12,609,341 listed options (LINOA), exercisable at $0.15 each on or
before 31 December 2011, were allotted.
• 500,000 listed options (LIN), exercisable at $0.30 each on or before 31 December 2009 were issued to CPS
Securities Pty Ltd as part of the share placement fee for the completion of a share placement in October
2009.
No Options were granted since the end of the financial year.
Options that have lapsed during or since the end of the financial year are as follows:
• 3,000,000 options exercisable at 30 cents before 15 September 2009.
• 17,836,798 options exercisable at 30 cents before 31 December 2009.
Shares issued on exercise of options
During or since the end of the financial year, the Company has issued the following ordinary shares as a result of
the exercise of options.
Number of
shares
Amount paid on
each share
45,081
35,034
$0.30
$0.15
For details on the valuation of the options issued during the prior 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 Anthony Cunningham
Mr Andrew Philips (appointed 19/02/10)
Mr Paul Jurman (appointed 20/08/10)
Mr Patrick Flint (resigned 19/02/10)
Mr Reginald Gillard (resigned 20/08/10)
Managing Director
Mr Gregory Smith (resigned 19/02/10)
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 2010
No options have been issued to directors and executives as part of their remuneration during the current year.
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 non-executive 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 2010 is detailed in Table 1 of this report.
Page 10
Lindian Resources Limited
Directors’ Report
REMUNERATION REPORT - continued
Executive Directors’ remuneration
Mr Smith was the Managing Director of the Company up to the date of his resignation on 22 February 2010 and
was entitled to Director Fees of $100,000 per annum plus superannuation.
Options issued to Directors and executives
There have been no options issued to Directors and executives for the years ended 30 June 2010 and 30 June 2009.
There were no alterations to the terms and conditions of options granted as remuneration since their grant date.
Table 1 – Director’s and executive remuneration
30 June 2010
Directors
R N Gillard (resigned 20/8/2010)
A R Cunningham
A Philips (appointed 19/02/2010)
G L Smith (resigned 19/02/2010)
P J Flint (resigned 19/02/2010)
Executive
P Jurman
30 June 2009
Directors
R N Gillard
G L Smith
P J Flint
G J Argyle (resigned 04/03/2009)
A R Cunningham (appointed 04/03/2009)
Executive
P Jurman
Short-term
Post
Employment
Share
Based
Payment
Remuneration
represented
by options
Total
Salary &
Fees
Other
Super
Options
$
$
$
$
$
%
30,000
20,000
7,083
89,881
12,976
10,000
169,940
2,072
2,072
623
1,243
1,243
2,072
9,325
2,700
1,800
637
5,839
1,168
900
13,044
-
-
-
-
-
-
34,772
23,872
8,343
96,963
15,387
12,972
192,309
-
-
-
-
-
Short-term
Post
Employment
Share
Based
Payment
Remuneration
represented
by options
Total
Salary &
Fees
Other
Super
Options
$
$
$
$
$
%
33,333
100,000
23,336
16,667
6,505
1,760
1,760
1,760
1,173
587
3,000
9,000
2,100
-
585
13,333
1,760
1,200
193,174
8,800
15,885
-
-
-
-
-
-
-
38,093
110,760
27,196
17,840
7,677
16,293
217,859
-
-
-
-
-
-
Page 11
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 $9,324 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 20 and forms part of this directors’ report for the year ended 30 June
2010.
Signed in accordance with a resolution of Directors.
T Cunningham
Non Executive Chairman
Perth, 17 September 2010
Page 12
Lindian Resources Limited
Statement of Corporate Governance Practices
ASX Listing Rule 4.10.3 requires listed companies to disclose in their Annual Report the extent to which they have
complied with the ASX Best Practice Recommendations of the ASX Corporate Governance Council in the
reporting period. A description of the Company’s main corporate governance practices is set out below. All these
practices, unless otherwise stated, were in place for the entire year. They comply with the August 2007 ASX
Principles of Good Corporate Governance and 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.
Principle 1: Lay solid foundations for management and oversight
Role of the Board and of Senior Executives (1.1)
The relationship between the board and senior management is critical to the Company’s long-term success. The
directors are responsible to the shareholders for the performance of the Company in both the short and the longer
term and seek to balance sometimes competing objectives in the best interests of the Company as a whole. Their
focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Company is properly
managed. 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.
Day to day management of the Company’s affairs and the implementation of the corporate strategy and policy
initiatives are formally delegated by the Board to the Managing Director and Company Secretary. Following Mr
Smith’s resignation, day to day management is managed by the Chairman and Company Secretary.
Senior Executive Performance Review (1.2)
It is the policy of the Board to conduct an evaluation of the performance of senior executives annually.
Performance has been measured to date by the efficiency and effectiveness of the enhancement of the Company’s
mineral interest portfolio, the designing and implementation of the exploration and development programme,
maintenance of relationships with joint venture partners and the securing of ongoing funding so to continue it’s
exploration and development activities. This performance evaluation is not based on specific financial indicators
such as earnings or dividends as the Company is at the exploration and development stage and during this period is
expected to incur operating losses.
Due to the size of the Company and the nature of its business, it has not been deemed necessary to institute a
formal documented performance review program of senior executives. The board considers that at this stage of the
Company’s development an informal process is appropriate.
This process for evaluating the Board and senior executives is contained in the Board Charter posted on the
Company’s website.
Page 13
Lindian Resources Limited
Statement of Corporate Governance Practices
Principle 2: Structure the board to add value
The Board operates in accordance with the broad principles set out in its charter which is available from the
corporate governance information section of the company website. The charter details the Board’s composition and
responsibilities.
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.
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.
Independent Directors (2.1)
In assessing whether a director is classified as independent, the Board considers the independence criteria set out in
the ASX Corporate Governance Council Recommendation 2.1 and other facts, information and circumstances
deemed by the Board to be relevant.
Using the ASX Best Practice Recommendations on the assessment of the independence of Directors, the Board
considers that of a total of three Directors, all three are considered to be independent (Mr Anthony Cunningham,
Mr Andrew Philips and Mr Paul Jurman). Mr Greg Smith was the Managing Director of the Company up to the
date of his resignation and was not considered to be independent. Mr Patrick Flint was employed in an executive
role in 2007 and although meeting other criteria and bringing independent judgement to bear in the role, was not
considered to be independent up to the date of his resignation.
The Company considers that each of the directors possess the skills and experience suitable for building the
Company and that the current composition of the Board is adequate for the Company's current size and operations."
Chairman and Chief Executive Officer (CEO) (2.2, 2.3)
The Board Charter requires that the Chairman of the Board will be a Non-Executive Director and will be elected by
the Directors. The Chairman is responsible for leading the Board, ensuring Directors are properly briefed in all
matters relevant to their role and responsibilities, facilitating Board discussions and managing Board’s relationship
with the Company’s senior executives. The Board considers that the Chairman, Mr Anthony Cunningham, is
independent as discussed in the above paragraph.
The CEO was Mr Greg Smith, Managing Director, up to the date of his resignation, who was responsible for
implementing Company strategies and policies. In this transitory phase, the Board as a whole have on the duties
normally associated with a Managing Director of the Company.
Page 14
Lindian Resources Limited
Statement of Corporate Governance Practices
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.
When a new director is to be appointed the Board reviews the range of skills, experience and expertise on the
board, identifies its needs and prepares a short-list of candidates with appropriate skills and experience. Where
necessary, advice is sought from independent search consultants.
The Board then appoints the most suitable candidate who must stand for election at the next annual general meeting
of the Company.
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.
This selection, nomination and appointment process is detailed on the company website.
Board Performance Review (2.5)
It is the policy of the Board to conduct an evaluation of the performance of the Board annually. 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.
Due to the size of the Board and the nature of its business, it has not been deemed necessary to institute a formal
documented performance review program of individuals. The Board considers that at this stage of the Company’s
development an informal process is appropriate.
Independent Professional Advice
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 Chairman 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.
Share Ownership
Directors are encouraged to own Company shares.
Page 15
Lindian Resources Limited
Statement of Corporate Governance Practices
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.
Principle 3: Promote ethical and responsible decision making
Code of Conduct (3.1)
The Company has developed a Code of Conduct (the Code) which has been endorsed by the Board and applies to
all Directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the
practices necessary to maintain confidence in the Company’s integrity and to take into account legal obligations
and reasonable expectations of the Company’s stakeholders. The Code outlines the responsibility and
accountability of Company personnel to report and investigate reports of unethical practices.
This Code of Conduct can be found on the company website.
Trading Policy (3.2)
Trading in Company securities is regulated by the Corporations Act and the ASX Listing Rules. The Board makes
all Directors, officers and employees aware on appointment that it is prohibited to trade in the Company’s securities
whilst that Director, 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 in these Financial
Statements. Directors are required to report to the Company Secretary any movements in their holdings of
Company securities, which are reported to ASX in the required timeframe prescribed by the ASX Listing Rules.
This Trading Policy can be found on the company website.
Whistleblower Policy
The Company requires employees who are aware of unethical practices within the Company or breaches of the
Company’s trading policy to report these using the Company’s Whistleblower Policy. This can be done
anonymously.
A copy of the Whistleblower Policy is available on the Company’s website.
Page 16
Lindian Resources Limited
Statement of Corporate Governance Practices
Principle 4: Safeguard Integrity in Financial reporting
Audit Committee (4.1, 4.2, 4.3)
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.
External Auditors
The Company requires external auditors to demonstrate quality and independence. The performance of the external
auditor is reviewed and applications for tender of external audit services requested as deemed appropriate, taking
into consideration assessment of performance, existing value and tender costs.
RSM Bird Cameron Partners were appointed as external auditor in 2003. In accordance with the Corporations Act
RSM Bird Cameron Partners’ rotates audit engagement partners on listed companies at least every 5 years, and in
accordance with that policy a new audit engagement partner was introduced for the year ended 30 June 2008.
Principle 5 & 6: Making Timely and Balanced Disclosure and Shareholder Communication
Continuous Disclosure Policy and Shareholder Communication (5.1, 6.1)
The Company has developed a Continuous Disclosure Policy which has been endorsed by the Board. The
Continuous Disclosure Policy ensures compliance with ASX Listing Rules and Corporations Act obligations to
keep the market fully informed of information which may have a material effect on the price or value if its
securities and outlines accountability at a senior executive level for that compliance. All ASX announcements are
to be posted to the Company website as soon as possible after confirmation of receipt is received from ASX,
including all financial reports. The Company encourages 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. All shareholders receive a copy of the Company’s annual (full
or concise) and half-yearly reports. All company announcements, media briefings, details of company meetings,
press releases and financial reports are available on the Company’s website.
The Continuous Disclosure Policy and Shareholder Communication Policy can be found on the Company website.
Principle 7: Recognise and Manage Risk
The Company is not currently of a size to require the formation of committees. The full Board has the
responsibility for the risk management, compliance and internal controls systems of the Company.
Risk Management (7.1, 7.2)
The Chairman and Company Secretary, formerly the Managing Director, is responsible for designing,
implementing and reporting on the adequacy of the Company’s risk management and internal control system. 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 Company 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 Company Secretary, formerly the Managing Director regularly appraises the full Board
of the Company as to the effectiveness of the Company’s management of its material business 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.
Page 17
Lindian Resources Limited
Statement of Corporate Governance Practices
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.
Assurances from the Managing Director and the Company Secretary/Financial Controller (7.3)
It is the responsibility of the Board to regularly assess the adequacy of the Company’s risk management and
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 (or Chairman in lieu of the position being vacated) 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.
The Chairman and the Company Secretary have declared in writing to the Board that the Company’s financial
statements for the year ended 30 June 2010 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, that this 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. This
representation is made by the Chairman and Company Secretary/Financial Controller prior to the Director’s
approval of the release of the annual and half yearly accounts. This representation is made after enquiry of, and
representation by, appropriate levels of management.
The policies on risk management can be found in the Board Charter on the Company website.
Principle 8: Remunerate Fairly and Responsibly
Remuneration Committee (8.1)
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.
Page 18
Lindian Resources Limited
Statement of Corporate Governance Practices
Remuneration Policy (8.2)
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.
Non-Executive Directors
Non-Executive Directors receive fees which are determined by the Board within the aggregate limit set by the
shareholders at a General Meeting. All Non-Executive Directors will receive remuneration by way of fees and
receive no retirement benefits excluding statutory superannuation, if applicable. External professional advice will
be sought to determine the level of Directors fees to ensure they are appropriate. The Board will determine the level
of fees with reference to other comparable listed companies determined by size and nature of operations. Directors’
fees should be set at a level to attract suitably qualified individuals to accept the responsibilities of a Directorship.
The issue of options to non-executive directors is considered an appropriate method of providing sufficient
incentive and reward whilst maintaining cash reserves.
Executives
The Executive Officers of the Company during the year were the Managing Director and Company Secretary. The
Executive Officers’ remuneration is considered to properly reflect the person’s duties and responsibilities, and
takes account of remuneration levels across the sector.
Share and Option based remuneration
The Company may issue options to Executives as it is considered an appropriate method of providing sufficient
incentive and reward whilst maintaining cash reserves. Participants in equity-based remuneration plans are not
permitted to enter into any transactions that would limit the economic risk of options or other unvested
entitlements. Details of this policy can be found in the Remuneration Statement on the Company website.
For details of remuneration paid to Directors and officers for the financial year please refer to the Directors’ Report
in these Financial Statements.
Page 19
RSM Bird Cameron Partners
8 St Georges Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 8 9261 9100 F +61 8 9261 9111
www.rsmi.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Lindian Resources Limited for the year ended 30 June 2010,
I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM BIRD CAMERON PARTNERS
Chartered Accountants
Perth, WA
Dated: 17 September 2010
TUTU PHONG
Partner
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney, Melbourne,
Adelaide and Canberra
ABN 36 965 185 036
RSM Bird Cameron Partners is an independent member firm of RSM
International, an affiliation of independent accounting and consulting firms.
RSM International is the name given to a network of independent accounting
and consulting firms each of which practices in its own right. RSM International
does not exist in any jurisdiction as a separate legal entity.
Lindian Resources Limited
Statement of Comprehensive Income
For the Year ended 30 June 2010
Revenue
Finance revenue
Other revenue
Total revenue
Expenses
Administration expense
Bad debt expense
Depreciation expense
Employee benefits expense
Exploration expenditure written off
Occupancy expense
Foreign exchange loss
Total expenses
Loss before income tax
Income tax (expense)/benefit
Net loss for the year
Other comprehensive income/(loss)
Exchange differences on translation of foreign operations
Income tax relating to components of other comprehensive
income
Other comprehensive income/(loss) for the year
Total comprehensive income/(loss) for the year
Loss for the year is attributable to :
Lindian Resources Limited
Minority Interest
Total comprehensive loss for the year attributable to:
Lindian Resources Limited
Minority Interest
Consolidated
Notes
2010
$
2009
$
2
2
3
3
3
5
81,421
27,275
108,696
(249,075)
(88,076)
(9,439)
(182,985)
(493,738)
(3,043)
(1,032)
82,415
15,493
97,908
(211,018)
-
(26,454)
(333,294)
(740,982)
(2,934)
-
(1,027,388)
(1,314,682)
(918,692)
(1,216,774)
-
-
(918,692)
(1,216,774)
(57,781)
86,891
-
-
(57,781)
86,891
(976,473)
(1,129,883)
(918,692)
(1,189,687)
16
-
(27,087)
(918,692)
(1,216,774)
(976,473)
(1,120,174)
-
(9,709)
(976,473)
(1,129,883)
Basic and diluted loss per share
6
(2.20) cents
(3.14) cents
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
Page 21
Lindian Resources Limited
Statement of Financial Position
As at 30 June 2010
Current Assets
Cash and cash equivalents
Receivables
Total Current Assets
Consolidated
Notes
2010
$
2009
$
8
9
2,215,636
6,732
1,514,160
11,514
2,222,368
1,525,674
Non-Current Assets
Other financial assets
Plant and equipment
Mineral interest acquisition, exploration and development
expenditure
10
11
12
Total Non-Current Assets
Total Assets
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
-
4,323
99,404
10,737
803,477
798,365
807,800
908,506
3,030,168
2,434,180
13
33,600
154,205
33,600
154,205
33,600
154,205
2,996,568
2,279,975
14
15
15
13,637,134
1,261,293
-
(11,901,859)
12,059,878
1,130,200
57,781
(10,983,167)
2,996,568
2,264,692
16
-
15,283
2,996,568
2,279,975
The above statement of financial position should be read in conjunction with the accompanying notes.
Page 22
Lindian Resources Limited
Statement of Changes in Equity
For the year ended 30 June 2010
Consolidated
Issued
Capital
Accumulated
Losses
Option
Premium
Reserve
Foreign
Currency
Translation
Reserve
Minority
Equity
Interest
Total Equity
$
$
$
$
$
$
12,063,317
(9,793,480)
1,130,200
(29,110)
42,370
3,413,297
-
-
-
(1,189,687)
-
(1,189,687)
(3,439)
-
-
-
-
-
-
(27,087)
(1,216,774)
86,891
-
86,891
86,891
(27,087)
(1,129,883)
-
-
(3,439)
Balance at 1 July 2008
Loss attributable to members of
the parent entity
Currency translation differences
Total comprehensive loss for
the period
Share issue expenses during the
year
Balance at 30 June 2009
12,059,878
(10,983,167)
1,130,200
57,781
15,283
2,279,975
Balance at 1 July 2009
Loss attributable to members of
the parent entity
Currency translation differences
Total comprehensive loss for
the period
Shares issued during the year
Share issue expenses during the
year
Fair value of options issued
Elimination of minority interest
on disposal of controlled entity
12,059,878
(10,983,167)
1,130,200
57,781
15,283
2,279,975
-
-
-
(918,692)
-
(918,692)
1,719,879
(142,623)
-
-
-
-
-
-
-
-
-
-
-
131,093
-
-
(57,781)
(57,781)
-
-
-
-
-
-
-
-
-
-
-
(15,283)
(918,692)
(57,781)
(976,473)
1,719,879
(142,623)
131,093
(15,283)
-
2,996,568
Balance at 30 June 2010
13,637,134
(11,901,859)
1,261,293
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Page 23
Lindian Resources Limited
Statement of Cash Flows
For the year ended 30 June 2010
____________________________________________________________________________________________
Cash Flows from Operating Activities
Cash payments in the course of operations
Interest received
Notes
Consolidated
2010
$
2009
$
(423,222)
77,169
(559,766)
82,415
Net Cash used in Operating Activities
21 (a)
(346,053)
(477,351)
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
Net Cash used in Investing Activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Proceeds from issue of options
Share issue expenses
Net cash provided by / (used in) Financing Activities
Net Increase / (Decrease) in Cash Held
Cash and cash equivalents at the beginning of the financial
year
Effect of foreign exchange on cash
Cash and cash equivalents at the end of the Financial Year
8
(658,192)
(3,025)
-
(468,477)
-
31,086
(661,217)
(437,391)
1,719,879
126,093
(136,193)
1,709,779
-
-
(2,008)
(2,008)
702,509
(916,750)
1,514,160
2,428,436
(1,033)
2,474
2,215,636
1,514,160
The above statement of cash flows should be read in conjunction with the accompanying notes
Page 24
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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’).
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which they
apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also
comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation
of this financial report are presented below and have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
The financial report is presented in Australian dollars and was authorised for issue on 17 September 2010. The
company is a listed public company, incorporated in Australia and operating in Australia and Africa.
Basis of Consolidation
A controlled entity is any entity over which Lindian Resources Limited has the power to govern the financial and
operating policies so as to obtain benefits from its activities. In assessing the power to govern, the existence and
effect of holdings of actual and potential voting rights are considered.
A list of controlled entities is contained in Note 10 to the financial statements.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated
financial statements as well as their results for the year then ended. Where controlled entities have entered (left)
the consolidated group during the year, their operating results have been included (excluded) from the date control
was obtained (ceased).
All inter-company balances and transactions between entities in the consolidated group, including any unrealised
profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with those adopted by the parent entity.
Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity
interests held by persons outside the Group, are shown separately within the equity section of the consolidated
statement of financial position and in the consolidated statement of comprehensive income.
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:
Page 25
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Significant accounting judgments, estimates and assumptions - continued
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 mineral
reserves.
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.
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 statement of financial position 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 statement of cash flows, 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 reporting date.
All differences in the consolidated financial report are taken to the statement of comprehensive income.
The functional currency of the overseas subsidiary was 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 reporting date and the statement of comprehensive
income are translated at the weighted average exchange rates for the reporting period.
Page 26
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Foreign currency transactions and balances - continued
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 statement
of comprehensive income.
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 reporting date.
Deferred income tax is provided on all temporary differences at the reporting 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 reporting 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 reporting 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 reporting 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 27
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Taxes - 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 statement of financial position.
Cash flows are presented in the statement of cash flows 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 28
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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 statement of financial position.
Page 29
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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 statement
of comprehensive income 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 30
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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 or loss 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 or loss 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.
Adoption of new and revised standards
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current
annual reporting period. The adoption of these new and revised Standards and Interpretations has not resulted in a
significant or material change to the Group’s accounting policies, except as noted below.
AASB 3 Business Combinations (revised 2008) and AASB 127 Consolidated and Separate Financial Statements
(revised 2008)
AASB 3 (revised 2008) introduces significant changes in the accounting for business combinations occurring after
1 July 2009. Changes affect the valuation of non-controlling interests (previously “minority interests”), the
accounting for transaction costs, the initial recognition and subsequent measurement of contingent consideration
and business combinations achieved in stages. These changes will impact the amount of goodwill recognised, the
reported results in the period when an acquisition occurs and future reported results.
AASB 127 (revised 2008) requires that a change in the ownership interest of a subsidiary (without a change in
control) is to be accounted for as a transaction with owners in their capacity as owners. Therefore such transactions
will no longer give rise to goodwill, nor will they give rise to a gain or loss in the statement of comprehensive
income. Furthermore the revised Standard changes the accounting for losses incurred by a partially owned
subsidiary as well as the loss of control of a subsidiary. The changes in AASB 3 (revised 2008) and AASB 127
(revised 2008) will affect future acquisitions, changes in, and loss of control of, subsidiaries and transactions with
non-controlling interests. The change in accounting policy was applied prospectively and had no material impact
on earnings per share.
Page 31
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
AASB 8 Operating Segments
The Group has adopted AASB 8 Operating Segments from 1 July 2009. AASB 8 replaces AASB 114 Segment
Reporting. The new standard requires a ‘management approach’, under which segment information is presented on
the same basis as that used for internal reporting purposes. This has not resulted in an increase in the number of
reportable segments presented. There has been no change to the way goodwill is allocated. There has been no other
impact on the measurement of the company’s assets and liabilities and no restatement of 2009 comparatives has
been necessary.
AASB 101 Presentation of Financial Statements
The revised Standard separates owner and non-owner changes in equity. The statement of changes in equity
includes only details of transactions with owners, with non-owner changes in equity presented in a reconciliation
of each component of equity and included in the new statement of comprehensive income. The statement of
comprehensive income presents all items of recognised income and expense, either in one single statement, or in
two linked statements. The Group has elected to present one statement.
New accounting standards for application in future periods
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2010
reporting periods. The Group’s assessment of these new standards and interpretations is set out below:
Effective date
(i.e. annual
reporting
periods
ending on or
after)
31 December
2013
New / revised
pronouncement
Superseded
pronouncement
Explanation of amendments
Accounting Standards
AASB 139
Financial
Instruments:
Recognition and
Measurement
(part)
AASB 9 Financial
Instruments
AASB 2009-11
Amendments to
Australian
Accounting
Standards arising
from AASB 9
AASB 9 introduces new
requirements for the classification
and measurement of financial
assets. AASB 9 uses a single
approach to determine whether a
financial asset is measured at
amortised cost or fair value,
replacing the many different rules
in AASB 139 and removes the
impairment requirement for
financial assets held at fair value.
Impact of new standard on
the financial report
Likely impact
Unlikely to
have
significant
impact.
AASB 9 amends the
classification and measurement
of financial assets; the effect on
the entity will be that more
assets are held at fair value and
the need for impairment testing
has been limited to assets held
at amortised cost only.
AASB 124
Related Party
Disclosures
AASB 124
Related Party
Disclosures
This revision amends the
disclosure requirements for
government related entities and the
definition of a related party.
31 December
2011
Since the entity is not a
government related entity;
there is not expected to be any
changes arising from this
standard.
Unlikely to
have
significant
impact.
AASB 2009-12
Amendments to
Australian
Accounting
Standards arising
from AASB 124.
Page 32
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
New / revised
pronouncement
Superseded
pronouncement
Explanation of amendments
Impact of new standard on
the financial report
Likely impact
Effective date
(i.e. annual
reporting
periods
ending on or
after)
N/a
Makes various amendments to a
number of standards and
interpretations in line with the
IASB annual improvements
project.
31 December
2010
Unlikely to have significant
impact on the financial report.
Unlikely to
have
significant
impact.
AASB 2009-5
Further
Amendments to
Australian
Accounting
Standards arising
from the Annual
Improvements
Project [AASB 5,
8, 101, 107, 117,
118, 136 & 139]
AASB 2009-9
Amendments to
Australian
Accounting
Standards –
Additional
Exemptions for
First-time
Adopters
AASB 2009-10
Amendments to
Australian
Accounting
Standards –
Classification of
Rights Issues
Amendments to
AASB 1 arising
from
Interpretation 19
AASB 2010-01
Limited
exemption from
comparative
AASB 7
disclosures for
first time adopters
(Amendments to
AASB 1 and
AASB 7)
AASB 2009-13
Interpretation 19
AASB 1 First
Time adoption of
Australian
Equivalents to
International
Financial
Reporting
Standards (June
2007)
AASB 132
Financial
Instruments:
Presentation
AASB 2009-9 makes amendments
to ensure that entities applying
Australian Accounting Standards
for the first time will not face
undue cost or effort in the
transition process in particular
situations.
31 December
2010
As this is not the first year of
adoption of IFRSs, these
amendments will not have any
impact on the entity’s financial
report
No impact for
entities who
are applying
IFRS.
31 January
2011
As the entity does not have any
rights, options or warrants to
acquire their own equity
instruments, these amendments
will not have any impact on the
entity’s financial report.
Unlikely to
have
significant
impact.
AASB 2009-10 makes
amendments which clarify that
rights, options or warrants to
acquire a fixed number of an
entity’s own equity instruments for
a fixed amount in any currency are
equity instruments if the entity
offers the rights, options or
warrants pro rata to all existing
owners of the same class of its
non-derivative equity instruments.
This standard amends AASB 1 to
allow a first-time adopter to use
the transitional provisions in
Interpretation 19.
30 June 2011
As the entity is not a first-time
adopter of IFRS, this standard
will not have any impact.
Unlikely to
have
significant
impact.
30 June 2011
As the entity is not a first-time
adopter of IFRS, this standard
will not have any impact.
No impact.
AASB 1: First-
time adoption of
Australian
Accounting
Standards
AASB 7
Financial
instruments:
Disclosures
These amendments principally
give effect to extending the
transition provisions of AASB
2009-2 Amendments to Australian
Accounting Standards – Improving
Disclosures about Financial
Instruments to first-time adopters
of Australian Accounting
Standards.
Page 33
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
New / revised
pronouncement
Superseded
pronouncement
Explanation of amendments
Various
IFRS Annual
Improvements
2010
(May 2010)
Makes various amendments to a
number of standards and
interpretations.
Australian Accounting Interpretations
N/A
Interpretation 19
Extinguishing
Financial Liabilities
with Equity
Instruments
This interpretation addresses the
accounting by an entity when the
terms of a financial liability are
renegotiated and result in the
entity issuing equity instruments to
a creditor to extinguish all or part
of the financial liability. These
transactions are sometimes
referred to as ‘debt for equity
swaps’.
Effective date
(i.e. annual
reporting
periods
ending on or
after)
Application
dates either
30 June 2011
or 31
December
2011.
30 June 2011
Impact of new standard on
the financial report
Likely impact
Unlikely to have significant
impact on the financial report.
Unlikely to
have
significant
impact.
As the entity has not
renegotiated any financial
liabilities into equity
instruments this interpretation
is not expected to have any
impact on the entity’s financial
report.
Unlikely to
have
significant
impact.
N/A
AASB 2009-14
Prepayments of a
Minimum Funding
Requirement
(Amendments to
Interpretation 14)
Critical judgements
This amendment to Interpretation
14 addresses the unintended
consequences that can arise from
the previous requirements when an
entity prepays future contributions
into a defined benefit pension plan.
31 December
2011
As the entity does not have a
defined benefit pension plan
this amendment to
Interpretation 14 is not
expected to have any impact on
the entity’s financial report.
No impact.
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.
During the financial year, the Company disposed of its investment in Coexco Sprl for nominal value and as a
consequence the Company does not retain any interest in the Bafwasende project. The directors have written off
exploration expenditure of $493,738 which was previously capitalised on the Bafwasende project.
Page 34
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
2. REVENUE
Interest revenue
Foreign exchange gain
Gain on sale of assets
3. EXPENSES
Loss before income tax has been determined after:
Expenses
Depreciation of plant and equipment
Notes
Consolidated
2010
$
2009
$
81,421
82,415
27,275
-
27,275
2,475
13,018
15,493
9,439
26,454
Exploration expenditure written off
493,738
740,982
Employee benefits expense
Director salaries, fees and superannuation
Employee salaries, fees and superannuation
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
172,085
10,900
182,985
209,059
124,235
333,294
21,000
21,000
18,000
18,000
Page 35
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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
statement of comprehensive income
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
2010
$
2009
$
(918,692)
(275,608)
93,755
181,853
(1,216,774)
(365,032)
127,074
237,958
-
-
42,787
42,787
1,031
1,031
2,653,350
2,579,347
The Group has tax losses arising in Australia of $8,844,502 (2009: $8,597,822) 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 in realising the benefit.
Page 36
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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
2010
cents
(2.20)
(2.20)
2009
cents
(3.14)
(3.14)
2010
$
(918,692)
2009
$
(1,189,687)
2010
Number
2009
Number
41,799,004
37,828,022
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 37
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
7. SEGMENT INFORMATION
The directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Board) in allocating
resources and have concluded during the year, Lindian Resources Limited operated in the mineral exploration industry within the geographical segments, Australia, Guinea and the Democratic
Republic of Congo.
Business segments
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
Mineral
Exploration
2010
$
Mineral
Exploration
2009
$
Consolidated
Consolidated
2010
$
2009
$
-
108,696
108,696
-
97,908
97,908
918,692
1,216,774
9,439
581,814
26,454
740,982
-
108,696
108,696
918,692
-
918,692
9,439
581,814
-
97,908
97,908
1,216,774
-
1,216,774
26,454
740,982
3,030,168
537,874
2,434,180
555,492
3,030,168
537,874
2,434,180
555,492
33,600
154,205
33,600
154,205
Australia
2010
$
Australia
2009
$
Africa
2010
$
Africa
2009
$
Consolidated
2010
$
Consolidated
2009
$
Revenue
Assets
108,696
97,908
-
-
108,696
97,908
2,225,948
1,536,125
804,220
898,055
3,030,168
2,434,180
Major Customers
-
-
-
-
-
-
Page 38
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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.
(i) Reconciliation to Statement of Cash flows:
For the purposes of the statement of cash flows, cash and
cash equivalents comprise cash on hand and at bank and
investments in money market instruments, net of outstanding
bank overdrafts.
Cash and cash equivalents as shown in the statement of cash
flows is reconciled to the related items in the statement of
financial position as follows:
Cash and cash equivalents
9. RECEIVABLES
Current
Trade and other receivables
Notes
Consolidated
2010
$
2009
$
41,391
43,108
2,174,245
1,471,052
2,215,636
1,514,160
2,215,636
1,514,160
6,732
11,514
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
the
receivable
allowance/impairment
the
trade
difference between
receivables and the estimated future cash flows expected to
be received from the relevant debtors.
loss has been measured as
the carrying amount of
impaired.
amount
The
the
of
is
10. OTHER FINANCIAL ASSETS (Non-Current)
Security deposits
-
-
99,404
99,404
(a) Particulars in relation to subsidiaries
Name of subsidiary
Parent Entity
Lindian Resources Limited
Subsidiaries
(i) Lindian Resources Guinea Pty Ltd
(ii) Congolese Exploration Company Sprl (“Coexco”)
Notes
Place of
Incorporation
Consolidated
Entity Interest
2010
%
Consolidated
Entity Interest
2009
%
Australia
Australia
100
100
Democratic
Republic of Congo
-
80
Page 39
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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
Expenditure incurred during the period
Costs written-off
Foreign translation 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, at amounts at least equal to book
value.
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.
Notes
Consolidated
2010
$
2009
$
32,725
(28,402)
29,700
(18,963)
4,323
10,737
10,737
3,025
-
(9,439)
55,259
-
(18,068)
(26,454)
4,323
10,737
798,365
534,849
(493,738)
(35,999)
875,703
592,068
(740,982)
71,576
803,477
798,365
20,559
13,041
33,600
13,557
140,648
154,205
Page 40
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
Notes
Consolidated
2010
$
2009
$
14. ISSUED CAPITAL
(a) Issued and paid-up share capital
43,578,473 (2009: 37,878,022) ordinary shares, fully paid
13,637,134 12,059,878
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
Share placement issue at $0.30 each (i)
Options converted to shares during year
Transaction costs on share issue
Balance at the end of the year
Number
Number
$
$
37,828,022 37,828,022 12,059,878 12,063,317
5,670,336
80,115
-
-
-
-
1,701,101
18,779
-
-
(142,624)
(3,439)
43,578,473 37,828,022 13,637,134
12,059,878
(i) On 20 October 2009, the Company issued 5,670,336 ordinary shares at 30 cents each.
(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 2009
Options
Issued
2009/10
Options
Exercised/
Cancelled/
Expired
2009/10
Closing
Balance
30 June 2010
On or before 31 December 2010
On or before 1 July 2011
On or before 15 September 2009
On or before 31 December 2009 (i)
On or before 30 September 2010
On or before 30 September 2010
On or before 31 December 2011
On or before 31 December 2011 (ii)
Number
Number
Number
$0.20
$0.20
$0.30
$0.30
$0.30
$0.35
$0.30
$0.15
495,000
1,000,000
3,000,000
17,381,879
200,000
350,000
500,000
-
-
-
-
500,000
-
-
-
12,609,341
-
-
(3,000,000)
(17,881,879)
-
-
-
(35,034)
Number
495,000
1,000,000
-
-
200,000
350,000
500,000
12,574,307
22,926,879
13,109,341
(20,916,913)
15,119,307
(i) Following shareholder approval at the annual general meeting on 25 November 2009, the Company granted 500,000 listed
options (LINO) to CPS Securities Pty Ltd as part of the share placement fee for the completion of a share placement in
October 2009.
(ii) In July 2009, the Company completed a pro-rata (on the basis of one option for every three shares held) non-renounceable
entitlement issue of options (LINOA) (at a price of 0.5 cents each). 12,609,341 options were allotted and dispatched on 4
August 2009.
Page 41
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
14. ISSUED CAPITAL – continued
(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.
15. RESERVES
Nature and purpose of reserves
Option Premium Reserve
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
17. SHARE-BASED PAYMENTS
Notes
Consolidated
2010
$
2009
$
-
-
-
42,370
(27,087)
15,283
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 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
2010
Number of
options
6,545,000
500,000
2010 Weighted
average
exercise price
28 cents
30 cents
-
-
(4,500,000)
2,545,000
2,545,000
-
-
30 cents
25 cents
2009
Number of
options
6,545,000
2009 Weighted
average
exercise price
28 cents
-
-
-
-
-
-
-
-
6,545,000
6,545,000
28 cents
The fair value of listed options issued is calculated by reference to the market value of the options trading on the Australian
Securities Exchange on or around the date of grant.
Page 42
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
18. FINANCIAL INSTRUMENTS
Overview
The Group has exposure to the following risks from their use of financial instruments:
- credit risk
- liquidity risk
- market risk
This note presents information about the 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 Financial Assets
Total Financial Liabilities
(a)
Credit Risk
Notes
Consolidated
2010
$
2009
$
8
9
10
2,215,636
6,732
-
2,222,368
1,514,160
11,514
99,404
1,625,078
13
33,600
154,205
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.
(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.
Page 43
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
18. FINANCIAL INSTRUMENTS - continued
(b)
Liquidity Risk - continued
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
2010
$
2009
$
2010
$
2009
$
United States Dollar
0.88
0.75
-
0.80
The consolidated entity’s exposure to foreign currency risk at the reporting date was as follows:
Functional currency of group entity
Notes
United States Dollar
Foreign currency risk sensitivity analysis
Net Financial Assets/(Liabilities) in AUD
30 June 2009
30 June 2010
$
-
$
475,546
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:
Year ended 30 June 2010
+/-10% in $A/$US
Year ended 30 June 2009
+/-10% in $A/$US
Consolidated
Profit
$
Equity
$
-
-
-
11,263
Page 44
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
18. FINANCIAL INSTRUMENTS - continued
Foreign currency risk sensitivity analysis - continued
(ii) Interest Risk
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 did not have any fixed rate instruments at reporting date.
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments:
Variable rate Instruments at call
Financial assets
Financial liabilities
Consolidated
Carrying Amount
2010
$
2009
$
2,215,636
-
2,215,636
1,514,160
-
1,514,160
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.
The following table summarises interest rate risk for the Group, together with effective interest rates as at reporting date.
Consolidation
2010
Financial Assets:
Current:
Cash at bank
Receivables
Total Financial Assets
Financial Liabilities:
Current:
Accounts payable
Total Financial Liabilities
2009
Financial Assets:
Current:
Cash at bank
Receivables
Non current:
Deposit
Total Financial Assets
Financial Liabilities:
Current:
Accounts payable
Total Financial Liabilities
Weighted
average effective
interest rate
Floating interest
rate
Non-interest
bearing
$
$
5.71%
2,215,199
-
2,215,199
2.75%
-
-
$
1,514,160
-
-
1,514,160
-
-
Page 45
437
6,732
7,169
33,600
33,600
$
-
11,514
99,404
110,918
154,205
154,205
Total
$
2,215,636
6,732
2,222,368
33,600
33,600
$
1,514,160
11,514
99,404
1,625,078
154,205
154,205
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
18. FINANCIAL INSTRUMENTS - continued
(iii) Cash flow sensitivity analysis for variable rate instruments
Consolidated
At 30 June 2010, a change in interest rates would only affect variable rate deposits and cash balances resulting in a decrease or
increase in overall income.
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 2010 from around
5.71% to 6.28% (10% decrease: 5.14%) representing a 57 basis points shift.
At 30 June, the effect on loss and equity as a result of changes in interest rates, with all other variables remaining constant is as
follows:
Year ended 30 June 2010
+/-10% in interest rates
Year ended 30 June 2009
+/-10% in interest rates
Consolidated
Profit
$
Equity
$
+/- 12,647
+/- 12,647
+/- 4,163
+/- 4,163
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 reporting date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of
financial position and in the notes to 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 46
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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
2010
$
181,761
82,543
-
264,304
2009
$
390,758
611,075
-
1,001,833
There were no contingent liabilities of the consolidated entity not provided for in the financial statements at 30 June
2010.
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
Bad debt expense
Foreign currency loss/(gain)
Gain on sale of property, plant and equipment
Exploration costs written-off
Change in assets and liabilities:
Decrease in receivables
Decrease in payables
(918,692)
(1,216,774)
9,439
88,076
(24,706)
-
493,738
4,782
1,310
26,454
-
(3,360)
(13,018)
740,982
280
(11,915)
Net cash used in operating activities
(346,053)
(477,351)
(b) Non-Cash Financing and Investing Activities
There were no non-cash financing or investing activities during the current year.
(c) Disposal of Entities
During the year the controlled entity Congolese Exploration Company Sprl was liquidated with nil asset or liabilities
recovered or paid.
An operating loss of $474,288 after income tax was attributable to members of the parent entity.
Page 47
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
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 – resigned 20 August 2010
Mr Patrick Flint – resigned 19 February 2010
Mr Anthony Cunningham
Mr Andrew Philips – appointed 19 February 2010
Senior Managers
Mr Paul Jurman
(b) Key management personnel remuneration
Short-term personnel benefits
Managing Director
Mr Gregory Smith – resigned 19 February 2010
Consolidated
2010
$
192,309
192,309
2009
$
217,859
217,859
(c) 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.
(d) Compensation options: Granted and vested during the year (Consolidated)
No options were granted during the current year or prior year as compensation benefits to key management personnel.
(e) Shares issued on Exercise of Compensation Options (Consolidated)
No shares were issued during the year on exercise of compensation options.
(f) Option holdings of Key Management Personnel (Consolidated)
Balance at
beginning
of period
30 June 2010
Directors
R N Gillard (ii)
1,676,103
G L Smith (i, iii)
1,366,976
P J Flint (i, iv)
1,493,603
A R Cunningham (v)
100,000
A Philips (i)
N/A
Senior managers
P Jurman
350,000
4,986,682
Granted as
remuneration
Options
exercised
Net change
Other (i - vi)
Balance at
end of period
Total
Exercisable
Not
Exercisable
Vested as at 30 June 2010
-
-
-
-
-
-
-
-
-
-
-
-
-
(635,089)
1,041,014
1,041,014
1,041,014
(367,333)
(550,255)
178,250
185,000
-
-
-
-
-
-
278,250
185,000
278,250
278,250
185,000
185,000
100,001
450,001
450,001
450,001
-
(1,089,426)
1,954,265
1,954,265
1,954,265
-
-
-
-
-
-
-
(i)
Mr Smith and Mr Flint resigned, and Mr Philips was appointed, as directors during the year.
Page 48
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
22. DIRECTOR AND EXECUTIVE DISCLOSURES - continued
(ii)
(iii)
(iv)
(v)
(vi)
Mr Gillard received 270,181 options due to his participation in the non-renounceable entitlements issue of one option
for every three shares held. He received a further 500,000 options for sub-underwriting the shortfall arising from the
non-renounceable entitlements issue. 1,405,270 options expired during the financial year.
Mr Smith received 244,652 options due to his participation in the non-renounceable entitlements issue of one option for
every three shares held. He received a further 754,991 options for sub-underwriting the shortfall arising from the non-
renounceable entitlements issue. 1,366,976 options expired during the financial year.
Mr Flint received 172,515 options due to his participation in the non-renounceable entitlements issue of one option for
every three shares held. He received a further 500,000 options for sub-underwriting the shortfall arising from the non-
renounceable entitlements issue. 1,222,770 options expired during the financial year.
Mr Cunningham received 33,334 options due to his participation in the non-renounceable entitlements issue of one
option for every three shares held. He received a further 244,916 options for sub-underwriting the shortfall arising from
the non-renounceable entitlements issue. 100,000 options expired during the financial year.
Mr Jurman received 100,001 options due to his participation in the shortfall arising out of the non-renounceable
entitlements issue of one option for every three shares held.
30 June 2009
Directors
R N Gillard
G L Smith
P J Flint
G J Argyle (i)
Balance at
beginning
of period
1,676,103
1,366,976
1,493,603
585,000
A R Cunningham (i)
N/A
Senior managers
P Jurman
350,000
5,471,682
Granted as
remuneration
Options
exercised
Net change
Other (i)
Balance at
end of period
Total
Exercisable
Not
Exercisable
Vested as at 30 June 2009
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
-
-
100,000
100,000
100,000
100,000
-
350,000
350,000
350,000
100,000
4,986,682
4,986,682
4,986,682
-
-
-
-
-
-
-
(vii) Mr Argyle resigned, and Mr Cunningham was appointed, as a director during the year.
(g) Number of shares held by Key Management Personnel
30 June 2010
Directors
R N Gillard
G L Smith (i)
P J Flint (i)
A R Cunningham
A Philips (i)
Senior managers
P Jurman
Balance
01 July 2009
Granted as
remuneration
On Exercise of
Options
Net Change Other
Balance
30 June 2010
Ord
Ord
Ord
Ord
Ord
810,541
733,952
517,541
100,000
-
-
2,162,034
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,354,167
2,164,708
-
-
350,000
783,000
-
-
450,000
783,000
-
-
2,487,167
3,397,708
(i) Mr Smith and Mr Flint resigned, and Mr Philips was appointed, as directors during the year.
Page 49
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
22. DIRECTOR AND EXECUTIVE DISCLOSURES - continued
(g) Number of shares held by Key Management Personnel - continued
30 June 2009
Directors
R N Gillard
G L Smith
P J Flint
G J Argyle (i)
A R Cunningham (i)
Senior managers
P Jurman
Balance
01 July 2008
Granted as
remuneration
On Exercise of
Options
Net Change Other
(i)
Balance
30 June 2009
Ord
Ord
Ord
Ord
Ord
810,541
733,952
517,541
-
N/A
-
2,062,034
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
810,541
733,952
517,541
-
100,000
100,000
-
-
100,000
2,162,034
(i) Mr Argyle resigned, and Mr Cunningham was appointed, as a director during the year.
(h) 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 $57,575 (2009: 54,622) 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 $3,043 (2009: 2,934) for the period. Mr Gillard has a
beneficial interest in the Ledgar Road Partnership.
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 consolidated entity since
the end of the previous financial year and there were no material contracts involving Directors’ interests subsisting at year-end.
(i) 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 Notes 10 and 9 respectively.
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 50
Lindian Resources Limited
Notes to the Financial Statements
For the Year ended 30 June 2010
24. PARENT ENTITY DISCLOSURES
(a) Summary financial information
Financial Position
Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Liabilities
Parent
2010
$
2009
$
2,221,625
1,525,389
812,269
863,826
3,033,894
2,389,215
33,600
153,957
33,600
153,957
Net Assets
3,000,294
2,235,258
Equity
Issued capital
Option premium reserve
Accumulated losses
Total Equity
Financial Performance
13,637,134
1,261,293
(11,898,133)
12,059,878
1,130,200
(10,954,820)
3,000,294
2,235,258
Parent
2010
$
2009
$
(Loss) for the year after income tax
(943,313)
(1,156,031)
Other comprehensive (loss)
-
-
Total comprehensive (loss)
(943,313)
(1,156,031)
(b) Guarantees entered into by the parent entity in relation to the debts of its subsidiary
Lindian Resources Limited has not entered into any guarantees in relation to the debts of its subsidiary.
(c) Contingent liabilities of the parent
The parent entity did not have any contingent liabilities as at 30 June 2010 or 30 June 2009.
(d) Contractual commitments for the acquisition of property, plant or equipment
As at 30 June 2010 (30 June 2009 – $Nil), the parent entity did not have any contractual commitments for the acquisition of
property, plant or equipment.
Page 51
Lindian Resources Limited
Directors’ Declaration
30 June 2010
In the opinion of the Directors:
(a) The accompanying financial statements and the notes and the additional disclosures included in the directors’
report designated as audited of the consolidated entity are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2010 and of
their performance for the year ended that date; and
Complying with Accounting Standards (including the Australian Accounting Interpretations) 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) The financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board, as disclosed in Note 1.
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 2010.
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
T Cunningham
Chairman
Dated at Perth, 17 September 2010
Page 52
RSM Bird Cameron Partners
8 St George’s Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 8 9261 9100 F +61 8 9261 9111
www.rsmi.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
LINDIAN RESOURCES LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Lindian Resources Limited, which comprises the statement
of financial position as at 30 June 2010, and the statement of comprehensive income, statement of changes in
equity and statement of cash flows for the year then ended, a summary of significant accounting policies, other
explanatory notes and the directors' declaration of the consolidated entity comprising the company and the
entities it controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation and fair presentation of the financial report in
accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the
preparation and fair presentation of the financial report that is free from material misstatement, whether due to
fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard
AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International
Financial Reporting Standards ensures that the financial report, comprising the consolidated financial statements
and notes, complies with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney, Melbourne,
Adelaide and Canberra
ABN 36 965 185 036
RSM Bird Cameron Partners is an independent member firm of RSM
International, an affiliation of independent accounting and consulting firms.
RSM International is the name given to a network of independent accounting
and consulting firms each of which practices in its own right. RSM International
does not exist in any jurisdiction as a separate legal entity.
Auditor’s Independence Declaration
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s Opinion
In our opinion:
(a) the financial report of Lindian Resources Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2010 and of their
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report which is included within the directors’ report for the financial year
ended 30 June 2010. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Auditor’s Opinion
In our opinion the Remuneration Report of Lindian Resources Limited for the financial year ended 30 June 2010
complies with section 300A of the Corporations Act 2001.
RSM BIRD CAMERON PARTNERS
Chartered Accountants
Perth, WA
Dated: 17 September 2010
TUTU PHONG
Partner
Lindian Resources Limited
Mineral Concession Interests
TENEMENT DIRECTORY
Mineral tenements held at 15 September 2010 are as follows:
Project
Tenement Reference
Company Interest %
Status / Comment
Dinguiraye Iron and PGE /
base metal project in Guinea,
Africa.
A 2009/017/DIGM/CPDM
Exploration Licence (“EL”)
A 2009/138/DIGM/CPDM
Exploration Licence (“EL”)
Notes
92%
Granted 18/3/2009
92%
Granted 11/9/2009
1. The governments of African countries in which the Company holds minerals interests are entitled to equity
in mining companies owning projects as follows – Guinea 15%. Lindian's quoted equity is before allowance
for that national interest, which occurs when a new project company is established prior to commencement
of mining.
2. The granting of both Exploration Licences was facilitated in Guinea by Adem sarl (“Adem”) and Corporate
& Resources Consultants Pty Ltd (“CRCPL”). Adem received a cash payment of US$40,000 following the
granting of both licences, and Adem and CRC will each receive a cash payment of US$35,000 on 18 March
2011 (provided the Company continues to hold the licence).
Adem and CRC also each have a 4% interest in this exploration licence, carried to production. The Company
has the right (but not the obligation) to buy half (2%) of each parties interest upon completion of a feasibility
study by payment to each party of US$1.5 million (comprising US$1 million in cash and US$0.5 million in
shares).
Page 55
Lindian Resources Limited
Additional Shareholder Information
The shareholder information set out below was applicable as at 15 September 2010.
Distribution of Holders of Equity Securities
Size of
Holding
Ordinary
Shares
Options
(LINOA)
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
476
487
150
234
61
1,408
61
55
24
54
30
224
The number of shareholdings comprising less than a marketable parcel was 997.
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 15 September 2010
ANZ Nominees Limited
Corporate & Resource Consultants Pty Ltd
Amalgamation Sale and Takeover Consultants Pty Ltd < RN & MK Gillard A/C>
Mr Michael Robert Franco + Mr Robert Mario Franco + Miss Laura Michelle
Franco
HSBC Custody Nominees (AUSTRALIA) Limited
Mikado Corporation Pty Ltd
Eurogold Limited
Shah Nominees Pty Ltd
Eagle River Holdings Pty Ltd
Nefco Nominees Pty Ltd
Stevsand Investments Pty Ltd
National Nominees Limited
Crestline Investments Pty Ltd
Manikato Financial Services Pty Ltd
Mr Alfonso Di Lanzo
Mr John Francis Corr
Dr Todd Andrew Silbert
Mr Thomas Francis Corr
Ms Nicole Joan Gallin
Mr David Argyle
Number of
Shares
6,914,577
1,927,084
1,692,708
% Held
15.87
4.42
3.88
1,500,000
1,410,625
1,156,828
1,000,000
800,000
783,000
675,115
660,000
616,000
600,952
581,640
566,000
506,000
500,000
468,313
443,050
417,411
3.44
3.24
2.65
2.29
1.84
1.80
1.55
1.51
1.41
1.38
1.33
1.30
1.16
1.15
1.07
1.02
0.96
23,219,303
53.27
Page 56
Lindian Resources Limited
Additional Shareholder Information
Twenty Largest Optionholders as at 15 September 2010
Options Expiring 31 December 2011 (ASX code: LINOA)
ANZ Nominees Limited
Corporate & Resource Consultants Pty Ltd
Mr Gregory Lowell Smith + Mrs Charmaine Smith
Mr Noel David McEvoy + Mrs Shelley Dawn McEvoy
Mr Patrick Flint
Mr Michael Robert Franco + Mr Robert Mario Franco + Miss Laura Michelle
Franco
Mr Thomas Francis Corr
Mr Michael John King
Amalgamation Sale and Takeover Consultants Pty Ltd < Super Fund A/C>
Amalgamation Sale and Takeover Consultants Pty Ltd < RN & MK Gillard A/C>
Cunningham Peterson Sharbarnee Securities Pty Ltd
Albatross Pass Pty Ltd
Stevsand Investments Pty Ltd
Crestline Investments Pty Ltd
Mikado Corporation Pty Ltd
Manikato Financial Services Pty Ltd
Mr Alfonso Di Lanzo
Mark Anderson Pty Ltd
Eagle River Holdings Pty Ltd
Mr John Francis Corr
Number of
Options
1,605,365
1,519,098
799,325
% Held
12.77
12.08
6.36
550,000
502,334
500,000
500,000
500,000
315,000
309,000
303,334
278,250
220,000
200,318
196,834
193,880
188,667
185,884
185,000
166,667
4.37
3.99
3.98
3.98
3.98
2.51
2.46
2.41
2.21
1.75
1.59
1.57
1.54
1.50
1.48
1.47
1.32
9,218,956
73.32
Unquoted Options
Unquoted options on issue at 15 September 2010 were as follows:
Refer
Note
1
2
3
4
5
Number of
Options
495,000
1,000,000
200,000
350,000
500,000
Exercise Price
Exercise Periods/ Expiry Dates
20 cents
20 cents
30 cents
35 cents
30 cents
On or before 31 December 2010
On or before 1 July 2011
On or before 30 September 2010
On or before 30 September 2010
On or before 31 December 2011
Number of
Holders
4
1
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
4
5
Gavin Argyle
Corporate & Resource Consultants Pty Ltd
Guy Scherrer
Paul Jurman
John V Hamilton
330,000
1,000,000
200,000
350,000
500,000
66.67
100
100
100
100
Page 57