ABN 53 090 772 222
Annual Report
30 June 2011
Lindian Resources Limited
CONTENTS
Corporate Directory
Directors‟ Report
Corporate Governance Statement
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
Directors‟ Declaration
Auditor‟s Independence Declaration
Independent Auditor‟s Report
ASX Additional Information
Tenement Table
PAGE NO
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54
Lindian Resources Limited
CORPORATE DIRECTORY
Directors
Mr. Matthew Wood (Non-Executive Chairman)
Mr. Steven Leithead (Managing Director)
Mr. Scott Funston (Executive Director)
Mr. Brian McMaster (Executive Director)
Mr. Angus Caithness (Non-Executive Director)
Company Secretary
Mr Scott Funston
Registered Office
Level 1
33 Richardson Street
West Perth WA 6005
Telephone: +61 8 9200 4438
Facsimile: +61 8 9200 4469
Share Registry
Computershare Investor Services Pty Ltd
Level 2
45 St Georges Terrace
Perth WA 6000
Telephone:
+61 8 9323 2000
Facsimile:
+61 8 9323 2033
Auditors
RSM Bird Cameron Partners
8 St Georges Terrace
Perth WA 6000
Stock Exchange
Lindian Resources Limited shares
are listed on the Australian Securities
Exchange, the home branch being Perth
ASX code: LIN, LINOA
Lindian Resources Limited
1
2011 Report to Shareholders
Directors’ Report
The Directors present their report for Lindian Resources Limited (“Lindian” or “the Company”) and its subsidiaries for the
year ended 30 June 2011 (“the Group”).
DIRECTORS
The names, qualifications and experience of the Company‟s Directors in office during the period and until the date of this
report are as follows. Directors were in office for this entire period unless otherwise stated.
Mr Matthew Wood (appointed 5 May 2011)
Non-Executive Director, Chairman
Mr. Wood has over 18 years experience in the resource sector with both major and junior resource companies and has
extensive experience in the technical and economic evaluation of resource projects throughout the world. Mr. Wood‟s
expertise is in project identification, negotiation, acquisition and corporate development. Mr. Wood has an honours degree in
geology from the University of New South Wales and a graduate certificate in mineral economics from the Western
Australian School of Mines.
Mr. Wood was a Director of Black Range Minerals Limited (appointed 27 June 2005, resigned 15 May 2009) and Laguna
Resources NL (appointed 6 August 2009, resigned 8 December 2010). Mr. Wood is currently a director of Signature Metals
Limited (appointed 19 February 2007), Avanco Resources Limited (appointed 4 July 2007), Copper Range Limited
(appointed 29 May 2009), Voyager Resources Limited (appointed 12 June 2009), Hunnu Coal Limited (appointed 19 August
2009) and Haranga Resources Limited (appointed 2 February 2010).
Mr Steven Leithead (appointed 5 May 2011)
Managing Director
Mr. Leithead has over 29 years experience in the global resources industry, with a focus on exploration, development,
financing and management of mineral projects in various commodities including gold, copper, coal, uranium, and oil and gas
in Australia, Africa, Asia and the Former Soviet Union. He has a Bachelor of Applied Science degree from Curtin University
and a Masters of Mineral and Energy Economics from Macquarie University.
Mr. Leithead was previously a Director of Global Nickel Investments NL (appointed 26 February 2007, resigned 7 July
2009). He has not had any other listed directorships over the past three years.
Mr Scott Funston (appointed 5 May 2011)
Executive Director
Mr. Funston is a qualified Chartered Accountant and Company Secretary with more than 10 years experience in the mining
industry and the accounting profession. His expertise is financial management, regulatory compliance and corporate advice.
Mr. Funston possesses a strong knowledge of the Australian Securities Exchange requirements and currently assists a
number of resources companies operating throughout Australia, South America, USA and Canada with financial accounting,
stock exchange compliance and regulatory activities.
Mr. Funston is currently a Director of Avanco Resources Limited (appointed 17 March 2009). He has not held any other
listed directorships over the past three years.
Mr Brian McMaster (appointed 20 June 2011)
Executive Director
Mr. McMaster is a Chartered Accountant, a registered and official liquidator and has almost 20 years‟ experience in the area
of corporate reconstruction and turnaround / performance improvement. Mr. McMaster‟s experience includes numerous
reorganisations and turnarounds, including being instrumental in the recapitalisation and listing of 12 Australian companies
Lindian Resources Limited
2
2011 Report to Shareholders
Directors’ Report
on the ASX. Recently, Mr. McMaster was a partner of the restructuring firm Korda Mentha and prior to that was a partner at
Ernst & Young. His experience includes significant working periods in the United States, South America, Asia and India.
Mr. McMaster is currently a Director of Alloy Steel International Incorporated. He has not held any other listed directorships
in the past three years.
Mr Angus Caithness (appointed 31 January 2011)
Non-Executive Director
Mr. Caithness is a Chartered Accountant, member of the Financial Services Institute of Australasia and is currently the Chief
Financial Officer of Hunnu Coal Limited and Joint Company Secretary of Haranga Resources Limited. Mr Caithness was
previously an Executive Director at Ernst & Young and has been providing assurance and transaction advisory services
across the international resources community within established and emerging markets for over 10 years.
Mr. Caithness has no other current or former listed directorships in the past three years.
Mr Paul Jurman (appointed 20 August 2010, resigned 5 May 2011)
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. Mr Jurman is a CPA and holds a Bachelor of Commerce.
Mr Anthony Cunningham (resigned 5 May 2011)
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.
Mr Andrew Philips (resigned 31 January 2011)
Mr. Philips 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.
Mr Reginald Gillard (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.
COMPANY SECRETARY
Mr. Funston is a Director and the Company Secretary of the company.
Lindian Resources Limited
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2011 Report to Shareholders
Directors’ Report
INTERESTS IN THE SECURITIES OF THE COMPANY
As at the date of this report, the interests of the Directors in the securities of Lindian Resources Limited are:
Director
Ordinary
Shares
M. Wood
S. Leithead
S. Funston
A. Caithness
B. McMaster
7,400,000
9,000,000
3,207,500
625,000
-
Listed Options
over Ordinary
Shares
exercisable at 15
cents each
Unlisted Options
over Ordinary
Shares
exercisable at 15
cents each
10,400,000
9,000,000
3,207,500
625,000
-
-
-
-
-
500,000
RESULTS OF OPERATIONS
The Group‟s net loss after taxation attributable to the members for the year to 30 June 2011 was $1,259,828 (2010:
$918,692).
DIVIDENDS
No dividend was paid or declared by the Group during the year and up to the date of this report.
CORPORATE STRUCTURE
Lindian Resources Limited is a company limited by shares, which is incorporated and domiciled in Australia.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
During the financial year, the principal activity was mineral exploration. The Group currently holds base metal projects in
Philippines and Guinea.
REVIEW OF OPERATIONS
HIGHLIGHTS
- Completion of the Bundok Resources Pty Ltd acquisition (Bundok Transaction) resulting in Lindian acquiring (or
obtaining a right to acquire) 5 gold and 2 copper-gold projects in the Philippines.
- Commencement of exploration on the Company‟s flagship Masapelid Project with immediate success.
- High grade gold, silver and base metal assays obtained from underground channel sampling of the former
Davaoeno Mine.
- New gold discovery made following rock chip sampling at the Lunar-Magbanua Prospect.
-
Identification of widespread copper-gold-silver mineralisation at the Sabang Porphyry. Presence of copper, gold
and silver confirmed by underground channel sampling.
- Discovery of the May Tubig Prospect copper prospect with test pitting and sampling confirming copper
mineralisation extending up to 1,000 metres along strike from Sabang.
-
The Company raised approximately $4.29M through a fully underwritten rights issue and placement.
MASAPELID PROJECT
Following completion of the Bundok Transaction on 20 April 2011, the Company immediately commenced exploration on the
Masapelid Project.
With commencement of activities at Masapelid, Lindian recorded immediate exploration success at the Davaoeno and
Lunar-Magbanua gold prospects, and Sabang and May Tubig copper-gold prospects.
Lindian Resources Limited
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2011 Report to Shareholders
Directors’ Report
GOLD
Davaoeno Mine Prospect
Dewatering and underground channel sampling of the former Davaoeno gold mine has produced exceptional results with
assays from sampling across the main Galena Leader gold-silver-base metal vein producing maximum values of:
-
-
-
-
-
65.48g/t gold.
102g/t silver.
1.68% copper.
9.31% lead.
7.13% zinc.
Full results show that whilst gold-silver mineralisation occurs in quartz-sulphide stockwork zones in the hangingwall and
footwall sections of the mineralised mine sequence, consistent higher grade gold and silver mineralisation is associated with
significant copper, lead and zinc mineralisation in the Galena Leader vein zone.
The former Davaoeno Mine is the northeastern most mine, developed historically on the Manuel Vein system. The Manuel
Vein being approximately 1km long and one of the two major gold vein systems mined pre-WWII on Masapelid.
Interpretation of geological, alteration and structural mapping of the Layong and Manuel Vein and surrounding area
suggests that veins hosting gold mineralisation within the Layong and Manuel Vein corridors are vein splits related to a
deeper level, major epithermal gold mineralising vein system.
Shaft No.2
In parallel with work on the Davaoeno mine, work commenced on Shaft No.2 during the June quarter 2011. This No.2 shaft
is situated approximately 800 metres to the southwest and along strike of the Davaoeno Mine. This shaft was one of the
deeper shafts previously developed on the Manuel Vein. At the onset of WWII, the then operator of the mine imploded the
shaft with that action resulting in the shaft filling with mud, rock and mine debris. Shaft No.2 has not been re-entered since
then.
The Company commenced cleanout and re-timbering of this old shaft during June 2011. To the end of the June quarter
2011, a headframe and hoist were installed on the shaft with clean out operations recovering 12 metres of the 30 metre
deep shaft (approximately 100 feet). Lindian intends to access underground workings on the Manuel Vein via Shaft No.2 to
assess the tenor and extent of gold mineralisation in that section of mine sequence.
Consideration is being given to performing similar clean-out and shaft recovering works on the Manuel Vein Main Shaft. The
Main Shaft was developed historically to a depth of 100 metres (approximately 300 feet).
Lunar-Magbanua Prospect
Initial exploration at Masapelid recorded immediate success for the Company with outstanding results obtained from
sampling in an extended area between the historically significant, Manuel and Layong Vein Systems. Seven samples
collected from outcropping, intensively altered and opaline silica flooded host rock at Lunar-Magbanua produced the
following results:
-
-
-
-
-
-
-
3.21g/t gold
6.87 g/t gold
2.68g/t gold
4.78g/t gold
3.75g/t gold
7.45g/t gold
8.41g/t gold
Lindian Resources Limited
5
2011 Report to Shareholders
Directors’ Report
Sampling at Lunar-Magbanua has defined an acute zone of gold mineralisation extending over an area of approximately
400 metres by 50 metres.
Uyajan Prospect
The Uyajan Prospect forms one of several targets proximal to the east coast of Masapelid Island.
Over the last year, local small scale miners have been mining and recovering native gold from surface hardpan, beach
terraces and narrow (0.05-0.50 metre wide) quartz vein and quartz vein stockworks hosted in altered andesite. A rock chip
sample of quartz vein material beneath hardpan was obtained which returned 5.75 g/t gold.
In addition, underground sampling of two narrow (±5cm thick) quartz veins within a quartz vein stockwork zone at Uyajan
has produced 66.77 and 77.14 g/t gold. Given the nature and extent of gold mineralisation in the near surface zone, Lindian
believes that the Uyajan Prospect has very good exploration potential.
COPPER-GOLD
Sabang Copper-Gold Porphyry
The Sabang copper-gold porphyry is located on the southern portion of Masapelid Island and covers the Sabang and May
Tubig porphyries. The prospect contains a copper-gold composite porphyry system previously explored by Western Mining
Corporation in the period 1991-1995.
Sabang Prospect
Preliminary exploration and routine mapping of Sabang earlier this year identified secondary copper mineralisation at
surface in historical small-scale underground excavations. During June 2011, the Company developed 2 adits and
underground drives on copper mineralisation to support exploration activities. Channel sampling of underground workings in
Adit No.1 returned assay results averaging 1.22% copper, 1.32g/t silver and a gold credit of 0.13g/t.
The Sabang copper mineralisation is hosted by a clay-silica-sulphide altered porphyritic andesite in the near surface
environment. Copper sulphides, principally covellite-bornite, occur as fracture fillings and disseminations. Observation of all
exposures shows that the copper sulphide to pyrite ratio is much greater than one. Preliminary findings suggest that near
surface copper mineralisation at Sabang may very well be on the high level core of a significant porphyry copper system.
These results are significant when compared to other copper-gold porphyry systems in the Philippines and worldwide and
the Company believes they demonstrate the substantial potential of the Sabang Porphyry System.
May Tubig Prospect
The recently discovered May Tubig porphyry and intrusive breccia system extends up to 1,000 metres to the west-northwest
of Sabang. The locally significant west-northwest/east-southeast trending Sabang Fault passes through both prospects and
is interpreted to have a controlling influence over copper mineralisation at Sabang and May Tubig.
DIAMOND DRILLING
Lindian commenced diamond drilling of various prospects on the Masapelid Project in June 2011. The objective is to have 4
diamond drilling rigs operating on the project by September 2011 to assess the gold mineralisation potential of the Manuel
and Layong Vein Systems, the Uyajan Prospect and copper-gold potential of the Sabang and May Tubig Prospects.
Lindian Resources Limited
6
2011 Report to Shareholders
Directors’ Report
GUINEA
Dinguiraye Pt-Ni-Cu Project (LIN 92%)
During the year the Company continued to review results of detailed exploration work completed to date to determine
priority targets for the next stage of the exploration programme. The Company is currently considering options for the
Dinguiraye Project.
CORPORATE ACTIVITIES
Bundok Acquisition
Lindian completed the acquisition of Bundok Resources Pty Ltd (Bundok) for the issue of 50,000,000 shares and
50,000,000 listed options (exercise price 15 cents expiry date 31 December 2011). As a result of the Bundok transaction,
Lindian has acquired (or has the option to purchase rights to acquire) a portfolio of 5 prospective gold projects and 2
porphyry copper-gold exploration projects in the Philippines.
Capital Raising
On 18 May 2011, the Company advised that it had completed a placement of 30,000,000 Shares at an issue price of 8 cents
per share and 30,000,000 listed Options (exercisable at 15 cents each on or before 31 December 2011) to sophisticated
and institutional investors, raising $2.4M.
In April 2011 and prior to completion of the Bundok Transaction, Lindian announced a fully underwritten non-renounceable
entitlement issue on the basis of one share for every two shares, together with one free attaching listed option for every one
share subscribed for, raising approximately $1.89M.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the consolidated entity during the financial year were as follows:
-
In February 2011, the Company entered into an agreement to acquire Bundok Resources Pty Ltd (Bundok) in
consideration of the issue of 50,000,000 Lindian Shares and 50,000,000 Lindian listed options to the Bundok
shareholders as vendors. Completion of the agreement was subject to various conditions including Shareholder
approval, completion of due diligence and Lindian becoming entitled to acquire 100% of Bundok as a result of
Bundok shareholders accepting the offers to be made to them by Lindian. These conditions were met and the
completion of the Bundok acquisition was effected in May 2011. The Bundok acquisition results in Lindian gaining
rights to a portfolio of 5 prospective gold projects and 2 porphyry copper-gold exploration projects in the
Philippines, through Bundok‟s wholly owned Philippine subsidiary Bundok Mineral Resources Corporation.
-
In March 2011, the Company issued a prospectus pursuant to a fully underwritten, pro-rata (on the basis of one
share for every two shares held plus one free attaching option) non-renounceable entitlement issue of shares (at a
price of 8 cents per share). The issue closed on 29 March 2011and 17,225,054 shares and options were allotted,
the shortfall of 6,393,013 shares and options were allocated and allotted by the underwriter CPS Securities.
-
In May 2011, the Company completed a placement to raise $2.4 million through the issue of 30 million shares with
one free attaching option per share.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
There were no known significant events from the end of the financial year to the date of this report.
Lindian Resources Limited
7
2011 Report to Shareholders
Directors’ Report
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Directors have excluded from this report any further information on the likely developments in the operations of the
Company and the expected results of those operations in future financial years, as the Directors believe that it would be
speculative and prejudicial to the interests of the Company.
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The Group carries out operations that are subject to environmental regulations under legislation in Philippines. The Group
has formal procedures in place to ensure regulations are adhered to. The Group is not aware of any breaches in relation to
environmental matters.
SHARE OPTIONS
As at the date of this report, there were 137,529,001 unissued ordinary shares under options (138,530,161 at the reporting
date). The details of the options at the date of this report are as follows:
Number
Exercise Price $
Expiry Date
500,000
136,529,001
500,000
137,529,001
0.30
0.15
0.15
31 December 2011
31 December 2011
14 June 2016
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
During the financial year 127,618,067 listed options with an exercise price of 15 cents, expiring on 31 December 2011 were
issued and 500,000 unlisted options with an exercise price of 15 cents, expiring on 14 June 2016 were issued.
3,662,213 options with an exercise price of 15 cents, expiring on 31 December 2011 were exercised during the financial
year. 1,160 options with an exercise price of 15 cents, expiring on 31 December 2011 have been exercised since year end.
The following options have lapsed during or since the end of the financial year:
-
-
-
-
200,000 options exercisable at 30 cents lapsed on 30 September 2010.
350,000 options exercisable at 35 cents lapsed on 30 September 2010.
495,000 options exercisable at 20 cents lapsed on 31 December 2010.
1,000,000 options exercisable at 20 cents lapsed on 1 July 2011.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has made an agreement indemnifying all the Directors and officers of the Company against all losses or
liabilities incurred by each Director or officer in their capacity as Directors or officers of the Company to the extent permitted
by the Corporation Act 2001. The indemnification specifically excludes wilful acts of negligence. The Company paid
insurance premiums in respect of Directors‟ and Officers‟ Liability Insurance contracts for current officers of the Company,
including officers of the Company‟s controlled entities. The liabilities insured are damages and legal costs that may be
incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of
entities in the Group. The total amount of insurance premiums paid has not been disclosed due to confidentiality reasons.
Lindian Resources Limited
8
2011 Report to Shareholders
Directors’ Report
DIRECTORS’ MEETINGS
During the financial year, in addition to regular Board discussions, the number of meetings of directors held during the year
and the number of meetings attended by each director were as follows:
Director
Eligible to Attend
Attended
Number of Meetings
Number of Meetings
Mr. Matthew Wood
Mr. Steven Leithead
Mr. Scott Funston
Mr. Angus Caithness
Mr. Brian McMaster
Mr. Paul Jurman
Mr. Anthony Cunningham
Mr. Andrew Philips
Mr. Reginald Gillard
-
-
-
-
-
1
1
1
-
-
-
-
-
-
1
1
1
-
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Lindian
Resources Limited support and have adhered to the principles of sound corporate governance. The Board recognises the
recommendations of the Australian Securities Exchange Corporate Governance Council, and considers that Lindian
Resources is in compliance with those guidelines to the extent possible, which are of importance to the commercial
operation of a junior listed resources company. During the financial year, shareholders continued to receive the benefit of an
efficient and cost-effective corporate governance policy for the Company. The Company‟s Corporate Governance Statement
and disclosures are contained elsewhere in the annual report.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Company‟s auditors to provide the Directors of Lindian Resources
Limited with an Independence Declaration in relation to the audit of the full year financial report. A copy of that declaration is
included within this report.
There were no non audit services provided by the Company‟s auditor.
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for directors and executives of Lindian Resources Limited in
accordance with the requirements of the Corporation Act 2001 and its Regulations. For the purpose of this report, Key
Management Personnel (KMP) of the Company are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Group, directly or indirectly, including any director (whether
executive or otherwise) of the Group, and includes the executives in the Company receiving the highest remuneration.
Lindian Resources Limited
9
2011 Report to Shareholders
Directors’ Report
Details of Key Management Personnel
Mr. Matthew Wood
Mr. Steven Leithead
Mr. Scott Funston
Mr. Brian McMaster
Non-Executive Chairman
Executive Director
Executive Director, Company Secretary
Executive Director
Mr. Angus Caithness
Non-Executive Director
Mr. Anthony Cunningham
Former Chairman
Mr. Paul Jurman
Mr. Andrew Philips
Former Non-Executive Director, Company Secretary
Former Non-Executive Director
Mr. Reginald Gillard
Former Chairman
Remuneration Policy
The Board is responsible for determining and reviewing compensation arrangements for the Directors. The Board assesses
the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant
employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a
high quality board and executive team. The Group does not link the nature and amount of the emoluments of such officers
to the Group‟s financial or operational performance. The expected outcome of this remuneration structure is to retain and
motivate Directors.
The rewards for Directors‟ have no set or pre-determined performance conditions or key performance indicators as part of
their remuneration due to the current nature of the business operations. The Board determines appropriate levels of
performance rewards as and when they consider rewards are warranted. The Group has no policy on executives and
directors entering into contracts to hedge their exposure to options or shares granted as part of their remuneration package.
The table below shows the performance of the Group as measured by loss per share for the past five financial years:
As at 30 June
Loss per share (cents)
2011
(2.07)
2010
(2.20)
2009
(3.14)
2008
(2.10)
2007
(6.22)
Lindian Resources Limited
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2011 Report to Shareholders
Directors’ Report
Details of the nature and amount of each element of the emolument of each Director and Executive of the Group for the
financial year are as follows:
Short term
Options
Post
employment
2011
Base
Directors Consulting
Share based
Option
Director
Mr. Matthew Wood *
Mr. Steve Leithead *
Mr. Scott Funston *
Mr. Angus Caithness *
Mr. Brian McMaster *
Salary
$
-
-
-
-
-
Mr. Paul Jurman #
15,329
Mr. Anthony
Cunningham ^
Mr. Andrew Philips ^
Mr. Reginald Gillard ^
23,333
11,667
4,192
54,521
Fees
$
-
-
-
-
-
-
-
-
-
-
Fees
Payments
Superannuation
Total
Related
$
20,000
40,000
20,000
10,000
850
-
-
-
-
$
-
-
-
-
41,384
-
-
-
-
$
-
-
-
-
-
1,380
2,100
1,050
377
$
20,000
40,000
20,000
10,000
42,234
16,709
25,433
12,717
4,569
%
-
-
-
-
98%
-
-
-
-
90,850
41,384
4,907
191,662
* Mr. Wood, Mr. Leithead and Mr. Funston were appointed on 5 May 2011, Mr. Caithness was appointed on 31 January 2011 and Mr
McMaster was appointed on 20 June 2011.
^ Mr. Cunningham resigned on 5 May 2011, Mr. Philips resigned on 31 January 2011 and Mr. Gillard resigned on 20 August 2010.
# Mr. Jurman was appointed as a Director on 20 August 2010, previous to this he was an executive in his capacity as Company Secretary.
Mr. Jurman resigned as a Director on 5 May 2011.
Short term
Options
Post
employment
2010
Base
Directors Consulting
Share based
Option
Director
Mr. Reginald Gillard
Mr. Anthony
Cunningham
Mr. Andrew Philips *
Mr. Gregory Smith ^
Mr. Patrick Flint ^
Executive
Mr. Paul Jurman
Salary
$
30,000
20,000
7,083
89,881
12,976
10,000
169,940
Fees
$
-
-
-
-
-
-
-
* Mr. Philips was appointed on 19 February 2010
^ Mr. Smith and Mr. Flint resigned on 19 February 2010
Fees
Payments
Superannuation
Total
Related
$
%
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
$
2,700
1,800
637
5,839
1,168
32,700
21,800
7,720
95,720
14,144
900
10,900
13,044
182,984
-
-
-
-
-
-
There were no other executive officers of the Group during the financial years ended 30 June 2011 and 30 June 2010. No
remuneration is performance related. The share options issued were not subject to a performance hurdle as these options
were issued as a form of retention bonus and incentive package. There were no options issued to KMPs as part of
remuneration during the year ended 30 June 2010.
There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There were
no forfeitures during the period. No remuneration options were exercised for the year ended 30 June 2011 or for the year
ended 30 June 2010.
Lindian Resources Limited
11
2011 Report to Shareholders
Directors’ Report
Executive Directors
Mr. Leithead is paid an annual fee of $240,000 per annum. The agreement commenced on 1 June 2011 and is for a term of
two years unless extended by both parties. Mr. Leithead may terminate the agreement by giving three months written notice.
The Company may terminate the agreement by giving three months written notice or by paying an amount equivalent to
three months fees (based on agreed consulting fee) or without notice in the case of serious misconduct.
Mr. Scott Funston and Mr. Brian McMaster are paid an annual consulting fee on a monthly basis. Their services may be
terminated by either party at any time.
Non Executive Director
The Non Executive Directors, Mr. Matthew Wood and Mr. Angus Caithness are paid an annual consulting fee on a monthly
basis. Their services may be terminated by either party at any time.
The aggregate remuneration for non-executive Directors has been set at an amount not to exceed $150,000 per annum.
This amount may only be increased with the approval of Shareholders at a general meeting.
Service Agreements
The Group has entered into a service agreement for certain administrative services and office space for a term of two years
with Garrison Capital Pty Ltd, a company of which Mr. Wood and Mr. McMaster are Directors. The Group is required to give
three months written notice to terminate the agreement.
Signed on behalf of the board in accordance with a resolution of the Directors.
Steven Leithead
Director
19 September 2011
Competent Person Statement
The information in this report that relates to Mineral Resources and Exploration Results are based on information compiled by Mr Steven
Leithead who is a Member of the Australian Institute of Mining and Metallurgy. Mr Leithead is a Director of Lindian Resources Limited. Mr
Leithead has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves‟. Mr Leithead consents to the inclusion in the report of the matters based on his information
in the form and context in which it appears.
Lindian Resources Limited
12
2011 Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Lindian Resources Limited (“Lindian Resources” or “the Company”) is responsible for corporate
governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the
shareholders by whom they are elected and to whom they are accountable.
Upon listing, the Company established a set of corporate governance policies and procedures. These were based on the
Australian Securities Exchange Corporate Governance Council‟s (the Council‟s) “Principles of Good Corporate Governance
and Best Practice Recommendations” (the Recommendations). In accordance with the Council‟s recommendations, the
Corporate Governance Statement must now contain certain specific information and must disclose the extent to which the
company has followed the guidelines during the period. Where a recommendation has not been followed, that fact must be
disclosed, together with the reasons for the departure. For further information on corporate governance policies adopted by
the Company, refer to our website: www.lindianresources.com.au
Structure of the Board
The skills, experience and expertise relevant to the position of Director held by each Director in office at the date of the
annual report is included in the Directors‟ Report. Directors of the Company are considered to be independent when they
are independent of management and free from any business or other relationship that could materially interfere with, or
could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.
The Board has accepted the following definition of an Independent Director:
“An Independent Director is a Director who is not a member of management, is a Non-executive Director and who:
is not a substantial shareholder (under the meaning of Corporations Law) of the Company or an officer of, or
otherwise associated, directly or indirectly, with a substantial shareholder of the Company;
has not within the last three years been employed in an executive capacity by the Company or another Company
member, or been a Director after ceasing to hold any such employment;
is not a principal of a professional adviser to the Company or another Company member;
is not a significant consultant, supplier or customer of the Company or another Company member, or an officer of or
otherwise associated, directly or indirectly, with a significant consultant, supplier or customer;
has no significant contractual relationship with the Company or another Company member other than as a Director of
the Company;
is free from any interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the Director‟s ability to act in the best interests of the Company.”
In accordance with the definition of independence above, Mr. Caithness is considered an Independent Director. Accordingly,
a majority of the board is not considered independent.
There are procedures in place, as agreed by the board, to enable Directors to seek independent professional advice on
issues arising in the course of their duties at the company‟s expense. The term in office held by each Director in office at the
date of this report is as follows:
Name
Matthew Wood
Steve Leithead
Scott Funston
Brian McMaster
Anguus Caithness
Term in office
5 months
5 months
5 months
3 months
9 months
Lindian Resources Limited
13
2011 Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
Nomination Committee
The Board 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 of the Directors must retire and offer themselves for re-election.
This selection, nomination and appointment process is detailed on the company website.
Audit and Risk Management Committee
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. At such time when
the Company is of sufficient size a separate Audit and Risk Management Committee will be formed.
It is the Board‟s responsibility to ensure that an effective internal control framework exists within the entity. This includes
both internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding
of assets, the maintenance of proper accounting records, and the reliability of financial and non-financial information. It is
the Board‟s responsibility for the establishment and maintenance of a framework of internal control of the Company.
Performance
The Board of Lindian Resources conducts its performance review of itself on an ongoing basis throughout the year. The
small size of the company and hands on management style requires an increased level of interaction between directors and
executives throughout the year. Board members meet amongst themselves both formally and informally. The Board
considers that the current approach that it has adopted with regard to the review of its performance provides the best
guidance and value to the Company.
Remuneration
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.
Lindian Resources Limited
14
2011 Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
Executives
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.
For details of remuneration paid to Directors and officers for the financial year please refer to the Directors‟ Report in these
Financial Statements.
Trading Policy
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.
Assurance
The CEO and CFO (or equivalent) periodically provide formal statements to the Board that in all material aspects:
the company‟s financial statements present a true and fair view of the company‟s financial condition and
operational results; and
the risk management and internal compliance and control systems are sound, appropriate and operating efficiently
and effectively.
This assurance forms part of the process by which the Board determines the effectiveness of its risk management and
internal control systems in relation to financial reporting risks.
Shareholder Communication Policy
Pursuant to Principle 6, the Company‟s objective is to promote effective communication with its shareholders at all times.
Lindian Resources Limited is committed to:
Ensuring that shareholders and the financial markets are provided with full and timely information
Complying with continuous disclosure obligations contained in the ASX listing rules and the Corporations Act in Australia
Communicating effectively with its shareholders and making it easier for shareholders to communicate with the
Company
To promote effective communication with shareholders and encourage effective participation at general meetings,
information is communicated to shareholders:
Through the release of information to the market via the ASX
Through the distribution of the annual report and notices of annual general meeting
Through shareholder meetings and investor relations presentations
Lindian Resources Limited
15
2011 Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
Through letters and other forms of communications directly to shareholders
By posting relevant information on the Company‟s website: www.lindianresources.com.au
The external auditors are required to attend the annual general meeting and are available to answer any shareholder
questions about the conduct of the audit and preparation of the audit report.
Corporate Governance Compliance
During the financial year Lindian Resources has complied with each of the 8 Corporate Governance Principles and the
corresponding Best Practice Recommendations, other than in relation to the matters specified below:
Best Practice
Recommendation
Notification of Departure
Explanation of Departure
2.1
2.2
2.4
The Company does not have a
The Directors consider that the current structure and
majority of independent directors
composition of the Board is appropriate to the size
and nature of operations of the Company.
The Chairman is not an
The Directors consider that the current structure and
independent director
composition of the Board is appropriate to the size
The Group does not have a
The role of the Nomination Committee has been
Nomination Committee
assumed by the full Board.
and nature of operations of the Company.
4.1 and 4.2
The Group does not have an
The role of the Audit and Risk Management
Audit and Risk Management
Committee has been assumed by the full Board.
8.1
8.2
Committee
The Group does not have a
The role of the Remuneration Committee has been
Remuneration Committee
assumed by the full Board.
Non-executive directors receive
To attract and retain an independent Non-executive
options as a part of
director with sufficient skills and experience to the
remuneration.
Company, incentive options were required as part of
the remuneration package.
Lindian Resources Limited
16
2011 Report to Shareholders
Lindian Resources Limited
Statement of Comprehensive Income for the year ended 30 June 2011
Notes
Revenue
Interest income
Foreign exchange gain
Total Revenue
Bad debt expense
Depreciation expense
Consulting and directors fees
Exploration expenditure written off
Foreign exchange loss
Share based payments
Administration expenses
Loss from continuing operations before
income tax
Income tax expense
10
4
5
Loss from continuing operations after income
tax
Other Comprehensive Income/(loss)
Foreign currency translation
Other comprehensive (loss) for the year
Consolidated
2011
$
146,178
52
2010
$
81,421
27,275
146,230
108,696
-
(1,568)
(214,233)
(823,681)
-
(41,384)
(88,076)
(9,439)
(182,985)
(493,738)
(1,032)
-
(325,192)
(252,118)
(1,259,828)
(918,692)
-
-
(1,259,828)
(918,692)
(3,488)
(3,488)
(57,781)
(57,781)
Total comprehensive(loss) for the year
(1,263,316)
(976,473)
Loss per share attributable to owners of
Lindian Resources Limited
(1,263,316)
(976,473)
Basic and diluted loss per share (cents per share)
20
(2.07)
(2.20)
Lindian Resources Limited
17
2011 Report to Shareholders
Lindian Resources Limited
Statement of Financial Position as at 30 June 2011
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Deferred exploration and evaluation expenditure
Notes
6
7
9
10
Consolidated
2011
$
2010
$
6,172,982
2,215,636
88,765
6,732
6,261,747
2,222,368
22,541
4,323
5,798,164
803,477
TOTAL NON-CURRENT ASSETS
5,820,705
807,800
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
12,082,452
3,030,168
11
221,571
33,600
221,571
33,600
221,571
33,600
11,860,881
2,996,568
21,873,379
13,637,134
3,149,189
1,261,293
(13,161,687)
(11,901,859)
11,860,881
2,996,568
12
13
14
Lindian Resources Limited
18
2011 Report to Shareholders
Lindian Resources Limited
Statement of Cash Flows for the year ended 30 June 2011
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Consolidated
2011
$
2010
$
(480,225)
(423,222)
132,564
77,169
NET CASH USED IN OPERATING ACTIVITIES
6
(347,661)
(346,053)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Expenditure on exploration
Cash acquired on acquisition of subsidiary
Loans to related parties
(24,104)
(3,025)
(133,608)
(658,192)
38,205
(98,746)
-
-
NET CASH USED IN INVESTING ACTIVITIES
(218,253)
(661,217)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from issue of options
Share issue costs
4,838,777
1,719,879
-
126,093
(315,569)
(136,193)
NET CASH FROM FINANCING ACTIVITIES
4,523,208
1,709,779
Net increase in cash held
Cash and cash equivalents at beginning of period
Effect of foreign exchange on cash
CASH AND CASH EQUIVALENTS AT END OF
3,957,294
2,215,636
52
702,509
1,514,160
(1,033)
THE FINANCIAL YEAR
6
6,172,982
2,215,636
Lindian Resources Limited
19
2011 Report to Shareholders
Lindian Resources Limited
Statement of Changes in Equity for the year ended 30 June 2011
Consolidated
At 1 July 2009
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners in their
capacity as owners
Issue of ordinary shares
Share based payments
Elimination of minority interest on
disposal of controlled entity
At 1 July 2010
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners in their
capacity as owners
Issue of ordinary shares
Share based payments
Options issued on acquisition of
subsidiary
Issued capital
$
Accumulated
losses
$
Foreign
Currency
Translation
Reserve
$
Option
reserves
$
12,059,878
(10,983,167)
57,781
-
-
-
(918,692)
-
(918,692)
(57,781)
(57,781)
Share based
payment
reserves
$
1,130,200
Minority
Equity
Interest
$
15,283
-
-
-
-
-
-
-
-
-
126,093
5,000
-
-
-
-
126,093
1,135,200
126,093
1,135,200
-
-
-
-
-
1,250,000
-
-
-
-
641,384
-
-
-
-
-
-
-
(15,283)
-
-
-
-
-
-
-
-
-
-
-
Total
$
2,279,975
(918,692)
(57,781)
(976,473)
1,719,879
131,093
(15,283)
(142,623)
2,996,568
2,996,568
(1,259,828)
(3,488)
(1,263,316)
8,838,777
641,384
1,250,000
(602,532)
11,860,881
1,719,879
-
-
8,838,777
-
-
13,637,134
(11,901,859)
-
-
-
(1,259,828)
-
(1,259,828)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,488)
(3,488)
-
-
-
-
Transaction costs on share issue
(142,623)
At 30 June 2010
13,637,134
(11,901,859)
Transaction costs on share issue
(602,532)
At 30 June 2011
21,873,379
(13,161,687)
(3,488)
1,376,093
1,776,584
Lindian Resources Limited
20 2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
1.
Corporate Information
The financial report of Lindian Resources Limited (“Lindian Resources” or “the Company”) and its controlled entities (“the Group”
or “ Consolidated” ) for the year ended 30 June 2011 was authorised for issue in accordance with a resolution of the directors on
19 September 2011.
Lindian Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange.
The separate financial statements of the parent entity, Lindian Resources Limited, have not been presented within this financial
report as permitted by the Corporations Act 2001.
The nature of the operations and the principal activities of the Group are described in the Directors‟ Report.
2. Summary of Significant Accounting Policies
(a)
Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001.
The financial report has been prepared on an accrual 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. Material accounting policies
adopted in preparation of this financial report are presented below and have been consistently applied unless otherwise stated.
The presentation currency is Australian dollars.
(b)
Compliance statement
Australian Accounting Standards set out accounting polices that the AASB has concluded would result in a financial report
containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting
Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.
(c)
New accounting standards and interpretations issued but yet effective
The following applicable accounting standards and interpretations have been issued or amended but are not yet effective. These
standards have not been adopted by the Group for the year ended 30 June 2011, and no change to the Group‟s accounting
policy is required:
Reference
Title
Summary
AASB 9
Financial Instruments AASB 9 includes requirements for the
classification and measurement of
financial assets resulting from the first
part of Phase 1 of the IASB‟s project to
replace IAS 39 Financial Instruments:
Recognition and Measurement (AASB
139 Financial Instruments: Recognition
and Measurement).
These requirements improve and simplify
the approach for classification and
measurement of financial assets
compared with the requirements of AASB
Impact on Group’s
financial report
The Group has not yet
determined the impact on
the Group‟s financial
statements.
Application
date for
Group
1 July 2013
Lindian Resources Limited
21
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
Reference
Title
Summary
Impact on Group’s
financial report
Application
date for
Group
139. The main changes from AASB 139
are described below.
(a) Financial assets are classified
based on (1) the objective of the
entity‟s business model for
managing the financial assets; (2)
the characteristics of the
contractual cash flows. This
replaces the numerous categories
of financial assets in AASB 139,
each of which had its own
classification criteria.
(b) AASB 9 allows an irrevocable
election on initial recognition to
present gains and losses on
investments in equity instruments
that are not held for trading in other
comprehensive income. Dividends
in respect of these investments that
are a return on investment can be
recognised in profit or loss and
there is no impairment or recycling
on disposal of the instrument.
(c) Financial assets can be designated
and measured at fair value through
profit or loss at initial recognition if
doing so eliminates or significantly
reduces a measurement or
recognition inconsistency that
would arise from measuring assets
or liabilities, or recognising the
gains and losses on them, on
different bases.
The revised AASB 124 simplifies the
definition of a related party, clarifying its
intended meaning and eliminating
inconsistencies from the definition,
including:
(a)
The definition now identifies a
subsidiary and an associate with
the same investor as related parties
of each other
(b) Entities significantly influenced by
one person and entities significantly
influenced by a close member of
the family of that person are no
longer related parties of each other
(c) The definition now identifies that,
whenever a person or entity has
both joint control over a second
entity and joint control or significant
influence over a third party, the
second and third entities are related
to each other
A partial exemption is also provided from
the disclosure requirements for
government-related entities. Entities that
are related by virtue of being controlled
by the same government can provide
reduced related party disclosures.
AASB 124
(Revised)
Related Party
Disclosures
(December 2009)
The Group has not yet
determined the impact on
the Group‟s financial
statements.
1 July 2011
The Group has not elected to early adopt any new Standards or Interpretations.
Lindian Resources Limited
22
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(d)
Changes in accounting policies and disclosures
In the year ended 30 June 2011, the Group has reviewed all of the new and revised Standards and Interpretations issued by the
AASB that are relevant to its operations and effective for the current annual reporting period.
It has been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and
Interpretations on its business and, therefore, no change is necessary to Group accounting policies.
(e)
Basis of Consolidation
The consolidated financial statements comprise the financial statements of Lindian Resources Limited and its subsidiaries as at
30 June each year („the Company‟).
Subsidiaries are all those entities (including special purpose entities) over which the Company has the power to govern the
financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether a Company controls another entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, using consistent
accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit
and losses resulting from intra-company transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Company and cease to be consolidated from
the date on which control is transferred out of the Company.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting
involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any
non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their
acquisition date fair values.
The difference between the above items and the fair value of the consideration (including the fair value of any pre-existing
investment in the acquiree) is goodwill or a discount on acquisition.
A change in the ownership interest of a subsidiary that does not result in a loss of control, is accounted for as an equity
transaction.
(f)
Foreign Currency Translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Company‟s entities are measured using the currency of the primary
economic environment in which the entity operates („the functional currency‟). The functional and presentation currency of
Lindian Resources Limited is Australian dollars. The functional currency of the overseas subsidiaries is Philippine Peso.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of
comprehensive income.
Lindian Resources Limited
23
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(iii) Group entities
The results and financial position of all the Company entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
assets and liabilities for each statement of financial position presented are translated at the closing rate
at the date of that statement of financial position;
income and expenses for each statement of comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are taken to foreign
currency translation reserve.
When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such
exchange differences are recognised in the statement of comprehensive income, as part of the gain or loss on sale where
applicable.
(g)
Plant and Equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment
losses.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. Repairs and maintenance expenditure is charged to the statement of comprehensive income during the financial period
in which it is incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight line basis over their useful lives to the Group commencing
from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
25% – 33%
Furniture, Fixtures and Fittings
Computer and software
Motor Vehicles
15 %
33 %
25 %
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position
date.
Derecognition
Additions of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from
its use or disposal.
Lindian Resources Limited
24
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
recognised in the statement of comprehensive income.
(h)
Impairment of non financial assets other than goodwill
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset‟s recoverable
amount. An asset‟s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for
an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets of
the Group and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for
impairment as part of the cash generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable
amount.
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. Impairment losses relating to
continuing operations are recognised in the statement of comprehensive income.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously
recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset‟s
recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is
increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in profit or loss.
After such a reversal the depreciation charge is adjusted in future periods to allocate the asset‟s revised carrying amount, less
any residual value, on a systematic basis over its remaining useful life.
(i)
Exploration expenditure
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest.
Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include
general overheads or administrative expenditure not having a specific nexus with a particular area of interest.
Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining
operation.
Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one of the following
conditions is met:
such costs are expected to be recouped through successful development and exploitation of the area of interest or,
alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in
relation to the area are continuing.
Expenditure which fails to meet the conditions outlined above is written off, furthermore, the directors regularly review the
carrying value of exploration and evaluation expenditure and make write downs if the values are not expected to be recoverable.
Lindian Resources Limited
25
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
Identifiable exploration assets acquired are recognised as assets at their cost of acquisition.
Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset acquired, is
accounted for in accordance with the policy outlined above for exploration expenditure incurred by or on behalf of the entity.
Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not expected to
be recovered.
When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off.
Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Group‟s rights of tenure to that
area of interest are current.
(j)
Trade and Other Receivables
Trade receivables, which generally have 30 – 90 day terms, are recognised and carried at original invoice amount less an
allowance for any uncollectible amounts.
An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when
identified.
(k)
Cash and Cash Equivalents
Cash and cash equivalent in the statement of financial position include cash on hand, deposits held at call with banks and other
short term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown as current
liabilities in the statement of financial position. For the purpose of the statement of cash flows, cash and cash equivalents consist
of cash and cash equivalents as described above and bank overdrafts.
(l)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that 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.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to
any provision is presented in the statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money, and where appropriate, the risks specific to the
liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(m)
Trade and other payables
Liabilities for trade creditors and other amounts are measured at amortised cost, which is the fair value of the consideration to be
paid in the future for goods and services received that are unpaid, whether or not billed to the Group.
Lindian Resources Limited
26
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(n)
Income Tax
Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and liabilities and
their carrying amounts for financial reporting purposes.
No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.
No deferred income tax will be recognised in respect of temporary differences associated with investments in subsidiaries if the
timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not
reverse in the near future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled.
Deferred tax is charged or credited in the statement of comprehensive income except where it relates to items that may be
charged or credited directly to equity, in which case the deferred tax is adjusted directly against equity.
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 future tax profits will be available against which deductible temporary
differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on tax rates (and tax laws) that have
been enacted or substantially enacted at the balance date and the anticipation that the Group will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
The carrying amount of deferred tax assets is reviewed at each balance date and only recognised to the extent that sufficient
future assessable income is expected to be obtained.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive
income.
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.
(o)
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. Incremental costs directly attributable to the issue of new shares or options
are deducted from equity.
(p)
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue is
capable of being reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Interest income
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial
asset.
Lindian Resources Limited
27
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(q)
Segment Information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors of Lindian Resources Limited.
(r)
Basic earnings per share
Earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company, excluding any
costs of servicing equity other than dividends, by the weighted average number of ordinary shares, adjusted for any bonus
elements.
Diluted earnings per share
Diluted earnings per share is calculated as net profit or loss attributable to members of the Company, adjusted for:
•
•
•
costs of servicing equity (other than 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
elements.
(s)
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the
asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of
GST.
The net amount of GST recoverable from, or payable to, the Australian Tax Office is included as part of receivables or payables
in the statement of financial position.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing
activities, which is receivable from or payable to the ATO, are disclosed as operating cash flows.
(t)
Share based payment transactions
The group provides benefits to individuals acting as, and providing services similar to employees (including Directors) of the
group in the form of share based payment transactions, whereby individuals render services in exchange for shares or rights over
shares („equity settled transactions‟).
There is currently an Employee Share Option Plan (ESOP) in place, which provides benefits to Directors and individuals
providing services similar to those provided by an employee.
The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they
are granted. The fair value is determined by using the Black Scholes formula, taking into account the terms and conditions upon
which the instruments were granted.
Lindian Resources Limited
28
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price
of the shares of Lindian Resources Limited („market conditions‟).
The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the
award („vesting date‟).
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 number of awards that, in the opinion of the Directors of the group, will
ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the
likelihood of the 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 at the beginning and end of the period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market
condition.
Where 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 increase in the value of the transaction as a result of the modification, as
measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expens e 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 cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods and services
received unless this cannot be measured reliably, in which case the cost is measured by reference to the fair value of the equity
instruments granted.
(u)
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, includin g
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and
evaluation asset through sale.
Factors which could impact the future recoverability include the level of proved, probable and inferred mineral resources, future
technological changes which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
Lindian Resources Limited
29
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will
reduce profits and net assets in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it
is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the
period in which this determination is made.
Share based payment transactions
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black Scholes formula, taking into
account the terms and conditions upon which the instruments were granted.
3.
Segment Information
For management purposes, the Group is organised into one main operating segment, which involves mining exploration for gold
and copper. All of the Group‟s activities are interrelated, and discrete financial information is reported to the Board (Chief
Operating Decision Makers) as a single segment.
Revenues of approximately Nil (2010 - Nil) are derived from a single external customer.
Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from
this segment are equivalent to the financial statements of the Group as a whole. Total revenue earned by the Group is generated
in Australia and all of the Group‟s non-current assets reside in the Philippines.
Lindian Resources Limited
30
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
4.
Other Expenses
Accounting and audit fees
Insurance
Occupancy
Legal fees
Listing and share registry costs
Travel
Printing and stationary
Other
Total other expenses
5.
Income Tax
(a) Income tax expense
Major component of tax expense for the year:
Current tax
Deferred tax
Consolidated
2011
$
2010
$
68,506
8,751
20,000
111,748
54,988
25,114
7,975
28,110
82,870
9,534
3,043
3,001
31,453
37,890
5,370
78,957
325,192
252,118
-
-
-
-
-
-
(b) Numerical reconciliation between aggregate tax
expense recognised in the statement of comprehensive
income and tax expense calculated per the statutory
income tax rate.
A reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Group‟s
applicable tax rate is as follows:
Loss from continuing operations before income tax expense
(1,259,828)
(918,692)
Tax at the group rate of 30%
Non-deductible expenses
Income tax benefit not brought to account
Income tax expense
(377,948)
(275,608)
260,077
117,871
-
93,755
181,853
-
Lindian Resources Limited
31
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(c) Deferred tax
The following deferred tax balances have not been brought
to account:
Liabilities
Capitalised exploration and evaluation expenditure
Offset by deferred tax assets
Deferred tax liability recognised
Assets
Losses available to offset against future taxable income
Share issue costs deductible over five years
Accrued expenses
Deferred tax assets offset against deferred tax liabilities
Deferred tax assets not brought to account as realisation is
not regarded as probable
Deferred tax asset recognised
(d) Unused tax losses
Unused tax losses
Potential tax benefit not recognised at 30%
The benefit for tax losses will only be obtained if:
Consolidated
2011
$
2010
$
1,739,449
241,043
(1,739,449)
(241,043)
-
-
4,576,457
2,804,464
114,906
9,255
86,017
3,912
(1,739,449)
(241,043)
(2,961,169)
(2,653,350)
-
-
9,870,563
8,844,500
2,961,169
2,653,350
(i)
the Group derives future assessable income in Australia and Philippines of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised, and
(ii)
(iii)
the Group continues to comply with the conditions for deductibility imposed by tax legislation in Australia and
no changes in tax legislation in Australia or the Philippines, adversely affect the Group in realising the benefit from
the deductions for the losses.
Lindian Resources Limited
32
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
6.
Cash and Cash Equivalents
Reconciliation of Cash
Cash comprises of:
Cash at bank
Short term deposits
Cash at bank
Reconciliation of operating loss after tax to net the cash
flows from operations
Loss after tax
Non cash items
Share based payment
Depreciation and impairment charges
Exploration expenditure written off
Bad debts written off
Foreign currency loss / (gain)
Change in assets and liabilities
Trade and other receivables
Trade and other payables
Net cash outflow from operating activities
(b) Non-cash financing and investing activities
During the financial year the company:
Consolidated
2011
$
2010
$
3,172,982
41,391
3,000,000
2,174,245
6,172,982
2,215,636
(1,259,828)
(918,692)
41,384
5,891
-
9,439
823,681
493,738
-
88,076
1,113
(24,706)
(36,135)
76,233
4,782
1,310
(347,661)
(346,053)
(i) acquired 100% of the issued capital of Bundok Resources Pty Ltd and its subsidiaries, the consideration being the
issue of 50,000,000 ordinary fully paid shares and 50,000,000 listed options. The company also paid 12,000,000
listed options as introductory fee for the acquisition. The fair value of the consideration at date of acquisition was
$5,550,000. Refer to note 25 for details of acquisition.
(ii)
Share-based payments (to employees and placement lead manager) as disclosed in note 23;
7.
Trade and Other Receivables – Current
GST receivable
Accrued interest
Other
42,013
13,891
32,861
88,765
6,732
-
-
6,732
Trade debtors, other debtors and goods and services tax are non-interest bearing and generally receivable on 30 day terms.
They are neither past due nor impaired. The amount is fully collectible. Due to the short term nature of these receivables, their
carrying value is assumed to approximate their fair value.
Lindian Resources Limited
33
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
8.
Investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of Entity
Country of
Equity Holding
Equity Holding
Lindian Resources Guinea Pty Ltd
Bundok Resources Pty Ltd
Bundok Holdings Pty Ltd
Bundok Mineral Resources Corporation
Incorporation
Australia
Australia
Australia
Philippines
2011
100%
100%
2008
100%
100%
2010
100%
-
-
-
9.
Plant and Equipment
Plant and Equipment
Cost
Accumulated depreciation
Net carrying amount
Computer Equipment and Software
Cost
Accumulated depreciation
Net carrying amount
Motor Vehicles
Cost
Accumulated depreciation
Net carrying amount
Consolidated
2011
$
2010
$
33,144
32,725
(32,759)
(28,402)
385
4,323
3,689
(75)
3,614
20,000
(1,458)
18,542
-
-
-
-
-
-
Total Plant and Equipment
22,541
4,323
Movements in Plant and Equipment
Plant and Equipment
At beginning of the period
Additions
Impairment
Depreciation charge for the year
Computer Equipment and Software
At beginning of the period
Additions
Depreciation charge for the year
Motor Vehicles
At beginning of the period
Additions
Depreciation charge for the year
Total Plant and equipment
4,323
419
(4,323)
(34)
385
-
3,689
(75)
3,614
-
20,000
(1,458)
18,542
22,541
10,737
3,025
-
(9,439)
4,323
-
-
-
-
-
-
-
-
4,323
Lindian Resources Limited
34
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
10.
Deferred Exploration and Evaluation Expenditure
At beginning of the period
Exploration expenditure during the year
Acquisition of assets
Impairment loss
Net exchange differences on translation
Total exploration and evaluation
Consolidated
2011
$
2010
$
803,477
194,537
5,634,614
798,365
534,849
-
(823,681)
(493,738)
(10,783)
5,798,164
(35,999)
803,477
The ultimate recoupment of costs carried forward for exploration expenditure is dependent on the successful development
and commercial exploitation or sale of the respective mining areas. The impairment loss during the year relates to the
Dinguiraye Project located in Guinea. The Directors are currently considering options for this project. The impairment loss in
2010 relates to the withdrawal from projects held in the Democratic Republic of Congo through disposal of the Groups 80%
shareholding in Congolese Exploration Company Sprl.
11.
Trade and Other Payables
Trade payables
Accruals
Other
150,192
61,011
10,368
20,559
13,041
-
221,571
33,600
Trade creditors, other creditors and goods and services tax are non-interest bearing and generally payable on 30 day terms.
Due to the short term nature of these payable, their carrying value is assumed to approximate their fair value.
12.
Issued Capital
(a) Issued capital
Ordinary shares fully paid
(b) Movements in shares on issue
At beginning of the period
Placement at $0.30
Placement at $0.08
Rights issue at $0.08
Shares issued upon acquisition of subsidiary
Exercise of options
less fundraising costs
At 30 June
(c) Ordinary shares
21,873,379
13,637,134
2011
2010
Number of
shares
$
Number of
$
shares
43,578,473
13,637,134
37,828,022
12,059,878
-
-
5,670,336
1,701,101
30,000,000
2,400,000
23,618,067
1,889,445
50,000,000
4,000,000
-
-
-
-
3,662,213
549,332
80,115
18,779
-
(602,532)
-
(142,624)
150,858,753
21,873,379
43,578,473
13,637,134
Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to
participate in the proceeds from 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 proxy, at a meeting of the Company.
Lindian Resources Limited
35
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(d)
Capital risk management
The Group‟s capital comprises share capital, reserves less accumulated losses amounting to $11,860,881 at 30 June 2011
(2010: $2,996,568). The Group manages its capital to ensure its ability to continue as a going concern and to optimise returns
to its shareholders. The Group was ungeared at year end and not subject to any externally imposed capital requirements.
(e) Share options
At 30 June 2011, there were 138,530,161 unissued ordinary shares under options (2010: 15,119,307 options). The details of
the options are as follows:
Number
Exercise Price $
Expiry Date
1,000,000
500,000
136,530,161
500,000
138,530,161
0.20
0.30
0.15
0.15
1 July 2011
31 December 2011
31 December 2011
14 June 2016
The following options were issued during the year:
- 127,618,067 options with an exercise price of 15 cents expiring on 31 December 2011; and
- 500,000 options with an exercise price of 15 cents expiring on 14 June 2016;
The following options expired during the year:
- 495,000 options with an exercise price of $0.20, expired on 31 December 2010;
- 200,000 options with an exercise price of $0.30, expired on 30 September 2010; and
- 350,000 options with an exercise price of $0.35, expired on 30 September 2010.
3,662,213 options with an exercise price of 15 cents, expiring on 31 December 2011 were exercised during the financial year.
1,000,000 options with an exercise price of 20 cents expired on 1 July 2011. 1,160 options with an exercise price of 15 cents,
expiring on 31 December 2011 were exercised since year end.
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
13.
Reserves
Share based payment reserve
Option reserves
Foreign currency translation reserve
Consolidated
2011
$
2010
$
1,776,584
1,135,200
1,376,093
126,093
(3,488)
-
3,149,189
1,261,293
Lindian Resources Limited
36
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
Movements in Reserves
Share based payment reserve
At beginning of the period
Share based payment expense
Balance at the end of the year
Consolidated
2011
$
2010
$
1,135,200
1,130,200
641,384
5,000
1,776,584
1,135,200
The share based payment reserve is used to record the value of equity benefits provided to directors and executives as part
of their remuneration and non-employees for their services.
Option reserves
At beginning of the period
Options issued
Balance at the end of the year
126,093
1,250,000
1,376,093
-
126,093
126,093
The option reserves are used to record the premium paid on the issue of listed options.
Foreign currency translation reserve
At beginning of the period
Foreign currency translation
Balance at the end of the year
-
(3,488)
(3,488)
57,781
(57,781)
-
The foreign exchange differences arising on translation of balances originally denominated in a foreign currency into the
functional currency are taken to the foreign currency translation reserve. The reserve is recognised in profit and loss when
the net investment is disposed of.
14.
Accumulated losses
Movements in accumulated losses were as follows:
At beginning of the period
Loss
Balance at the end of the year
15.
Expenditure Commitments
(a)
Rental and services agreement
11,901,859
10,983,167
1,259,828
918,692
13,161,687
11,901,859
The Group entered a service agreement for certain administrative services and office space for a term of two years starting in
May 2011. The Group is required to give three months written notice to terminate the agreement.
Within one year
After one year but not longer than 5 years
120,000
100,000
220,000
-
-
-
Lindian Resources Limited
37
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(b) Exploration commitments
Exploration commitments contracted for at reporting date but not recognised as liabilities are as follows:
Within one year
After one year but not longer than 5 years
Greater than 5 years
16.
Auditors Remuneration
The auditor of Lindian Resources Limited is RSM Bird
Cameron Partners
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 Group
17.
(a)
Key Management Personnel Disclosures
Details of Key Personnel
Consolidated
2011
$
2010
$
75,038
75,038
-
181,761
82,543
-
150,076
264,304
23,000
23,000
21,000
21,000
Mr. Matthew Wood
Mr. Steven Leithead
Mr. Scott Funston
Mr. Brian McMaster
Non-Executive Chairman
Executive Director
Executive Director, Company Secretary
Executive Director
Mr. Angus Caithness
Non-Executive Director
Mr. Anthony Cunningham
Former Chairman
Mr. Paul Jurman
Mr. Andrew Philips
Former Non-Executive Director, Company Secretary
Former Non-Executive Director
Mr. Reginald Gillard
Former Chairman
(b)
Remuneration of Key Management Personnel
Refer to the remuneration report contained in the directors‟ report for details of the remuneration paid or payable to each
member of the Group‟s key management personnel for the year ended 30 June 2011.
Details of the nature and amount of each element of the emolument of each Director and Executive of the Group for the
financial year are as follows;
Short term employee benefits
Post employment benefits
Share based payments
Total remuneration
145,371
169,940
4,907
41,384
13,044
-
191,662
182,984
Lindian Resources Limited
38
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(c)
Shareholdings of Key Management Personnel
Share holdings
The number of shares in the company held during the financial year held by each key management personnel of Lindian
Resources Limited, including their personally related parties, is set out below. There were no shares granted during the
reporting period as compensation.
2011
Balance at the
Granted during the
On exercise of
Other changes
Balance at the end
start of the year
year as
share options
during the year
of the year
compensation
Director
Mr. Matthew Wood * (i)
Mr. Steve Leithead * (ii)
Mr. Scott Funston * (iii)
Mr. Angus Caithness *
(iv)
Mr. Brian McMaster *
Mr. Paul Jurman #
Mr. Anthony
Cunningham ^
Mr. Andrew Philips ^
-
-
-
-
-
-
450,000
783,000
Mr. Reginald Gillard ^
2,164,708
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,400,000
9,000,000
3,207,500
7,400,000
9,000,000
3,207,500
625,000
625,000
-
-
(450,000)
(783,000)
(2,164,708)
-
-
-
-
-
* Mr. Wood, Mr. Leithead and Mr. Funston were appointed on 5 May 2011, Mr. Caithness was appointed on 31 January 2011 and Mr
McMaster was appointed on 20 June 2011.
^ Mr. Cunningham resigned on 5 May 2011, Mr. Philips resigned on 31 January 2011 and Mr. Gillard resigned on 20 August 2010.
# Mr. Jurman was appointed as a Director on 20 August 2010, previous to this he was an executive in his capacity as Company
Secretary. Mr. Jurman resigned as a Director on 5 May 2011.
i.
Mr. Wood acquired 6,400,000 shares as a shareholder of Bundok Resources Pty Ltd („Bundok‟) in consideration for
the acquisition of Bundok during the financial year. Mr. Wood acquired a further 1,000,000 shares due to his
participation in the Placement.
ii.
Mr. Leithead acquired 8,000,000 shares as a shareholder of Bundok in consideration for the acquisition of Bundok
during the financial year. Mr. Leithead acquired a further 1,000,000 shares due to his participation in the Placement.
iii.
Mr. Funston acquired 3,020,000 shares as a shareholder of Bundok in consideration for the acquisition of Bundok
during the financial year. Mr. Funston acquired a further 187,500 shares due to his participation in the Placement.
iv.
Mr. Caithness acquired 625,000 shares due to his participation in the Placement.
2010
Balance at the
Granted during the
On exercise of
Other changes
Balance at the end
start of the year
year as
share options
during the year (*)
of the year
compensation
Director
Mr. Reginald Gillard
Mr. Greg Smith
Mr. Patrick Flint
Mr. Anthony
Cunningham
Mr. Andrew Philips
810,541
733,952
517,541
100,000
-
-
-
-
-
-
-
-
-
-
-
1,354,167
(733,952)
(517,541)
350,000
783,000
Executive
Mr. Paul Jurman
-
* Mr Smith and Mr Flint resigned on 19 February 2010 and Mr Philips was appointed on 19 February 2010
-
-
-
2,164,708
-
-
450,000
783,000
-
Lindian Resources Limited
39
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
All equity transactions with key management personnel other than arising from the exercise of remuneration options have
been entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at
arm‟s length.
(d)
Option holdings of Key Management Personnel
The numbers of options over ordinary shares in the company held during the financial year by each key management
personnel of Lindian Resources Limited and specified executive of the group, including their personally related parties, are set
out below:
2011
Balance at the
Granted during
Exercised
Other changes
Balance at the
Exercisable
Non-
start of the year
the year as
during the
during the year
end of the year
exercisable
compensation
year
Vested options
Director
Mr. Matthew Wood * (i)
Mr. Steve Leithead * (ii)
Mr. Scott Funston * (iii)
Mr. Angus Caithness *
(iv)
Mr. Brian McMaster *
-
-
-
-
-
Mr. Paul Jurman #
450,001
Mr. Anthony Cunningham
^
Mr. Andrew Philips ^
278,250
185,000
Mr. Reginald Gillard ^
1,041,014
-
-
-
-
500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
10,400,000
10,400,000 10,400,000
9,000,000
9,000,000
9,000,000
3,207,500
3,207,500
3,207,500
625,000
625,000
625,000
-
500,000
500,000
(450,001)
(278,250)
(185,000)
(1,041,014)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Mr. Wood, Mr. Leithead and Mr. Funston were appointed on 5 May 2011, Mr. Caithness was appointed on 31 January 2011 and Mr
McMaster was appointed on 20 June 2011.
^ Mr. Cunningham resigned on 5 May 2011, Mr. Philips resigned on 31 January 2011 and Mr. Gillard resigned on 20 August 2010.
# Mr. Jurman was appointed as a Director on 20 August 2010, previous to this he was an executive in his capacity as Company
Secretary. Mr. Jurman resigned as a Director on 5 May 2011.
i. Mr. Wood acquired 6,400,000 listed options as a shareholder of Bundok in consideration for the acquisition of Bundok
during the financial year and 3,000,000 listed options in his capacity as a Director of Garrison Capital Pty Ltd as an
introduction fee for the Bundok transaction. Mr. Wood acquired a further 1,000,000 listed options due to his participation
in the Placement whereby one free attaching option was issued for every share subscribed.
ii.
Mr. Leithed acquired 8,000,000 listed options as a shareholder of Bundok in consideration for the acquisition of Bundok
during the financial year. Mr. Leithead acquired a further 1,000,000 listed options due to his participation in the
Placement whereby one free attaching option was issued for every share subscribed.
iii. Mr. Funston acquired 3,020,000 listed options as a shareholder of Bundok in consideration for the acquisition of Bundok
during the financial year. Mr. Funston acquired a further 187,500 listed options due to his participation in the Placement
whereby one free attaching option was issued for every share subscribed.
iv. Mr. Caithness acquired 625,000 listed options due to his participation in the Placement whereby one free attaching
option was issued for every share subscribed.
Lindian Resources Limited
40
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
2010
Balance at
Granted during
Exercised
Other changes
Balance at
Exercisable
Non-
the start of
the year as
during the
during the year
the end of the
exercisable
the year
compensation
year
year
Vested options
Director
Mr. Reginald Gillard (i)
Mr. Greg Smith * (ii)
Mr. Patrick Flint * (iii)
Mr. Anthony Cunningham (iv)
Mr. Andrew Philips *
Executive
Mr. Paul Jurman
1,676,103
1,366,976
1,493,603
100,000
-
350,000
-
-
-
-
-
-
-
-
-
-
-
-
(635,089)
1,041,014 1,041,014
(367,333)
(550,255)
-
-
-
-
178,250
278,250
278,250
185,000
185,000
185,000
100,001
450,001
450,001
-
-
-
-
-
-
* Mr Smith and Mr Flint resigned on 19 February 2010 and Mr Philips was appointed on 19 February 2010
i.
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.
ii.
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.
iii.
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.
iv.
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.
There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There were
no forfeitures during the years ended 30 June 2011 and 30 June 2010.
Options granted as part of remuneration have been valued using the Black-Scholes option pricing model, which takes account
of factors such as the option exercise price, the current level and volatility of the underlying share price and the time to
maturity of the option. Options granted under the plan carry no dividend or voting rights.
Other transactions with Key Management Personnel
Garrison Capital Pty Ltd, a company of which Mr. Wood is a director, provided the Group with a fully serviced office including
administration and information technology support totalling $20,000 (2010: $Nil) and reimbursement of payments for courier,
accounting and other minor expenses, at cost $14,542 (2010: $Nil). $26,473 (2010: $Nil) was outstanding at year end.
Mineral Quest Pty Ltd, a company of which Mr. Wood is a director, charged the Group consulting fees of $20,000 (2010: $Nil)
and reimbursement of payments for secretarial expenses, at cost for $900 (2010: $Nil) during the year. This amount is
included in Note 17(b) “Remuneration of key management personnel”. $10,450 (2010: $Nil) was outstanding at year end.
Lindian Resources Limited
41
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
Resourceful International Consulting Pty Ltd, a company of which Mr. Funston is a Director, charged the Group consulting
fees of $20,000 (2010: $Nil). This amount is included in Note 17(b) “Remuneration of key management personnel”. $10,000
(2010: $Nil) was outstanding at year end.
Banquo Consulting Pty Ltd, a company of which Mr. Caithness is a Director, charged the Group consulting fees of $10,000
(2010: $Nil). This amount is included in Note 17(b) “Remuneration of key management personnel”. $2,500 (2010: $Nil) was
outstanding at year end.
Vega Funds Pty Ltd, a company of which Mr. McMaster is a Director, charged the Group consulting fees of $850 (2010: $Nil).
This amount is included in Note 17(b) “Remuneration of key management personnel”. $850 (2010: $Nil) was outstanding at
year end.
Corporate Consultants Pty Ltd (“CCPL”), a company of which Mr. Gillard and Mr. Flint are Directors, provided accounting,
administrative and company secretarial services on commercial terms. Total amounts paid to CCPL were $62,968 (2010:
$57,575) during the reporting period. $11,184 (2010: $2,961) was outstanding at year end.
During the 2010 financial year, Ledgar Road Partnership, a Company of which Mr. Gillard has a beneficial interest, charged
rent at commercial rates, totalling $2,934 for the year. No transactions have occurred between the Group and Ledgar Road
Partnership in the 2011 financial year.
These transactions have been entered into on normal commercial terms.
18.
Events Subsequent to Balance Date
There have been no known events that have arisen since the balance date that has affected or may significantly affect the
operation of Group.
19.
Related Party Disclosures
For Director related party transactions please refer to Note 17 “Key Management Personnel Disclosures”. The ultimate
parent entity is Lindian Resources Limited. Refer to note 8 for list of all subsidiaries within the group. There were no other
related party transactions during the year.
20.
Loss per Share
Loss used in calculating basic and dilutive EPS
1,259,828
918,692
Consolidated
2011
$
2010
$
Weighted average number of ordinary shares used in
calculating basic earnings / (loss) per share (*):
Effect of dilution:
Share options
Adjusted weighted average number of ordinary shares used
Number of Shares
60,845,943
41,799,004
-
-
in calculating diluted loss per share:
60,845,943
41,799,004
There is no impact from 138,530,161 options outstanding at 30 June 2011 (2010: 15,119,307 options) on the earnings per
share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the future. There have
Lindian Resources Limited
42
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of
ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these
financial statements.
21.
Financial Risk Management
The group‟s principal financial instruments comprise mainly of deposits with banks.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting
policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Financial Risk Management Policies
Consolidated
2011
$
2010
$
6,172,982
46,752
2,215,636
-
221,571
33,600
The board‟s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, while
minimising potential adverse effects on financial performance. Its functions include the review of future cash flow
requirements.
Specific Financial Risk Exposure and Management
The main risks arising from the Company‟s financial instruments are interest rate risk, credit risk and liquidity risk.
(a) Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities.
The Group manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of the business
and investing excess funds in highly liquid short term investments. The responsibility for liquidity risk management rests with
the Board of Directors.
Alternatives for sourcing our future capital needs include our cash position and the issue of equity instruments. These
alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. We expect that, absent a
material adverse change in a combination of our sources of liquidity, present levels of liquidity along with future capital raising
will be adequate to meet our expected capital needs.
Maturity analysis for financial liabilities
Financial liabilities of the Group comprise trade and other payables. As at 30 June 2011 and 30 June 2010 all financial
liabilities are contractually matured within 60 days.
(b)
Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of
financial instruments.
The Group‟s exposure to market risk for changes to interest rate risk relates primarily to its earnings on cash and term
deposits. The Group manages the risk by investing in short term deposits.
Lindian Resources Limited
43
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
Cash and cash equivalents
Interest rate sensitivity
Consolidated
2011
$
2010
$
6,172,982
2,215,636
The following table demonstrates the sensitivity of the Group‟s statement of comprehensive income to a reasonably possible
change in interest rates, with all other variables constant.
Consolidated
Judgements of reasonably possible movements
Effect on Post Tax Earnings
Effect on Equity
Increase 100 basis points
Decrease 100 basis points
Increase/(Decrease)
including accumulated losses
Increase/(Decrease)
2011
$
61,730
(61,730)
2010
$
2011
$
2010
$
22,156
61,730
22,156
(22,156)
(61,730)
(22,156)
A sensitivity of 100 basis points has been used as this is considered reasonable given the current level of both short term and
long term Australian Dollar interest rates. The change in basis points is derived from a review of historical movements and
management‟s judgement of future trends. The analysis was performed on the same basis in 2010.
(c) Credit Risk Exposures
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause the
Group to incur a financial loss. The Group‟s maximum credit exposure is the carrying amounts on the statement of financial
position. The Group holds financial instruments with credit worthy third parties.
At 30 June 2011, the Group held cash at bank. These were held with financial institution with a rating from Standard & Poors
of AA or above (long term). The Group has no past due or impaired debtors as at 30 June 2011.
22.
Contingent Liabilities
On 19 April 2011, the Company announced that a supreme court action had commenced against Bundok Resources Pty Ltd
(Bundok), a wholly owned subsidiary of Lindian, and another party on 7 April 2011 claiming that Bundok, in breach of an
alleged contract, failed to issue 4,000,000 Bundok shares to the plaintiff. The plaintiff seeks damages being the loss of the
value of 4,000,000 Bundok shares, interest and costs. On 13 September 2011, mediation occurred between the parties,
however no resolution was achieved. Bundok has disclaimed liability and intends to continue to defend the action.
23.
Share Based Payments
(a) Recognised share based payment transactions
Share based payment transactions recognised either as operation expenses in the statement of comprehensive income or as
capital raising expenses in the equity during the year were as follows:
Lindian Resources Limited
44
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
Operating expenses
Employee share based payment
Capital raising expenses
Share based payments to supplier
Exploration Expenditure
Share based payments to supplier
Consolidated
2011
$
2010
$
41,384
-
300,000
131,093
300,000
-
(b) Employee share based payment plan
The Group has established an employee share option plan (ESOP). The objective of the ESOP is to assist in the recruitment,
reward, retention and motivation of employees of Lindian Resources Limited. Under the ESOP, the Directors may invite
individuals acting in a manner similar to employees to participate in the ESOP and receive options. An individual may receive
the options or nominate a relative or associate to receive the options. The plan is open to executive officers, nominated
consultants and employees of Lindian Resources Limited.
The fair value at grant date of options granted during the reporting period was determined using the Black Scholes option
pricing model, that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant
date and expected price volatility of the underlying share and the risk free interest rate for the term of the option.
The table below summaries options granted under ESOP:
Grant Date
Expiry date
Exercise
price
Balance at
start of the
year
Number
Granted
during the
year
Number
Exercised
during the
year
Number
Expired
during the
year
Number
Balance at
end of the
year
Number
Exercisable at
end of the year
Number
14 June 2011
14 June 2016
$0.15
Weighted remaining contractual life
(years)
Weighted average exercise price
-
-
-
-
500,000
500,000
5
$0.15
-
-
-
-
-
-
-
-
500,000
500,000
500,000
500,000
4.9
4.9
$0.15
$0.15
The weighted average fair value of options granted during the year was $0.082 (2010: Nil).
The model inputs, not included in the table above, for options granted during the year ended 30 June 2011 included:
(a)
(b)
(c)
(d)
(e)
(f)
options are granted for no consideration and vest immediately;
Expected life of options is five years;
share price at grant date was $0.096;
expected volatility of 137%;
expected dividend yield of Nil; and
a risk free interest rate of 4.9%.
No options were granted under the ESOP for the year ended 30 June 2010.
Lindian Resources Limited
45
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
(c) Share-based payment to suppliers:
(i) Capital raising expenses
During the financial year - 12,000,000 (2010:500,000) listed options, exercisable at $0.15 and expiring on 31 December
2011 were issued to CPS Securities Pty Ltd as consideration for their services as underwriters of the Placement. The fair
value of the options of $300,000 (2010:$131,093) was determined by reference to the market value on the Australian
Securities Exchange at the grant date.
(ii) Exploration expenditure
During the financial year - 50,000,000 (2010:Nil) listed shares were issued to the Vendors of Bundok Resources Pty Ltd.
The fair value of the shares of $4,000,000 was determined by reference to the market value on the Australian Securities
Exchange at the acquisition date.
During the financial year - 50,000,000 (2010:Nil) listed options, exercisable at $0.15 and expiring on 31 December 2011
were issued to the Vendors of Bundok Resources Pty Ltd. The fair value of the options of $1,250,000 was determined by
reference to the market value on the Australian Securities Exchange at the acquisition date.
During the financial year - 12,000,000 (2010:Nil) listed options, exercisable at $0.15 and expiring on 31 December 2011
were issued to Garrison Capital Pty Ltd as an introduction fee for the acquisition of Bundok Resources Pty Ltd. The fair
value of the options of $300,000 was determined by reference to the market value on the Australian Securities Exchange at
the acquisition date.
24.
Dividends
No dividend was paid or declared by the Group in the period since the end of the financial year and up to the date of this
report. The Directors do not recommend that any amount be paid by way of dividend for the financial year ended 30 June
2011.
The balance of the franking account is Nil as at 30 June 2011 (2010: Nil).
25.
Acquisition of Assets
Acquisition – Bundok Resources Pty Ltd and its subsidiaries
During the financial year, the company acquired 100% of the voting shares of Bundok Resources Pty Ltd.
The total cost of the acquisition was $5,550,000 and comprised an issue of equity instruments. The Group issued securities as
described in Note 6 (b)(i) with an issue price based on the quoted price of shares and options at the date of exchange.
The fair values of the identifiable assets and liabilities of Bundok Resources Pty Ltd and its subsidiaries as at the date of
acquisition are:
Cash and cash equivalents
Trade and other receivables
Tenement interests, exploration and evaluation expenditure
Trade and other payables
Fair value of identifiable net assets
Cost of the acquisition:
Securities issued, at fair value
Total cost of the acquisition
Recognised on
acquisition
$
38,205
22,225
5,634,614
(145,044)
5,550,000
5,550,000
5,550,000
Lindian Resources Limited
46
2011 Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2011
26. Parent Entity Information
The following details information related to the parent entity, Lindian Resources Limited, at 30 June 2011. The information
presented here has been prepared using consistent accounting policies as presented in Note 2.
Current assets
Non current assets
Total Assets
Current liabilities
Non current liabilities
Total Liabilities
Net Assets
Issued capital
Share based payment reserve
Option reserves
Accumulated losses
Total Equity
Loss for the year
Other comprehensive income for the year
Parent
2011
$
2010
$
5,873,607
6,136,415
2,221,625
812,269
12,010,022
3,033,894
149,141
-
33,600
-
149,141
33,600
11,860,881
3,000,294
21,873,379
13,637,134
1,776,584
1,376,093
1,135,200
126,093
(13,165,175)
(11,898,133)
11,860,881
3,000,294
(1,267,042)
(943,313)
-
-
Total comprehensive loss for the year
(1,267,042)
(943,313)
b) Guarantees
Lindian Resources Limited has not entered into any guarantees in relation to the debts of its subsidiary.
c) Other Commitments and Contingencies
Lindian Resources Limited entered into a service agreement during the financial year for certain administrative
services and office space for a term of two years. The Company is required to give three months written notice to
terminate the agreement. Total commitments at 30 June 2011 under the contract are $220,000 (2010: Nil). There are
no commitments to acquire property, plant and equipment, and has no contingent liabilities.
Lindian Resources Limited
47
2011 Report to Shareholders
Directors’ Declaration
The directors of the company declare that:
1.
the financial statements and notes, are in accordance with the Corporations Act 2001 and:
a.
comply with Australian Accounting Standards, which, as stated in accounting policy Note 2(b) to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards
(IFRS); and
b.
give a true and fair view of the Group‟s financial position as at 30 June 2011 and of its performance for the year
ended on that;
2.
the Managing Director and Company Secretary have each declared that:
a.
the financial records of the company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
b.
c.
the financial statements and notes for the financial year comply with the Australian Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view;
3.
in the directors‟ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Steven Leithead
Director
19 September 2011
Lindian Resources Limited
48
2011 Report to Shareholders
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 2011,
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: 19 September 2011
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.
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 9101
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
consolidated statement of financial position as at 30 June 2011, and the consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors' declaration of the consolidated entity comprising the company and the entities it
controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that is free from
material misstatement, whether due to fraud or error. In Note 2(b), the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. 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 about 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.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We
confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of Lindian Resources Limited, would be in the same terms if given to the directors as at the time of this
auditor's report.
Opinion
In our opinion:
(a) the financial report 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 2011 and of its
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2(b).
Report on the Remuneration Report
We have audited the Remuneration Report contained within the directors’ report for the year ended 30 June 2011.
The directors of the company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion the Remuneration Report of Lindian Resources Limited for the year ended 30 June 2011 complies
with section 300A of the Corporations Act 2001.
RSM BIRD CAMERON PARTNERS
Chartered Accountants
Perth, WA
Dated: 19 September 2011
TUTU PHONG
Partner
ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current at 6 September 2011.
Substantial Share Holders
The names of shareholders who have notified the Company in accordance with Section 671B of the Corporations Act 2001
are:
Shareholder Name
Steven Leithead
No. of
Ordinary
Shares
Percentage
%
9,000,000
5.96
Distribution of Share Holders
Ordinary Shares
Number of Holders
Number of Shares
1
- 1,000
1,001
- 5,000
5,001
- 10,000
10,001
- 100,000
100,001
- and over
TOTAL
455
459
125
301
196
1,536
227,735
1,084,045
939,176
12,368,982
136,239,975
150,859,913
There were 832 holders of ordinary shares holding less than a marketable parcel.
Top Twenty Share Holders
Name
Nefco Nominees Pty Ltd
JP Morgan Nominees Australia Limited
Mr Steven Leithead
Mitchell Grass Holdings Pty Ltd
Mr Jason Peterson & Mrs Lisa Peterson
Mr Paul Gabriel Sharbanee
Mikado Corporation Pty Ltd
Ms Victoria Funston & Mr Francis Scott Funston < Funston
Investment a/c>
Mr Timothy James Flavel
Corporate & Resource Consultants Pty Ltd
Amalgamation Sale and Takeover Consultants Pty Ltd
Mr Michael Robert Franco & Mr Robert Mario Franco & Miss
Laura Michelle Franco
HSBC Custody Nominees Limited
Eagle River Holdings Pty Ltd
Brijohn Nominees Pty Ltd
Celtic Capital Pty Ltd
Stevsand Investments Pty Ltd
Eurogold Limited
Shah Nominees Pty Ltd
Number of Ordinary Shares held
12,125,173
9,472,134
9,000,000
7,400,000
4,400,000
4,000,000
3,494,242
3,020,000
2,900,000
2,656,250
2,643,062
2,250,000
2,190,882
2,174,500
2,000,000
1,550,000
1,520,000
1,500,000
1,335,405
%
8.04
6.28
5.96
4.91
2.92
2.65
2.32
2.00
1.92
1.76
1.75
1.49
1.45
1.44
1.33
1.03
1.01
0.99
0.89
Albatross Pass Pty Ltd
Total ordinary shares
1,250,000
76,881,648
0.83
50.97
52
ASX Additional Information
Voting Rights
All ordinary shares carry one vote per share without restriction.
Top Twenty Option Holders Expiry 31 December 2011
Name
Nefco Nominees Pty Ltd
Mitchell Grass Holdings Pty Ltd
Mr Steven Leithead
Celtic Capital Pty Ltd
Mr Paul Gabriel Sharbanee
Mr Jason Peterson & Mrs Lisa Peterson
Mr Gary Raymond Powell
JP Morgan Nominees Australia Limited
Mikado Corporation Pty Ltd
Ms Victoria Funston & Mr Francis Scott Funston < Funston Investment
a/c>
Mr Timothy James Flavel
Mr Timothy James Flavel
Albatross Pass Pty Ltd
Brijohn Nominees Pty Ltd
Cunningham Peterson Sharbanee Securities Pty Ltd
Corporate & Resource Consultants Pty Ltd
ABN Amro Clearing Sydney Nominees Pty Ltd
Mr Michael Robert Franco & Mr Robert Mario Franco & Miss Laura
Michelle Franco
Surfboard Pty Ltd
Amalgamation Sale and Takeover Consultants Pty Ltd
Total options
Number of Options held
10,950,058
10,400,000
9,000,000
7,550,000
6,400,000
4,400,000
4,000,000
3,695,453
3,204,249
3,020,000
3,000,000
2,900,000
2,314,125
2,000,000
1,701,667
1,519,098
1,396,875
1,250,000
1,250,000
1,014,354
80,965,879
%
8.02
7.61
6.59
5.53
4.69
3.22
2.93
2.71
2.35
2.21
2.20
2.12
1.69
1.46
1.25
1.11
1.02
0.92
0.92
0.74
59.29
53
Tenement Table
Project
Tenure Title
Tenure
Status of
Lindian Interest
Owner
Reference
Tenure
Masapelid
SMMC
Del Gallego
BMRC
Salacot
Mt Balintigon
SMMC
SMMC
MPSA 004-91-XI
EP V 2001-001
EXPA V-0025
EXPA V-0026
EXPA V-0028
EXPA III-06-97
EP III-03-98
Buena Aurora
SMMC
EXPA V-019
Granted
Granted
Application
Application
Application
Application
Application
Application
SMMC
MRD 302,MRD 303
Granted
note 1
100%
note 2
note 2
note 2
note 2
note 2
note 2
note 2
Exciban
Abra
Dinguiraye Iron
and PGE/base
metal project in
Guinea, Africa
MRI
Lindian
Resources
Guinea
EXPA 90-CAR
2009/017/DIGM/CPDM
Exploration License
Application
Granted
note 2
92% - note 3
2009/138/DIGM/CPDM
Exploration License
Granted
92% - note 3
-
Tenure
Expiry
2016
note 4
N/a
N/a
N/a
N/a
N/a
N/a
2011
N/a
-
„BMRC‟ = Bundok Mineral Resources Corporation
„SMMC‟ = San Manuel Mining Corporation
„MRI‟ = Merrit Resources Incorporated
Note 1: BMRC has full rights to explore, develop and mine under MPSA. BMRC has a further right to convert
MPSA to a FTAA realising a 100% interest under the FTAA.
Note 2: BMRC has entered into an option to purchase agreement and will acquire 100% of the project upon
exercise of the option.
Note 3: The government of Guinea are entitled to equity in mining companies owning projects of 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.
Note 4: Application for two year extension to the exploration period is pending.
54