ABN 53 090 772 222
Annual Report
30 June 2015
Lindian Resources Limited
CONTENTS
Corporate Directory
Directors’ Report
Corporate Governance Statement
PAGE NO
1
2
12
Consolidated Statement of Comprehensive Income
25
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated 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
26
27
28
29
52
53
54
56
58
Lindian Resources Limited
CORPORATE DIRECTORY
Directors
Mr. Ariel Edward (Eddie) King (Non-Executive Chairman)
Mr. Steve Formica (Non-Executive Director)
Mr. Kerry Griffin (Exploration Director)
Company Secretary
Mr. Ariel Edward (Eddie) King
Registered Office
Level 11
216 St Georges Terrace
Perth WA 6000
Telephone: + 61 8 9481 0389
Facsimile: + 61 8 9463 6103
Website: www.lindianresources.com.au
Share Registry
Automic Registry Services
Level 1
7 Ventnor Avenue
West Perth WA 6005
Telephone: + 61 8 9324 2099
Facsimile: + 61 8 9321 2337
Auditors
HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000
Stock Exchange
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
ASX Code: LIN, LINO
Lindian Resources Limited
1
2015 Annual 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 2015 (“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. Eddie King
Non-Executive Chairman (appointed 3 October 2014, previously Non-Executive Director since 13 June 2014) and
Company Secretary (appointed 11 March 2015)
Mr. King is a qualified mining engineer and holds a Bachelor of Commerce and Bachelor of Engineering from The University
of Western Australia. Mr. King is currently a representative for CPS Capital. Mr. King’s past experience includes being
manager for an investment banking firm, where he specialised in the technical and financial requirements of bulk commodity
and other resource projects. Mr. King was born in the Philippines where he has an extensive network.
He has not held any other current or former listed directorships in the past three years.
Mr. Steve Formica
Non-Executive Director (appointed 15 July 2014)
Mr. Formica has been a successful businessman for over 30 years through involvement in multiple ventures either as a
founding shareholder, operational managing director or as a non-executive director. Mr. Formica has been a long time share
investor and is a large shareholder of the Company.
Mr. Formica is currently a non-executive director and chairman of Enerji Limited (appointed 2 May 2014). He has not held any
other listed directorships in the past three years.
Mr. Kerry Griffin
Non-Executive Director
Mr. Griffin has 18 years’ professional experience in exploration, resource development and mining geology in Australia,
Southern Africa, South America and Mongolia including senior roles with such companies as Ivanhoe, Newcrest Mining and
Consolidated Minerals.
Mr. Griffin has significant experience in Mongolia having spent four years with Ivanhoe Mines as the Senior Development
Geologist for the world class OyuTolgoi development. In this role he not only managed major diamond drilling programs, but
also looked after geological interpretation, 3D modelling and resource estimation, and the training of the incoming Mongolian
geologists. Mr. Griffin is a Competent/Qualified Person for JORC/43-101 standard reporting and sign-off. Mr. Griffin is a
resident of Mongolia and based in Ulaanbaatar.
Mr. Griffin was formerly a director of Haranga Resources Limited (appointed 1 January 2012, resigned 9 August 2013). He
has not held any other listed directorships in the past three years.
Lindian Resources Limited
2
2015 Annual Report to Shareholders
Directors’ Report
Mr. Matthew Wood
Former Executive Chairman (resigned 3 October 2014)
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 Signature Metals Limited (appointed 19 February 2007, resigned 13 February 2012). Mr. Wood is
currently a director of Avanco Resources Limited (appointed 4 July 2007), Caravel Energy Limited renamed Antares Mining
Limited (appointed 29 May 2009, resigned 12 August 2015), Voyager Resources Limited (appointed 12 June 2009), Haranga
Resources Limited (appointed 2 February 2010), Wolf Petroleum Limited (appointed 24 April 2012), Black Star Petroleum
Limited (appointed 28 February 2013), Triumph Tin Limited (appointed 1 April 2014) and Castillo Copper Limited (appointed
1 April 2014). He has not held any other listed directorships over the past three years.
Mr. Brian McMaster
Former Executive Director (resigned 16 September 2014)
Mr. McMaster is a Chartered Accountant, and has over 20 years’ experience in the area of corporate reconstruction and
turnaround/performance improvement. Formerly, 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 was a director of The Waterberg Coal Company (appointed 12 April 2012, resigned 17 March 2014), Caravel
Energy Limited renamed Antares Mining Limited (appointed 2 December 2011, resigned 12 August 2015) and Firestone
Energy Limited (appointed 14 June 2013, resigned 18 March 2014). Mr. McMaster is currently a director of Wolf Petroleum
Limited (appointed 24 April 2012), Black Star Petroleum Limited (appointed 9 August 2012), Paradigm Metals Limited
(appointed 14 September 2012), Castillo Copper Limited (appointed 31 August 2013), Haranga Resources Limited (appointed
1 April 2014), Triumph Tin Limited (appointed 1 April 2014) and Voyager Resources Limited (appointed 27 August 2014). He
has not held any other listed directorships in the past three years.
Mr. Scott Funston
Former Executive Director (resigned 3 July 2014)
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 or has
previously assisted a number of resources companies operating throughout Australia, South America, Asia, USA and Canada
with financial accounting, stock exchange compliance and regulatory activities.
Mr. Funston was a director of Highfield Resources Limited (appointed 2 November 2012, resigned 28 February 2014), The
Waterberg Coal Company (appointed 5 April 2013, resigned 17 March 2014) and Castillo Copper Limited (appointed 19
November 2012, resigned 1 April 2014). 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.
Lindian Resources Limited
3
2015 Annual Report to Shareholders
Directors’ Report
COMPANY SECRETARY
Mr. Jack James
Former Company Secretary (appointed 3 July 2014 and resigned 11 March 2015)
Mr. James has a Bachelor of Business from the Queensland University of Technology and is a Chartered Accountant. Mr.
James provides accounting, secretarial and advisory advice to private and public companies, government and other
stakeholders. Mr. James has over 15 years’ experience in chartered accounting, specialising in corporate advisory and
reconstruction.
Mr. James is currently a director on Lithex Resources Limited (appointed 12 December 2013) and Eumeralla Resources
Limited (appointed 22 August 2011). Mr. James was previously a director of Caravel Energy Limited renamed Antares Mining
Limited (appointed 15 October 2014, resigned 10 September 2015) Black Star Petroleum Limited (appointed 9 August 2012,
resigned 28 February 2013) and Firestone Energy Limited (appointed 5 February 2013, resigned 13 June 2013). He has not
held any other listed directorships over the past three years.
Mr. Scott Funston
Former Company Secretary (resigned 3 July 2014)
Mr. Funston was the former Company Secretary and resigned on 3 July 2014.
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. Eddie King
Mr. Steve Formica
Mr. Kerry Griffin
Mr. Matthew Wood
Mr. Brian McMaster
Mr. Scott Funston
2
2
2
2
1
-
2
2
2
2
1
-
Lindian Resources Limited
4
2015 Annual Report to Shareholders
Directors’ Report
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.
The remuneration report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
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.
As part of its Corporate Governance Policies and Procedures, the Board has adopted a formal Remuneration Committee
Charter. Due to the current size of the Group and number of directors, the Board has elected not to create a separate
Remuneration Committee but has instead decided to undertake the function of the Committee as a full Board under the
guidance of the formal charter.
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 six financial years:
As at 30 June
Loss per share (cents)
2015
(4.01)
2014
(0.28)
2013
(0.66)
2012
(2.23)
2011
(2.07)
2010
(2.20)
Details of remuneration
Details of Key Management Personnel
Mr. Eddie King
Mr. Steve Formica
Mr. Kerry Griffin
Mr. Matthew Wood
Mr. Brian McMaster
Mr. Scott Funston
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Former Executive Chairman
Former Executive Director
Former Executive Director
Lindian Resources Limited
5
2015 Annual 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
2015
Base
Directors Consulting
Share based
Performance
Fees
Payments
Superannuation
Total
Related
Director
Mr. Eddie King
Mr. Steve Formica*
Mr. Kerry Griffin
Mr. Matthew Wood**
Mr. Brian McMaster***
Mr. Scott Funston****
Salary
$
-
-
-
-
-
-
-
Fees
$
67,400
51,500
-
-
-
-
$
-
-
62,546
21,800
15,000
-
118,900
99,346
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
$
67,400
51,500
62,546
21,800
15,000
-
218,246
%
-
-
-
-
-
-
-
* Mr. Formica was appointed on 15 July 2014
** Mr. Wood resigned on 3 October 2014
*** Mr. McMaster resigned on 16 September 2014
**** Mr. Funston resigned on 3 July 2014
Short term
Options
Post
employment
2014
Base
Directors Consulting
Share based
Performance
Director
Mr. Matthew Wood
Mr. Kerry Griffin*
Mr. Brian McMaster
Mr. Eddie King**
Mr. Steven Leithead***
Mr. Scott Funston
Mr. Angus Caithness***
Salary
$
-
-
-
-
-
-
-
-
Fees
$
-
-
-
-
-
-
-
-
Fees
Payments
Superannuation
Total
Related
$
69,000
87,489
60,000
-
140,000
105,000
7,500
468,989
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
$
69,000
87,489
60,000
-
140,000
105,000
7,500
468,989
%
-
-
-
-
-
-
-
-
* Mr. Griffin was appointed on 16 October 2013
** Mr. King was appointed on 13 June 2014
*** Mr. Leithead and Mr. Caithness resigned on 16 October 2013
There were no other executive officers of the Group during the financial years ended 30 June 2015 and 30 June 2014. No
remuneration is performance related. The share options issued in previous financial years were not subject to a performance
hurdles as these options were issued as a form of retention bonus and incentive package.
Executive Directors
All Executive Directors are paid an annual consulting fee on a monthly basis. Their services can be terminated at any time by
either party.
Lindian Resources Limited
6
2015 Annual Report to Shareholders
Directors’ Report
Non-Executive Director
All Non-Executive Directors are paid an annual consulting fee on a monthly basis. Their services can be terminated at any
time by either party.
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
There were no service agreements with directors or other key management personnel as at 30 June 2015.
Share-based compensation
Issue of shares
There were no share issued to directors and other key management personnel as part of compensation during the year ended
30 June 2015.
Options
There were no grants of options over ordinary shares affecting remuneration of directors and other key management personnel
in this financial year or future reporting years.
Additional disclosures relating to key management personnel
Key Management Personnel Options
The numbers of options over ordinary shares in the company held during the financial year by each key management personnel
of Lindian Resources Limited, including their personally related parties, are set out below:
2015
Director
Balance at the
Balance on
Expired during
Balance on
Balance at the
Exercisable
Non-
start of the
appointment
the year
resignation
end of the
exercisable
year
year
Vested options
Mr. Eddie King
62,500
-
(62,500)
Mr. Steve Formica*
Mr. Kerry Griffin
-
-
Mr. Matthew Wood**
19,587,500
Mr. Brian McMaster***
4,750,002
Mr. Scott Funston****
7,520,000
8,834,001
(2,500,667)
-
-
-
-
-
-
-
-
-
-
-
(19,587,500)
(4,750,002)
(7,520,000)
-
-
6,333,334
6,333,334
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Mr. Formica was appointed on 17 July 2014
** Mr. Wood resigned on 3 October 2014
*** Mr. McMaster resigned on 16 September 2014
**** Mr. Funston resigned on 3 July 2014
Lindian Resources Limited
7
2015 Annual Report to Shareholders
Directors’ Report
Key Management Personnel Share holdings
The number of shares in the company held during the financial year 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.
2015
Balance at the
Balance on
On exercise of
Balance on
Balance at the
start of the year
appointment
share options
resignation
end of the year
Director
Mr. Eddie King
Mr. Steve Formica*
Mr. Kerry Griffin
62,500
-
-
Mr. Matthew Wood**
30,337,500
Mr. Brian McMaster***
Mr. Scott Funston****
3,000,004
8,207,500
-
14,666,667
-
-
-
-
* Mr. Formica was appointed on 17 July 2014
** Mr. Wood resigned on 3 October 2014
*** Mr. McMaster resigned on 16 September 2014
**** Mr. Funston resigned on 3 July 2014
Other transactions with key management personnel
-
-
-
-
-
-
-
-
-
(30,337,500)
(3,000,004)
(8,207,500)
62,500
14,666,667
-
-
-
-
Garrison Capital Pty Ltd, a company of which Mr. Wood and Mr. McMaster are directors and shareholders, provided the Group
up to September 2015 with a fully serviced office including administration and information technology support totalling $30,000
(2014: $120,000) and reimbursement of payments for courier, accounting and other minor expenses totalling $8,963 (2014:
$45,777). $3,155 (2014:$13,875) was outstanding at year end.
These transactions have been entered into on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
END OF REMUNERATION 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
Listed Options
over Ordinary
Shares
exercisable at 2
cents each
Mr. Eddie King
62,500
-
Mr. Steve Formica
14,666,667
6,333,334
Mr. Kerry Griffin
-
-
Lindian Resources Limited
8
2015 Annual Report to Shareholders
Directors’ Report
RESULTS OF OPERATIONS
The Group’s net loss after taxation attributable to the members for the year to 30 June 2015 was $14,582,418 (2014: $856,266)
and the net liabilities of the Group at 30 June 2015 was $414,656 (2014: net assets of $14,587,698). A loss from discontinued
operations of $14,154,997 was included in the current year loss after taxation.
DIVIDENDS
No dividend was paid or declared by the Company 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 on base metal projects in the Philippines.
REVIEW OF OPERATIONS
MASAPELID PROJECT AND OTHER PROJECTS
Denial by the Philippines Department of Environment and Natural Resources of the Extension (Decision) was received by
Bundok Mineral Resources Corporation (BMRC) and San Manuel Mining Corporation (SMMC) on 28 May 2013. SMMC on
behalf of itself and BMRC, issued a Motion for Reconsideration (MR) to the DENR on 7 June 2013 to reverse its Decision.
The MR was denied on 6 January 2014, however in issuing the resolution, the DENR has granted SMMC until 6 January 2015
to submit a Declaration of Mining Project Feasibility in respect of the Project (DMPF). The Company successfully submitted
the DMPF on 22 December 2014 but is still yet to receive a response.
Due to the ongoing uncertainty around the approval process for the DMPF and having regard to the cash resources available
to the Company, the Directors placed wholly owned subsidiary Bundok Resources Pty Ltd into administration on 11 March
2015 and subsequently into liquidation on 28 April 2015. Bundok Resources Pty Ltd wholly owns Bundok Mineral Resources
Corporation, via Bundok Holdings Pty Ltd.
Subsequent to balance date, the Directors executed a share sale agreement with the liquidators of Bundok Resources Pty
Ltd to repurchase the Masapelid Project and Other Projects for cash consideration of $50,000, through the acquisition of
Bundok Holdings Pty Ltd.
OTHER OPPORTUNITIES
Lindian continues to assess new global opportunities in copper and gold projects as they arise.
CORPORATE:
During the period Mr Steve Formica joined the board of the Company as Non-Executive Director, Mr Eddie King, has taken
on the role as Non-Executive Chairman and Mr Matthew Wood, Mr Brian McMaster and Mr Scott Funston resigned from their
positions as Directors.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Due to the ongoing uncertainty around the approval process for the Declaration of Mining Project Feasibility and having regard
to the cash resources available to the Company, the Directors placed wholly owned subsidiary Bundok Resources Pty Ltd
into administration on 11 March 2015 and subsequently into liquidation on 28 April 2015. Bundok Resources Pty Ltd wholly
owns Bundok Mineral Resources Corporation, via Bundok Holdings Pty Ltd.
There have been no other significant changes in the state of affairs of the Group during the financial year.
Lindian Resources Limited
9
2015 Annual Report to Shareholders
Directors’ Report
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 30 October 2015, the Directors executed a share sale agreement with the liquidators of Bundok Resources Pty Ltd to
repurchase the Masapelid Project and Other Projects for cash consideration of $50,000, through the acquisition of Bundok
Holdings Pty Ltd.
On 30 October 2015, the Company signed an underwriter and corporate advisor mandate with CPS Capital Group Pty Ltd
(CPS). Under the mandate, CPS will underwrite a proposed non-renounceable rights issue on the basis of three (3) new
shares for every one (1) share held on the record date, at an issue price of $0.001 per share. Based on the current capital
structure of the Company, up to 1,090,031,850 shares will be issued pursuant to the rights issue to raise approximately
$1,090,032 before costs. The terms of the rights issue will be contained in a prospectus to be lodged with ASIC and ASX
shortly after the date of this annual report to shareholders, with the offer under the prospectus conditional on shareholders
approving the rights issue.
There were no other known significant events from the end of the financial year to the date of this 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 is not aware of any breaches in relation to environmental matters.
SHARE OPTIONS
As at the date of this report, there were 104,308,440 unissued ordinary shares under options (104,308,440 at the reporting
date). The details of the options at the date of this report are as follows:
Number
500,000
103,808,440
104,308,440
Exercise Price $
0.15
0.02
Expiry Date
14 June 2016
30 July 2018
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
No options were issued during the financial year.
131,671,754 options with an exercise price of 8 cents, expiring on 31 December 2014 and 19,250,000 options with an exercise
price of 20 cents, expiring on 28 February 2015 lapsed during the financial year.
No options were exercised during the financial year.
Lindian Resources Limited
10
2015 Annual Report to Shareholders
Directors’ Report
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 Corporations 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.
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.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
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.
Signed on behalf of the board in accordance with a resolution of the Directors.
Eddie King
Non-Executive Chairman
30 October 2015
.
Lindian Resources Limited
11
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
The Company is committed to implementing the highest standards of corporate governance. In determining what those high
standards should involve the Company has turned to the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations, 3rd Edition. The Company is pleased to advise that the Company’s practices are largely
consistent with those ASX guidelines. Where the Company does not have certain policies or committees recommended by
the ASX Corporate Governance Council (the Council) in place during the reporting period, we have identified such policies or
committees.
The Board of Directors of Lindian Resources Limited is responsible for corporate governance of the Company. The Board
guides and monitors the business and affairs of Lindian Resources Limited on behalf of the shareholders by whom they are
elected and to whom they are accountable. Where the Company’s corporate governance practices do not correlate with the
practices recommended by the Council, the Company is working towards compliance however it does not consider that all the
practices are appropriate for the Company due to the size and scale of Company operations. For further information on
corporate governance policies adopted by Lindian Resources Limited, refer to our website: www.lindianresources.com.au.
Date of last review and Board approval: 30 October 2015.
Principle/
Recommendation
Principle 1:
Lay solid foundations
for management and
oversight
Recommendation 1.1
A
disclose:
a)
listed entity should
the respective roles
and responsibilities
of its board and
management; and
those
matters
expressly reserved
to
the board and
those delegated to
management.
b)
Compliance Reference
Commentary
Yes
Board
Charter,
Independent
Professional
Advice
Policy,
Website
The Company does not currently have a Managing Director.
Therefore, all reference to a Managing Director in the
Corporate Governance Statement and its related policies
and charters will relate to the Company’s current Non-
Executive Chairman.
The Company has established the functions reserved to the
Board, and those delegated to senior executives and the
Company Secretary and has set out these functions in its
Board Charter.
commensurate with
The Board is collectively responsible for promoting the
success of the Company through its key functions of
overseeing the management of the Company, providing
overall corporate governance of the Company, monitoring
the financial performance of the Company, engaging
the
appropriate management
Company's structure and objectives, involvement in the
development of corporate strategy and performance
objectives, reviewing, ratifying and monitoring systems of
risk management and internal control, codes of conduct and
legal compliance, overseeing the Company’s process for
making timely and balanced disclosure of all material
information concerning the Company that a reasonable
person would expect to have a material effect on the price
or value of the entity’s securities and monitoring the
effectiveness of the Company’s governance practices.
Lindian Resources Limited
12
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
Director
Selection
Procedure
Website
Recommendation 1.2
A listed entity should:
a) undertake
Yes
appropriate checks
before appointing a
person, or putting
forward to security
holders a candidate
for election, as a
director; and
b) provide
security
all
in
holders with
material
information
its
possession relevant
to a decision on
whether or not
to
elect or re- elect a
director.
Senior executives are responsible for supporting Managing
Director and assisting the Managing Director in implementing
the running of the general operations and financial business
of the Company in accordance with the delegated authority
of the Board. Senior executives are responsible for reporting
all matters which fall within the Company's materiality
thresholds directly to the Chair or the lead independent
director, as appropriate. To assist directors with independent
judgement, it is the Board's policy that if a director considers
it necessary to obtain independent professional advice to
properly discharge the responsibility of their office as a
director then, provided the director first obtains approval from
the Chair for incurring such expense, the Company will pay
the reasonable expenses associated with obtaining such
advice.
follows a prescribed process whereby
In determining candidates for the Board, the Nomination
it
Committee
evaluates the mix of skills, experience and expertise of the
existing Board. In particular, the Nomination Committee is to
identify the particular skills that will best increase the Board's
effectiveness. Consideration is also given to the balance of
independent directors. Potential candidates are identified
and, if relevant, the Nomination Committee (or equivalent)
recommends an appropriate candidate for appointment to
the Board. Any appointment made by the Board is subject
to ratification by shareholders at the next general meeting.
The Board recognises that Board renewal is critical to
performance and the impact of Board tenure on succession
planning. Each director other than the Managing Director,
must not hold office (without re-election) past the third annual
general meeting of the Company following the director's
appointment or three years following that director's last
election or appointment (whichever is the longer). However,
a director appointed to fill a casual vacancy or as an addition
to the Board must not hold office (without re-election) past
the next annual general meeting of the Company. At each
annual general meeting a minimum of one director or one
third of the total number of directors must resign. A director
who retires at an annual general meeting is eligible for re-
election at that meeting and re-appointment of directors is
not automatic.
Lindian Resources Limited
13
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
Yes
Recommendation 1.3
listed entity should
A
have
written
a
agreement with each
director
senior
and
executive setting out the
terms
their
of
appointment.
at
Kept
registered
office,
Independent
Professional
Advice Policy
to
the Company’s
Each non-executive director has a written agreement with
the Company that covers all aspects of their appointment
including term, time commitment required, remuneration,
disclosure of interests that may affect independence,
guidance on complying with the Company’s corporate
governance policies and the right to seek independent
advice, indemnity and insurance arrangements, rights of
access
information and ongoing
confidentiality obligations as well as roles on the Company’s
committees. Each executive director’s agreement with the
Company includes the same details as the non-executive
directors’ agreements but also
includes a position
description, reporting hierarchy and termination clauses. To
assist directors with independent judgement, it is the Board's
policy that if a director considers it necessary to obtain
independent professional advice to properly discharge the
responsibility of their office as a director then, provided the
director first obtains approval from the Chair for incurring
such expense, the Company will pay the reasonable
expenses associated with obtaining such advice.
Recommendation 1.4
The company secretary
of a listed entity should
be accountable directly
to the board, through the
chair, on all matters to
the proper
do with
functioning of the board.
Recommendation 1.5
A listed entity should:
a) have a diversity
which
policy
includes
for
requirements
the board or a
relevant committee
of the board to set
measurable
for
objectives
gender
achieving
to
diversity and
annually
assess
both the objectives
entity’s
and
progress
in
achieving them;
b) disclose that policy
or a summary of it;
and
the
c) disclose as at the
each
period
measurable
for
of
end
reporting
the
objectives
Yes
Yes
Board
Charter
Website
The Company has established the functions reserved to the
Board, and those delegated to senior executives and the
Company Secretary and has set out these functions in its
Board Charter.
Diversity
Policy
Website
Diversity includes, but is not limited to, gender, age, ethnicity
and cultural background. The Company is committed to
diversity and recognises the benefits arising from employee
and board diversity and the importance of benefiting from all
available talent. The Company has established a Diversity
Policy, which includes requirements for the Board to
establish measurable objectives
for achieving gender
diversity and for the Board to assess annually both the
objectives and progress in achieving them.
The Company’s Diversity Strategy details the Company’s
measurable objectives for achieving gender diversity in
accordance with the Diversity Policy. In doing this, and
assigning the responsibility for the Diversity Policy and its
administration, monitoring and review. The Diversity
Strategy
including
includes a number of concepts
contribution to enhance local workforce and provision of
opportunities for career development. Initiation of programs
and schemes to achieve these goals were achieved during
the Reporting Period. The Board has also adopted a policy
to address harassment and discrimination in the Company,
which
that
it believes will
encourages a diverse workforce.
facilitate an environment
The Company set
employment of women:
the
following objectives
for
the
to the Board – 50% by 2018
Lindian Resources Limited
14
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
achieving
gender
diversity set by the
board or a relevant
the
committee of
board
in
with
accordance
the entity’s diversity
policy
its
towards
progress
them,
achieving
and either:
and
to senior management
Company Secretary) – 50% by 2018
to the organisation as a whole – 50% by 2018
(including CFO and
As at the date of this report, the Company has the following
proportion of women appointed:
to the Board – 0%
to senior management
Company Secretary) – 0%
to the organisation as a whole – 20%
(including CFO and
The Company recognises that the mining and exploration
industry is intrinsically male dominated in many of the
operational sectors and the pool of women with appropriate
skills will be limited in some instances. Where possible, the
Company will seek to identify suitable candidates for
positions from a diverse pool.
2)
1)
the respective
proportions of
and
men
women on the
board,
in
senior
executive
positions and
across
the
whole
organisation
(including how
the entity has
defined “senior
for
executive”
these
purposes); or
if the entity is
“relevant
a
employer”
under
Workplace
Gender
Equality Act,
entity’s
the
most
recent
“Gender
Equality
Indicators”, as
defined in and
published
under
Act.
Recommendation 1.6:
A listed entity should:
a) have and disclose a
for
that
the
process
periodically
evaluating
the
performance of the
board,
its
committees
and
individual directors;
and
Yes
Board,
Committee &
Individuals
Performance
Evaluation
Policy
Website
Board, its committees, the chair and individual directors
The Chair is responsible for evaluating the performance of
the Board and, when appropriate, Board committees and
individual directors deemed. A Non-Executive Director is
responsible for evaluating the Chair. The evaluations of the
Board, and any applicable Board committees and individual
directors are undertaken via informal discussions on an
ongoing basis with the Chair. The evaluation of the
Managing Director (if applicable) is undertaken via an
informal interview process which occurs annually or more
frequently, at the Board’s discretion. During the reporting
period an evaluation of Board, its committees, the chair and
individual directors took place in accordance with the
process disclosed above.
Lindian Resources Limited
15
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
b) disclose, in relation
to each reporting
period, whether a
performance
evaluation
was
undertaken in the
reporting period in
accordance
with
that process.
Recommendation 1.7:
A listed entity should:
a) have and disclose a
for
process
periodically
evaluating
the
performance of its
senior executives;
and
b) disclose, in relation
to each reporting
period, whether a
performance
evaluation
was
undertaken in the
reporting period in
accordance
with
that process.
Principle 2: Structure
the board to add value
Recommendation 2.1
The board of a listed
entity should:
a) have a nomination
Yes
No
committee which:
1) has at
least
three members,
of
a majority
whom
are
independent
directors; and
is chaired by an
independent
director,
disclose:
the charter of
the committee;
the members of
the committee;
and
and
2)
3)
4)
5) as at the end of
each reporting
period,
the
number of times
the committee
met throughout
the period and
the
individual
attendances of
the members at
those meetings;
or
if it does not have a
nomination
committee,
disclose
fact
b)
that
Lindian Resources Limited
Board,
Committee &
Individuals
Performance
Evaluation
Policy
Website
Senior executives
The Chair is responsible for evaluating the performance of
senior executives. The evaluation of senior executives is
undertaken via an informal interview process which occurs
annually or more frequently as required and otherwise takes
place as part of the annual salary review under the senior
executives’ employment contract. During the reporting
period an evaluation of senior executives took place in
accordance with the process disclosed above.
Nomination
Committee
Charter,
Independent
Professional
Advice Policy
Website
The Board has not established a separate Nomination
Committee. Given the current size and composition of the
Board, the Board believes that there would be no efficiencies
gained by establishing a separate Nomination Committee.
Accordingly, the Board performs the role of the Nomination
Committee. Items that are usually required to be discussed
by a nomination committee are discussed at a separate
meeting when required. When the Board convenes as the
Nomination Committee it carries out those functions which
are delegated to it in the Company’s Nomination Committee
Charter. The Board deals with any conflicts of interest that
may occur when convening in the capacity of the Nomination
Committee by ensuring that the Director with conflicting
interests is not party to the relevant discussions.
the role, composition,
To assist the Board to fulfil its function as the Nomination
Committee, it has adopted a Nomination Committee Charter
functions and
which describes
responsibilities of the Nomination Committee. The Board
met as the Nomination Committee once during the year and
all Board members were in attendance. To assist directors
with independent judgement, it is the Board's policy that if a
director considers it necessary to obtain independent
professional advice to properly discharge the responsibility
of their office as a director then, provided the director first
obtains approval from the Chair for incurring such expense,
the Company will pay the reasonable expenses associated
with obtaining such advice.
16
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
and the processes
to
employs
it
board
address
succession
issues
and to ensure that
the board has the
appropriate
balance of skills,
knowledge,
experience,
independence and
diversity to enable it
to discharge
its
duties
and
responsibilities
effectively.
Recommendation 2.2
A
listed entity should
have and disclose a
board skills matrix setting
out the mix of skills and
diversity that the board
currently has or is looking
to
its
achieve
membership.
Recommendation 2.3
A
disclose:
a)
listed entity should
in
the names of the
directors
considered by the
board
be
to
independent
directors;
if a director has an
interest, position,
association
or
relationship of the
type described in
the
Box 2.3 but
board
the
is of
opinion that it does
compromise
not
independence
the
of the director, the
nature
the
interest, position,
association
or
in
relationship
question and an
explanation of why
the board is of that
opinion; and
length
the
service
director.
of
of each
of
b)
c)
Yes
Website
The Company has reviewed the skill set of its Board to
determine where the skills lie and any relevant gaps in skills
shortages. The Company is working towards filling these
gaps through professional development initiatives as well as
seeking to identify suitable Board candidates for positions
from a diverse pool.
Yes
Board
Charter,
Independenc
e of Directors
Assessment
Website
All Director including Eddie King (appointment 13 June
2014), Kerry Griffin (appointment 16 October 2013) and
Steve Formica (appointment 15 July 2014) are deemed
independent as they are non-executive directors who are not
members of management and who are free of any business
or other relationship that could materially interfere with, or
could reasonably be perceived to materially interfere with,
the independent exercise of their judgement. The Board
considers the independence of directors having regard to the
in Box 2.3 of
relationships
the Principles &
Recommendations
the Company's materiality
and
thresholds. The Board has agreed on the following
guidelines, as set out in the Company's Board Charter, for
assessing the materiality of matters:
listed
Balance sheet items are material if they have a value
of more than 10% of pro-forma net asset.
Profit and loss items are material if they will have an
impact on the current year operating result of 10% or
more.
Items are also material if they impact on the reputation
of the Company, involve a breach of legislation, are
outside the ordinary course of business, could affect
the Company’s rights to its assets, if accumulated
involve a
would
contingent liability that would have a probable effect of
10% or more on balance sheet or profit and loss items,
or will have an effect on operations which is likely to
result in an increase or decrease in net income or
dividend distribution of more than 10%.
the quantitative
trigger
tests,
Lindian Resources Limited
17
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
Contracts will be considered material if they are outside
the ordinary course of business, contain exceptionally
onerous provisions in the opinion of the Board, impact
on income or distribution in excess of the quantitative
tests, there is a likelihood that either party will default
and the default may trigger any of the quantitative or
qualitative tests, are essential to the activities of the
Company and cannot be replaced or cannot be
replaced without an increase in cost which triggers any
of the quantitative tests, contain or trigger change of
control provisions, are between or for the benefit of
related parties, or otherwise trigger the quantitative
tests.
The Board has a majority of Directors who are independent.
Independenc
e of Directors
Assessment
Website
Independenc
e of Directors
Assessment
Website
The Board believes that there would be no efficiencies
gained by having a separate Chair due to its current size.
The Chairperson is an independent Director who is not the
CEO / Managing Director.
Director
Induction
Program,
Ongoing
Education
Framework
Website
It is the policy of the Company that each new Director
undergoes an induction process in which they are given a full
briefing on the Company. Where possible this includes
meetings with key executives, tours of the premises, an
induction package and presentations. Information conveyed
to new Directors include:
details of the roles and responsibilities of a Director;
formal policies on Director appointment as well as
conduct and contribution expectations;
a copy of the Corporate Governance Statement,
Charters, Policies and Memos and
a copy of the Constitution of the Company.
In order to achieve continuing improvement in Board
performance, all Directors are encouraged to undergo
continual professional development.
The Board has
implemented an Ongoing Education Framework.
Yes
Yes
Yes
Recommendation 2.4
A majority of the board
of a listed entity should
be
independent
directors.
Recommendation 2.5
The chair of the board of
a listed entity should be
an independent director
and, in particular, should
not be the same person
as the CEO of the entity.
Recommendation 2.6
A listed entity should have
a program for inducting
new directors and provide
appropriate professional
development
opportunities for directors
to develop and maintain
the skills and knowledge
needed to perform their
role
directors
as
effectively.
3:
Act
and
Principle
ethically
responsibly
Recommendation 3.1
A listed entity should:
a) have a code of
its
senior
and
conduct
directors,
executives
employees; and
b) disclose that code
or a summary of it.
for
Yes
of
Code
Conduct
Website
to maintain confidence
The Company has established a Code of Conduct as to the
practices necessary
the
Company's integrity, the practices necessary to take into
account its legal obligations and the reasonable expectations
of its stakeholders, and the responsibility and accountability
of individuals for reporting and investigating reports of
unethical practices.
in
Principle 4: Safeguard
integrity in corporate
reporting
Lindian Resources Limited
18
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
No
Audit
Committee
Charter
Website
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.
The Company has established procedures for the selection,
appointment and rotation of its external auditor. The Board
is responsible for the initial appointment of the external
auditor and the appointment of a new external auditor when
the Audit
any vacancy arises, as recommended by
Committee (or its equivalent). Candidates for the position of
external auditor must demonstrate complete independence
from the Company through the engagement period. The
Board may otherwise select an external auditor based on
the Company's business and
criteria
circumstances. The performance of the external auditor is
reviewed on an annual basis by the Audit Committee (or its
equivalent) and any recommendations are made to the
Board.
relevant
to
audit
Recommendation 4.1
The board of a listed
entity should: (a) have
an
committee
which:
a) has at least three
members, all of
whom
non-
are
executive directors
and a majority of
whom
are
independent
directors; and
1)
is chaired by an
independent
director, who is
not the chair of
the board,
and disclose:
2)
the charter of
the committee;
the
relevant
qualifications
and
3)
4) experience
5)
of
the members of
the committee;
and
in relation to
each reporting
the
period,
number of times
the committee
met throughout
the period and
individual
the
attendances of
the members at
those meetings;
or
b)
that
of
employs
if it does not have
an
audit
committee,
disclose
fact
and the processes
it
that
independently verify
and safeguard the
integrity
its
corporate
reporting, including
the processes for
the
appointment
and removal of the
auditor
external
and the rotation of
the
audit
engagement
partner.
Recommendation 4.2
The board of a listed
entity should, before it
approves
the entity’s
financial statements for
period,
a
receive from its CEO and
CFO a declaration that, in
their
the
opinion,
financial records of the
financial
Yes
at
Kept
registered
office
The Chairman and the Chief Financial Officer (Company
Secretary) provide a declaration to the Board in accordance
with section 295A of the Corporations Act for each financial
report and assure the Board that such declaration is founded
on a sound system of risk management and internal control
and that the system is operating effectively in all material
respects in relation to financial reporting risks.
Lindian Resources Limited
19
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
the
of
that
entity
been
have
properly maintained and
that
financial
statements comply with
appropriate
the
accounting
standards
and give a true and fair
financial
view of
the
and
position
the
performance
entity and
the
opinion has been formed
on the basis of a sound
system
risk
management
and
internal control which is
operating effectively.
Recommendation 4.3
A listed entity that has
an AGM should ensure
that its external auditor
attends its AGM and is
available
answer
to
questions from security
holders relevant to the
audit.
of
Yes
AGM
The external auditor is invited to attend every AGM for the
purpose of answering questions from security holders
relevant to the audit.
5:
Principle
Make
timely and balanced
disclosure
Recommendation 5.1
A listed entity should:
a) have
a written
policy for complying
with its continuous
disclosure
obligations
under
the Listing Rules;
and
b) disclose that policy
or a summary of it.
Principle 6: Respect
the rights of security
holders
Recommendation 6.1
A
listed entity should
provide
information
its
about
governance to investors
via its website.
itself
and
Yes
Yes
Continuous
Disclosure
Policy
Website
The Company has established written policies and
procedures designed to ensure compliance with ASX Listing
Rule disclosure requirements and accountability at a senior
executive level for that compliance. The Company has
appointed a Responsible Officer who is responsible for
ensuring
The
Responsible Officer is Eddie King, and in that person's
absence, Steve Formica.
the procedures are complied with.
Website
Disclosure
Policy
Website
The Company’s website includes the following:
Corporate Governance policies, procedures, charters,
programs, assessments, codes and frameworks
Names and biographical details of each of its directors
and senior executives
Constitution
Copies of annual, half yearly and quarterly reports
ASX announcements
Copies of notices of meetings of security holders
Media releases
Overview of the Company’s current business, structure
and history
Details of upcoming meetings of security holders
Historical market price information of the securities on
issue
Contact details for the share registry and media
enquiries
Lindian Resources Limited
20
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
to
Recommendation 6.2
listed entity should
A
design and implement an
relations
investor
facilitate
program
two-way
effective
communication
with
investors.
Recommendation 6.3
listed entity should
A
disclose the policies and
processes it has in place
to
and
facilitate
encourage participation
at meetings of security
holders.
Recommendation 6.4
A
listed entity should
give security holders the
receive
option
to
from
communications
and
send
communications to, the
entity and
its security
registry electronically.
Principle 7: Recognise
and manage risk
Recommendation 7.1
The board of a listed
entity should:
a) have a committee
or committees to
oversee risk, each
of which:
1) has at
least
three members,
of
a majority
whom
are
independent
directors; and
is chaired by an
independent
director,
disclose:
the charter of
the committee;
the members of
the committee;
and
and
2)
3)
4)
5) as at the end of
each reporting
period,
the
number of times
the committee
met throughout
the period and
the
individual
attendances of
the members at
those meetings;
or
b)
if it does not have a
risk committee or
that
committees
(a) above,
satisfy
fact
disclose that
Lindian Resources Limited
Yes
Yes
Yes
No
Shareholder
Communicati
on Policy
The Company has designed a communications policy for
promoting effective communication with shareholders and
encouraging shareholder participation at shareholder
meetings.
Shareholder
Communicati
on Policy
Website
The Company has designed a communications policy for
promoting effective communication with shareholders and
encouraging shareholder participation at shareholder
meetings.
Shareholders are regularly given the opportunity to receive
communications electronically.
Shareholder
Communicati
on Policy
Website
Risk
Management
Policy
Website
The Company does not have a risk committee. The Board is
of the opinion that due to the nature and size of the
Company, the functions performed by an risk 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.
The Board has adopted a Risk Management Policy to assist
with the identification and review of risk as well as the
responsibilities within the Company.
21
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
employs
and the processes
for
it
the
overseeing
entity’s
risk
management
framework.
Recommendation 7.2
The
a
committee of the board
should:
a)
board
or
review the entity’s
risk management
framework at least
annually to satisfy
itself
it
to be
continues
sound; and
that
b) disclose, in relation
to each reporting
period,
whether
such a review has
taken place.
listed entity should
Recommendation 7.3
A
disclose:
a)
if it has an internal
audit function, how
the
is
function
and
structured
what
it
role
performs; or
if it does not have
internal audit
an
function, that
fact
and the processes
for
it
evaluating
and
continually
improving
the
effectiveness of its
risk management
employs
b)
Yes
Risk
Management
Policy
Website
No
Audit
Committee
Charter
Website
The Board has adopted a Risk Management Policy, which
sets out the Company's risk profile. Under the policy, the
Board is responsible for approving the Company's policies
on risk oversight and management and satisfying itself that
management has developed and implemented a sound
system of risk management and internal control. Under the
policy, the Board delegates day-to-day management of risk
to the Managing Director (if not applicable, then the Chair),
who is responsible for identifying, assessing, monitoring and
managing risks. The Managing Director is also responsible
for updating the Company's material business risks to reflect
any material changes, with the approval of the Board.
In fulfilling the duties of risk management, the Managing
Director may have unrestricted access
to Company
employees, contractors and records and may obtain
independent expert advice on any matter they believe
appropriate, with the prior approval of the Board. In addition,
the following risk management measures have been adopted
by the Board to manage the Company's material business
risks:
limits
the Board has established authority
for
management, which, if proposed to be exceeded,
requires prior Board approval;
the Board has adopted a compliance procedure for the
purpose of ensuring compliance with the Company's
continuous disclosure obligations; and
the Board has adopted a corporate governance
manual which contains other policies to assist the
Company to establish and maintain its governance
practices.
During the year, management reported to the Board on the
following categories of risks affecting the Company as part
of the Company’s systems and processes for managing
material business risks: operational, financial reporting,
sovereignty and market-related risks.
The Board performs the role of Audit Committee. When the
Board convenes as the Audit Committee it carries out those
functions which are delegated to it in the Company’s Audit
Committee Charter which include reviewing the Company’s
internal financial control system. Due to the nature and size
of the Company's operations, and the Company’s ability to
derive substantially all of the benefits of an independent
internal audit function, the expense of an independent
internal auditor is not considered to be appropriate.
Lindian Resources Limited
22
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
and internal control
processes.
Recommendation 7.4
A
listed entity should
disclose whether it has
any material exposure to
economic, environmental
and social sustainability
risks and, if it does, how
it manages or intends to
manage those risks.
Yes
Corporate
Governance
Statement
The Company has considered its economic, environmental
and social sustainability risks by way of internal review and
has concluded that it is not subject to material economic,
environmental and social sustainability risks.
Remuneratio
n Committee
Charter,
Independent
Professional
Advice Policy
Website
The Board has not established a separate Remuneration
Committee, and therefore it is not structured in accordance
with Recommendation 8.1. Given the current size and
composition of the Board, the Board believes that there
would be no efficiencies gained by establishing a separate
Remuneration Committee. Accordingly, the Board performs
the role of Remuneration Committee. Items that are usually
required to be discussed by a Remuneration Committee are
discussed at a separate meeting when required. When the
Board convenes as the Remuneration Committee it carries
out those functions which are delegated to it in the
Company’s Remuneration Committee Charter. The Board
deals with any conflicts of interest that may occur when
convening in the capacity of the Remuneration Committee by
ensuring that the Director with conflicting interests is not
party to the relevant discussions.
The Board as a whole met as the Remuneration Committee
once during the year and all Board members were in
attendance. To assist the Board to fulfil its function as the
Remuneration Committee, the Company has adopted a
Remuneration Committee Charter which describes the role,
composition,
the
Remuneration Committee.
responsibilities of
functions and
independent professional advice
To assist directors with independent judgement, it is the
Board's policy that if a director considers it necessary to
to properly
obtain
discharge the responsibility of their office as a director then,
provided the director first obtains approval from the Chair for
incurring such expense,
the
reasonable expenses associated with obtaining such advice.
the Company will pay
Principle
8:
Remunerate fairly and
responsibly
Recommendation 8.1
The board of a listed
entity should:
a) have
a
No
remuneration
committee which:
1) has at
least
three members,
of
a majority
whom
are
independent
directors; and
is chaired by an
independent
director,
and disclose:
the charter of
the committee;
the members of
the committee;
and
2)
3)
4)
5) as at the end of
each reporting
period,
the
number of times
the committee
met throughout
the period and
the
individual
attendances of
the members at
those
meetings; or
if it does not have a
remuneration
committee,
fact
disclose
and the processes
it
for
employs
setting the level
and composition of
for
remuneration
and
directors
executives
senior
and ensuring
that
such remuneration
that
b)
Lindian Resources Limited
23
2015 Annual Report to Shareholders
CORPORATE GOVERNANCE STATEMENT
Yes
Remuneratio
n Policy
Website
is appropriate and
not excessive.
Recommendation 8.2
listed entity should
A
separately disclose
its
policies and practices
the
regarding
remuneration of non-
executive directors and
the
remuneration of
executive directors and
other senior executives.
Details of remuneration, including the Company’s policy on
remuneration, are contained in the Remuneration Report
which forms of part of the Annual Report. The remuneration
of non-executive directors is set by reference to payments
made by other companies of similar size and industry, and
by reference to the director’s skills and experience. Given
the Company is at its early stage of development and the
financial restrictions placed on it, the Company may consider
it appropriate to issue unlisted options to non-executive
directors, subject to obtaining the relevant approvals. The
Remuneration Policy is subject to annual review. All of the
directors’ option holdings are fully disclosed. Executive pay
and rewards consists of a base salary and performance
incentives. Long term performance incentives may include
options granted at the discretion of the Board and subject to
obtaining the relevant approvals. The grant of options is
designed to recognise and reward efforts as well as to
provide additional incentive and may be subject to the
successful completion of performance hurdles. Executives
are offered a competitive level of base pay at market rates
(for comparable companies) and are reviewed annually to
ensure market competitiveness.
Yes
Recommendation 8.3
A listed entity which has
an
equity-based
remuneration scheme
should:
a) have a policy on
Remuneratio
n Policy
Website
Executives and Non-Executive Directors are prohibited from
entering into transactions or arrangements which limit the
economic risk of participating in unvested entitlements.
whether
participants are
permitted
to
enter
into
transactions
(whether
through the use
of derivatives
or
otherwise)
which limit the
risk
economic
of participating
in the scheme;
and
b) disclose
policy
summary of it.
that
a
or
Lindian Resources Limited
24
2015 Annual Report to Shareholders
Lindian Resources Limited
Consolidated Statement of Comprehensive Income for the year ended 30 June 2015
Revenue
Interest income
Other income
Foreign exchange gain
Total Revenue
Consulting and directors’ fees
Other expenses
Share based payments
Loss from continuing operations before income tax
Income tax expense
Loss from continuing operations after income tax
Discontinued operations after income tax
Loss from discontinued operations after income tax
Notes
Consolidated
2015
$
2014
$
2,337
-
-
2,337
24,792
620
8,532
33,944
(232,095)
(197,663)
-
(390,644)
(358,430)
5,155
(427,421)
(709,975)
-
-
(427,421)
(709,975)
(14,154,997)
(146,291)
4
23
5
6
Loss attributable to owners of Lindian Resources Limited
(14,582,418)
(856,266)
Other comprehensive income
Item that may be reclassified subsequently to operating result
Foreign currency translation
Reclassification adjustments
Reclassification to profit or loss on loss of control of subsidiary
Other comprehensive (loss) for the year
-
(349,780)
(419,936)
(419,936)
-
(349,780)
Total comprehensive (loss) for the year
(15,002,354)
(1,206,046)
Loss per share attributable to owners of Lindian Resources
Limited from continuing operations
Basic and diluted loss per share (cents per share)
Loss per share attributable to owners of Lindian Resources
Limited from discontinued operations
Basic and diluted loss per share (cents per share)
Loss per share attributable to owners of Lindian Resources
Limited
Basic and diluted loss per share (cents per share)
17
17
17
The accompanying notes form part of these financial statements.
(0.12)
(0.23)
(3.89)
(0.05)
(4.01)
(0.28)
Lindian Resources Limited
25
2015 Annual Report to Shareholders
Lindian Resources Limited
Consolidated Statement of Financial Position as at 30 June 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Deferred exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET (LIABILITIES)/ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Notes
7
8
9
10
11
12
13
14
15
Consolidated
2015
$
8,867
4,650
2014
$
515,012
118,819
13,517
633,831
539
-
5,013
14,071,130
539
14,076,143
14,056
14,709,974
278,712
150,000
122,276
-
428,712
122,276
428,712
122,276
(414,656)
14,587,698
24,121,968
24,121,968
8,508,404
8,928,340
(33,045,028)
(18,462,610)
TOTAL (DEFICIENCY IN EQUITY)/EQUITY
(414,656)
14,587,698
The accompanying notes form part of these financial statements.
Lindian Resources Limited
26
2015 Annual Report to Shareholders
Lindian Resources Limited
Consolidated Statement of Cash Flows for the year ended 30 June 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Other receipts
Notes
Consolidated
2015
$
2014
$
(285,681)
(1,000,126)
2,237
-
24,442
620
NET CASH USED IN OPERATING ACTIVITIES
7
(283,444)
(975,064)
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditure on exploration
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
Share issue costs
NET CASH FROM FINANCING ACTIVITIES
Net (decrease) in cash held
Cash and cash equivalents at beginning of period
Effect of foreign exchange on cash
CASH AND CASH EQUIVALENTS AT END OF YEAR
7
The accompanying notes form part of these financial statements.
(371,590)
(371,590)
(1,484,986)
(1,484,986)
-
2,076,301
150,000
-
150,000
(505,034)
515,012
(1,111)
8,867
-
(179,039)
1,897,262
(562,788)
1,069,268
8,532
515,012
Lindian Resources Limited
27
2015 Annual Report to Shareholders
Lindian Resources Limited
Consolidated Statement of Changes in Equity for the year ended 30 June 2015
Consolidated
At 1 July 2013
Loss for the year
Other comprehensive (loss)
Total comprehensive (loss)
Transactions with owners in their capacity
as owners
Issue of ordinary shares
Capital raising costs
Exercise of options
Share based payments
At 30 June 2014
At 1 July 2014
Loss for the year
Other comprehensive (loss)
Total comprehensive (loss)
At 30 June 2015
Issued capital
$
Accumulated
losses
$
Foreign currency
translation reserve
$
Option reserves
$
Share based
payment reserves
$
22,222,985
(17,606,344)
769,716
4,106,626
4,406,933
-
-
-
(856,266)
-
(856,266)
-
(349,780)
(349,780)
2,076,234
(177,318)
67
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,121,968
(18,462,610)
419,936
4,106,626
-
-
-
-
-
-
(5,155)
4,401,778
24,121,968
(18,462,610)
419,936
4,106,626
4,401,778
-
-
-
24,121,968
(14,582,418)
-
(14,582,418)
(33,045,028)
-
(419,936)
(419,936)
-
-
-
-
-
-
-
4,106,626
4,401,778
Total
$
13,899,916
(856,266)
(349,780)
(1,206,046)
2,076,234
(177,318)
67
(5,155)
14,587,698
14,587,698
(14,582,418)
(419,936)
(15,002,354)
(414,656)
The accompanying notes form part of these financial statements.
Lindian Resources Limited
28 2014 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
1. Corporate Information
The financial report of Lindian Resources Limited (“Lindian Resources” or “the Company”) and its controlled entities (“the Group”)
for the year ended 30 June 2015 was authorised for issue in accordance with a resolution of the Directors on 30 October 2015.
Lindian Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange.
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 with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001. The Group is a for profit entity for financial reporting purposes under Australian Accounting
Standards.
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.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred losses of $14,582,418 and had net cash outflows from operating
activities of $283,444 and from exploration of activities of $371,590 for the year ended 30 June 2015.
Notwithstanding the deficiency in net assets of $414,656 at balance date, the Directors believe that it is reasonably foreseeable
that the Group will continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of
the financial report after consideration of the following factors:
On 30 October 2015, the Company signed an underwriter and corporate advisor mandate with CPS Capital Group Pty
Ltd (CPS). Under the mandate, CPS will underwrite a proposed non-renounceable rights issue on the basis of three (3)
new shares for every one (1) share held on the record date, at an issue price of $0.001 per share. Based on the current
capital structure of the Company, up to 1,090,031,850 shares will be issued pursuant to the rights issue to raise
approximately $1,090,032 before costs. The terms of the rights issue will be contained in a prospectus to be lodged with
ASIC and ASX shortly after the date of this annual report to shareholders, with the offer under the prospectus conditional
on shareholders approving the rights issue.
The directors have reduced discretionary spending and are not seeking payment of directors’ fees or fees and loans
owing to director related entities until the Company has sufficient funds; and
The Group has interim finance facility agreements with Agri-Projects Pty Ltd and Albatross Pass Pty Ltd, which each
lender agreeing to provide a secured loan facility to Lindian Resources of up to $250,000 and $120,000 respectively.
Currently, $160,000 has been drawn down, leaving a further $210,000 in loan facilities available.
In considering the above, the directors have reviewed the Group’s financial position and are of the opinion that the use of the
going concern basis of accounting is appropriate as they believe the Group will be able to secure funds to meet non-related party
creditors.
Lindian Resources Limited
29
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
However, if the Group is not successful in securing sufficient funds, there is a material uncertainty that may cast significant doubt
whether the Group will continue as a going concern and therefore the Group may be unable to realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial report.
The financial report does not contain any adjustments relating to the recoverability and classification of recorded assets or to the
amounts or classification of recorded assets or liabilities that might be necessary should the Group not be able to continue as a
going concern.
(b) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 24.
(c) Compliance statement
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report
containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting
Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.
(d) Adoption of new and revised standards
In the year ended 30 June 2015, the Directors have 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. The Directors have also reviewed
all new standards and interpretations that have been issued but are not yet effective for the year ended 30 June 2015. It has been
determined by the Directors 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 control. The Company controls
an entity when the company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power to direct the activities of the entity.
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.
Lindian Resources Limited
30
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
(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 subsidiary 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.
(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.
Lindian Resources Limited
31
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
Derecognition
Additions of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from
its use or disposal.
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
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) Deferred Exploration and Evaluation 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
32
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the requirements of
AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration assets acquired are reassessed on a regular basis and
these costs are carried forward provided that at least one of the conditions referred to in AASB 6 is met.
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
33
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
(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.
(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.
(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.
Lindian Resources Limited
34
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
(r) Earnings per share
Basic 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:
the 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 statement of cash flows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
(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.
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’).
Lindian Resources Limited
35
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
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 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 expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated
as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of
the original award, as described in the previous paragraph.
The 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) Comparative figures
When required by Accounting Standards, comparatives have been adjusted to conform to changes in presentation for the current
financial year.
(v) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value
is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they
act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use.
Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are
determined based on a reassessment of the lowest level input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable,
with external sources of data.
Lindian Resources Limited
36
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
(w) 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, including
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.
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.
(x) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit
or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are
recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility
to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate for an equivalent non-convertible
note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the note.
The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders’ equity, net
of income tax effects.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit
or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting period.
Lindian Resources Limited
37
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
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 (2014 - 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.
4. Other Expenses
Accounting and audit fees
Insurance
Occupancy
Legal fees
Listing and share registry costs
Travel
Printing and stationary
Depreciation
Others
Total other expenses
Consolidated
2015
$
39,841
8,600
82,827
4,915
22,574
26,012
2,143
294
10,457
2014
$
80,331
13,221
120,000
6,150
41,398
30,911
7,253
29,586
29,580
197,663
358,430
Lindian Resources Limited
38
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
5. Income Tax
(a) Income tax expense
Major component of tax expense for the year:
Current tax
Deferred tax
(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
Loss from discontinued operations before income tax expense
Total loss before income tax expense
Tax at the group rate of 30%
Non-deductible expenses
Non-assessable income
Income tax benefit not brought to account
Income tax expense
(c) Unrecognised deferred tax balances
The following deferred tax assets and liabilities have not been brought to
account:
Deferred tax assets comprise:
Losses available for offset against future taxable income - revenue
Other deferred tax balances
Deferred tax liabilities comprise:
Other deferred tax balances
(d) Income tax expense not recognised direct in equity during the year:
Share-issue costs
Consolidated
2015
$
2014
$
-
-
-
-
-
-
(427,421)
(709,975)
(14,154,997)
(146,291)
(14,582,418)
(856,266)
(4,374,725)
(256,880)
1,043
(1,547)
(222,864)
4,596,546
-
-
258,427
-
3,955,656
3,870,920
2,248,148
-
6,203,804
3,870,920
(338,821)
-
-
(53,712)
The benefit for tax losses will only be obtained if:
(i)
the Group derives future assessable income in Australia of a nature and of an amount sufficient to enable the benefit
from the deductions for the losses to be realised;
(ii)
the Group continues to comply with the conditions for deductibility imposed by tax legislation in Australia; and
(iii) no changes in tax legislation in Australia, adversely affect the Group in realising the benefit from the deductions for
the losses.
Lindian Resources Limited
39
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
6. Discontinued Operations
The Directors placed wholly owned subsidiary Bundok Resources Pty Ltd into administration on 11 March 2015 and
subsequently into liquidation on 28 April 2015. Bundok Resources Pty Ltd wholly owns Bundok Mineral Resources Corporation,
via Bundok Holdings Pty Ltd. The operations of these entities have been deemed to have discontinued on 11 March 2015.
Financial information relating to the discontinued operation is set out below.
The financial performance of the discontinued operation, which is included in the loss from discontinued operations per the
statement of comprehensive income, is as follows:
Revenue
Exchange differences in translation of foreign operations
Impairment of deferred exploration and evaluation expenditure
Other expenses
Loss before income tax
Income tax expense
Consolidated
2015
$
2014
$
250
2,928
1,576,664
(16,056,363)
-
-
(56,254)
(149,219)
(14,535,703)
(146,291)
-
-
Loss before income tax attributable to members of the parent entity
(14,535,703)
(146,291)
Loss on disposal of assets and liabilities on loss of control of
subsidiaries before income tax
Reclassification of items within other comprehensive income
Income tax expense
Gain on disposal of assets and liabilities on loss of control of
subsidiaries after income tax
(39,230)
419,936
-
380,706
-
-
-
-
Total loss after tax attributable to the discontinued operation
(14,154,997)
(146,291)
The net cash flows of the discontinued division, which have been
incorporated into the statement of cash flows, are as follows:
Net cash outflow from operating activities
Net cash outflow from investing activities
Net cash (outflow)/inflow from financing activities
Net cash outflow from the discontinued operation
(56,254)
(149,219)
(371,590)
(1,484,986)
-
-
(427,844)
(1,634,205)
Lindian Resources Limited
40
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
7. Cash and Cash Equivalents
Reconciliation of Cash
Cash comprises of:
Cash at bank
Short term deposits
Reconciliation of operating loss after tax to the net cash flows
from operations
Loss after tax
Non-cash items
Share-based payment
Depreciation and impairment charges
Foreign currency (gain)/loss
Foreign currency translation reserve realised on discontinued
operations
Impairment of deferred exploration and evaluation expenditure
Loss on disposal of discontinued operations
Change in assets and liabilities
Trade and other receivables
Trade and other payables
Net cash outflow from operating activities
Non-cash financing activities are as follows:
Consolidated
2015
$
2014
$
8,867
-
8,867
215,012
300,000
515,012
(14,582,418)
(856,266)
-
3,627
(5,155)
34,586
(1,576,664)
(11,000)
(419,936)
16,056,363
39,230
-
-
(964)
10,485
197,318
(147,714)
(283,444)
(975,064)
- Share-based payments (to Directors, employees and corporate advisors) as disclosed in note 23.
8. Trade and Other Receivables – Current
GST receivable
Prepayments
Security deposit
Advances
Other receivables
4,650
-
-
-
-
2,891
5,086
13,815
50,488
46,539
4,650
118,819
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
41
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
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
Total Plant and Equipment
Movements in Plant and Equipment
Plant and Equipment
At beginning of the period
Additions
Disposals
Depreciation charge for the year
Computer Equipment and Software
At beginning of the period
Additions
Disposals
Depreciation charge for the year
Motor Vehicles
At beginning of the period
Additions
Disposals
Depreciation charge for the year
Total Plant and equipment
Consolidated
2015
$
2014
$
-
-
-
890
(351)
539
-
-
-
539
-
-
-
-
-
866
-
-
(327)
539
4,147
-
700
469
(469)
-
6,210
(5,344)
866
21,452
(17,305)
4,147
5,013
37,168
-
(37,067)
(101)
-
1,805
634
-
(1,573)
866
9,481
-
(70)
(3,447)
(5,264)
-
539
4,147
5,013
Lindian Resources Limited
42
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
10. Deferred Exploration and Evaluation Expenditure
At beginning of the period
Exploration expenditure during the year
Net exchange differences on translation
Impairment of deferred exploration and evaluation expenditure
Total exploration and evaluation*
Consolidated
2015
$
2014
$
14,071,130
12,855,286
434,934
1,555,982
1,550,299
(340,138)
(16,056,363)
-
-
14,071,130
Due to the ongoing uncertainty around the approval process for the Declaration of Mining Project Feasibility and having regard
to the cash resources available to the Company, the Directors placed wholly owned subsidiary Bundok Resources Pty Ltd
into administration on 11 March 2015 and subsequently into liquidation on 28 April 2015. Bundok Resources Pty Ltd wholly
owns Bundok Mineral Resources Corporation, via Bundok Holdings Pty Ltd. As a result, the Company value of all deferred
exploration and evaluation expenditure has been fully impaired.
11. Trade and Other Payables
Trade payables
Accruals
Other
177,281
101,431
-
47,849
72,409
2,018
278,712
122,276
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. Borrowings
Shareholder loan – Albatross Pass Pty Ltd 1
Shareholder loan – Agri-Project Services Pty Ltd 2
100,000
50,000
150,000
-
-
-
1 On 26 November 2014, the Group reached an agreement with Albatross Pass Pty Ltd, a shareholder of the Consolidated
Entity, with a subsequent agreement amendment executed on 17 December 2014, providing the Group with a total loan facility
of $120,000. Of the $120,000 available, $100,000 had been drawn down as at 30 June 2015 to pay trade payables that are
due and payable, with a further $10,000 drawn down subsequent to 30 June 2015. The terms of the loan are as follows:
The loan is repayable on 31 December 2015;
Interest rate of 6% flat rate over the term of the loan;
The loan is secured over all of Lindian Resources’ present and after acquired assets and undertakings; and
If the Group undertakes an equity raising at any time prior to the repayment date, then the Group agrees to repay
the lender in share capital valued to the equivalent of any outstanding monies. The amount of shares to be issued
shall be the equivalent to the outstanding monies divided by the issue price of the capital raising.
2 On 7 May 2015, the Group signed an interim finance facility agreement with Agri-Project Services Pty Ltd (‘AP’), to provide
a secured loan to Lindian Resources of up to $250,000. Of the $250,000 available, $50,000 had been drawn down as at 30
June 2015 to pay trade payables that are due and payable. The ability to drawdown on the balance of the loan requires prior
written consent, which may be withheld without reason. The terms of the loan are as follows:
The loan is repayable on 31 December 2015;
Interest rate of 10% flat rate over the term of the loan;
The loan is secured over all of Lindian Resources’ present and after acquired assets and undertakings; and
Lindian Resources Limited
43
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
If the Group undertakes an equity raising at any time prior to the repayment date, then the Group agrees to, at the
Lenders election, repay the Lender in share capital valued to the equivalent of any outstanding monies. The amount
of shares to be issued shall be the equivalent to the outstanding monies divided by the issue price of the capital
raising.
13. Issued Capital
(a) Issued capital
Ordinary shares fully paid
(b) Movements in shares on issue
At beginning of the period
Exercise of options
Entitlement issue
Less fundraising costs
At 30 June
(c) Ordinary shares
Consolidated
2015
$
2014
$
24,121,968
24,121,968
2015
2014
Number of
shares
$
Number of
$
shares
363,343,950
24,121,968 155,717,160
22,222,985
-
-
-
-
3,324
67
- 207,623,466
2,076,234
-
-
(177,318)
363,343,950
24,121,968 363,343,950
24,121,968
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.
(d) Capital risk management
The Group’s capital comprises share capital, reserves less accumulated losses amounting to a deficiency of $414,656 at 30
June 2015 (2014: equity of $14,587,698). 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 2015, there were 104,303,440 unissued ordinary shares under options (2014: 255,230,194 options). The details of
the options are as follows:
Number
Exercise Price $
Expiry Date
500,000
103,808,440
104,303,440
0.15
0.02
14 June 2016
30 July 2018
No options were issued or exercised during the financial year. 131,671,754 options with an exercise price of 8 cents, expiring
on 31 December 2014 and 19,250,000 options with an exercise price of 20 cents, expiring on 28 February 2015 lapsed during
the financial year.
Lindian Resources Limited
44
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
14. Reserves
Share based payment reserve
Option reserves
Foreign currency translation reserve
Movements in Reserves
Share based payment reserve
At beginning of the period
Share based payment (income) expense
Balance at the end of the year
Consolidated
2015
$
2014
$
4,401,778
4,401,778
4,106,626
4,106,626
-
419,936
8,508,404
8,928,340
4,401,778
4,406,933
-
(5,155)
4,401,778
4,401,778
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
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
4,106,626
4,106,626
-
-
4,106,626
4,106,626
419,936
769,716
(419,936)
(349,780)
-
419,936
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.
15. Accumulated Losses
Movements in accumulated losses were as follows:
At beginning of the year
Loss
Balance at the end of the year
18,462,610
17,606,344
14,582,418
856,266
33,045,028
18,462,610
Lindian Resources Limited
45
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
16. 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 Ltd1
Bundok Holdings Pty Ltd1
Bundok Mineral Resources Corporation1
Incorporation
Australia
Australia
Australia
Philippines
2015
100%
-
2008
-
-
2014
100%
100%
2008
100%
100%
1 Bundok Resources Pty Ltd was placed into voluntary administration on 11 March 2015, with control deemed to be lost on
this date. Bundok Holdings Pty Ltd and Bundok Mineral Resources Corporation, wholly owned subsidiaries of Bundok
Resources Pty Ltd, were also deemed to be disposed of on this date.
17. Loss per Share
Loss used in calculating basic and dilutive EPS from
continuing operation
Loss used in calculating basic and dilutive EPS from
discontinued operations
Consolidated
2015
$
2014
$
(427,421)
(709,975)
(14,154,997)
(146,291)
Loss used in calculating basic and dilutive EPS
(14,582,418)
(856,266)
Number of Shares
Weighted average number of ordinary shares used in calculating
basic earnings / (loss) per share (*):
363,343,950 301,340,087
Effect of dilution:
Share options*
-
-
Adjusted weighted average number of ordinary shares used in
calculating diluted loss per share:
363,343,950 301,340,087
* There is no impact from the 104,303,440 options outstanding at 30 June 2015 (2014: 255,230,194 options) on the earnings
per share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the future. There have
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.
Lindian Resources Limited
46
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
18. Expenditure Commitments
Exploration commitments contracted for at reporting date but not recognised as liabilities are as follows:
Consolidated
2015
$
2014
$
Within one year
After one year but not longer than 5 years
19. Auditors’ Remuneration
The auditor of Lindian Resources Limited is HLB Mann Judd (2014: RSM Bird
Cameron Partners)
Amounts received or due and receivable by the auditor for :
- an audit or review of the financial report of the entity and any other entity in the
Group
-
-
-
125,774
-
125,774
26,500
26,500
26,500
26,500
20. Key Management Personnel Disclosures
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
Share based payments
Total remuneration
218,246
468,989
-
-
218,246
468,989
The Group has liabilities of $147,290 for unpaid Key Management Personnel remuneration at 30 June 2015.
21. Related Party Disclosures
The ultimate parent entity is Lindian Resources Limited. Refer to note 16 for list of all subsidiaries within the group.
Garrison Capital Pty Ltd, a company of which Mr. Wood and Mr. McMaster are directors and shareholders, provided the Group
up to September 2015 with a fully serviced office including administration and information technology support totalling $30,000
(2014: $120,000) and reimbursement of payments for courier, accounting and other minor expenses totalling $8,963 (2014:
$45,777). $3,155 (2014:$13,875) was outstanding at year end.
These transactions have been entered into on normal commercial terms and conditions no more favourable than those available
to other parties unless otherwise stated.
Lindian Resources Limited
47
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
22. Financial Risk Management
Exposure to interest rate, liquidity, and credit risk arises in the normal course of the Group’s business. The Group does not
hold or use derivative financial instruments. 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
Borrowings
8,867
515,012
4,650
118,819
278,712
150,000
122,276
-
The fair value of financial assets and liabilities at balance date approximate their carrying values.
Financial Risk Management Policies
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 Group’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 the Group’s future capital needs include the 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 raisings
will be adequate to meet our expected capital needs.
Maturity analysis for financial liabilities
Financial liabilities of the Group comprise trade and other payables and borrowings. As at 30 June 2014, all trade and other
payables contractually matured within 60 days.As at 30 June 2015, all trade and other payables and borrowings are expected
to contractually mature within 1-3 months, subject to the completion of the non-renounceable rights issue as disclosed in note
2(a).
(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
48
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
Consolidated
2015
$
2014
$
Cash and cash equivalents
8,867
515,012
Interest rate sensitivity
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
2015
$
88
(88)
2014
$
5,150
(5,150)
Increase/(Decrease)
2015
$
88
(88)
2014
$
5,150
(5,150)
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 2014.
(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 2015, 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 2015.
23. Share Based Payments
(a) Recognised share based payment transactions
Share based payment transactions recognised either as operating expenses in the statement of comprehensive income, capital
raising expenses in equity or exploration expenditure on the statement of financial position as follows:
Operating expenses
Employee share based payment
Consolidated
2015
$
-
-
2014
$
(5,155)
(5,155)
(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.
Lindian Resources Limited
49
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
The fair value at grant date of options granted during the prior 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. No options
were granted under ESOP during the financial year.
The table below summaries options granted under ESOP during the previous financial years:
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
500,000
17 April 2012 28 February 2015
$0.20 1,050,000
18 May 2012 28 February 2015
$0.20 9,250,000
10,800,000
0.7
$0.20
Weighted remaining contractual life
(years)
Weighted average exercise price
24. Parent Entity Information
-
-
-
-
-
-
-
-
500,000
500,000
-
(1,050,000)
-
(9,250,000)
-
-
-
-
- (10,300,000)
500,000
500,000
-
-
-
0.9
0.9
$0.20
$0.15
$0.15
The following details information related to the parent entity, Lindian Resources Limited, at 30 June 2015. 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
Total Liabilities
Net (Liabilities)/Assets
Issued capital
Reserves
Accumulated losses
Total (Deficiency in Equity)/Equity
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Parent
2015
$
13,517
539
14,056
428,482
428,482
2014
$
495,756
14,149,210
14,644,966
57,431
57,431
(414,426)
14,587,535
24,121,968
24,121,968
8,508,404
8,508,404
(33,044,798)
(18,042,837)
(414,426)
14,587,535
(15,001,961)
(1,206,210)
-
-
(15,001,961)
(1,206,210)
Lindian Resources Limited
50
2015 Annual Report to Shareholders
Lindian Resources Limited
Notes to the financial statements at and for the year ended 30 June 2015
Guarantees
Lindian Resources Limited has not entered into any guarantees in relation to the debts of its subsidiary.
Other Commitments and Contingencies
Lindian Resources Limited has commitments which are disclosed in note 18. There are no commitments to acquire property,
plant and equipment. The company has no contingent liabilities.
25. 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 2015. The
balance of the franking account is Nil as at 30 June 2015 (2014: Nil).
26. Events Subsequent to Balance Date
On 30 October 2015, the Directors executed a share sale agreement with the liquidators of Bundok Resources Pty Ltd to
repurchase the Masapelid Project and Other Projects for cash consideration of $50,000, through the acquisition of Bundok
Holdings Pty Ltd.
On 30 October 2015, the Group signed an underwriter and corporate advisor mandate with CPS Capital Group Pty Ltd. Under
the mandate, CPS will underwrite a proposed non-renounceable rights issue on the basis of three (3) new shares for every
one (1) share held on the record date, at an issue price of $0.001 per share. Based on the current capital structure of the
Company, up to 1,090,031,850 shares will be issued pursuant to the rights issue to raise approximately $1,090,032. The
terms of the rights issue will be contained in a prospectus to be lodged with ASIC and ASX shortly after the date of this annual
report to shareholders, with the offer under the prospectus conditional on shareholders approving the rights Issue.
There were no other known significant events from the end of the financial year to the date of this report.
27. Contingent Liabilities
There are no known contingent liabilities as at 30 June 2015.
Lindian Resources Limited
51
2015 Annual Report to Shareholders
Directors’ Declaration
In accordance with a resolution of the Directors of Lindian Resources Limited, I state that:
1). In the opinion of the Directors:
(a)
the financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the financial position of the Group as at 30 June 2015 and of its
performance, for the year ended on that date; and
(ii)
complying with Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001.
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
(c)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed
in note 2(c).
2). This declaration has been made after receiving the declarations required to be made by the director in accordance with
sections 295A of the Corporations Act 2001 for the year ended 30 June 2015.
On behalf of the board
Eddie King
Non-Executive Chairman
30 October 2015
Lindian Resources Limited
52
2015 Annual Report to Shareholders
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Lindian Resources Limited for the
year ended 30 June 2015, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
30 October 2015
D I Buckley
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
Lindian Resources Limited
53
2015 Annual Report to Shareholders
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 (“the company”),
which comprises the consolidated statement of financial position as at 30 June 2015, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity
and the 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 for
the Group. The Group comprises 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(c), the directors also state, in accordance with Accounting Standard AASB 101:
Presentation of Financial Statements, that the financial report complies with International Financial
Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Group’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 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.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
Lindian Resources Limited
54
2015 Annual Report to Shareholders
Auditor’s opinion
In our opinion:
(a)
the financial report of Lindian Resources Limited is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2015 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(c).
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 2(a) of the financial report which indicates
that the Group will be required to secure funding from a capital raising in order to continue as a going
concern. Should the Group not be successful in securing sufficient funds, there is a material
uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern
and therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal
course of business.
Report on the Remuneration Report
We have audited the remuneration report included in the directors’ report for the year ended 30 June
2015. The directors of the company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance
with Australian Auditing Standards.
Auditor’s opinion
In our opinion the remuneration report of Lindian Resources Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
30 October 2015
D I Buckley
Partner
Lindian Resources Limited
55
2015 Annual Report to Shareholders
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 30 October 2015.
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
Paul Gabriel Sharbanee
Jason Peterson
Matthew Wood
Distribution of Share Holders
No. of Ordinary
Shares
30,403,935
Percentage
%
8.37
22,154,409
30,337,500
6.09
8.35
Ordinary Shares
Number of Holders
Number of Shares
1 - 1000
1001 - 5000
5001 - 10,000
10,001 - 100,000
100,001 and above
Total
426
441
160
379
247
1,653
211,740
1,073,596
1,204,627
15,403,759
345,450,228
363,343,950
There were 403 holders of ordinary shares holding less than a marketable parcel.
Top Twenty Share Holders
Name
MR PAUL GABRIEL SHARBANEE
MR STEVEN STEWART LEITHEAD
NEFCO NOMINEES PTY LTD
CELTIC CAPITAL PTY LTD
STEVSAND HOLDINGS PTY LTD
ALBATROSS PASS PTY LTD
MR MATTHEW GADEN WESTERN WOOD
ZERO NOMINEES PTY LTD
DR SALIM CASSIM
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR FRANCIS SCOTT FUNSTON & MRS VICTORIA ALEXIS SUZANNE
FUNSTON
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MIKADO CORPORATION PTY LTD
SHAH NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
MR MICHAEL ROBERT FRANCO & MR ROBERT MARIO FRANCO & MISS
LAURA MICHELLE FRANCO
MR JOSE LEVISTE JNR
GOLDREEF CORPORATION PTY LTD
NEWMEK INVESTMENTS PTY LTD
MR JASON PETERSON & MRS LISA PETERSON
Number of Ordinary
Shares held
22,053,934
19,000,000
18,000,000
16,747,875
14,666,667
12,448,642
12,437,500
12,132,952
12,000,000
8,555,575
8,207,500
7,640,385
7,494,242
6,166,667
5,816,887
5,250,000
5,206,195
4,812,473
4,400,000
4,204,867
%
6.07
5.23
4.95
4.61
4.04
3.43
3.42
3.33
3.30
2.35
2.26
2.10
2.06
1.70
1.60
1.44
1.43
1.38
1.21
1.16
195,404,182
57.04
56
ASX Additional Information
Voting Rights
All ordinary shares carry one vote per share without restriction.
On-Market Buy Back
There is no current on-market buy back.
Top Twenty Option Holders Expiry 30 July 2018 Exercisable at $0.02
Name
MR PAUL GABRIEL SHARBANEE
CELTIC CAPITAL PTY LTD
NEFCO NOMINEES PTY LTD
STEVSAND HOLDINGS PTY LTD
MR STEVEN STEWART LEITHEAD
ZERO NOMINEES PTY LTD
DR SALIM CASSIM
MR MATTHEW GADEN WESTERN WOOD
ALBATROSS PASS PTY LTD
SHAH NOMINEES PTY LTD
MR FRANCIS SCOTT FUNSTON & MRS VICTORIA ALEXIS SUZANNE
FUNSTON
MIKADO CORPORATION PTY LTD
NEWMEK INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR MANVEL BAGRATYAN
VEGA FUNDS PTY LTD
BILL BROOKS PTY LTD
MR MICHAEL ROBERT FRANCO & MR ROBERT MARIO FRANCO & MISS
LAURA MICHELLE FRANCO
AGENS PTY LTD
MAGENTACITY PTY LTD
Number of Options
held
9,276,134
7,500,000
7,500,000
6,333,334
5,000,000
4,680,844
4,000,000
3,500,000
3,109,471
2,833,334
2,500,000
2,500,000
1,900,000
1,873,624
1,800,000
1,500,002
1,500,000
1,500,000
1,250,000
1,250,000
%
8.94
7.22
7.22
6.10
4.82
4.51
3.85
3.37
3.00
2.73
2.41
2.41
1.83
1.80
1.73
1.44
1.44
1.44
1.20
1.20
71,306,743
68.69
57
Tenement Table
Project
Tenure Title
Tenure
Masapelid
Del Gallego
Abra
Owner
SMMC 1
BMRC
BMRC
Reference
MPSA 004-91-XI
EP V 2001-001
EXPA 90-CAR
Status of
Tenure
Granted
Application
Application
Lindian
Interest
- 2
- 2
- 2
Tenure
Expiry
2016
N/a
N/a
‘BMRC’ = Bundok Mineral Resources Corporation
‘SMMC’ = San Manuel Mining Corporation
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. SMMC, as the titleholder, is required to maintain title to the MPSA.
2 On 30 October 2015, the Directors executed a share sale agreement with the liquidators of Bundok Resources Pty Ltd to
repurchase the Masapelid Project and Other Projects for cash consideration of $50,000, through the acquisition of Bundok
Holdings Pty Ltd.
58