d For personal use only - Australian Securities Exchange2008/10/09 · T 8 (ABN 36 008 988 583)...
Transcript of d For personal use only - Australian Securities Exchange2008/10/09 · T 8 (ABN 36 008 988 583)...
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Registered Officesecond Floor24 Outram streetWEsT PERTh WA 6005Ph: (08) 9481 1211Fax: (08) 9481 1233
DirectorsKim Robinson Executive chairmanJoe Treacy Executive directormark Ashley Non-Executive director (chairman Audit committee)Ross hutton Non-Executive director (Audit committee)John (shad) Linley Non–Executive director (Audit committee)
The Full Board constitutes the Remuneration and Nomination committees.
Company Secretarydavid Peterson
AuditorsWhK horwathLevel 6 256 st georges Terrace PERTh WA 6000
Share Registrarsecurity Transfer Registrars Pty Ltd770 canning highwayAPPLEcROss
WA 6153
Legal AdviserNeil Fearisminter EllisonLevel 49, central Park152-158 st georges TcePERTh WA 6000
BankersNational Australia Bank Ltd1234 hay streetWEsT PERTh WA 6005
Stock Exchange ListingKagara Ltd’s fully paid ordinary shares are quoted on the AsX Ltd.
ASX CodeKZL
Annual General MeetingThe 26th Annual general meeting of the company will be held at celtic club, 1st Floor, 48 Ord street, West Perth at 11.00am Friday 7 November 2008.
Website Visit our web site which is updated regularly at:www.kagara.com.au
Email: [email protected]
K A G A R A 2 0 0 8 A N N U A L R E P O R T
2 HiGHLiGHTs
4 CHAiRmAN’s LETTER
6 FiNANCiAL REviEw
8 OPERATiONs REviEw
18 DiRECTORs’ REPORT
30 CORPORATE GOvERNANCE sTATEmENT
41 FiNANCiAL sTATEmENTs
75 DiRECTORs’ DECLARATiON
76 iNDEPENDENT AUDiT REPORT
78 AUDiTOR’s iNDEPENDENCE DECLARATiON
79 ADDiTiONAL AsX iNFORmATiON
1 Kagara Limited Annual Report 2008
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• NetprofitAfteR tAx Of
A$65 MILLION.
• eBitDA Of A$131 MILLION.
• SAleSreveNueOf A$302 MILLION.
• MetAlproDuctioN fOR the
yeAR tOtALLed 40,940 tONNes Of
cONtAINed zINc, 9,359 tONNes Of
cONtAINed LeAd ANd 26,326 tONNes
Of cONtAINed cOppeR.
• cAShMArgiN fROM the Mt GARNet
ANd thALANGA cOppeR pLANts
Of Us$1.78 peR pOUNd Of pAyAbLe
cOppeR.
• cAShMArgiN fROM the Mt GARNet
pOLyMetALLIc pLANt Of Us$0.55 peR
pOUNd Of pAyAbLe zINc.
• cAShoNhAND pLUs ReceIvAbLes Of
A$71 MILLION At yeAR eNd.
• MuNgANAtreAtMeNtplANt
cONstRUctION cOMMeNced.
• MtgArNetdecLINedcOMMeNced.
• louNgelizArD INItIAL ResOURce
Of 5.7 MILLION tONNes At 1.08%
NIcKeL (INcLUdING 263,000 tONNes At
6.4% NIcKeL.)
• reDDoMeGOLd INteRsectION Of
63.4 MetRes At 3.14 G/t GOLd.
• ADMirAlBAyINItIAL ResOURce Of
72 MILLION tONNes At 3.1% zINc,
2.9% LeAd, 18 G/t sILveR ANd
11% bARIUM.
• victoriAINItIAL ResOURce Of
3.4 MILLION tONNes At 5.1% zINc
ANd 1% cOppeR.
2 Kagara Limited Annual Report 2008 3 Kagara Limited Annual Report 2008
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dear shareholder,
In spite of significantly lower zinc and copper prices, and
increasing costs, the year has been a very successful one for
Kagara. A net profit after tax of A$65 million was achieved
based on earnings before tax, amortization and depreciation
(ebItdA) of A$131 million. Although input costs increased,
cash costs for zinc remained at Us$0.55 per pound of
payable zinc produced and for copper reduced to Us$1.45
per pound of payable copper produced. the lower profit was
largely a result of a stronger Australian dollar which, over
the year averaged 15 percent higher than the previous year.
several significant development projects were advanced
during the year. the most important of these was the
continued development of the Mungana decline. this
decline will serve the dual purpose of firstly extracting the
very high grade Mungana base metal deposit and secondly
evaluating the 43 million tonne Mungana gold-copper-silver-
molybdenum deposit. construction of the treatment plant
to process the Mungana base metal commenced during the
year and is due for completion in March 2009, at which
point Kagara’s zinc production will more than double to
in excess of 100,000 tonnes annually. copper production
will also increase by more than 35% to between 35,000
and 40,000 tonnes in the 2008-2009 year a result.
the Mt Garnet decline and the extension of the dry River
south decline down plunge to the dry River south deeps
resource also commenced. As an environmental initiative
an IxeW plant was also installed at thalanga and is now
producing copper metal from mine water on site.
exploration was again very successful with an increase in
resources net of depletion recorded for the year. the most
important additions to Kagara’s inventory in North Queensland
were an initial resource of 3.44 million tonnes grading 1.0%
copper and 5.1% zinc at victoria and extensions to the
high grade Waterloo deposit which now contains 464,000
tonnes grading 15.5% zinc, 2.9% copper 2.2% lead, 76
grams per tonnes silver and 1.39 grams per tonne gold. In
Western Australia, an initial inferred resource of 72 million
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tonnes grading 6.1% lead plus zinc was announced for
the Admiral bay deposit and an initial indicated resource
of 5.719 million tonnes grading 1.08% nickel including
263,000 tonnes grading 6.4% nickel was announced for
the Lounge Lizard deposit. several gold intersections of
up to 63.45 metres grading 3.14 grams per tonne gold at
Red dome, up to 69.00 metres at 2.44 grams per tonne
gold from grade control drilling underground at Mungana
and a developing gold-copper system beneath the victoria
deposit offer an exciting development option for the future.
Kagara is on a strong growth path with an extraordinary
pipeline of exploration and development projects
backed by an outstanding team of employees and
contractors. With these complementary assets, we
can look forward to a long and productive future. In
light of a refocus on growth at the present time, your
directors have decided not to distribute a dividend for
the 2007/08 year. these funds will be primarily directed
towards completing the Mungana development which
will underwrite strong cash flows going forward.
I thank all our shareholders for their continued support
and look forward to meeting you at the company’s twenty
sixth AGM to be held on friday 7 November 2008.
yours faithfully,
KIM RObINsON
EXECUTIVE CHAIRMAN
15 september 2008
Basic epsRolling 12 month quaRteRly ltifR
4 Kagara Limited Annual Report 2008 5 Kagara Limited Annual Report 2008
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At Year End
eQUITY
during the financial year 1.4 million unlisted employee
options were converted in ordinary shares in the company
raising $5.8 million and increasing issued capital to
216,399,775 shares. As at 30 june 2008 unlisted options
totalled 14.6 million exercisable between $6.00 and $6.50
with expiry dates between 30 june 2009 and 30 june 2010.
eXPLOraTION & deVeLOPMeNT
exploration expenditure for the financial year totalled
$54.9 million (2006: $27.0 million), which is inclusive of
$14.4 million for the Mungana exploration decline and
$22.2 million for the Admiral bay drilling programme.
FINaNCe
during the financial year, the company refinanced its
corporate banking facilities from Investec bank (Australia)
Limited to National Australia bank Ltd. the new financing
arrangements include a corporate cash facility of $100
million, a lease facility of $40 million and a guarantee
facility of $25 million. the additional financing lines
have been put in place to accommodate the company’s
growth plans including new project developments and
corporate working capital purposes. As at 30 june 2008,
$79.0 million of the corporate cash facility, $22.0 million
of performance bonds under the guarantee facility and
$21 million under the lease facility were drawn down.
HedGING
Forward Sales Contracts
As at 30 june 2008, 4,750 tonnes of copper
was hedged at A$8,981 per tonne.
Options – Copper
the company has a hedging program in place covering
30,000 tonnes of copper maturing in 30 equal instalments
of 1,000 tonnes per month to december 2010. the
hedge program is a zero cost stepped cap collar
arrangement having a floor price of Us $1.30 per pound
of copper with a cascading ceiling price of Us $2.90 for
2008, Us $2.36 for 2009 and Us $1.81 for 2010.
Foreign exchange Contracts
during the financial year Kagara closed out Us$68.8
million of foreign exchange contracts at a flat exchange
rate of Us$0.6993 with expiry dates from january
2009 to december 2010. the total realised gain was
$19.9M and will be received by Kagara in 24 equal
monthly instalments of $828,187 from january 2009.
INVeSTMeNTS
during the financial year, the company increased its
investment in Metallica Minerals Ltd to 18.19% and also
acquired a 19.79% interest in Glengarry Resources Ltd.
reSULTS
the 2008 financial result for Kagara Ltd was A$65.0 million
compared to a profit of A$89.8 million in the previous
financial year. the result was impacted by lower zinc prices
and an appreciating Australian dollar against the United
states dollar. this was partially offset by the increase in
copper production to record levels following a full year
contribution from the thalanga copper treatment plant.
sales revenue from zinc, lead and copper concentrates
increased by 5% for the financial year to $302.3M (2007:
$287.5M). during the financial year the average zinc price
of Us$1.10 per pound of payable zinc was realised from
polymetallic operations (2007: Us$1.64) and the average
copper price of Us$3.24 per pound of payable copper
was realised from the Mt Garnet copper circuit (2007:
Us$3.33). the thalanga plant produced an average copper
price of Us$3.23 per pound of payable copper (2007:
Us$3.18) and the average Us exchange rate realised
during the financial year was $0.90 (2007: $0.79).
the cash operating cost for the Mt Garnet polymetallic
plant after by-product credits for the financial year was
Us$0.55 per pound of payable zinc (2007: Us$0.55) and
Us$1.37 per pound of payable copper (2007: Us$1.58)
for the Mt Garnet copper circuit. the cash operating cost
from the thalanga copper plant was $1.49 per pound
of payable copper (2007: Us$1.39). depreciation and
amortisation charges for the financial year was $28.2 million
(2007: $18.1 million) and employee options expensed
for the period was $5.2 million (2007: $9.1 million).
FINaNCIaL POSITION
the Group’s net asset position as at 30 june 2008 was
$236 million, an increase of 15% from the previous
financial year. cash on hand as at 30 june 2008 was
$15.8 million (2007: $14.3 million) and receivables
were $55.3 million (2007: $59.3 million).
during the financial year operating cash flows increased by
5% to $116 million (2007: $111 million) as the company
benefited from higher copper revenues. cash flows used in
investing activities increased by 36% to $147 million (2007:
$108 million) as a result of increased exploration activities at
the Admiral bay project and Mungana exploration decline.
capital expenditure on underground development activities
at Mt Garnet, balcooma and Mungana also increased during
the period along with investments in listed mining companies
of Metallica Minerals Ltd and Glengarry Resources Ltd.
the 2008 year saw the benefit of Kagara’s decision in
2006 to increase copper production and to diversify away
from zinc as the main revenue driver. copper production
increased by 44% over the previous year resulting in copper
revenue accounting for over two thirds of the total sales
revenue from operations. the increase in copper production
was due to the thalanga copper plant operating for the
full year compared to 2007 when it was undergoing
commissioning and only contributed 5 months of production.
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PrOdUCTION
the 2008 year saw the benefit of Kagara’s decision in 2006
to increase copper production and to diversify away from
zinc as the main revenue driver. during the past 12 months
Kagara produced 26,329 tonnes of copper in concentrate,
40,940 tonnes of zinc in concentrate and 9,359 tonnes of
lead in concentrate. the 44% increase in copper production
over the previous year has resulted in copper revenue
accounting for 75% of the total revenue from operations.
the increase in copper production was as a result of
the thalanga plant operating for the full year compared
to 2007 when it was undergoing commissioning and
only contributed 5 months of production. All plants
performed very well over the year with recoveries
increasing across all metals. zinc recoveries averaged
91.5% (up from 87.1% last year) and average copper
recoveries across the Mt. Garnet and thalanga plants
increased to 94.2% compared to 85.2% in 2007.
At thalanga, a trial program using an ion exchange
electrowinning (IxeW) plant to extract copper metal from
mine waters was undertaken. the aim of the trial was
to clean up the mine waters prior to release from site. A
side benefit of the IxeW plan is that it produces plus 99%
metallic copper which covers a significant portion of its
operating cost. A full scale plant has now been installed.
production of polymetallic ore from balcooma was sourced
predominantly from the dry River south underground mine
with lesser production from the balcooma polymetallic pit
and the balcooma underground mine. the balcooma open pit
copper mine continued to supply ore to both copper plants
at Mt Garnet and thalanga. All open pit mining equipment is
dry hired from eMxecO and the change to owner operator
at the beginning of the year resulted in a 20% increase in
tonnes moved, much higher equipment availability rates and
greater flexibility in mining practice. As part of the plan to
minimize production disruptions from road closures during
the wet season large stockpiles of ore were built up at all
plants. At Mt Garnet open pit mining commenced and it was
originally planned to “batch” process Mt Garnet ore over
the wet season to lessen the dependence on ore trucked
from balcooma. however following some excellent internal
metallurgical research it was found that Mt Garnet ore could
be blended with the balcooma and dry River south ores. this
has allowed steady state production to be achieved and has
contributed to the higher recoveries attained. conversely
the blended feed has a lower lead grade which is the reason
for the slight drop in lead production at Mt Garnet.
MT GarNeT POLYMeTIC PLaNT
PRODUCTiON REsULTs sEPTEmbER DECEmbER mARCH JUNE totAlQuarter
2007Quarter
2007Quarter
2008Quarter
20082007/08
ORE TREATEd
Ore treated (tonnes) 137,913 120,995 127,618 133,474 520,000
zinc grade (%) 10.5 8.5 8.2 7.3 8.6
Lead grade (%) 3.8 2.4 2.3 1.5 2.5
copper grade (%) 1.0 0.9 0.9 1.0 1.0
silver grade (g/t) 46 54 59 29 47
Gold grade (g/t) 0.5 0.5 0.5 0.4 0.5
ZINC CONCENTRATE
production (tonnes) 25,999 18,423 18,662 17,221 80,305
Grade (% zinc) 52.1 50.5 51.0 49.7 51.0
contained zinc (tonnes) 13,549 9,299 9,524 8,568 40,940
zinc Recovery (%) 93.7 90.7 90.9 90.5 91.5
LEAd CONCENTRATE
production (tonnes) 5,596 3,225 3,093 1,683 13,597
Grade (% Lead) 71.1 67.4 66.2 68.8 68.8
contained lead (tonnes) 3,977 2,173 2,049 1,160 9,359
contained silver (tonnes) 4.4 2.2 2.1 2.1 10.8
contained gold (kg) 18.3 9.4 8.3 3.2 39.2
Lead recovery (%) 76.0 73.3 69.6 67.5 71.6
COppER CONCENTRATE
production (tonnes) 3,826 3,082 2,889 4,401 14,198
Grade (% copper) 28.0 27.4 25.5 22.3 25.6
contained copper (tonnes) 1,071 844 737 984 3,636
contained silver (tonnes) 0.6 0.5 0.7 1.4 3.2
contained gold (kg) 15.0 8.2 18.3 23.5 65.0
copper recovery (%) 77.0 75.2 68.4 72.5 73.6
REVENUE
(Us $/lb of payable zinc) 1.39 1.02 1.00 0.97 1.10
CAsH COsT
(Us $/lb of payable zinc) 0.49 0.56 0.57 0.58 0.55
CAsH OpERATINg MARgIN
(Us $/lb of payable zinc) 1.02 0.46 0.43 0.39 0.55
8 Kagara Limited Annual Report 2008 9 Kagara Limited Annual Report 20088 Kagara Limited Annual Report 2008
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MT GarNeT COPPer PLaNT
PRODUCTiON REsULTs sEPTEmbER DECEmbER mARCH JUNE totAl
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Quarter2007
Quarter2008
Quarter2008
2007/08
ORE TREATEd
Ore treated (tonnes) 22,346 62,779 73,065 93,219 251,409
copper grade (%) 2.5 2.9 3.4 3.2 3.1
silver grade (g/t) 14 13 16 11 13
Gold grade (g/t) 0.4 0.3 0.4 0.3 0.3
COppER CONCENTRATE
production (tonnes) 1,824 6,609 8,926 10,817 28,176
Grade (% copper) 27.0 25.4 26.2 25.5 25.8
contained copper (tonnes) 492 1,679 2,338 2,755 7,264
contained silver (tonnes) 0.1 0.4 0.8 0.9 2.2
contained gold (kg) 4.3 10.7 11.0 13.6 39.6
copper recovery (%) 88.7 92.5 94.1 93.6 93.5
REVENUE
(Us $/lb of payable copper) 3.60 3.01 3.22 3.12 3.24
CAsH COsT
(Us $/lb of payable copper) 1.44 1.38 1.28 1.37 1.37
CAsH OpERATINg MARgIN
(Us $/lb of payable copper) 2.16 1.63 1.94 1.75 1.87
THaLaNGa COPPer PLaNT
PRODUCTiON REsULTs sEPTEmbER DECEmbER mARCH JUNE totAl
Quarter2007
Quarter2007
Quarter2008
Quarter2008
2007/08
ORE TREATEd
Ore treated (tonnes) 114,086 140,756 72,698 173,182 500,722
copper grade (%) 2.7 3.2 4.0 3.2 3.2
COppER CONCENTRATE
production (tonnes) 11,750 18,023 11,218 21,881 62,872
Grade (% copper) 24.6 24.6 25.3 24.0 24.5
contained copper (tonnes) 2,890 4,433 2,842 5,261 15,426
copper recovery (%) 94.3 92.8 96.6 94.9 94.9
REVENUE
(Us $/lb of payable copper) 3.65 2.93 3.25 3.10 3.23
CAsH COsT
(Us $/per lb of payable copper) 1.62 1.36 1.69 1.29 1.49
CAsH OpERATINg MARgIN
(Us $/lb of payable copper) 2.03 1.57 1.56 1.81 1.74
deVeLOPMeNT
As part of the development of the Mungana mine a
240 man accommodation village was established on the
outskirts of the town of chillagoe. environmental and
regulatory approvals were granted and construction of
the Mungana concentrator commenced on May 21 2008.
the plant is scheduled for completion by March 2009
with commissioning in April 2009. All major components
have been acquired and major contracts awarded and the
project is on schedule to be completed within the budget
of A$80 million dollars. total development metres for the
Mungana decline for the 12 month period was 2,697.5
metres and at year end the decline was located 2,769.4
metres from the portal at a vertical depth of approximately
400 metres. cross cuts to the orebody have been
developed on several levels and the next three months
will see the mining of approximately 50,000 tonnes of
development ore. Underground diamond drilling to help
design slope outlines for the mining of the base metal
lenses at Mungana is also providing valuable information
on the distribution and grade of the surrounding
porphyry hosted gold mineralisation. some of the better
intersections include 69 metres at 2.44 grams per tonne
gold and 62.30 metres at 2.72 gram per tonne gold.
At balcooma the exploration decline to access the dry
River south extension is well underway with production
anticipated for september 2009. the development
declines for the balcooma polymetallic orebody and the
balcooma copper deposits have encountered development
ore and stoping of the balcooma copper deposit is
planned to commence in the september quarter of 2009.
At Mt. Garnet the open pit was completed in
june 2008 and a portal for the development
of the Mt. Garnet underground orebody
commenced in March 2008 and development ore
will become available from february 2009.
10 Kagara Limited Annual Report 2008 11 Kagara Limited Annual Report 2008
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At Waterloo exploration upgraded the inferred resource
from 244,000 tonnes to an indicated and inferred resource
of 464,000 tonnes grading 15.5% zinc, 2.9% copper, 2.2%
lead 76 grams per tonne silver and 1.39 grams
per tonne gold.
All resources are detailed in the Reserves & Resources table
on pages 16 and 17.
Chillagoe
the victoria deposit, which was first discovered 2 years
ago after a shallow drilling program, was the subject
of an intense drilling campaign which resulted in the
announcement of an inferred resource of 3.44 million tones
at 5.1% zinc, 1.0% copper, 22 grams per tonne silver and
0.14 grams per tone gold. the resource is open along strike
to the south east and at depth. two significant parallel
lodes, Morrisons and triantular, were also intersected during
drilling, and the resource base is expected to increase
significantly once the results of this drilling are collated.
In addition to the zinc resource, deeper drilling has
outlined porphyry style copper-gold-molybdenum-zinc
mineralisation and an inferred resource of 1.63 million
tones at 0.6 gram per tonne gold, 0.3% copper and
2.3% zinc has been outlined. this resource is open in
all directions and the potentials demonstrated by hole
976 which returned intersections of 6.95 metres at 0.7
grams per tonne gold and 10.35 metres at 0.42 grams
per tonne gold and 0.8% copper. deeper drilling of
the porphyry style mineralisation is planned for later
in the year. the victoria porphyry mineralisation has a
similar geochemical signature to both the Red dome and
Mungana ore bodies and has significant potential.
At Red dome drilling for the extensions to the previously
mined Red dome copper gold porphyry has also been very
encouraging. the drilling was aimed at testing beneath and
along strike of hole 937 which has been reported previously
and which intersected 36.70 metres at 2.41 grams per
tonne gold and 0.19% copper. the first two holes from
the current program have been completed and the third is
underway. hole 937W4 intersected 63.45 metres at 3.14
grams per tonne gold including a higher grade zone of
41.00 metres grading 4.62 grams per tonne gold. hole
937W5 drilled above and to the west intersected 85.20
metres at 1.60 grams per tonne gold from 959.80 metres
including two high grade zones of 22.60 metres at 2.15
grams per tonne gold and 15.50 metres at 2.97 grams per
tonne gold. the gold mineralisation is vertically dipping
and is open along strike and at depth and further drilling
will determine the extent of the gold mineralisation. the
drilling program is designed to outline a target resource
of 50 million tones, which if located, would be developed
in tandem with the Mungana gold copper ore body.
eXPLOraTION
exploration during the year was again very successful with
resources inclusive of reserves increasing by 21% to 1.5
million tonnes of zinc, by 9% to 347,000 tonnes of copper,
by 9% to 40.7 million ounces of silver and by 3% to 1.7
million ounces of gold. Lead resources were down by 4% to
239,000 tonnes. In 2009-2010 zinc production is expected
to more than double from the current rate of 40,000 tonnes.
Maitland
during the year Kagara reached agreement with Glengarry
Resources Ltd to purchase the Maitland copper and
molybdenum deposit for A$6.5m. the agreement received
Glengarry shareholder approval at a general meeting
held on 9 september. the deposit has an indicated and
inferred resource of 1.5 million tonnes grading 1.5%
copper including 115,000 tonnes at 0.17% molybdenum
and is open at depth. Kagara, subject to regulatory
approval, will develop a satellite operation at Maitland
and truck ore to the thalanga mill for processing.
Thalanga
exploration at thalanga was conducted on the vomacka,
West 45 and Waterloo deposits. the vomacka and West 45
polymetallic deposits are scheduled to be processed during
calendar year 2010. during the year new resources were
calculated using data generated from infill and metallurgical
drilling. In addition, mining studies including open pit and
underground optimization, environmental and metallurgical
testwork were undertaken. the new inferred resource at
vomacka is 602,000 tonnes at 2.4% copper, 2.3% lead,
8.9% zinc, and 70 grams per tonne gold. the new West
45 inferred resource has increased to 532,000 tonnes at
0.5% copper, 3.0% lead, 7.2% zinc, 48 grams per tonne
silver and 0.26 grams per tonne gold. combined these
resources contain approximately 40% more copper, 25%
more lead and 20% more zinc than previous estimates.
e x p L O R At I O N d U R I N G t h e y e A R WA s A G A I N v e Ry s U c c e s s f U L W I t h R e s O U R c e s
I N c L U s I v e O f R e s e R v e s I N c R e A s I N G b y 2 1 % t O 1 . 5 M I L L I O N t O N N e s O f z I N c ,
b y 9 % t O 3 4 7 , 0 0 0 t O N N e s O f c O p p e R , b y 9 % t O 4 0 . 7 M I L L I O N O U N c e s O f
s I Lv e R A N d b y 3 % t O 1 . 7 M I L L I O N O U N c e s O f G O L d .
12 Kagara Limited Annual Report 2008 13 Kagara Limited Annual Report 2008
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$ 3 5 M I L L I O N h A s b e e N s p e N t O v e R t h e pA s t 1 8 M O N t h s At A d M I R A L b Ay
A N d c O N f I R M e d A d M I R A L b Ay A s A d e p O s I t O f W O R L d s I G N I f I c A N c e .
admiral Bay
An initial resource estimate for the Admiral bay deposit
containing an Inferred resource of 72 million tonnes at a
grade of 3.1% zinc, 2.9% lead, 18 grams per tonne silver
and 11% barium reported at a nominal 2% zinc equivalent
cutoff was announced on 22 August 2008. this is a subset
of a larger Inferred resource containing 97 million tonnes
at a grade of 2.4% zinc (2.3 million tonnes of zinc), 2.9%
lead (2.8 million tonnes of lead), 16 grams per tonne
silver (48 million ounces of silver) and 16% barium also
reported at a nominal 2% zinc equivalent cutoff. the model
has been restricted to a 2.1 kilometre section of an 18
kilometre strike length of known mineralisation and the
resource remains open to the east and west along strike.
the resource has been calculated by coffey Mining pty Ltd
using an inverse distance squared estimation method.
$35 million has been spent over the past 18 months at
Admiral bay and confirmed Admiral bay as a deposit of
world significance. the resource remains open to the west
where the closest drill hole is located 2 kilometres along
strike and which encountered a 13 metre intersection
grading 4.3% zinc, 3.1% lead, 29 g/t silver and 9%
barium in hole ss3 (see attached plan) and to the
east where hole ss17 encountered 25 metres grading
4.5% zinc, 0.8% lead, 23 g/t silver and 3% barium.
Intersections of up to 20 metres at 8.3% zinc, 4.9%
lead, 36 g/t silver and 21 % barium in hole AbRd1 from
within the resource, have demonstrated the potential
for higher grade zones within the overall resource.
scoping studies using the resource grades and
contemplating a 10 million tonne per year underground
operation have shown that the operation has the potential
to produce 300,000 tonnes of zinc, 250,000 tonnes of lead
and 4.5 million ounces of silver annually. Metallurgical test
work has shown that coarse grained very high quality lead
and zinc concentrates will be produced at recoveries in
excess of 95% into very high quality concentrates. the cost
of production is expected to be in the lowest quartile of
cash costs worldwide. Metallurgical test work is continuing
on the recoverability of barite to a saleable
product and it is expected that a proportion
of the 2 million tonnes of barite processed
annually will be recovered which will further
reduce the cash cost of production.
A number of development options are
currently being considered for taking the
project forward. drilling over the past
12 months has shown that defining a
reserve from surface drilling is currently
cost prohibitive and an exploration shaft
with 2.5 kilometres of lateral development
will be required to bring the project to a
bankable status. At present, a diamond
drilling program to obtain geotechnical
information in preparation for the sinking
of a shaft is nearing completion.
Forrestania Nickel (Lounge Lizard)
the Lounge Lizard project was purchased
from Lionore Mining in November 2006 for
$25 million dollars. drilling commenced at
july 2007 and an initial inferred resource
5.719 million tones grading 1.08% nickel
which was announced on 9 july 2008
included a high grade basal accumulation
of nickel sulphide indicated resource of
263,000 tonnes grading 6.4% nickel. the
resource remains open at depth, along strike
and several holes at shallower depths have
been excluded until infill drilling has been
completed down plunge of Western Areas’
drill hold ffd193W4W2 which intersected
13.30 metres grading 8.40% nickel.
With the success of the drilling program
to date, a second diamond drill rig has
been contracted to accelerate the pace
of resource definition at Lounge Lizard,
as well as testing the numerous high
quality regional exploration targets
along the Western belt at forrestania.
Lounge Lizard has now advanced to the stage where it represents a potentially low cost and low risk underground development
option with a very short development lead time, which will continue to grow in stature as drilling progresses. the Western
Areas’ flying fox decline has now progressed to a vertical depth of approximately 600 metres and is expected to be adjacent to
the Lounge Lizard deposit in december, 2009. Kagara has the right to use the decline to extract reserves from Lounge Lizard,
subject to the decline having sufficient haulage capacity and Kagara reimbursing a component of the decline capital cost. this
capital cost reimbursement will be abased on a pro rata a calculation of nickel reserves identified on the respective tenements.
14 Kagara Limited Annual Report 2008 15 Kagara Limited Annual Report 2008
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reSerVeS aNd reSOUrCeS TaBLe
ZiNC REsERvE TAbLE
dEpOsIT NOTEs CATEgORY TONNEs Zn % Cu % pb % Ag g/t Au g/t
Mt Garnet Underground probable 898,306 7.6 0.3 15
dry River south Underground proven 318,000 7.2 1.3 2.6 64 0.68
balcooma Underground probable 87,000 6.0 0.5 3.4 36 0.30
Mungana probable 1,350,000 11.8 2.0 1.1 124 1.00
King vol probable 1,317,000 11.2 0.7 0.8 36
TOTAL ZiNC REsERvE 3,970,306 10.2 1.1 0.9 63 0.40
COPPER REsERvEs TAbLE
dEpOsIT CATEgORY TONNEs Zn % Cu % pb % Ag g/t Au g/t
balcooma Open cut probable 1,167,000 0.2 3.2 0.1 15 0.34
balcooma Underground probable 958,621 0.2 3.1 - 11 0.19
TOTAL COPPER REsERvE 2,125,621 0.2 3.1 0.1 13 0.27
ZiNC REsOURCEs TAbLE (EXCLUDiNG REsERvEs)
dEpOsIT CATEgORY TONNEs Zn % Cu % pb % Ag g/t Au g/t
Mt Garnet underground Indicated 544,000 6.7 0.4 0.1 18
Mt Garnet underground Inferred 136,000 8.6 0.4 0.4 49
balcooma Upper Lens Indicated 69,000 11.5 0.9 3.9 35 0.29
balcooma Lens 2 Indicated 616,000 6.1 1.1 2.7 39 0.41
balcooma Lens 2 Inferred 10,000 7.8 0.9 3.6 36 0.35
balcooma Lens 1 sth Indicated 153,000 4.8 1.5 3.3 31 0.39
dry River south Inferred 560,000 6.4 0.9 2.3 59 0.63
Monte video Inferred 720,000 7.7 0.5 7
King vol Inferred 1,969,000 14.0 0.8 1.1 43
Mungana base Metal Indicated 230,000 13.3 2.5 5.1 173 1.21
Mungana base Metal Inferred 180,000 16.5 1.7 0.0 108 0.70
vomaka Oxide Inferred 90,000 6.5 3.3 1.9 57 0.66
vomaka transitional Inferred 230,000 9.8 2.7 2.4 79 0.84
vomaka primary Inferred 282,000 9.0 1.8 2.3 70 0.62
West 45 Inferred 532,000 7.2 0.5 3.0 48 0.26
Orient Indicated 194,000 12.0 1.0 2.9 55 0.20
Orient Inferred 72,000 15.0 0.8 3.3 68 0.20
Waterloo Indicated 307,000 18.4 3.4 2.4 83 1.71
Waterloo Inferred 157,000 9.7 1.8 1.9 64 0.75
victoria Main Inferred 2,890,000 4.8 0.9 16 0.16
victoria south Inferred 550,000 6.6 1.3 55 0.05
TOTAL ZiNC REsOURCEs 10,491,000 9.2 1.2 1.2 43 0.30
ZiNC REsOURCEs TAbLE (EXCLUDiNG REsERvEs) ADmiRAL bAY
dEpOsIT CATEgORY TONNEs Zn% Cu% pb% Ag g/t Ba%
Admiral bay Indicated 96,700,000 2.4 2.9 15 16.0
TOTAL ZiNC REsOURCEs 96,700,000 2.4 2.9 15 16.0
GOLD REsOURCEs TAbLE (EXCLUDiNG REsERvEs)
dEpOsIT CATEgORY TONNEs Zn Cu pb Ag Au
GOLd
Red dome Inferred 8,500,000 0.4 13 1.61
Mungana Upper Gold Resource Inferred 45,200,000 0.3 0.1 0.1 7 0.70
victoria Main Au-cu Inferred 1,630,000 0.3 0.3 4 0.60
surveyor 1 eastMeasured/
Indicated 119,000 - - 11.4 158 2.41
Lead oxide proven 58,600 11.9 125
Gold stockpile 36,000 2.78
TOTAL GOLD REsOURCEs 55,543,600 0.3 0.2 0.1 8 0.84
COPPER REsOURCEs TAbLE (EXCLUDiNG REsERvEs)
dEpOsIT CATEgORY TONNEs Zn% Cu% pb% Ag g/t Au g/t
Mungana copper Indicated 90,000 0.8 6.4 8.7 713 1.83
balcooma Upper Lens Indicated 79,000 1.1 2.3 0.2 7 0.20
balcooma Main Lens Indicated 169,000 0.1 3.0 0.1 14 0.30
Lens 2 cu Indicated 150,000 0.5 2.8 0.2 22 0.47
Lens 1 cu Upper Indicated 75,000 0.3 6.5 0.1 32 0.80
Lens 1 cu Upper Inferred 119,000 0.4 5.2 0.2 35 1.00
Lens 1 cu Mid Indicated 22,000 0.9 3.6 0.1 19 0.40
Lens 1 cu Mid Inferred 38,000 0.2 3.7 0.0 17 0.30
TOTAL COPPER REsOURCEs 742,000 0.5 4.1 1.2 105 0.68
NiCKEL REsOURCEs TAbLE
dEpOsIT CATEgORY TONNEs Ni% Cu% pb% Ag g/t Au g/t
Lounge Lizard Indicated 5,456,000 0.8
Lounge Lizard Indicated 263,000 6.4
TOTAL NiCKEL REsOURCE 5,719,000 1.1 - - - -
TOTAL REsERvEs & REsOURCEs 175,291,527
This report, so far as it pertains to ore and mineralisation, is based on information compiled by and as reported upon
by Mr Joe Treacy, Mr Ian Hodkinson, Mr Andrew Beaton and Mr Stephen Jones, all full time employees of Kagara
Ltd, Ms Peta Libby, an employee of Digirock Pty Ltd, Mr Ingvar Kirchner, an employee of Coffey Mining Ltd and
Mr Andrew Milne, an employee of Geocraft Pty Ltd, who are members of the Australian Institute of Geoscientists
or the Australasian Institute of Mining and Metallurgy and have over five years experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Messrs Treacy, Hodkinson, Beaton, Jones and Milne all consent to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
16 Kagara Limited Annual Report 2008 17 Kagara Limited Annual Report 2008
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Mark john Ashley, 51 b.App sc (Geology) – executive director (Appointed 15 june 1999)
Mr Ashley is a management accountant with
over 25 years experience in the natural resource
industry. Mr Ashley has held senior positions
with cluff Resource plc (executive director),
Normandy Mining (General Manager), forrestania
Gold NL (finance director), the LionOre group
(ceO) and most recently as managing director
of Apex Minerals Ltd. Mr Ashley has an
intimate knowledge of project financing and
resource-based corporate transactions both
internationally and in Australia and is chairman
of the company’s Audit committee. during the
past three years Mr Ashley has also served as a
director of the following other listed companies:
executive director of LionOre Mining •International Ltd (May 2005 to May 2006)
Non – executive director of terra Gold •Mining Ltd (March 2004 to March 2006)
Managing director of Apex Minerals Ltd •(April 2006 to date)
Non-executive director of tianshan •Goldfields Ltd (April 2006 to date)
Non-executive director of Metallica •Minerals Ltd (November 2006 to date)
Ross clive hutton, 60 b.eng (Mining) – Non-executive director (Appointed 23 july 2003)
Mr hutton has over 30 years experience in the
mining industry having graduated from the
University of Queensland in 1971 with a degree in
mining engineering. he has held senior positions
in national and international companies in the
areas of mining, smelting and project development.
previously, Mr hutton held the position of vice
president UsA Operations with pasminco. More
recently, as a consultant, Mr hutton conducted
feasibility studies on mining projects in Iran and
acted as construction superintendent for Kagara
on the Mt Garnet zinc project. he is a member
of the company’s Audit committee. during
the past three years Mr hutton has not served
as a director of any other listed companies.
dr john (shad) Linley, 62 b.sc (honours), dr of philosophy
dr Linley, until recently was ceO of sun Metals
Group Queensland and prior to that, he was former
director of the centre for strategic Industrial and
Resource development in Queensland. during his
term at the centre, he was involved in developing
a comprehensive gas strategy together with an
assessment of the long term future of the coal
industry in Queensland. formerly, he held several
executive positions in fluor engineers and prior to
that he was vice president of texasgulf Australia.
he is a member of the company’s Audit committee.
during the past three years dr Linley has also served
as a director of the following listed companies.
Non-executive director of carbon •energy Ltd (july 2008 – to date)
Non-executive director of Marathon •Resources Ltd (june 2008 – to date)
COMPaNY SeCreTarY
david William peterson, 60 bA (Acctg), cpA, fcIs
Mr peterson has been the company secretary of
the company since 1989. he was also company
secretary of forrestania Gold NL for eleven
years to 1998 and has extensive experience
in company secretarial & administration of
listed exploration and mining companies.
All directors were in office for the entire period.
dIreCTOrS
Kim Robinson, 57 b.sc (Geology) – executive chairman (Appointed 28 september 1981)
Mr Robinson is a founding director of Kagara. Mr Robinson
graduated from the University of Western Australia in 1973
with a degree in Geology and has over 30 years experience in
the minerals exploration and mining industries, including 10
years as executive chairman of forrestania Gold NL. during
his time at forrestania, Mr Robinson played a key role in the
discovery and development of the bounty Gold Mine, the
development of the Mt Mcclure Gold Mine and the discovery
of the Maggie hays and emily Ann nickel sulphide deposits.
during the past three years Mr Robinson has also served
as a director of the following other listed companies:
Non – executive chairman of carbon energy Ltd •(september 1992 to date)
Non – executive director of terra Gold Mining Ltd •(March 2004 to March 2006)
Non – executive chairman of Apex Minerals Ltd (April •2006 to date)
joseph Allen treacy, 53 b.App sc (Geology) – executive director (Appointed 15 june 1999)
Mr treacy has over 30 years experience as a geologist
specialising in gold, base metals and industrial minerals
exploration in Australia and overseas. he was appointed a
director of Kagara in 1999 and together with fellow director
Kim Robinson, was responsible for Kagara’s North Queensland
copper and zinc strategy. he is a member of the Australasian
Institute of Mining and Metallurgy and the Australian Institute
of Geoscientists. during the past three years Mr treacy has
not served as a director of any other listed companies.
the board of directors has pleasure in submitting its report in respect of the financial year
ended 30 june 2008. the names and details of the directors and company secretary of Kagara
Limited (Kagara) in office at the date of this report or at any time during the financial year are:
18 Kagara Limited Annual Report 2008 19 Kagara Limited Annual Report 2008
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c O N c e N t R At e p R O d U c t I O N f R O M t h e M t G A R N e t p O Ly M e tA L L I c p L A N t, M t G A R N e t
c O p p e R p L A N t A N d t h A L A N G A c O p p e R p L A N t WA s 2 6 , 3 2 6 t O N N e s O f c O N tA I N e d
c O p p e R , 4 0 , 9 4 0 t O N N e s O f c O N tA I N e d z I N c A N d 9 , 3 5 9 t O N N e s O f c O N tA I N e d L e A d .
Number of Securities Held
At the date of this report, the relevant interests of the directors in the shares and options of the company are:
sHAREs OPTiONs
direct Indirect direct Indirect
K Robinson 12,486,270 5,704,260 500,000 -
j A treacy 500,000 2,817,025 500,000 -
M j Ashley - 249,000 500,000 -
R c hutton - - 500,000 -
j G Linley - - 500,000 -
directors’ Meetings
there were 8 directors’ meetings (including meetings of committees and directors) held during the
financial year and the following table sets out the number of meetings attended by each director:
bOARD mEETiNGsREmUNERATiON COmmiTTEE & NOmiNATiON COmmiTTEE
mEETiNGsAUDiT COmmiTTEE mEETiNGs
Held Attended Held Attended Held Attended
K Robinson 8 8 1 1 - -
j A treacy 8 8 1 1 - -
M j Ashley 8 8 1 1 4 4
R c hutton 8 8 1 1 4 4
j G Linley 8 8 1 1 4 4
As at the date of this report, the company had an Audit committee of the board of directors with
the independent members of the committee being Mr M j Ashley (chairman), Mr R c hutton and
Mr j G Linley. the full board constitutes the Remuneration and Nomination committees.
Principal activities
the principal activities of the consolidated entity
during the financial year were mineral exploration,
development and mineral production. there were
no significant changes in the nature of the principal
activities that occurred during the financial year.
Operating result
the consolidated profit of the consolidated entity
after providing for income tax for the financial
year was $65,026,138 (2007 $89,820,897).
dividends
dividends paid to members during the
financial year were as follows:
2008 2007
$’000 $’000
final ordinary dividend for the year ended 30 june 2007 of 12 cents (2006: 10 cents) per fully paid share paid on the 17 October 2007
25,863 20,755
25,863 20,755
reVIew OF OPeraTIONS
the consolidated entity recorded a Net profit after
tax of $65.0 million for the financial year ended 30
june 2008 compared to a profit of $89.8 million in the
previous financial year. the lower profit was largely a
result of a stronger Australian dollar and lower zinc
prices. Major highlights for the financial year included:
Production
Ore mined and processed for the year was from the •balcooma and Mt Garnet open pits and underground mining at dry River south and balcooma.
concentrate production from the Mt Garnet polymetallic •plant, Mt Garnet copper plant and thalanga copper plant was 26,326 tonnes of contained copper, 40,940 tonnes of contained zinc and 9,359 tonnes of contained lead.
polymetallic cash operating costs after by-product credits •for the financial year was Us$0.55 per pound of payable zinc produced against an average realised zinc price of Us$1.10 per pound of payable zinc.
copper cash operating costs after by-product credits for •the financial year from the Mt Garnet copper circuit was Us$1.37 per pound of payable copper produced against an average realised copper price of Us$3.24 per pound of payable copper.
copper cash operating costs after by-product credits for •the financial year from the thalanga copper circuit was Us$1.49 per pound of payable copper produced against an average realised copper price of Us$3.23 per pound of payable copper.
development
several development projects were advanced during •the financial year including the commencement of construction of the company’s fourth treatment plant at Mungana. commissioning of the new plant is scheduled for April 2009.
development commenced during the financial year on •the Mt Garnet underground deposit and dry River south deeps resource.
Acquisition of the Maitland copper and molybdenum •deposit in North Queensland from Glengarry Resources Ltd, subject to Glengarry gaining shareholder approval.
exploration
Increases in resources, net of depletion, was recorded for •the financial year.
Initial nickel resources outlined at Lounge Lizard and a •new base metal discovery at the victoria project in North Queensland.
Corporate
cash on hand plus receivables increased to $71.1 million •at financial year end.
Investments of 19.8% in Glengarry Resources Ltd and •18.2% in Metallica Minerals Ltd.
20 Kagara Limited Annual Report 2008 21 Kagara Limited Annual Report 2008
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At the date of this report directors and Key Management personnel of the consolidated entity held the following unlisted options
NAmE GRANT DATE DETAiLs
K Robinson 23 November 2006 500,000 options exercisable at $6.00 per share on or before 30 june 2009
j A treacy 23 November 2006 500,000 options exercisable at $6.00 per share on or before 30 june 2009
M j Ashley 23 November 2006 500,000 options exercisable at $6.00 per share on or before 30 june 2009
j G Linley 23 November 2006 500,000 options exercisable at $6.00 per share on or before 30 june 2009
R c hutton 23 November 2006 500,000 options exercisable at $6.00 per share on or before 30 june 2009
f L Garofalo 23 August 2006 250,000 options exercisable at $6.00 per share on or before 30 june 2009
d W peterson 23 August 2006 250,000 options exercisable at $6.00 per share on or before 30 june 2009
events Subsequent to Balance date
In the directors’ opinion, no other events or circumstances
have arisen since the end of the financial year that have
significantly affected or may significantly affect the
operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity
in financial years subsequent to this financial year that have
not been otherwise disclosed in these financial statements.
Significant Changes in the State of affairs
No significant change in the state of affairs of the
consolidated entity occurred during the financial year other
than that already referred to elsewhere in this report.
Likely developments
the consolidated entity intends to continue its current
mining operations and mineral exploration in Australia.
Likely developments are included elsewhere in this
report and will depend upon the success of the current
exploration and mining operations. At this stage, the
expected results of these operations have not been
disclosed as the directors believe, on reasonable grounds,
that the inclusion of such information would result in
unreasonable prejudice to the consolidated entity.
Share Options Granted to directors and executives
during the financial year no options were granted
to executive or Non executive directors of the
company under the company’s esOp.
Share Options Under Issue
At the date of this report, there are 14,620,000 unlisted options outstanding, detailed as follows:
GRANT DATE DATE OF EXPiRY EXERCisE PRiCE NUmbER UNDER OPTiON
23 August 2006 30 june 2009 $6.00 500,000
23 November 2006 30 june 2009 $6.00 2,500,000
20 April 2007 30 june 2009 $6.50 4,220,000
17 March 2008 30 june 2010 $6.00 7,400,000
14,620,000
No person entitled to exercise an option had or has any right by virtue of the option to participate in any share issue of any other
body corporate. the following ordinary shares of Kagara Limited were issued by virtue of the exercise of unlisted options during
the financial year:
GRANT DATE DATE OF EXPiRY EXERCisE PRiCE NUmbER OF OPTiONs EXERCisED
24 december 2003 31 december 2007 $1.20 12,500
25 August 2005 31 december 2007 $1.50 300,000
1 May 2006 30 june 2008 $5.00 610,000
19 july 2006 30 june 2008 $5.00 450,000
1,372,500
No amounts are unpaid on any of the shares. the shares issued on the exercise of the options mentioned above are fully paid.
remuneration report
the chairman reviews the remuneration packages
of all directors and Key Management personnel
of the consolidated entity on an annual basis and
makes recommendations to the Review committee/
board. Remuneration packages are reviewed with due
regard to performance, competitive rates prevailing
in the industry and any other relevant factors.
Remuneration levels of the directors and the Key
Management personnel are set by reference to other
similar sized mining and exploration companies with similar
risk profiles and are set to attract and retain executives
capable of managing the consolidated entity’s operations
Remuneration of Non – executive directors is determined by
the board within the maximum approved by shareholders
from time to time. the board undertakes an annual review
of its performance against goals set at the start of the
year. No bonuses are paid to Non – executive directors.
reVIew OF OPeraTIONS (CONTINUed)
22 Kagara Limited Annual Report 2008 23 Kagara Limited Annual Report 2008
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(a) details of specified directors and Executives (Audited)
the following persons were directors of the
consolidated entity during the financial year:
(i) executive directors
Mr K Robinson executive chairman
Mr jA treacy executive director
(ii) Non-executive Independent directors
Mr Mj Ashley Non-executive Independent director
Mr Rc hutton Non-executive Independent director
Mr j Linley Non-executive Independent director
(iii) Other Key Management personnel
the following persons also have authority and
responsibility for planning, directing and controlling
the activities of the consolidated entity, directly
or indirectly during the financial year:
Mr dW peterson company secretary
Mr GW collins Operations Manager
Mr fL Garofalo chief financial Officer
Mr Ij Morrison exploration Manager
All of the above persons were also Key
Management personnel during the previous
financial year ended 30 june 2007.
(b) principles used to determine the nature and amount of remuneration (Audited)
the consolidated entity’s executive remuneration
framework aligns executive remuneration with the
achievement of strategic objectives and conforms with
market best practice. the board of directors ensures
that the executive remuneration is competitive and
reasonable, acceptable to shareholders, transparent
and aligns remuneration with performance.
(i) Non-executive directors
payments to Non-executive directors reflect the
demands which are made on and the responsibilities
of the directors. Non-executive directors’ fees and
payments are reviewed annually by the board of
directors, with independent advice received from
remuneration consultants to ensure that Non-
executive directors’ fees are in line with the market.
Non-executive directors’ fees are determined in
accordance with the aggregate Non-executive
directors’ fee limit as approved by shareholders. the
maximum aggregate currently stands at $500,000.
there are no retirement allowances for Non-executive
directors.
(ii) executives
the executive pay and reward framework includes
the payment of base pay, superannuation and long
term incentives through the issue of options under
the company’s esOp. Information on employee
options granted under the company’s esOp is
detailed in Note 39 to the financial statements.
the base pay of executives is inclusive of statutory
superannuation and is structured as a total
employment package which may be delivered as a
mix of cash and prescribed non-financial benefits at
the executives’ discretion, without creating undue
cost for the consolidated entity. benefits received
include car allowances and health insurance. external
remuneration consultants provide analysis and advice
to ensure that the base pay is set to reflect the
market for a comparable role.
(c) details of remuneration of specified directors and Key Management personnel (Audited)
details of the nature and amount of each element of the remuneration for each director and each of
the Key Management personnel of the consolidated entity are set out in the following tables:
specified directors of Kagara Ltd:
sPECiFiED DiRECTORs
2008
sALARY & FEEs $
NON-mONETARY bENEFiTs $
bONUs $
sUPERANNUATiON$
OPTiONs $
TOTAL RENUmERATiON bY OPTiONs %
TOTAL $
K Robinson 701,871 - - 13,129 - - 715,000
j A treacy 400,000 50,000 - 100,000 - - 550,000
M j Ashley 30,000 30,000 - 16,300 - - 76,300
R c hutton 22,500 - - 53,800 - - 76,300
j G Linley 70,000 - - 6,300 - - 76,300
Total 1,224,371 80,000 - 189,529 - - 1,493,900
sPECiFiED DiRECTORs
2007
sALARY & FEEs $
NON-mONETARY bENEFiTs $
bONUssUPERANNUATiON
$OPTiONs
$
TOTAL RENUmERATiON bY OPTiONs %
TOTAL $
K Robinson 637,314 - - 12,686 782,500 55 1,432,500
j A treacy 344,887 50,000 - 105,113 782,500 61 1,282,500
M j Ashley - 30,000 - 24,500 782,500 93 837,000
R c hutton 37,500 - - 17,000 782,500 93 837,000
j G Linley - - - 54,500 782,500 93 837,000
TOTAL 1,019,701 80,000 - 213,799 3,912,500 - 5,226,000
Key Management personnel of Kagara Ltd:
KEY mANAGEmENT
PERsONNEL 2008
sALARY & FEEs $
NON-mONETARY bENEFiTs $
bONUs $
sUPERANNUATiON$
OPTiONs $
TOTAL REmUNERATiON bY OPTiONs %
TOTAL $
G W collins 296,196 30,000 - 73,804 - - 400,000
f L Garofalo 326,871 30,000 - 13,129 - - 370,000
d W peterson 200,000 - - 100,000 - - 300,000
I j Morrison 231,175 - - 100,000 - - 331,175
Total 1,054,242 60,000 - 286,933 - - 1,401,175
24 Kagara Limited Annual Report 2008 25 Kagara Limited Annual Report 2008
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KEY mANAGEmENT
PERsONNEL 2007
sALARY & FEEs $
NON-mONETARY bENEFiTs $
bONUs $
sUPERANNUATiON $
OPTiONs $TOTAL
REmUNERATiON bY OPTiONs %
TOTAL $
G W collins 245,314 30,000 - 32,686 123,800 29 431,800
f L Garofalo 277,314 31,216 - 12,686 391,250 55 712,466
d W peterson 149,888 1,653 - 105,112 391,250 61 647,903
I j Morrison 99,888 - - 105,112 123,800 38 328,800
Total 772,404 62,869 - 255,596 1,030,100 - 2,120,969
(d) Service agreements (audited)
Remuneration for the executive directors are formalised in
service agreements and include base pay, superannuation
and long term incentives through the issue of options.
each of these agreements do not have a fixed term and
have a termination benefit payable on early termination
by the company, other than for gross misconduct,
equal to six months of base salary. there are no other
bonus arrangements in place for executive directors.
Remuneration for Key Management personnel are formalised
in service agreements and include base pay, superannuation
and long term incentives through the issue of options.
each of these agreements do not have a fixed term and
have a termination benefit payable on early termination
by the company, other than for gross misconduct,
equal to three months of base salary. there are no other
bonus arrangements in place for specified executives.
the remuneration of executive directors and Key
Management personnel is reviewed annually and is
set to reflect the market for a comparable role.
(e) Share based compensation – options (audited)
the consolidated entity did not grant options as
equity compensation benefits to any directors or Key
Management personnel during the 2008 financial year.
(f) Option holdings of Specified directors and executives (audited)
the numbers of options over ordinary shares vested and exercisable in the consolidated entity held by each
director of Kagara Ltd and the Key Management personnel of the consolidated entity are set out below:
sPECiFiED DiRECTORs 2008
bALANCE As AT 1/7/07
GRANTED As REmUNERATiON
OPTiONs EXERCisED
OTHER CHANGEsbALANCE As AT
30/6/08
K Robinson 500,000 - - - 500,000
j A treacy 500,000 - - - 500,000
M j Ashley 500,000 - - - 500,000
R c hutton 500,000 - - - 500,000
j G Linley 500,000 - - - 500,000
2,500,000 - - - 2,500,000
KEY mANAGEmENT
PERsONNEL 2008
bALANCE As AT 1/7/07
GRANTED As REmUNERATiON
OPTiONs EXERCisED
OTHER CHANGEsbALANCE As AT
30/6/08
G W collins 100,000 - (100,000) - -
f L Garofalo 250,000 - - - 250,000
d W peterson 250,000 - - - 250,000
I j Morrison 250,000 - (150,000) (100,000) -
Total 850,000 - (250,000) (100,000) 500,000
(g) Shareholdings in Kagara Ltd of Specified directors and Key Management Personnel (audited)
the numbers of shares in the consolidated entity held by each director of Kagara Ltd and the Key Management personnel are
set out below:
sPECiFiED DiRECTORs 2008
bALANCE As AT 1/7/07
GRANTED As REmUNERATiON
OPTiONs EXERCisED
OTHER NET CHANGEs *
bALANCE As AT 30/6/08
K Robinson 17,790,530 - - 400,000 18,190,530
j A treacy 3,316,865 - - 160 3,317,025
M j Ashley 469,000 - - (220,000) 249,000
R c hutton - - - - -
j G Linley - - - - -
Total 21,576,395 - - 180,160 21,756,555
Key Management personnel of Kagara Ltd (continued)
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KEY mANAGEmENT
PERsONNEL 2008
bALANCE As AT 1/7/07
GRANTED As REmUNERATiON
OPTiONs EXERCisED
OTHER NET CHANGEs *
bALANCE As AT 30/6/08
G W collins 75,000 - 75,000
f L Garofalo 250,000 - - - 250,000
d W peterson 1,135,231 - - 334,000 1,469,231
I j Morrison 230,000 - 150,000 - 380,000
Total 1,690,231 - 150,000 334,000 2,174,231
* Other Net changes refers to shares bought or sold during the financial year.
Non-audit Services
the auditor did not provide any non-auditor services
during the financial year ended 30 june 2008. the board
of directors, in accordance with advice from the audit
committee, is satisfied that the provision of non-audit
services in the 2008 financial year were compatible
with the general standard of independence for auditors
imposed by the corporations Act 2001. the directors
are satisfied that the services disclosed in note 31 did
not compromise the external auditor’s independence for
the following reason: the nature of the services provided
did not compromise the general principles relating to
auditor independence in accordance with Apes 110:
code of ethics for professional Accountants set by the
Accounting professional and ethical standards board.
A copy of the auditor’s independence declaration
as required under section 307c of the corporations
Act 2001 is set out separately in this report.
environmental regulations
the consolidated entity’s operations are subject to various
commonwealth and state laws governing the protection of
the environment in areas such as air and water quality, waste
emission and disposal, environmental impact assessments,
mine rehabilitation and access to and use of ground water.
In particular, some operations are required to be licensed to
conduct certain activities under the environmental protection
legislation of the state in which they operate and such
licenses include requirements specific to the subject site.
so far as the directors are aware, there have been no
material breaches of the consolidated entity’s licenses and
all mining and exploration activities have been undertaken
in compliance with the relevant environmental regulations.
Insurance of Officers
during the financial year, the consolidated entity paid
a premium to insure the directors and Officers of the
consolidated entity against liabilities incurred by such an
officer to the extent permitted by the corporations Act
2001. the Officers of the consolidated entity covered by the
insurance policy include any person acting in the course of
duties for the consolidated entity who is or was a director,
secretary or executive Officer as well as senior executive
staff. the contract of insurance prohibits disclosure of the
nature of the liability and the amount of the premium.
the consolidated entity has not otherwise during
or since the end of the financial year indemnified
or agreed to indemnify an officer or auditor of the
consolidated entity or any related body corporate against
a liability incurred as such an officer or auditor.
Proceedings on Behalf of the Company
No person has applied for leave of court to bring
proceedings on behalf of the consolidated entity or
intervene in any proceedings to which the company is a
party for the purpose of taking responsibility on behalf
of the consolidated entity for all or any part of those
proceedings. the consolidated entity was not a party
to any such proceedings during the financial year.
auditor’s Independence declaration
the auditor’s independence declaration for the year
ended 30 june 2008 has been received and can
be found on page 78 of the annual report.
rounding of amounts
the company is a company of the kind referred to in the
Australian securities and Investments commission class
Order 98/100. Amounts shown in the financial statements
and this directors’ report have been rounded off to the
nearest one thousand dollars, except where otherwise
required, in accordance with that class order. this report
has been made in accordance with a resolution of directors
pursuant to section 298(2) of the corporations Act 2001.
K RObINsON
EXECUTIVE CHAIRMAN
perth, Western Australia
20 August 2008
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this statement reports on Kagara’s key governance framework, principles and practices
as at 20 August 2008. these principles and practices are reviewed regularly and revised
as appropriate to reflect changes in law and best practice in corporate governance.
C o r p o r a t e g o v e r n a n C e s t a t e m e n t
aSX PrINCIPLeS OF GOOd COrPOraTe GOVerNaNCe
Kagara, as a listed entity, must comply with the
corporations Act 2001 (cwtth) (“corporation Act”), the
Australian securities exchange Limited (“Asx”) Listing
Rules (“Asx Listing Rules”) and other Australian laws.
Asx Listing Rule 4.10.3 requires Asx listed companies
to report on the extent to which they have followed the
principles of Good corporate Governance and best practice
Recommendations (“Asx principles”) released by the
Asx corporate Governance council. the Asx principles
require the board to consider carefully the development
and adoption of appropriate corporate governance
policies and practices founded on the Asx principles.
COMPLIaNCe wITH aSX PrINCIPLeS OF GOOd COrPOraTe GOVerNaNCe
details of the company’s compliance with the Asx
principles are set out below. A checklist cross referencing
the Asx principles to the relevant section of this
statement and the Remuneration Report is provided
on pages 39 and 40 of this report and published on
the company’s website at www.kagara.com.au.
As detailed in this corporate Governance statement,
Kagara considers that its governance practices comply
with the Asx principles, subject to the qualifications
noted in the compliance statement relating to
Asx principle Recommendations 2.2 and 2.3.
1 THe BOard OF dIreCTOrS
(a) Board composition and expertise
the board has an expansive range of relevant
industry experience, financial and other skills
and expertise to meet its objectives.
the current board composition comprises three
independent non executive directors and two
executive directors. details on each non executive
director’s background including experience, knowledge
and skills and their status as an independent
director are set out in the directors Report.
the board considers that the non executive directors
collectively bring the range of skills, knowledge
and experience necessary to direct the company.
In assessing the composition of the board, the
directors have regard to the following policies:
the ceO should be a full time employee of the •company;
the majority of the board should comprise directors •who are both non executive and independent; and
the board should represent a broad range of •qualifications, experience and expertise considered of benefit to the company
(b) Board role and responsibilities
the roles and responsibilities of the board are
formalised in the board charter. the board charter
defines in detail the matters that are reserved for
the board and its committees, and those that the
board has delegated to management. the central
role of the board is to oversee and approve the
company’s strategic direction, to select and appoint
a ceO, to oversee the company’s management and
business activities and report to shareholders.
In addition to matters required by law to be
approved by the board, the following powers
are reserved to the board for decision:
strategy – providing strategic oversight and •approving strategic plans and initiatives;
board performance and composition – evaluating •the performance of non executive directors, and
determining the size and composition of the board as well as recommending to shareholders the appointment and removal of directors;
Leadership selection – evaluating the performance •of, and selection of, the ceO and those executives reporting directly to the ceO;
corporate responsibility – considering the •social, safety, ethical and environmental impacts of Kagara’s activities, and setting policy and monitoring compliance with safety, corporate and social policies and practices;
financial performance – approving Kagara’s •annual operating plans and budget, monitoring management, financial and operational performance;
financial reports to shareholders – approving annual •and half year reports and disclosures to the market that contain, or relate to, financial projections, statements as to future financial performance or changes to the policy or strategy of the company; and
establishing procedures – ensuring that the board is •in a position to exercise its power and to discharge its responsibilities as set out in the board charter;
the board also recognises its responsibilities
to Kagara’s employees, the communities and
environments within which Kagara operates
and, where relevant, other stakeholders.
Responsibility for management of Kagara’s
business activities is delegated to the ceO
who is accountable to the board.
the board charter is available in the corporate
governance section of Kagara’s website.
(c) Chairman
the chairman is responsible for leadership of the
board, for the efficient organisation and conduct
of the board’s function and for the promotion of
relations between board members and between
board and management that are open, cordial
and conducive to productive cooperation.
the current chairman is Kim Robinson. he has been a
director and the chairman of the board since inception.
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(d) director’s independence
the board has approved a policy on independence
of directors, a copy of which is available in the
corporate governance section of Kagara’s website.
the policy provides that the independence of a director
will be assessed by determining whether the director is
independent of management and free of any business or
other relationship that could materially interfere with, or
could reasonably be perceived to materially interfere with,
the exercise of their unfettered and independent judgement.
the test of whether a relationship or business is material
is based on the nature of the relationship or business
and on the circumstances and activities of the director.
Materiality is considered from the perspective of Kagara,
the persons or organisations with which the director
has an affiliation and from the perspective of the
director. Materiality thresholds are considered by the
board from time to time. the board considers that;
A material customer is a customer of Kagara which •accounts for more than 5 per cent of Kagara’s consolidated gross revenue;
A supplier is material if Kagara accounts for more than 5 •per cent of the supplier’s consolidated gross revenue;
A substantial shareholder of Kagara is someone who •holds greater than 5 per cents of the voting capital of Kagara; and
In the event that one or more of these thresholds
is exceeded, the board then focuses on whether
or not in their view that impacts materially on
the independent judgement of the director.
On appointment, each director is required to provide
information for the chairman to assess and confirm their
independence as part of their consent to act as a director.
the chairman has considered the associations of each of the
non executive directors in office at the date and considers
that all non executive directors are considered independent.
(e) directors’ retirement and re-election
Kagara’s constitution states that at each annual general
meeting (“AGM”) one third of its directors (excluding the
managing director and any director appointed to fill a
casual vacancy) and any director who has held office for
three or more years since their last election must retire.
Any director appointed to fill a casual vacancy since
the date of the previous AGM must submit themselves
to the shareholders for election at the next AGM.
directors who retire as required may offer themselves
for re-election by shareholders at the next AGM.
Reappointment of directors retiring by rotation
or filling a casual vacancy is not automatic.
(f) Board succession planning
the board in conjunction with the Remuneration and
Nominations committees reviews the size and composition of
the board and the mix of existing and desired competencies
across members from time to time. criteria considered by
the directors when evaluating prospective candidates are
contained in the board’s charter and more fully detailed in a
procedure for selection and Appointment of New directors.
(g) Board performance evaluation
the board undertakes ongoing self-assessment and a
review of performance of the board, committees and
individual directors annually. the chairman of the board
is responsible for determining the process for evaluating
board performance. the chairman’s performance is
reviewed each year by the other members of the board.
(h) Nominations and appointment of new directors
Recommendations for nomination of new directors
are considered by the Remuneration and Nominations
committees and approved by the board as a whole.
the Remuneration and Nominations committees
review director appointments having regard to the
candidate’s commercial experience, skills and other
qualities. external consultants may be used from time
to time to access a wide base of potential directors.
(i) Professional advice
directors may, in carrying out their company related
duties, seek external professional advice.
If external professional advice is sought a director
is entitled to reimbursement of all reasonable costs
where such a request for advice is approved by the
chairman. In the case of a request by the chairman,
approval is required by a least two other directors.
(j) Conflicts of interest
directors are required to disclose any actual or potential
conflict of material personal interests on appointment as a
director and are required to keep these disclosures up to date.
In the event that there is, or may be, a conflict between the
personal or other interests of a director, then the director
with an actual or potential conflict of interest in relation to
a matter before the board does not receive the board papers
relating to that matter. When the matter comes before
the board for discussion, the director withdraws from the
meeting for the period the matter is considered and takes
no part in the discussion or decision making process.
(k) Terms of appointment, induction training and continuing education
All new directors are provided with a formal letter of
appointment setting out the key terms and conditions of the
appointment, including duties, rights and responsibilities,
the time commitment envisaged and the board’s
expectations regarding their obligations to the company.
(l) directors’ remuneration
details of remuneration paid to directors (executive and
non executive) are set out in the Remuneration Report.
(m) Board meetings
the chairman sets the agenda for each meeting
in conjunction with the company secretary. Any
director may request additional matters be added
to the agenda. Members of senior management
attend meetings of the board by invitation.
copies of board papers are circulated in advance
of the meetings in either electronic or hard copy
form. directors are entitled to request additional
information where they consider the information is
necessary to support informed decision making.
the board works to an agenda encompassing periodic
reviews of Kagara’s operations, recurring statutory
obligations, business approvals, strategy and other
responsibilities identified in the board charter.
particulars of the number of meetings of the board
of directors of Kagara and each board committee of
directors held and attended by each director during the
12 months ended 30 june 2008 are set out below.
(n) Company secretary
the company secretary is david peterson. Mr. peterson
joined Kagara in december 1989 with responsibility
for management and delivery of company secretary,
legal and governance advice and support to the Kagara
board, executive and business. Mr. peterson is a qualified
chartered secretary (fcIs) with over 20 years experience.
Responsibilities for the secretarial function include providing
advice to directors and executives on corporate governance
and regulatory matters, recording minutes of director’s
meetings, development Kagara’s corporate governance
framework and giving effect to the board’s decisions. All
directors have access to advice from the company secretary.
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2 BOard COMMITTeeS
(a) Board committees and membership
the board has established three committees to assist in
the discharge of its responsibilities. these are the:
Audit committee•
Remuneration committee: and•
Nominations committee•
the charters of all board committees detailing the
roles and duties of each are available in the corporate
governance section of Kagara’s website. All board
committee charters are reviewed at least annually.
At the date of this report the membership of each
board committee is listed below the executive directors
attend the Audit committee meetings by invitation. All
papers considered by the committees are available on
request to directors who are not on that committee.
following each committee meeting, generally at the next
board meeting, the board is given a verbal update by
the chairman of each committee. In addition, minutes of
all committee meetings are available to all directors.
the company secretary provides secretarial
services for each committee.
NUmbER OF bOARD AND COmmiTTEE mEETiNGs HELD AND ATTENDED iN 2007/2008
BOARd MEETINgs BOARd COMMITTEE MEETINgs
AUdIt cOMMItteeReMUNeRAtION
cOMMItteeNOMINAtIONs cOMMIttee
A b A b A b A b
Kim Robinson 8 8 - - 1 1 1 1
joe treacy 8 8 - - 1 1 1 1
Mark Ashley 8 8 4 4 1 1 1 1
Ross hutton 8 8 4 4 1 1 1 1
john Linley 8 8 4 4 1 1 1 1
A = Number of meeting attendedb = Number of meetings held during the time the director held office or was a member of the relevant committee during the year.
BOARd COMMITTEE MEMBERsHIp As AT 20 AUgUsT 2008
AUdIT COMMITTEE REMUNERATION COMMITTEE NOMINATIONs COMMITTEEMark Ashley (chairman)Ross huttonjohn Linley
(a) executive committee
Kim Robinson (chairman)
Kim Robinson (chairman)
joe treacy
john Linley
Mark Ashley
Ross hutton
joe treacy
(b) Non-executive committee
Mark Ashley (chairman)
john Linley
Ross hutton
(b) audit Committee
the role of the Audit committee is to assist the board
to meet its oversight responsibilities in relation to the
company’s financial reporting, internal control structure,
corporate governance policies and practices, financial
and operational risk management procedures and the
internal and external audit function. In doing so, it
is the committee’s responsibility to maintain free and
open communication between the committee and the
external auditors and the management of Kagara.
the Audit committee is required to have a minimum of three
members composed of independent non executive directors.
the external auditors, the cfO and the financial
controller attend committee meetings by invitation.
the committee meets at least four times per year.
during the year the committee approved a plan to
implement an improved risk management framework
across the Kagara group of companies.
(c) remuneration and Nominations committees
the roles of the Remuneration and Nominations
committees are to assist the board by reviewing and
approving Kagara’s remuneration policies and practices
and the appointment of non executive directors to the
board. the committee’s responsibilities include:
Assess the necessary and desirable competencies of •board members;
Reviewing board succession plans and board •performance;
Reviewing the performance and company’s remuneration •framework, which is used to attract, retain and motivate employees to achieve operational excellence and create value for shareholders;
Reviewing the performance and remuneration packages •for the executive directors and senior executives, to establish rewards, which are fair and responsible, having regard to the financial results of the group, individual performance and general remuneration conditions;
Independent remuneration consultants are engaged
by the Remuneration and Nominations committees
to ensure that Kagara’s remuneration and reward
practices are consistent with market practice.
the committees meet at least twice per year.
3 aUdIT GOVerNaNCe aNd INdePeNdeNCe
(a) approach to audit and governance
the board is committed to the basic principles that:
Kagara’s financial reports represent a true and fair view;•
Kagara’s accounting practices are comprehensive, •relevant and comply with applicable accounting standards and policies; and
the external auditor is independent and serves •shareholders’ interests.
(b) external auditor relationship
Kagara’s independent external auditor is WhK
horwath (WhK). WhK was appointed by
shareholders at the 2007 annual general meeting
in accordance with the corporations Act.
the board requires rotation of the audit partner at least
every five years, prohibits the reinvolvement of a previous
audit partner in the audit service for two years following
their rotation, and provides that a former partner of the
audit firm, or member of the audit team, may only be
recruited into a position as a director or senior employee
of Kagara after the expiry of at least two years.
furthermore, the Audit committee oversees detailed external
auditor guidelines covering the terms of engagement
of Kagara’s external auditor. the guidelines include
provisions directed to maintaining the independence
of the external auditor and in assessing whether the
provision of any non-audit services by the external
auditor that may be proposed is appropriate.
the external auditor guidelines contain a set of
controls which address threats to the independence
of the external auditor including, in particular, any
threat which may arise by reason of self interest,
self review, advocacy, familiarity or intimidation.
the external auditor guidelines classify a range
of non-audit services which are considered not
acceptable for provision by the external auditor.
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(c) attendance of auditor at the aGM
Kagara’s external auditor attends the AGM and is
available to answer questions from shareholders on;
the conduct of the audit;•
the preparation and content of the auditor report;•
the accounting policies adopted by Kagara in relation to •the preparation of the financial statements; and
the independence of the auditor in relation to the •conduct of the audit.
4 CONTrOLLING aNd MaNaGING rISK
(a) approach to risk management
the board and senior executives are responsible
for overseeing the implementation of the
company’s Risk Management policy.
the company’s approach to risk management is
based on the systematic identification, assessment,
monitoring and management of material risks
to the business. this framework is based on the
Australian standards for Risk Management.
during the year, the Audit committee in conjunction
with management commenced a review of the
company’s risk management framework systems
and approved a new risk management plan. the risk
management plan is focused on reviewing Kagara’s
risk management policies and practices for managing
strategic operational, compliance and financial risks.
the executive management team is responsible for
implementation of the board approved risk management
strategy and developing policies, processes and procedures
to identify risks and mitigation strategies in Kagara’s activities
and provide, at the end of each six monthly period a formal
statement to the board confirming the effectiveness of the
company’s management of its material business risks.
(b) Material risks
In implementing its risk management system, the
company identified risks at a strategic and corporate
level, and risks to its Queensland operations and its
Queensland and West Australian exploration programs.
A number of material risks emerged, including:
declining metal prices•
Rising exchange rates•
Increased input costs•
Unavailability of shipping•
Loss of tenements•
(c) CeO and CFO assurance
the board receives monthly reports about the financial
condition and operational results of Kagara and its controlled
entities. the ceO and cfO provide, at the end of each six
monthly period, a formal statement to the board confirming
that the company’s financial reports present a true and
fair view, in all material respects, and the group’s financial
condition and operational results have been prepared in
accordance with the relevant accounting standards.
the statement also confirms the integrity of the company’s
financial statements and notes to the financial statements
and notes to the financial statements, is founded on a
sound system of risk management and internal compliance
and control which implements the policies approved
by the board, and that Kagara’s risk management
and internal compliance and control systems, to the
extent they relate to financial reporting, are operating
efficiently and effectively in all material respects.
A copy of the company’s Risk Management policy is available
on the corporate Governance section of Kagara’s website.
5 PrOMOTING eTHICaL aNd reSPONSIBLe BeHaVIOUr
(a) Codes of conduct
the board has approved a code of conduct for
directors and code of conduct for employees which
describes the standards of ethical behaviour that
directors and employees are required to maintain.
compliance with the code of conduct by directors and
employees will also assist Kagara in effectively managing
its operating risks and meeting its legal and compliance
obligations, as well as enhancing Kagara’s corporate
reputation.
the code of conduct describes Kagara’s requirements on
matters such as confidentially, conflicts of interest, sound
employment practices, compliance with laws and regulations
and the protection and proper use of Kagara’s assets.
A copy of each code of conduct is available in the in
the corporate governance section of Kagara’s website.
(b) Concern reporting and whistleblowing
the board has approved a Whistleblower policy which
documents Kagara’s commitment to maintaining an open
working environment in which employees are able to report
instances of unsafe work practices, unethical, unlawful or
undesirable conduct without fear of intimidation or reprisal.
A copy of the Whistleblower policy is available in the
corporate governance section of Kagara’s website.
(c) Share trading policy
Kagara’s share trading policy is binding on all directors
and employees. this policy provides a brief summary of
the law on insider trading and other relevant laws, sets
out the restrictions on dealing in securities by people
who work for, or are associated with Kagara and is
intended to assist in maintaining market confidence in
the integrity of dealings in the company’s securities.
the policy stipulates that the only appropriate time for a
director or employee to deal in the company’s securities
is when he or she is not in possession of ‘price sensitive
information’ that is not generally available to the share
market. A director wishing to deal in the company’s
securities may only do so after first having advised the
chairman of his or her intention. A senior executive wishing
to deal must first notify the company secretary. confirmation
of any dealing must also be given by the director or senior
executive within two business days after the dealing. In
the case of other employees, contractors, consultants
and advisers, there is no notification requirement.
directors and senior executives’ dealings in the company’s
securities are also subject to specified blackout periods.
Which are set out in the company’s share trading policy or
as otherwise determined by the board from time to time.
A copy of the company’s share trading policy is available
on the corporate governance section of Kagara’s website.
6 reMUNeraTION FraMewOrK
details of Kagara’s remuneration framework are included
in the Remuneration Report.
7 COrPOraTe reSPONSIBILITY aNd SUSTaINaBILITY
Kagara aims to produce positive outcomes for all
stakeholders in managing its business and to maximise
financial, social and environmental value from our activities.
In practice this means having a commitment to transparency,
fair dealing, responsible treatment of employees and
customers and positive links into the community.
sustainable and responsible business practices with
Kagara are viewed as an important long term driver
of performance and shareholder value. through such
practices Kagara seeks to reduce operational and
reputation risk and enhance operational efficiency
while contributing to a more sustainable society.
Kagara accepts that the responsibilities on the board and
management, which flow from this approach, go beyond
strict legal and financial obligations. In particular, the Kagara
board seek to take a practical and broad view of directors’
fiduciary duties, in line with stakeholders’ expectations.
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C o r p o r a t e g o v e r n a n C e s t a t e m e n t
8 CONTINUOUS dISCLOSUre
Kagara is committed to maintaining a level of disclosure
that meets the highest standards and provides all
investors with timely and equal access to information.
Kagara’s continuous disclosure policy reinforces
Kagara’s commitment to Asx continuous disclosure
requirements and outline management’s accountabilities
and the processes to be followed for ensuring
compliance. the policy also describes Kagara’s
guiding principles for market communications.
A copy of the continuous disclosure policy is available on
the corporate governance section of Kagara’s website.
9 SHareHOLder COMMUNICaTIONS aNd ParTICIPaTION
Kagara’s is committed to giving all shareholders
comprehensive, timely and equal access to information
about its activities so that they can make informed
decisions. similarly, prospective new investors are entitled
to be able to make informed investment decisions
when considering the purchase of shares in Kagara.
A wide range of communication approaches are
employed including direct communications with
shareholders and presentations to shareholders at
the company’s Annual General Meeting. publication
of all relevant company information, including the
company’s Annual Report is in the Investor Information
section of Kagara’s website at www.kagara.com.au.
Kagara’s shareholder communication policy provides
that the company will communicate effectively
with its shareholders and give shareholders ready
access to balanced and understandable Information
about Kagara. the way it does this includes;
ensuring that financial reports are prepared in accordance •with applicable laws and industry best practice;
ensuring the disclosure of full and timely information •about Kagara’s activities in accordance with the general and continuous disclosure principles of the Asx Listing Rules and the corporations Act 2001. this includes reporting on a quarterly basis the activities and prospects of the company;
the chairman reporting to shareholders at the company’s •Annual General Meeting;
placing all Asx announcements (including quarterly •reports and financial reports) on Kagara’s website as soon as practicable following release; and
ensuring that reports, notices of meeting and other •shareholder communications are prepared in a clear and concise manner.
A copy of the company’s shareholder communication
policy is available on the corporate governance
section of Kagara’s website.
aSX PrINCIPLeS COMPLIaNCe STaTeMeNT
AsX CORPORATE GOvERNANCE COUNCiL’s bEsT PRACTiCE RECOmmENDATiONs
REFERENCE (1) COmPLiANCE
pRINCIpLE 1: LAY sOLId fOUNdATIONs fOR MANAgEMENT ANd OVERsIgHT
1.1 formalise and disclose the functions reserved to the board and those delegated to management 1b comply
1.2 disclose the process for evaluating the performance of senior executives 1b,2c comply
1.3 provide the information indicated in the Guide to reporting on principle 1 1b,2c comply
pRINCIpLE 2: sTRUCTURE THE BOARd TO Add VALUE
2.1 A majority of the board should be independent directors 1a,1d comply
2.2 the chairperson should be an independent director (2) 1a, 1c does Not comply
2.3 the roles of chairperson and chief executive officer should not be exercised by the same individual (2) 1a,1b does Not comply
2.4 the board should establish a nomination committee 1h, 2c comply
2.5 disclose the process for evaluating the performance of the board, its committees and individual directors 1b,1g,1h,2c comply
2.6 provide the information indicated in Guide to reporting on principle 2
1a, 1e, 1i, 1mdirectors’ Report comply
pRINCIpLE 3: pROMOTE ETHICAL ANd REspONsIBLE dECIsION-MAKINg
3.1 establish a code of conduct and disclose the code or a summary of the code as to the:
practices necessary to maintain confidence in the company’s •integrity; and
practices necessary to take into account their legal •obligations and the reasonable expectations of their stakeholders
Responsibility and accountability of individuals for reporting •and investigating reports of unethical practices 5a, 5b comply
3.2 establish and disclose the policy concerning trading in company securities by directors, officers and employees 1j, 5c comply
3.3 provide the information indicated in the Guide to reporting on principle 3 5a, 5b, 5c comply
pRINCIpLE 4: sAfEgUARd INTEgRITY IN fINANCIAL REpORTINg
4.1 the board should establish an audit committee 2b comply
4.2 structure the audit committee so that it consists of:
Only non executive directors•
A majority of independent directors•
An independent chairperson who is not chairperson of the •board
At least three members•
2a, 2b
2a, 2b
2a
2a ,2b
4.3 the audit committee should have a formal charter 2a, 2b comply
4.4 provide the information indicated in Guide to reporting on principle 4
2a, 3bdirectors’ Report comply
Asx principles compliance statement is continued on next page.
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ASX CORPORATE GOVERNANCE COUNCIL’S BEST PRACTICE RECOMMENDATIONS
REFERENCE (1) COMPLIANCE
PrinciPle 5: Make tiMely and balanced disclosure
5.1 Establish written policies and procedures designed to ensure compliance with ASX Listing Rules disclosure requirements and to ensure accountability at a senior management level for that compliance and disclose those policies or a summary of those policies 8 Comply
5.2 Provide the information indicated in the Guide to reporting on Principle 5 8 Comply
PrinciPle 6: resPect the rights of shareholders
6.1 Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings 8,9 Comply
6.2 Provide the information indicated in the Guide to reporting on Principle 6 9 Comply
PrinciPle 7: recognise and Manage risk
7.1 Establish policies on risk oversight and management of material business risks and disclose a summary of those policies 2b, 4a, 4b Comply
7.2 Require management to design and implement the risk management and internal control system to manage the Company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the Company’s management of its material business risks 4a Comply
7.3 Disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act 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 4b Comply
7.4 Companies should provide the information indicated in the Guide to reporting on Principle 7 4 Comply
PrinciPle 8: reMunerate fairly and resPonsibly
8.1 Establish a remuneration committee 2b Comply
8.2 Clearly distinguish the structure of non executive directors’ remuneration from that of executives
Remuneration Report
8.3 Provide the information indicated in Guide to reporting on Principle 8
2c, 6Remuneration Report
Directors’ Report
Comply
Note:
The default reference refers to the relevant sections of this Corporate Governance Statement. Reference to the Directors (1) Report and the Remuneration Report is shown where applicable.
The Company does not comply with Principle Recommendations 2.2 and 2.3 as the Chairman and CEO roles are conducted (2) by the same person (Kim Robinson). The Board considers that given its size, no other benefits will be gained by separating these roles.
f i n a n c i a l s t a t e m e n t s
f O R T h E y E A R E N D E D 3 0 J u N E 2 0 0 8
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Income statement for the year ended 30 June 2008
NOTES CONSOLIDATED KAGARA LTD
2008 $’000
2007 $’000
2008 $’000
2007 $’000
Sales revenue 2(a) 302,267 287,570 302,267 287,570
Cost of sales 3(a) (199,403) (142,649) (194,835) (140,464)
Gross profit 102,864 144,921 107,432 147,106
other revenue 2(b) 7,122 2,249 7,107 2,239
other expenses 3(b) (8,496) (11,820) (8,478) (11,810)
finance costs 3(c) (7,031) (3,403) (7,031) (3,403)
Profit before income tax 94,459 131,947 99,030 134,132
Income tax expense 4 (29,433) (42,126) (30,282) (42,768)
Profit after income tax 65,026 89,821 68,748 91,364
net profit attributable to members of Kagara Ltd 65,026 89,821 68,748 91,364
Earnings pEr sharE attributablE to ordinary Equity holdEr
Cents Cents
Basic earnings per share (cents per share) 37 30.14 43.71
diluted earnings per share (cents per share) 37 30.14 40.73
BaLance sheet as at 30 June 2008
NOTES CONSOLIDATED KAGARA LTD
2008 $’000
2007 $’000
2008 $’000
2007 $’000
CurrEnt assEts
Cash and cash equivalents 5 15,812 14,340 15,811 14,337
trade and other receivables 6 55,324 59,288 53,942 58,607
available for sale financial assets 7 13,312 15,610 13,312 15,610
Inventories 8 24,381 15,215 22,045 13,792
derivative financial instruments 9 14,632 8,237 14,632 8,237
other current assets 10 2,597 - 2,597 -
total Current assets 126,058 112,690 122,339 110,583
non-CurrEnt assEts
trade and other receivables 11 274 261 127,293 74,879
Plant and equipment 12 120,194 82,589 59,592 50,250
Mine properties 13 130,162 107,704 130,162 107,704
development 14 73,628 3,419 16,385 3,019
Capitalised exploration and evaluation 15 85,219 80,112 44,098 21,122
deferred tax assets 4 38,317 26,121 38,160 26,075
derivative financial instruments 9 14,750 16,261 14,750 16,261
other non-current assets 16 1,050 1,050 1,050 1,050
total non-Current assets 463,594 317,517 431,490 300,360
total assEts 589,652 430,207 553,829 410,943
CurrEnt liabilitiEs
trade and other payables 17 52,127 39,246 36,292 33,567
Interest-bearing liabilities 18 10,858 22,940 10,858 22,940
Provisions 19 2,732 1,847 2,383 1,652
derivative financial instruments 9 37,904 22,838 37,904 22,838
Current tax liabilities 4 2,067 9,156 2,067 9,156
other current liabilities 20 191 122 167 116
total Current liabilities 105,879 96,149 89,671 90,269
non-CurrEnt liabilitiEs
trade and other payables 21 - 881 - 881
Interest-bearing liabilities 22 89,201 6,944 89,201 6,944
deferred tax liabilities 4 84,054 57,989 59,208 43,054
Provisions 23 11,417 8,449 11,375 8,446
derivative financial instruments 9 63,493 53,283 63,493 53,283
other non-current liabilities 24 52 75 49 75
total non-Current liabilities 248,217 127,621 223,326 112,683
total liabilitiEs 354,096 223,770 312,997 202,952
nEt assEts 235,556 206,437 240,832 207,991
Equity
Contributed equity 25 117,225 109,611 117,225 109,611
reserves 26 (33,191) (15,534) (33,191) (15,534)
retained profit 27 151,522 112,360 156,798 113,914
total Equity 235,556 206,437 240,832 207,991
the above income statement should be read in conjunction with the accompanying notes. the above balance sheet should be read in conjunction with the accompanying notes.
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statement of recoGnIsed Income and eXPense for the year ended 30 June 2008NOTES CONSOLIDATED KAGARA LTD
2008$’000
2007$’000
2008$’000
2007$’000
total equity at the beginning of the year 206,437 91,093 207,991 91,104
employee share options 26 3,510 7,674 3,510 7,674
Change in fair value of cash flow hedges, net of tax 26 (12,987) 213 (12,987) 213
Change in fair value of available-for-sale investments, net of tax 26 (8,134) 9,313 (8,134) 9,313
net income recognised directly in equity 188,826 108,293 190,380 108,304
Profit for the year 65,026 89,821 68,748 91,364
total recognised income and expense for the year 253,852 198,114 259,128 199,668
transactions with equity holders in their capacity as equity holders
Issue of shares to employees 25 7,447 9,836 7,447 9,836
Shares issued during the year, net of tax 25 120 19,242 120 19,242
dividends provided for or paid for 28 (25,863) (20,755) (25,863) (20,755)
total Equity at thE End of thE yEar 235,556 206,437 240,832 207,991
statement of cash fLoWs for the year ended 30 June 2008NOTES CONSOLIDATED KAGARA LTD
2008 $’000
2007 $’000
2008 $’000
2007 $’000
Cash flows from opErating aCtivitiEs
Cash receipts in the course of operations 306,607 248,592 306,591 248,592
Cash payments in the course of operations (170,457) (125,595) (174,191) (125,595)
Interest received 653 465 653 465
Borrowing costs (6,908) (3,280) (6,414) (3,280)
Income tax paid (13,625) (8,907) (13,625) (8,907)
nEt Cash from opErating aCtivitiEs 35(b) 116,270 111,275 113,014 111,275
Cash flows from invEsting aCtivitiEs
Payments for plant and equipment (31,127) (29,850) (12,568) (3,598)
Payments for exploration and evaluation (49,072) (21,648) (23,023) (7,897)
Payments for mine development expenses (57,510) (28,040) (49,373) (28,040)
Loans to controlled entities - - (49,486) (66,483)
acquisition of exploration tenement - (26,479) - -
Payments for investments (9,322) (846) (9,322) (846)
Cash outflow for short term deposits (12) (1,164) (13) (1,164)
nEt Cash usEd in invEsting aCtivitiEs (147,043) (108,027) (143,785) (108,028)
Cash flows from finanCing aCtivitiEs
Proceeds from issues of ordinary shares 5,862 8,417 5,862 8,417
Proceeds from borrowings 63,980 15,000 63,980 15,000
repayments of borrowings (11,734) (7,131) (11,734) (7,131)
dividends paid to shareholders (25,863) (20,755) (25,863) (20,755)
nEt Cash (usEd in) /from finanCing aCtivitiEs 32,245 (4,469) 32,245 (4,469)
net increase / (decrease) in cash held 1,472 (1,221) 1,474 (1,222)
Cash at the beginning of the financial year 14,340 15,561 14,337 15,559
Cash at thE End of thE finanCial yEar 35(a) 15,812 14,340 15,811 14,337
the above statements should be read in conjunction with the accompanying notes.
1. statement of sIGnIfIcant accountInG PoLIcIes
the principal accounting policies adopted in the preparation of the financial statements are set out below. these policies have
been consistently applied to all the years presented, unless otherwise stated. the financial statements include separate financial
statements for Kagara Ltd as a parent entity and the consolidated entity consisting of Kagara Ltd and its subsidiaries.
a) Basis of Preparation
this general purpose financial report has been prepared in accordance with australian accounting Standards, other authoritative
pronouncements of the australian accounting Standards Board, australian accounting Interpretations and the Corporations act
2001.
australian accounting Standards set out accounting policies that aaSB has concluded would result in the financial report
containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with
australian accounting Standards ensures that the financial statements and notes also comply with International financial
reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. they
have been consistently applied unless otherwise stated.
Historical cost convention
the financial statements have been prepared on an accrual basis and are based on historical cost convention, as modified by the
revaluation of available-for-sale investments and financial assets and liabilities including derivative financial instruments.
Critical accounting estimates
the preparation of financial statements in conformity with aIfrS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Consolidated entity’s accounting policies. the areas
involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed separately in the notes of these financial statements where relevant.
b) Principals of consolidation
Subsidiaries
the consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Kagara Ltd (“parent entity”) as at
30 June 2008 and the results of all subsidiaries for the year then ended. Kagara Ltd and its subsidiaries together are referred to in
these financial statements as the Consolidated entity.
Subsidiaries are all those entities over which the Consolidated entity has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one-half of the voting rights. the existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the Consolidated entity controls
another entity.
Subsidiaries are consolidated from the date on which control is transferred to the Consolidated entity. they are de-consolidated
from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between
consolidated companies are eliminated. unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred.
the financial statements of the subsidiaries are prepared for the same reporting period as the parent entity. accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Consolidated entity.
c) Income tax
the income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax
rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences.
deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. deferred income tax is determined using
tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the
related deferred income tax assets is realised or the deferred income tax liability is settled.
deferred tax assets are recognised for deductible temporary differences only if it is probable that the taxable amounts will be
available to utilise those temporary differences.
deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
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the depreciable amount of all fixed assets including buildings, but excluding freehold land, is depreciated on a straight-line basis
or units of production over their useful lives to the Consolidated entity commencing from the time the asset is held ready for use.
the expected useful lives used in the calculation of depreciation are as follows:
Processing Plant 10 years
Buildings 10 - 40 years
Plant and equipment 4 - 10 years
Motor Vehicles 3 - 10 years
furniture and fittings 5 - 10 years
the assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
an assets’ carrying amount is written down immediately to its recoverable amount if the assets’ carrying amount is greater than
it’s estimated recoverable amount (note 1(k)).
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. these are included in the income
statement when revalued assets are sold, it is the Consolidated entity’s policy to transfer the amounts included in other reserves
in respect of those assets to retained earnings.
i) exploration and evaluation expenditure
exploration and evaluation expenditure is carried forward as an asset where:
such costs are expected to be recouped through successful development and exploitation of the area of interest or, by its sale; •or
exploration 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 continued.
accumulated costs in relation to an abandoned area are written off in full in the year in which the decision to abandon the area
is made. a regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest. When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.
j) mine Properties
Mine properties represent the acquisition costs and/or accumulation of exploration, evaluation and development expenditure
in respect of areas of interest in which mining has commenced. When further development expenditure is incurred in respect
of mine property after the commencement of production, such expenditure is carried forward as part of the mine property only
when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of
production.
amortisation is provided on a unit of production basis so as to write off the cost in proportion to the depletion of the proven and
probable mineral reserves.
the net carrying value of each area of interest is reviewed regularly and to the extent to which this value exceeds its recoverable
amount (based on the higher of the net present value of estimated future net cash flows and its estimated sale value), that excess
is fully provided for in the financial year in which this is determined.
k) Impairment of assets
at each reporting date the Consolidated entity reviews the carrying value of its tangible and intangible assets for impairment.
an impairment loss is recognised for the amount by which the assets’ carrying amount exceeds its recoverable amount.
the recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. for the purpose of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows which are largely
independent of the cash flows from other assets or groups of assets (cash-generating units). non-financial assets other than
goodwill that suffered an impairment are reviewed for possible reversal on the impairment at each reporting date.
deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities.
Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on
a net basis, or to realise the assets and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Tax consolidation legislation
Kagara Ltd and its wholly-owned australian controlled entities have implemented the tax consolidation legislation.
the head entity, Kagara Ltd, and the controlled entities in the tax consolidated group account for their own current and deferred
amounts. these tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone tax payer
in its own right.
assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from or payable to other entities in the Consolidated entity.
any difference between amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as
a contribution to (or distribution from) wholly-owned tax consolidated entities.
d) Goods and services tax
revenues, expenses and assets are recognised net of the amount of associated GSt, unless the GSt incurred is not recoverable
from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
receivables and payables are stated inclusive of the amount of GSt receivable or payable. the net amount of GSt recoverable
from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. the GSt components of cash flows arising from investing or financing activities which
are recoverable from, or payable to the taxation authority, are presented as operating cash flow.
e) cash and cash equivalents
for cash flow statement presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
f) Inventories
raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realised value. the costs
of mining stocks include direct material, direct labour, transportation costs and a proportion of variable and fixed overhead costs
relating to mining activities. net realisable Value is the amount to be obtained from the sale of the item of inventory in the
normal course of the business, less any anticipated selling costs to be incurred prior to its sale.
Inventories of consumable supplies and spare parts expected to be used in production are valued at weighted average cost.
obsolete or damaged inventories are valued at net realisable Value. a regular and ongoing review is undertaken to establish the
extent of surplus items and a provision is made for any potential loss on their disposal.
g) trade receivables and other receivables
trade receivables and other receivables are recorded at fair value based on estimated amounts due less any impairment losses.
an impairment loss is established when there is evidence that the Consolidated entity will not be able to collect all amounts due
according to the original term of receivables.
h) Plant and equipment
all Property, Plant and equipment is stated at historical cost less accumulated depreciation. historical cost includes expenditure
that is directly attributable to the acquisition of the items.
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 Consolidated entity and the cost of the item can
be measured reliably. all other repairs and maintenance are charged to the income statement during the financial period in which
they are incurred.
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m) restoration and rehabilitation expenditure
the Consolidated entity is obligated to dismantle, remove, restore and rehabilitate certain items of property, plant and
equipment. under aaSB 116 Property, Plant and equipment, the cost of an item of property, plant and equipment includes the
initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for
which an entity incurs either when the item is acquired, or as a consequence to having used the item during a particular period.
In conjunction with this standard, aaSB 137 Provisions, Contingent Liabilities, and Contingent assets contains requirements
on how to measure decommissioning, restoration and similar liabilities. under aaSB 137 an entity is required to recognise as a
provision the best estimate of the present value of the expenditure required to settle the obligation at the Balance Sheet position
date. the present value of the costs should be measured using a current market-discount rate. as the value of the provision
represents the discounted value of the present obligation to restore, dismantle and rehabilitate, the increase in carrying amount
of the provision due to the passage of time is recognised as a borrowing cost in the Income Statement.
n) foreign currency transactions
the consolidated financial statements are presented in australian dollars which is Kagara Ltd’s functional and presentation
currency.
foreign currency transactions are translated to australian dollars using the exchange rate prevailing at the date of the
transaction. 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 dominated in foreign currencies are recognised in the income statement,
except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
o) trade and other Payables
these amounts represent liabilities for goods and services provided to the Consolidated entity prior to the end of the financial
year which are unpaid. these amounts are unsecured, non interest bearing and are usually paid within 30 days of recognition.
p) employee Benefits
(i) Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non - monetary benefits, annual leave and accumulating sick leave expected to be
settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the
reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Long service leave
the liability for long service leave is recognised in the provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. expected future payments are discounted using markets yields at the reporting date on national government
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
(iii) Share-based payments
Share-based compensation benefits are provided to employees via the Kagara Ltd employee Share option Plan (eSoP).
the fair value of options granted under the Kagara Ltd eSoP is recognised as an employee benefit expense with a corresponding
increase in equity. the fair value is measured at grant date and recognised over the period during which the employees become
unconditionally entitled to the options.
the fair value at grant date is independently determined using Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the non-tradeable nature of the option, the expected dividend yield
and the risk-free interest rate for the term of the option.
upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to
share capital.
at each reporting date, the Consolidated entity revises its estimate of the number of options that are expected to become
excisable. the employee benefit expense recognised each period takes into account the most recent estimate. the impact of
the revision to original estimates, if any, is recognised in the income statement with a corresponding adjustment to equity.
l) financial assets
Classification
the Consolidated entity classifies its investments in the following categories: financial assets at fair value through profit or
loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. the classification depends on
the purpose for which the investments were acquired. Management determines the classification of its investments at initial
recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting date.
(i) Financial assets at fair value through profit or loss
financial assets at fair value through profit or loss are financial assets held for trading. a financial asset is classified in this
category acquired principally for the purpose of selling in the short term. derivatives are classified as held for trading unless they
are designated as hedges. assets in this category are classified as current assets.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. they are included in current assets, except for those with maturities greater than 12 months after the balance sheet date
which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the balance sheet
(notes 6 and 11).
(iii) Available-for-sale financial assets
available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either
designated in this category or not classified in any of the other category. they are included in non-current assets unless
management intends to dispose of the investment within 12 months of the balance sheet date.
recognition and derecognition
regular purchases and sales on financial assets are recognised on trade-date - the date on which the Consolidated entity commits
to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. financial assets carried at fair value through profit or loss are initially recognised as
fair value and transaction costs are expensed in the income statement. financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the Consolidated entity has transferred
substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are included
in the income statement.
Subsequent measurement
Loans and receivables are carried at their amortised cost using the effective interest method.
fair value
the fair value of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for
unlisted securities), the Consolidated entity establishes fair value by using valuation techniques. these include the use of recent
arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and
option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.
Impairment
the Consolidated entity assesses at each balance date whether there is objective evidence that a financial asset or group of
financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the
fair value of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for
available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current
fair value, less any impairment loss on the financial asset previously recognised in the profit or loss – is removed from equity and
recognised in the income statement. Impairment losses recognised in the income statement on equity instruments classified as
available-for-sale are not reversed through the income statement.
48 Kagara Limited annual report 2008 49 Kagara Limited annual report 2008
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the fair values of various derivative financial instruments used for hedging purposes are disclosed in note 9. Movements in the
hedging reserve in shareholders’ equity are shown in note 26. the full fair value of a hedging derivative is classified as a non-
current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current
asset or liability when the remaining maturity of the hedged item is less than 12 months. trading derivatives are classified as a
current asset or liability.
the Consolidated entity documents at the inception of the transaction the relationship between hedging instruments and
hedging items, as well as its risk management objective and strategy for undertaking various hedge transactions. the
Consolidated entity also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or
cash flow of hedged items.
(i) Cash flow hedge
the effective portion of changes in the fair value of derivatives that are designated and qualify as a cash flow hedge is recognised
in equity in the hedging reserve. the gain or loss relating to the ineffective portion is recognised immediately in the income
statement.
amounts accumulated in equity are transferred to the income statement in the periods when the hedged item will affect profit or
loss (for instance when the forecast sale that is hedged takes place). the gain or loss relating to the effective portion of forward
foreign exchange contracts hedging export sale is recognised in the income statement within ‘sales’.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is
no longer expected to occur. the cumulative gain or loss that was reported in equity is immediately transferred to the income
statement.
(ii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that
does not qualify for hedge accounting are recognised immediately in the income statement.
v) contributed equity
ordinary shares are classified as equity (note 25).
Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated entity. any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a deduction, net of tax, from the proceeds.
w) earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing net profit after income tax attributable to equity holders of the company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
x) rounding of amounts
the Consolidated entity is of a kind referred to in Class order 98/100, issued by the australian Securities & Investments
Commission, relating to the “rounding off” of amounts in the financial report. amounts in the financial report have been
rounded off in accordance with that Class order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
q) Interest Bearing Liabilities
all loans are measured at the principal amount and interest expense is recognised on an accrual basis.
r) Leases
Leases of property, plant and equipment where the controlled entity has substantially all the risks and rewards of the ownership
are classified as finance leases. finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased
property and the present value of the minimum lease payments. the corresponding rental obligations, net of finance charges,
are included in either long term or short term payables. each lease payment is allocated the liability and finance cost. the finance
cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. the property, plant and equipment acquired under finance leases is depreciated
over the shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Consolidated entity as
lessee are classified as operating leases. Payments made under operating leasing (net of any incentives received from the lessor)
are charged to the income statement on a straight-line basis over the period of the lease.
s) Provisions
Provisions for legal claims are recognised when: the Consolidated entity has a present legal or constructive obligation as a result
of past events; it is more probable than not that an outflow of resources will be required to settle the obligation; and the amount
has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. a provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the balance sheet date. the discount rate used to determine the present value reflects current market assessments
of the time value of money and the risks specific to the liability. the increase in the provision due to the passage of time is
recognised as an interest expense.
t) revenue recognition
revenue is measured at the fair value of the consideration received or receivable. amounts disclosed as revenue are net of
hedging where applicable.
Sales revenue comprises revenue earned from the provision of products to entities outside the company. Sales revenue is
recognised when the product is shipped and:
risk has been passed to the customer;•
the product is in a form suitable for delivery;•
the quantity of the product can be determined with reasonable accuracy;•
the product has been despatched to the customer and is no longer under the physical control of the company;•
the selling price can be determined with reasonable accuracy.•
Concentrate sales revenue represents gross proceeds receivable from the customer. Concentrate sales are initially recognised
at estimated sales value when the product is shipped. adjustments are made for variations in metal price, assay, weight and
currency between the time of shipment and the time of final settlement of sale proceeds.
Interest income is recognised as it accrues at an interest rate applicable to the financial asset.
u) derivatives
derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured
to their fair value. the method of recognising the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged.
50 Kagara Limited annual report 2008 51 Kagara Limited annual report 2008
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CONSOLIDATED KAGARA LTD
2. revenue2008
$’0002007
$’0002008
$’0002007
$’000
(a) rEvEnuE
revenue from sale of goods 302,267 287,570 302,267 287,570
total revenues 302,267 287,570 302,267 287,570
(b) othEr rEvEnuE
net realised and unrealised gains from closeout of fX and base metal contracts 6,277 1,774 6,277 1,774
Interest received from other corporations 652 465 652 465
other revenue 193 10 178 -
total other revenue 7,122 2,249 7,107 2,239
total rEvEnuEs 309,389 289,819 309,374 289,809
3. eXPenses and Losses / (GaIns)(a) Cost of salEs
Production costs 158,084 113,657 158,084 113,657
depreciation - plant and equipment 14,647 9,630 10,079 7,445
amortisation of mining properties 13,603 8,463 13,603 8,463
royalties - mining 13,069 10,899 13,069 10,899
total Cost of salEs 199,403 142,649 194,835 140,464
(b) othEr ExpEnsEs
exploration expenditure written-off 1,117 - 1,117 -
administration 1,561 2,546 1,544 2,536
depreciation - plant and equipment 111 65 110 65
rental expense relating to operating leases 170 126 170 126
Share based payments expense 5,238 9,095 5,238 9,095
Written down value of non-current assets sold 299 (12) 299 (12)
total othEr ExpEnsEs 8,496 11,820 8,478 11,810
(c) finanCE Costs
Interest expense – other persons/corporations 7,031 3,403 7,031 3,403
total finanCE Cost 7,031 3,403 7,031 3,403
y) Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. other borrowing costs are expensed.
z) dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the
entity, on or before the end of the financial year but not distributed at balance date.
(aa) critical accounting estimates and Judgments
the directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best
available current information. estimates assume a reasonable expectation of future events and are based on current trends and
economic data, obtained both externally and within the group.
(i) Estimation for the provision for rehabilitation and dismantling
Provision for rehabilitation and dismantling property, plant and equipment is estimated taking into consideration facts and
circumstances available at the balance sheet date. this estimate is based on the expenditure required to undertake the
rehabilitation and dismantling, taking into consideration time value at money.
(ii) Impairment of property, plant and equipment, deferred exploration and development expenditure and mine properties
the consolidated entity reviews for impairment of property, plant and equipment, deferred exploration and development
expenditure and mine properties in accordance with the applicable accounting policies stated in note 1(o) to 1(s). With the
exception of deferred exploration, the recoverable amount of these assets has been determined based on higher of the assets’
fair value less value in use. these calculations require the use of estimates and judgements.
(iii) Income taxes
Judgment is required in determining the provision for income taxes. the Consolidated entity recognises liabilities of anticipated
tax based on estimates of taxes due. Where the final tax outcome of these matters is different from the amounts that
were initially recognised, such differences will impact the income tax and deferred tax provisions in the year in which such
determination is made.
other areas of judgment are:
determination of ore reserves.•
deferred mining expenditure and capitalisation of underground development costs.•
capitalisation and impairment of exploration and evaluation costs.•
recoverability of deferred tax assets.•
units of production method of depreciation.•
52 Kagara Limited annual report 2008 53 Kagara Limited annual report 2008
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bALANCE ShEET INCOmE STATEmENT
4. Income taX (contInued)2008
$’0002007
$’0002008
$’0002007
$’000
deferred income tax at 30 June relates to the following:
ConsolidatEd
Deferred Tax Liabilities
depreciation of plant and equipment - (342) - (456)
amortisation of exploration, production and development costs (70,816) (47,594) 21,201 28,965
deferred foreign exchange gains and losses - 210 (210) (410)
deferred gain on revalued investments - (2,753) - -
deferred gain on hedged commodity contracts (8,814) (7,350) - 388
accrued expenses / income (4,424) (160) 2,463 169
(84,054) (57,989)
ConsolidatEd
Deferred Tax Assets
depreciation of plant & equipment 2,419 - (1,196) -
Borrowing costs 175 71 158 73
deferred foreign exchange gains and losses 220 - (220) -
equity raising costs charged directly to equity - 46 - -
Business related costs 13 7 8 (2)
Provisions for employee entitlements 1,116 935 (180) (568)
deferred gain on revalued investments 733 - - -
Losses available for offset against future taxable income - - - 1,991
Provision for rehabilitation 3,202 2,213 (429) (1,615)
deferred loss on hedged commodity contracts 30,420 22,836 (548) (1,067)
other 19 13 (13)
Gross deferred income tax assets 38,317 26,121
deferred tax income / (expense) 21,047 27,455
deferred income tax at 30 June relates to the following:
parEnt
Deferred Tax Liabilities
depreciation of plant and equipment - (507) - (291)
amortisation of exploration, production and development costs (45,972) (32,493) 11,427 17,443
deferred foreign exchange gains and losses - 210 (210) (410)
deferred gain on revalued investments - (2,753) - -
deferred gain on hedged commodity contracts (8,814) (7,350) - 388
accrued expenses / income (4,422) (161) 2,463 169
(59,208) (43,054)
parEnt
Deferred Tax Assets
depreciation of plant & equipment 2,388 - (853) -
Borrowing costs 175 72 158 73
deferred foreign exchange gains and losses 220 - (220) -
equity raising costs charged directly to equity - 46 - -
Business related costs 14 7 7 (2)
Provisions for employee entitlements 990 888 (56) (521)
Losses available for offset against future taxable income 733 - - 1,991
CONSOLIDATED KAGARA LTD
4. Income taX 2008 $’000
2007 $’000
2008 $’000
2007 $’000
the major components of income tax expense are:
inComE tax statEmEnt
Current income tax charge 8,478 14,671 18,633 26,623
adjustment in respect of current income tax of previous year (91) - (91) -
deferred income tax
relation to origination and reversal of temporary differences 21,046 27,455 11,740 16,145
Income tax expense reported in the income statement 29,433 42,126 30,282 42,768
amounts ChargEd or CrEditEd dirECtly to Equity
deferred Income tax related to items charged or credited directly to equity
recognition of commodity hedge contracts 5,566 91 5,566 91
net gain on revaluation of investments 3,486 2,576 3,486 2,576
Movement in capital raising costs charged directly to equity (46) 58 (46) 58
Income tax expense reported in equity 9,006 2,725 9,006 2,725
a reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group’s applicable income tax rate as follows:
accounting profit before tax 94,459 131,947 99,030 134,132
accounting profit before income tax 94,459 131,947 99,030 134,132
tax at the australian tax rate of 30% (2007:30%) 28,338 39,584 29,709 40,239
adjustment in respect of current income tax of previous years (91) - (91) -
non deductible amortisation on exploration tenements 353 227 353 227
deduction of capital raising costs charged directly to equity (46) (58) (46) (58)
realised foreign exchange gains (394) (425) (394) (425)
expenditure not allowable for income tax purposes 1,575 2,751 1,576 2,751
adjustment to recognise prior year tax balances not previously recognised (302) - (825) -
other - 47 - 34
income tax Expense reported in the Consolidated income 29,433 42,126 30,282 42,768
54 Kagara Limited annual report 2008 55 Kagara Limited annual report 2008
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CONSOLIDATED KAGARA LTD
7. current assets - avaILaBLe for saLe fInancIaL assets
2008$’000
2007$’000
2008$’000
2007$’000
Listed securities at fair value
ordinary shares 13,312 12,073 13,312 12,073
unlisted securities at fair value - - - -
options - 3,537 - 3,537
13,312 15,610 13,312 15,610
movement in listed securities
Balance at beginning 1 July 2007 15,610 2,874 15,610 2,874
acquisition of listed securities 7,521 846 7,521 846
Conversion of options to shares 1,800 - 1,800 -
revaluations surplus/(deficit) transfer to equity (11,619) 11,890 (11,619) 11,890
balanCE at 30 JunE 2008 13,312 15,610 13,312 15,610
8. current assets - InventorIesMaterials and supplies - at cost 6,035 4,595 3,699 3,172
Work in progress (broken ore) - at cost 16,567 10,553 16,567 10,553
finished goods (concentrates awaiting shipment) - at cost 1,779 67 1,779 67
total invEntoriEs at lowEr of Cost and nEt rEalisablE valuE 24,381 15,215 22,045 13,792
there were no write downs on inventory to net realisable value during the period ending 30 June 2008.
9. derIvatIve fInancIaL InstrumentsCurrEnt assEts
forward contracts – cash flow hedge 14,632 8,237 14,632 8,237
total CurrEnt dErivativE finanCial instrumEnts assEts 14,632 8,237 14,632 8,237
non CurrEnt assEts
forward contracts – cash flow hedge 14,750 16,261 14,750 16,261
total non CurrEnt dErivativE finanCial instrumEnts assEts 14,750 16,261 14,750 16,261
CurrEnt liabilitiEs
forward contracts - cash flow hedge 37,904 22,838 37,904 22,838
total CurrEnt dErivativE finanCial instrumEnts liabilitiEs 37,904 22,838 37,904 22,838
non CurrEnt liabilitiEs
forward contracts – cash flow hedge 63,493 53,283 63,493 53,283
total non CurrEnt dErivativE finanCial instrumEnts liabilitiEs 63,493 53,283 63,493 53,283
the Consolidated entity is party to derivative financial instruments in the normal course of business in order to hedge exposure
to fluctuations in foreign exchange rates and to the movements in the price of zinc, copper and lead. the portion of the gain or
loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity. When the cash flows
occur, the consolidated entity adjusts the initial measurement of the component recognised in the balance sheet by the related
amount deferred in equity.
bALANCE ShEET INCOmE STATEmENT
DEfERRED INCOmE TAx (CONTINuED)2008
$’0002007
$’0002008
$’0002007
$’000
Provision for rehabilitation 3,202 2,213 (428) (1,615)
deferred loss on hedged commodity contracts 30,419 22,836 (548) (1,067)
other 19 13 (13)
gross dEfErrEd inComE tax assEts 38,160 26,075
dEfErrEd tax inComE / (ExpEnsE) 11,740 16,145
CONSOLIDATED KAGARA LTD
CurrEnt tax liabilitiEs2008
$’0002007
$’0002008
$’0002007
$’000
Current income tax liability 2,067 9,156 2,067 9,156
2,067 9,156 2,067 9,156
tax consolidation
Kagara Ltd and its 100% owned australian resident subsidiaries have formed a tax consolidated group with effect from 1 July
2003. Kagara Ltd is the head entity of the tax consolidated group.
tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have agreed to enter into a tax funding arrangement. under the tax funding
arrangement, the allocation of current taxes to members of the tax consolidated group has been completed using the “separate
tax payer within group” approach in accordance with uIG 1052, while deferred taxes have been allocated to members of the tax
consolidated group in accordance with the principles of aaSB 112 Income Taxes.
5. current assets - cash and cash equIvaLentsCash on hand and at Bank 689 7,880 688 7,877
deposits at call 15,123 6,460 15,123 6,460
15,812 14,340 15,811 14,337
the Consolidated entity’s exposure to interest rate risk is discussed in note 29.
6. current assets - trade and other receIvaBLestrade debtors 50,635 57,701 50,635 57,701
other 4,689 1,587 3,307 906
55,324 59,288 53,942 58,607
a) Impaired receivables and receivables past due
the average credit period on Sales is within 15 days. no interest is charged on trade receivables. the trade and current
receivables do not contain impaired assets or past due not impaired. Based on the credit history of these debtors, it is expected
that these amounts will be received when due.
b) foreign exchange and interest rate risk and credit risk
Information about the Consolidated entities exposure to foreign currency risk, interest rate risk and credit risk in relation to trade
and other receivables is provided in note 29.
c) fair value
due to the short term nature of these receivables, their carrying amount is assumed to approximate their fair value.
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CONSOLIDATED KAGARA LTD
12. non-current assets - PLant and equIPment (contInued)
2008$’000
2007$’000
2008$’000
2007$’000
land and buildings
at cost 16,385 8,404 8,052 7,646
Less provision for amortisation (3,030) (1,398) (2,263) (1,392)
total land and buildings 13,355 7,006 5,789 6,254
total writtEn down amount 120,194 82,589 59,592 50,250
reconciliations
reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the current financial
year are set out below:
plant and EquipmEnt
opening carrying amount 73,954 47,292 43,012 44,238
additions 42,885 34,945 18,485 5,052
disposals (404) - (852) -
depreciation (12,064) (8,283) (8,536) (6,278)
Closing Carrying amount 104,371 73,954 52,109 43,012
offiCE furniturE and fixturEs
opening carrying amount 194 77 98 38
additions 22 149 22 81
disposals - - - -
depreciation (50) (32) (36) (21)
Closing Carrying amount 166 194 84 98
motor vEhiClEs
opening carrying amount 1,435 1,022 886 1,014
additions 1,778 920 1,337 212
disposals (23) - - -
depreciation (888) (507) (613) (340)
Closing Carrying amount 2,302 1,435 1,610 886
land and buildings
opening carrying amount 7,006 4,566 6,254 4,566
additions 7,981 3,184 405 2,426
disposals - - - -
depreciation (1,632) (744) (870) (738)
Closing Carrying amount 13,355 7,006 5,789 6,254
(a) asset in the course of construction
the carrying amount of assets disclosed above include the following expenditure recognised in relation to property, plant and
equipment which is in the course of construction:
Mungana Processing Plant 14,960 4,016 - -
total assets in the course of construction 14,960 4,016 - -
the majority of the Consolidated entity’s revenue is determined in united States dollars. In order to protect against exchange rate
movement the Consolidated entity has entered into forward exchange contracts to sell uS dollars.
Kagara Ltd hedges lead and copper production on a shipment by shipment basis using forward sales contracts. as at 30 June
2008, 4,750 tonnes of copper was hedged at $8,981 per tonne.
a hedging program covering 30,000 tonnes of copper has been entered into, this program, which matures in 30 equal
instalments until december 2010. this is a zero stepped cap collar arrangement having a floor price of uS$1.30 per pound of
copper with a cascading ceiling price of uS$3.49 per pound of copper for calendar year 2007, uS$2.90 for 2008, uS$2.36 for
2009 and uS$1.81 for 2010.
CONSOLIDATED KAGARA LTD
10. current assets - other2008
$’0002007
$’0002008
$’000 2007$’000
Prepayments 2,597 - 2,597 -
2,597 - 2,597 -
11. non-current assets - trade and other receIvaBLes
Security deposits 274 261 122 108
Loans to controlled entities (note 34c) - - 127,171 74,771
274 261 127,293 74,879
none of the non-current trade and other receivables are impaired or past due but not impaired. the carrying amount of the
trade and other receivables approximate their fair value. Information about the consolidated and parent entity’s risk exposure is
provided in note 29.
12. non-current assets - PLant and equIPmentplant and EquipmEnt
at cost 99,490 68,138 57,338 44,864
Less provision for depreciation (19,171) (13,798) (19,131) (12,857)
80,319 54,340 38,207 32,007
under finance leases 35,643 24,717 19,990 15,034
Less provision for depreciation (11,591) (5,103) (6,088) (4,029)
24,052 19,614 13,902 11,005
total plant and EquipmEnt 104,371 73,954 52,109 43,012
offiCE furniturE and fixturEs
at cost 288 266 181 159
Less provision for depreciation (122) (72) (97) (61)
total offiCE furniturE and fixturEs 166 194 84 98
motor vEhiClEs
at cost 1,615 607 1,412 483
Less provision for depreciation (901) (377) (797) (367)
714 230 615 116
under finance leases 2,616 1,903 1,696 1,300
Less provision for depreciation (1,028) (698) (701) (530)
1,588 1,205 995 770
total motor vEhiClEs 2,302 1,435 1,610 886
58 Kagara Limited annual report 2008 59 Kagara Limited annual report 2008
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CONSOLIDATED KAGARA LTD
18. current LIaBILItIes – Interest-BearInG LIaBILItIes
2008$’000
2007$’000
2008$’000
2007$’000
sECurEd
Corporate facility (a) - 15,000 - 15,000
hire Purchase Liability (b) 10,858 7,940 10,858 7,940
10,858 22,940 10,858 22,940
the Corporate facility is held with national australia Bank Ltd. the facility limit is $100 million secured as a fixed and (a) floating charge of the consolidated entities assets. the facility comprises of two cash advance facilities each of $50 million. the interest rate is variable based on BBSy plus a margin. the margin for cash advance facility one and two are 0.75% and 0.80% respectively.
hire Purchase Liabilities are secured by charges over each respective asset. the interest rate ranges from 7.01% to 9.09%. (b) refer to note 32(b) for details on timing and amount of future hire Purchase payments.
Interest rate risk exposure, fair value disclosure and security disclosures are detailed in note 29.(c)
19. current LIaBILItIes - ProvIsIons
employee entitlements (note 39b) 2,732 1,847 2,383 1,652
2,732 1,847 2,383 1,652
movEmEnt in provisions
Movements in each class of provisions at the beginning and end of the current financial year are set out below.
CONSOLIDATED KAGARA LTD
2008$’000
2008$’000
Carrying amount at 1 July 2007 1,847 1,652
amounts incurred and charged 885 731
Carrying amount at 30 June 2008 2,732 2,383
20. current LIaBILItIes - other employee entitlements 191 122 167 116
191 122 167 116
21. non-current LIaBILItIes - PayaBLes other creditors and accruals - 881 - 881
- 881 - 881
22. non-current LIaBILItIes – Interest-BearInG LIaBILItIessECurEd
Corporate facility (note 18(a)) 78,980 - 78,980 -
hire Purchase Liabilities (note 18(b)) 10,221 6,944 10,221 6,944
89,201 6,944 89,201 6,944
CONSOLIDATED KAGARA LTD
13. non-current assets – mIne ProPertIes 2008$’000
2007$’000
2008 $’000
2007 $’000
Cost
opening balance 133,558 89,799 133,558 89,799
expenditure incurred 36,061 38,750 36,254 38,750
transfer from development - 5,009 - 5,009
Closing balanCE 169,619 133,558 169,812 133,558
aCCumulatEd dEprECiation
opening balance (25,854) (17,391) (25,854) (17,391)
amortisation for the year (13,603) (8,463) (13,796) (8,463)
Closing balance (39,457) (25,854) (39,650) (25,854)
net book value 130,162 107,704 130,162 107,704
Included in the mine properties are the following capitalised borrowing costs:
Costs brought forward 1,011 1,257 1,011 1,257
Costs incurred during the year 879 - 879 -
amortised during the year (510) (246) (510) (246)
1,380 1,011 1,380 1,011
14. non-current assets - deveLoPment
opening balance 3,419 5,451 3,019 5,051
expenditure incurred 21,503 2,977 13,366 2,977
transfer to mine properties - (5,009) - (5,009)
transfer from exploration and evaluation 48,706 - - -
Closing balanCE 73,628 3,419 16,385 3,019
15. non-current assets – caPItaLIsed eXPLoratIon and evaLuatIon
opening balance 80,112 26,317 21,122 9,501
expenditure incurred 54,930 27,028 24,093 11,621
acquisition of exploration tenements - 26,767 - -
transfer to development (48,706) - - -
expenditure written off (1,117) - (1,117) -
Closing balanCE 85,219 80,112 44,098 21,122
16. non-current assets – other
Prepayments 1,050 1,050 1,050 1,050
1,050 1,050 1,050 1,050
17. current LIaBILItIes – trade and other PayaBLes
trade creditors 25,678 15,779 14,175 11,292
other creditors and accruals 26,449 23,467 22,117 22,275
52,127 39,246 36,292 33,567
60 Kagara Limited annual report 2008 61 Kagara Limited annual report 2008
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(c) share options
Information relating to the Kagara employee option Plan, is detailed in note 39(a).
(d) terms and conditions of contributed equity
ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the Company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of and amounts of shares held. ordinary shares
entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(e) capital risk management
the consolidated entity’s and the parent entity’s objectives when managing capital is to safeguard their ability to continue as a
going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
Management effectively manage the consolidated entities capital by assessing the financial risks and adjusting its capital structure
in response to changes in these risks and in the market. these responses include the management of debt levels, distributions to
shareholders and share issues. there have been no changes in the strategy adopted by management to control the capital of the
consolidated entity since the prior year.
the gearing ratios for the year ended 30 June 2008 and 30 June 2007 are as follows:
NOTES CONSOLIDATED KAGARA LTD
(e) capital risk management2008
$’0002007
$’0002008
$’0002007
$’000
total borrowings 17,18,21,22 152,186 70,011 136,351 64,332
Less cash and cash equivalents 5 (15,812) (14,340) (15,811) (14,337)
net debt 136,374 55,671 120,540 49,995
total equity 235,556 206,437 240,832 207,991
total capital 371,930 262,108 361,372 257,986
Gearing ratio 36% 21% 33% 19%
26. reservesavailable-for-sale investment revaluation reserve, net of tax (i) 1,593 9,727 1,593 9,727
Share based payment reserve, net of tax (ii) 12,697 9,187 12,697 9,187
hedge reserve, net of tax (iii) (47,538) (34,551) (47,538) (34,551)
Capital profits reserve (iv) 57 57 57 57
other - 46 - 46
(33,191) (15,534) (33,191) (15,534)
nature and purpose of reserve
(i) Available-for-sale Investment Revaluation Reserve
Changes in the fair value and exchange differences arising on translation of investments, such as equities, classified as available-
for-sale financial assets, are taken to the available-for-sale investments revaluation reserve. amounts are recognised in the profit
and loss when the associated assets are sold or impaired.
available-for-Sale revaluation reserve
Balance at beginning of financial year 9,727 518 9,727 518
revaluation – gross (8,082) 11,785 (8,082) 11,785
Conversion of options to shares (3,538) - (3,538) -
deferred tax 3,486 (2,576) 3,486 (2,576)
balanCE at End of finanCial yEar 1,593 9,727 1,593 9,727
CONSOLIDATED KAGARA LTD
23. non-current LIaBILItIes - ProvIsIons 2008$’000
2007$’000
2008 $’000
2007 $’000
Provision for rehabilitation 10,675 7,376 10,675 7,376
employee entitlement (note 39(b)) 742 1,073 700 1,070
11,417 8,449 11,375 8,446
Movements In Provisions CONSOLIDATED KAGARA LTD
Movements in each class of provisions at the beginning and end of the current financial year are set out below.
2008$’000
2008$’000
Provision For Rehabilitation
Carrying amount at 1 July 2007 7,376 7,376
amounts incurred and charged 3,299 3,299
Carrying amount at 30 June 2008 10,675 10,675
Provision For Employee Entitlement
Carrying amount at 1 July 2007 1,073 1,070
additional provisions recognised - -
unused amounts reversed (331) (370)
Carrying amount at 30 June 2008 742 700
Provision For Rehabilitation
a provision has been recognised for the costs to be incurred for the restoration of the mining site used for the exploration of
zinc, lead and copper. It is anticipated that the mine will require restoration within 10 years. a discount rate adjusted to reflect
the risk inherent in the mining operation has been applied.
Provision For Long-Term Employee Benefits
a provision has been recognised for employee entitlement relating to long service leave. In calculating the present value of future
cash flows in respect to long service leave, the probability of long service leave being taken is based on historical data.
the measurement and recognition criterion relating to employee benefits has been included in note 1(p) of this report.
24. non-current LIaBILItIes – otheremployee entitlements 52 75 49 75
52 75 49 75
25. contrIButed equIty(a) issued and paid up capital
216,399,775 ordinary shares fully paid 117,225 109,611 117,225 109,611
117,225 109,611 117,225 109,611
(b) movements in contributed equity for the year
2008 NumbER Of
ShARES$’000
2007 NumbER Of
ShARES$’000
Beginning of the financial year 215,008,437 109,611 195,791,718 80,476
Issued during the 2008 financial year
employee option conversions to ordinary shares (i)• 1,372,500 7,494
sundry other shares issued (ii)• 18,838 120
Issued during the 2007 financial year
employee option conversions to ordinary shares• 4,267,500 9,836
other options exercised• 2,169,404 14,361
conversion of notes• 12,779,815 4,938
End of the financial year 216,399,775 117,225 215,008,437 109,611
during the year 1.4 million options (2007: 4.3 million) were exercised at prices ranging from $1.20 to $5.00. (i) refer to note 39(a).
during the year Kagara allotted 18,838 shares to the australian Prospectors and Miners hall of fame at $6.37 per share.(ii)
62 Kagara Limited annual report 2008 63 Kagara Limited annual report 2008
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28. dIvIdends (contInued)
the above amounts represent the balance of the franking account as at the financial year, adjusted for:
franking credits that will arise from payment of the amount of the provision for income tax(a)
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date, and (b)
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.(c)
29. fInancIaL rIsk manaGement
the Consolidated entity’s activities expose it to market risk (including currency risk, commodity price risk, interest rate risk
and investment risk), credit risk and liquidity risk. the Consolidated entity’s overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Consolidated entity. the Consolidated entity uses derivative financial instruments such as foreign exchange contracts and
commodity contracts to hedge certain risk exposures. the Consolidated entity’s financial instruments consist mainly of deposits
with banks, short-term investments, accounts receivable and payable loans to and from subsidiaries, leases, working capital
facility and derivatives.
the Board meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the
context of the most recent economic conditions and forecasts. the overall risk management strategy seeks to assist the
consolidated group in meeting its financial targets, whilst minimising potential adverse effects on financial performance.
risk management policies include the use of hedging derivative instruments, credit risk policies and future cash flow
requirements.
(a) market risk
(i) Foreign exchange risk
Generally, forward contract and options are used to manage foreign exchange risk. the Consolidated entity’s currency exposure
based on the information provided to key management is mainly in cash and cash equivalents and forward exchange contracts
which is disclosed in notes 5 and 9.
foreign exchange risk arises from future commercial transactions and recognised assets and liabilities that are denominated in a
currency that is not the entity’s functional currency. the Consolidated entity has exposure to foreign exchange risk due to its sale
revenue being derived in united States dollars.
external foreign exchange contracts are designated at a Consolidated entity level as hedges of foreign exchange risk on revenue.
at 30 June 2008, had the australia dollar weakened/strengthened by 10% against these foreign currencies with all other
variables held constant, the consolidated entity’s pre-tax profit for the year would have been $6.6 million higher/lower (2007:
$6.5 million higher/lower), mainly as a result of foreign exchange gains/losses on translation of cash and cash equivalents.
receivables and payables denominated in foreign currencies. equity would have been $6.6 million higher/lower (2007: $6.5
million) had the australian dollar weakened/strengthened by 10% against theses foreign currencies, arising mainly from cash and
cash equivalents, interest bearing loans, receivables and payable denominated in foreign currencies.
(ii) Commodity risk price
the Consolidated entity is exposed to commodity price risk arising from revenue derived from sales of zinc, copper and lead
concentrates. the risk is managed through contractual arrangements with customers and use of derivative instruments such as
forward and option contracts. at 30 June 2008, had the commodity prices weakened/strengthened by 5% with all other variables
held constant, the consolidated entity’s pre-tax profit for the year would have been $17.7 million higher/lower (2007: $18.2
million higher/lower), mainly as a result of movement in zinc, copper and lead prices. equity would have been $17.7 million
higher/lower (2007: $18.2 million higher/lower) had the commodity prices weakened/strengthened by 5%, arising mainly as a
result of the movement in zinc, copper and lead prices.
(iii) Interest rate risk exposure
Interest rate risk arises as a result of the repricing of investments and borrowings and is affected by the length of the repricing
period.
CONSOLIDATED KAGARA LTD
2008 $’000
2007 $’000
2008 $’000
2007 $’000
26. reserves (contInued)
ii) Share-based Payments Reserve
the share-based payments reserve is used to recognise the fair value of options issued but not exercised.
Share Based Payment reserve
Balance at beginning of financial year 9,187 1,512 9,187 1,512
employee share plan expense 4,810 9,526 4,810 9,526
transfer to share capital (options exercised) (1,300) (1,851) (1,300) (1,851)
balanCE at End of finanCial yEar 12,697 9,187 12,697 9,187
(iii) Hedging Reserve – cash flow hedge
the hedging reserve is used to record gains or losses on hedging instruments used in a cash flow hedge that are recognised
directly in equity, as described in note 1(u). amounts are recognised in profit and loss when the associated hedge transaction
affects profit and loss.
hedge reserve
Balance at beginning of financial year (34,551) (34,764) (34,551) (34,764)
revaluation - gross (18,553) 304 (18,553) 304
deferred tax 5,566 (91) 5,566 (91)
balanCE at End of finanCial yEar (47,538) (34,551) (47,538) (34,551)
(iv) Capital Profit Reserve
the capital profit reserve is used to accumulate realised capital profit.
Capital profit reserve
Balance at beginning of financial year 57 57 57 57
Incurred during the year - - - -
balanCE at End of finanCial yEar 57 57 57 57
27. retaIned ProfItsBalance at the beginning of the year 112,360 43,294 113,914 43,305
dividend provided or paid for (25,864) (20,755) (25,864) (20,755)
net profit attributable to members of Kagara Ltd 65,026 89,821 68,748 91,364
balanCE at thE End of finanCial yEar 151,522 112,360 156,798 113,914
28. dIvIdends
(a) ordinary shares
final dividend for the year ended 30 June 2007 of 12 cents (2006: 10 cents) per fully paid share paid on the 17 october 2007
fully franked based on tax paid at 30% 25,863 20,755 25,863 20,755
25,863 20,755 25,863 20,755
(b) franked dividends
franking credits available for subsequent financial years based on tax paid of 30% 8,097 8,254 8,097 8,254
8,097 8,254 8,097 8,254
64 Kagara Limited annual report 2008 65 Kagara Limited annual report 2008
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29. fInancIaL rIsk manaGement (contInued)
(b) credit risk exposures
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in a financial loss to the
group. Credit risk is managed on a consolidated entity basis. Credit risk arises from cash and cash equivalents, and deposits with
banks and financial institutions, as well as credit exposures to trade customers, including outstanding receivables and committed
transactions.
the Consolidated entity has no significant concentrations of credit risk. the Consolidated entity has policies in place to ensure
that sales of products are made to customers with an appropriate credit history. all potential customers are rated for credit
worthiness taking into account their size, market position and financial standing. derivative counterparties and cash transactions
are limited to high credit quality financial institutions. the Consolidated entity has policies that limit the amount of credit
exposure to any one financial institution.
the age analysis to trade receivables past due but not impaired is disclosed in note 6. the carrying amount of trade receivables
individually determined to be impaired and the movement in the related allowance for impairment are also disclosed in note 9.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining at all times sufficient cash, liquid investments and committed credit
facilities to meet the Consolidated entities commitments as they arise.
Liquidity risk management covers daily, short-term and long-term needs. the appropriate levels of liquidity are determined by
both the nature of the Consolidated entity’s business and its risk profile.
to the extent the Consolidated entity has liabilities on its cash flow hedges; the Consolidated entity expects to produce sufficient
copper from its copper operations to deliver into its committed hedge contracts.
(d) fair value estimation
the fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes.
the fair value of financial instruments traded in active markets (such as available for sale investments) are based on quoted
market prices at the reporting date. the quoted market price used for financial assets held by the consolidated entity is the
current bid price.
derivative contracts classified as held for trading are fair valued by comparing the contracted rate to the current market rate for a
contract with the same remaining period to maturity.
the carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due
to their short-term nature.
29. fInancIaL rIsk manaGement (contInued)
the significance of the risks to the consolidated entity is dependant on a number of factors including:
interest rates and the currencies that the borrowings are drawn;•
level of cash, liquid investments and borrowings and their term;•
maturity dates of investments and borrowings;•
proportion of investments and borrowings that are fixed rate or floating rate.•
the Consolidated entity’s exposure to interest rate risk and the effective interest rates of financial assets and financial liabilities at
the balance date, are as follows:
AS AT 30 JuNE 2008fLOATING INTEREST
mATuRING IN:NON INTEREST
bEARINGTOTAL
WEIGhTED AvERAGE INTEREST
RATE
1 yr or less$’000
over 1 to 5 yrs$’000 $’000 $’000
finanCial assEts
Cash and cash equivalents 15,812 - - 15,812 1.52%
trade and other receivables 40 - 55,558 55,598 8.40%
derivative financial instruments - - 29,382 29,382 -
total finanCial assEts 15,852 - 84,940 100,792
finanCial liabilitiEs
trade and other payables - - 52,127 52,127 -
Interest bearing liabilities 10,858 89,201 - 100,059 8.41%
derivative financial instruments - - 101,397 101,397 -
total finanCial liabilitiEs 10,858 89,201 153,524 253,583
AS AT 30 JuNE 2007fLOATING INTEREST
mATuRING IN:NON INTEREST
bEARINGTOTAL
WEIGhTED AvERAGE INTEREST
RATE
1 yr or less$’000
over 1 to 5 yrs$’000 $’000 $’000
finanCial assEts
Cash and cash equivalents 14,340 - - 14,340 5.85%
trade and other receivables 40 - 59,509 59,549 6.45%
derivative financial instruments - - 24,498 24,498 -
total finanCial assEts 14,380 - 84,007 98,387
finanCial liabilitiEs - - - -
trade and other payables - - 40,127 40,127 -
Interest bearing liabilities 22,940 6,944 - 29,884 7.84%
derivative financial instruments - - 76,119 76,119 -
total finanCial liabilitiEs 22,940 6,944 116,246 146,130
at 30 June 2008, if interest rates had changed by -/+ 50 bases points from the weighted average year end rates with all other
variables held constant, pre-tax profit for the year would have been $0.4 million higher/lower (2007:$0.1 million higher/lower),
mainly as a result of higher/lower interest from interest bearing liabilities. equity would have been $0.4 million higher/lower
(2007: $0.1 million higher/lower) mainly as a result of an increase/decrease from interest bearing liabilities.
(iv) Investment Risk
at 30 June 2008 if the australian share prices changed by 5% with all other variables held constant there would be no affect on
the pre-tax profit as all movements is recorded in equity. equity would have been $0.67 million higher/lower (2007: $0.6 million
higher/lower).
66 Kagara Limited annual report 2008 67 Kagara Limited annual report 2008
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d) contingent liabilities (continued)
DATE REGISTERED
NATIvE TITLE AppLICATION TENEmENTS
22/04/05 Gudjala People ePM 10582, ML 10137, ML 1531
22/04/05 Warrungu People 2 ePM 16024
22/04/05 Gugu Badhun People 2 ePM 13229, ePM 14107, ePM 9323, ML 1393, ML 30156
28/05/01 Bar-Barrum People 2ePM 13272, ePM 14626, ePM 16022, ePM 16024, ePM 16072, ML 20005, ML 20105, ML 4043, ML 4044
28/05/01 Bar-Barrum People 3
ePM 13272, ePM 14626, ePM 16022, ePM 16024, ePM 16072, ML 20005, ML 20007, ML 20104, ML 20105, ML 4042, ML 4043, ML 4044, ML 4130, ML 7110
12/12/02 Bar-Barrum People 4 ePM 12902, ePM 13272
03/07/00 Ballardong Wad6181-98e77/1399, e77/272, M77/467, M77/468, M77/544, M77/99, P74/282, P74/283, P74/284, P74/285, P77/3007, P77/3008
08/09/04 Karajarri Wad6100-98 e04/1610, M4/244, M4/249
tenements that may have appeared in this list previously but do so no longer have nIL native title Claims registered
within there area.
It is not possible at this time to quantify the financial impact (if any) that these applications may have on the Consolidated entity.
33. Investments In controLLed entItIes
the consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policies described in note 1(b).
NAmE Of CONTROLLED ENTITy
ENTITy hOLDING ThE INvESTmENT
bOOK vALuE Of INvESTmENT OWNERShIp INTEREST
2008$
2007$
2008%
2007%
Mungana Pty Ltd Kagara Ltd 1 1 100 100
Kagara Copper Pty Ltd Kagara Ltd 1 1 100 100
Kagara nickel Pty Ltd Kagara Ltd 1 1 100 100
the above controlled entities are incorporated in australia. the controlled entities have the same financial year end reporting date
as the parent entity. the proportion of ownership interest is equal to the proportion of voting power held.
34. reLated Party dIscLosures
a) Parent entity
Kagara Ltd is the ultimate australian parent entity of the Consolidated entity. Kagara Ltd is a Company limited by shares that is
incorporated and domiciled in australia.
b) key management personnel
disclosures relating to key management personnel are set out in the director’s report.
c) controlled entities - wholly owned
Interest in controlled entities are set out in note 33.
a controlled entity made payments and received funds on behalf of Kagara Ltd by way of inter-company loan accounts. the loan
is unsecured, bears no interest and is repayable on demand; however, demand for repayment is not expected in the next twelve
months. aggregate amounts receivable from the wholly owned controlled entity by the Company are set out in note 11.
d) transactions with director related entities
there were no transactions with director related entities during the 2008 financial year.
CONSOLIDATED KAGARA LTD
2008$’000
2007$’000
2008$’000
2007$’000
30. dIrectors and eXecutIves dIscLosure details of the directors and Key Management Personnel are provided in the “remuneration report” contained within the
directors’ report.
31. audItors’ remuneratIonaudit and review of the financial reports 95 72 95 72
tax compliance services - 83 - 83
95 155 95 155
32. commItments and contInGent LIaBILItIes
a) exploration commitments
the Consolidated entity has established minimum exploration commitments as follows:
not later than one year 3,927 3,601 1,251 1,803
Later than one year but not later than five years 11,356 10,011 1,550 2,488
15,283 13,612 2,801 4,291
this expenditure will only be incurred should the Consolidated entity retain its existing level of interest in its various exploration
areas.
b) hire purchase liabilities
Commitments in relation to non cancellable hire purchase liabilities are payable as follows:
no later than one year 12,249 8,961 12,249 8,961
Later than one year but not later than five years 11,602 7,883 11,602 7,883
23,851 16,844 23,851 16,844
Less: future finance charges (2,772) (1,960) (2,772) (1,960)
21,079 14,884 21,079 14,884
representing hire Purchase Liabilities
Current (note 18) 10,858 7,940 10,858 7,940
non-current (note 22) 10,221 6,944 10,221 6,944
21,079 14,884 21,079 14,884
hire purchase agreements are entered into as a means of funding the acquisition of items of plant and equipment. repayments
are fixed and have no escalation clauses. no hire purchase arrangements create restrictions on any other financing arrangements.
c) capital commitments
as at 30 June 2008 Kagara Ltd has capital commitments of $33.7 million. these commitments relate to the construction of the
Mungana Processing Plant. this capital expenditure was contracted at the reporting date but not recognised as a liability in the
balance sheet and will be payable within one year.
d) contingent liabilities
(i) to the best of the Consolidated entity’s knowledge, no native title applications have been registered under the native title act
1993 (Cth) over any land included within the boundaries of the Mining tenements other than those listed below.
68 Kagara Limited annual report 2008 69 Kagara Limited annual report 2008
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CONSOLIDATED KAGARA LTD
36. non-cash InvestInG and fInancInG actIvItIes
2008 $’000
2007 $’000
2008 $’000
2007 $’000
(a) non-cash financing and investing activities
during the financial year, the Consolidated entity acquired plant and equipment with an aggregate fair value of $17.5 million
(2007: $10.1 million) by means of hire purchase finance. these transactions are not reflected in the Statement of Cash flow.
(b) facility arrangements
unrestricted access was available at balance date to the following lines of credit:
Secured Bank Loan facility (working capital facility) 100,000 25,000 100,000 25,000
Less draw down portion (78,980) (15,000) (78,980) (15,000)
Performance Bonds (i) 25,000 16,000 25,000 16,000
Less draw down portion (22,214) (15,537) (22,214) (15,537)
hire Purchase facility 39,650 16,209 39,650 16,209
Less draw down portion (21,078) (16,209) (21,078) (16,209)
Chattel Mortgage - 2,693 - 2,693
Less draw down portion - (634) - (634)
42,378 12,522 42,378 12,522
the Performance Bonds are secured by a fixed and floating charge over the assets of the Consolidated entity and an (i) annual performance bond fee is charged at market rates.
37. earnInGs Per share
classification of securities as ordinary shares
the following securities have been classified as ordinary shares and included in basic earnings per share:
(a) Ordinary shares
classification of securities as potential ordinary shares
the following securities have been classified as potential ordinary shares and included in diluted earnings per share only:
(a) Options
as at 30 June 2008, the options on issue had an exercise price in excess of the market price and are therefore anti-dilutive.
CONSOLIDATED
2008$
2007$
earnings reconciliation
net profit used in the calculation of basic and diluted earnings per share 65,026,138 89,820,897
NumbER Of ShARES
NumbER Of ShARES
Weighted average number of ordinary shares used in the calculation of basic earnings per share 215,768,035 205,478,130
Weighted average number of options & notes - 15,051,954
wEightEd avEragE numbEr of ordinary sharEs usEd in thE CalCulation of dilutEd Earnings pEr sharE 215,768,035 220,530,084
38. seGment rePortInG
the Consolidated entity operates within one business and geographical segment, being the mineral exploration, development
and extraction industry within australia.
CONSOLIDATED KAGARA LTD
35. statement of cash fLoWs2008
$’0002007
$’0002008
$’000 2007
$’000
(a) reconciliation of cash
for the purpose of the statement of cashflows, cash includes cash on hand, cash at bank and short term deposits at call. Cash balance comprises:
Cash on hand and at bank 1,472 7,880 688 7,877
deposits at call 14,340 6,460 15,123 6,460
Closing cash balance 15,812 14,340 15,811 14,337
(b) reconciliation of net profit after income tax to net cash flows from/(used in) operations
net profit after income tax 65,026 89,821 68,748 91,364
add/(less) non cash items:
depreciation 14,758 9,695 10,178 7,510
amortisation of mining properties 12,740 8,463 12,740 8,463
Provision for restoration and rehabilitation 1,430 532 1,430 532
(Profit)/loss on sale of property, plant & equipment 299 (12) 299 (12)
exploration overhead recoveries (3,862) (3,070) (3,862) (3,070)
exploration expenditure written off 1,117 - 1,117 -
net foreign exchange differences 4,107 (1,868) 4,104 (1,868)
Provision/(reversal) for employee entitlements 600 1,894 385 1,894
fair value adjustment to derivatives 5,686 2,263 5,686 2,264
non cash employee expense – share based payment 5,238 9,095 5,238 9,095
Change in operating assets and liabilities:
(Increase)/decrease in receivables 6,777 (41,889) 7,076 (41,879)
(Increase)/decrease in inventories (9,166) (2,345) (8,253) (2,345)
(Increase)/decrease in deferred tax assets (12,195) (6,031) (12,086) (6,031)
(Increase)/decrease in prepayments (2,597) 152 (2,597) 152
(Increase)/decrease in accrued income (1,169) - (1,169) -
(decrease)/increase in creditors 5,966 7,455 2,574 7,445
(decrease)/increase in provisions (7,090) 4,943 (7,090) 4,942
(decrease)/increase in income tax 1,079 (2,725) 11,728 (2,084)
(decrease)/increase in deferred tax liability 26,065 37,032 16,155 37,032
(decrease)/increase in accrued expenses 1,461 (2,130) 613 (2,129)
nEt Cash providEd by opErating aCtivitiEs 116,270 111,275 113,014 111,275
70 Kagara Limited annual report 2008 71 Kagara Limited annual report 2008
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39. emPLoyee entItLements (contInued)
consolidated and parent entity - 2007
GRANT DATE
ExpIRy DATE
ExERCISE pRICE
bALANCE AT START Of ThE yEAR
GRANTED DuRING
ThE yEAR
ExERCISED DuRING
ThE yEAR
fORfEITED DuRING
ThE yEAR
bALANCE AT END Of ThE yEAR
vEST AND
ExERCISAbLEAT ThE END
Of ThE yEAR
NumbER NumbER NumbER NumbER NumbER NumbER
24-dec-03 31-dec-07 $1.20 225,000 - (212,500) - 12,500 12,500
25-nov-04 31-dec-07 $1.50 1,500,000 - (1,500,000) - - -
25-aug-05 31-dec-07 $1.50 975,000 - (655,000) - 320,000 320,000
08-dec-05 30-Jun-08 $2.00 1,500,000 - (1,500,000) - - -
01-May-06 30-Jun-08 $5.00 2,940,000 - (220,000) (220,000) 2,500,000 2,500,000
19-Jul-06 30-Jun-08 $5.00 - 1,070,000 (180,000) (75,000) 815,000 815,000
23-aug-06 30-Jun-09 $6.00 - 500,000 - - 500,000 500,000
23-nov-06 30-Jun-09 $6.00 - 2,500,000 - - 2,500,000 2,500,000
20-apr-07 30-Jun-09 $6.50 - 4,820,000 - (20,000) 4,800,000 -
total 7,140,000 8,890,000 (4,267,500) (315,000) 11,447,500 6,647,500
Weighted average exercise Price $3.04 $6.15 $1.99 $5.10 $5.79 $5.28
no options expired during the periods covered by the above tables.
CONSOLIDATED KAGARA LTD
b) employee entitlements2008
$’0002007
$’0002008
$’0002007
$’000
the aggregate employee entitlement is comprised of:
Provisions (current) 2,732 1,847 2,383 1,652
Provisions (non current) 742 1,073 700 1,070
Provision - other (current) 191 122 167 116
Provision - other (non current) 52 75 49 75
3,717 3,117 3,299 2,913
number of Employees:
number of employees at year end 486 298 370 248
40. events suBsequent to BaLance date
In the directors’ opinion, no other events or circumstances have arisen since the end of the financial year that have significantly
affected or may significantly affect the operations of the Consolidated entity, the results of those operations, or the state of
affairs of the Consolidated entity in financial years subsequent to this financial year that have not been otherwise disclosed in
these financial statements.
41. chanGe In accountInG PoLIcy
the following australian accounting Standards have been issued or amended and are applicable to Kagara Ltd and its
consolidated group but are not yet effective. they have not been adopted in preparation of the financial statements at
reporting date.
39. emPLoyee entItLements
a) employee share option plan
an employee Share option Plan has been established where by Kagara may grant options over ordinary shares of Kagara to
executive directors and staff of the Consolidated entity who have been continuously employed by Kagara. the options are issued
for nil consideration, and are granted at the discretion of the directors. the options cannot be transferred, are not quoted on
the aSX and carry no dividend or voting rights. options are exercisable at any time, (after any applicable escrow period) whilst
the holder is employed by Kagara and each option is convertible into one ordinary share. the market value of shares under these
options at 30 June 2008 was $4.60 (30 June 2007: $6.38).
fair Value of options Granted
the assessed fair value at grant date of options is allotted equally over the period from grant date to vesting date. fair value at
grant date is independently determined using the Black-Scholes option pricing model that takes into account the exercise price,
the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the
share price at grant date, expected price volatility of the underlying share, the expected dividend yield and the risk-free interest
rate for the term of the option.
Set out below are summaries of options granted under the plan:
consolidated and parent entity - 2008
GRANT DATE
ExpIRy DATE
ExERCISE pRICE
bALANCE AT START Of ThE yEAR
GRANTED DuRING
ThE yEAR
ExERCISED DuRING ThE
yEAR
fORfEITED DuRING ThE
yEAR
bALANCE AT END Of ThE yEAR
vEST AND ExERCISAbLE AT ThE END
Of ThE yEAR
NumbER NumbER NumbER NumbER NumbER NumbER
24-dec-03 31-dec-07 $1.20 12,500 - (12,500) - - -
25-aug-05 31-dec-07 $1.50 320,000 - (300,000) (20,000) - -
1-May-06 30-Jun-08 $5.00 2,500,000 - (610,000) (1,890,000) - -
19-Jul-06 30-Jun-08 $5.00 815,000 - (450,000) (365,000) - -
23-aug-06 30-Jun-09 $6.00 500,000 - - - 500,000 500,000
23-nov-06 30-Jun-09 $6.00 2,500,000 - - - 2,500,000 2,500,000
20-apr-07 30-Jun-09 $6.50 4,800,000 - - (580,000) 4,220,000 4,220,000
17-Mar-08 30-Jun-10 $6.00 - 7,720,000 - (320,000) 7,400,000 -
total 11,447,500 7,720,000 (1,372,500) (3,175,000) 14,620,000 7,220,000
Weighted average exercise Price $5.79 $6.00 $4.20 $5.35 $6.14 $6.29
In relation to the options granted during the year, the weighted average fair value of the options granted was $0.802. this price
was calculated by using a Black and Scholes option pricing model applying the following inputs:
Weighted average exercise price $6.00
Weighted average life of the option 2.29 yrs
underlying share price $4.20
expected share price volatility 49%
risk free interest rate 7.35%
historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of
future tender, which may not eventuate.
72 Kagara Limited annual report 2008 73 Kagara Limited annual report 2008
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dIrectors’ decLaratIon
In accordance with a resolution of the directors of Kagara Ltd, I state that:
In the opinion of the directors:
the financial statements and notes of the Company and of the Consolidated entity are in accordance with the (a) Corporations act 2001, including:
(i). Giving a true and fair view of the Company’s and Consolidated entity’s financial position as at 30 June 2008 and of their performance for the year ended on that date; and
(ii). Complying with accounting Standards and Corporations regulations 2001 and other mandatory professional reporting requirements and;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due (b) and payable and;
the remuneration disclosures set out on pages 6 to 9 of the director’s report comply with accounting Standard aaSB 124 (c) related Party disclosures and the Corporations regulations 2001 and;
this declaration has been made after receiving the declarations made by the Chief financial officer and executive (d) Chairman to the directors in accordance with section 295a of the Corporations act 2001 for the financial year ending 30 June 2008.
on behalf of the Board.
K roBInSon ExECutivE Chairman
Perth, 20 august 2008
41. chanGe In accountInG PoLIcy (contInued)
AASb AmENDmENT
STANDARDS AffECTED OuTLINE Of AmENDmENTAppLICATION DATE Of STANDARD
AppLICATION DATE fOR GROup
aaSB 2007-3 amendments to australian accounting Standards
aaSB 5 non-current assets held for Sale and discontinued operations
the disclosure requirements of aaSB 114: Segment reporting have been replaced due to the issuing of aaSB 8: Segment reporting in february 2007. these amendments will involve changes to segment reporting disclosures within the financial report. however, it is anticipated there will be on direct impact on recognition and measurement criteria amounts included in the financial report.
1 Jan 2009 1 Jul 2009
aaSB 6 exploration for and evaluation of Mineral
aaSB 102 Inventories
aaSB 107 Cash flow Statements
aaSB 119 employee Benefits
aaSB 127 Consolidated and Separate financial Statements
aaSB 134 Interim financial reporting
aaSB 136 Impairment of assets
aaSB 8 operating Segments
aaSB 114 Segment reporting as above. 1 Jan 2009 1 Jul 2009
aaSB 2007-6 amendments to australian accounting Standards
aaSB 1 first time adoption of aIfrS
the revised aaSB 123: Borrowing Costs issued in June 2007 has removed the option to expense all borrowing costs. this amendment will require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. however, there will be no direct impact to the amounts included in the financial group as they already capitalise borrowing costs related to qualifying assets.
1 Jan 2009 1 Jul 2009
aaSB 101 Presentation of financial Statements
aaSB 107 Cash flow Statements
aaSB 116 Property, Plant and equipment
aaSB 138 Intangible assets
aaSB 123 Borrowing Costs
aaSB 123 Borrowing Costs as above. 1 Jan 2009 1 Jul 2009
aaSB 2007-8 amendments to australian accounting Standards
aaSB 101 Presentation of financial Statements
the revised aaSB 101: Presentation of financial Statements issued in September 2007 requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity.
1 Jan 2009 1 Jul 2009
aaSB 101 aaSB 101 Presentation of financial Statements
as above. 1 Jan 2009 1 Jul 2009
d i r e c t o r s ’ d e c l a r a t i o n
74 Kagara Limited annual report 2008 75 Kagara Limited annual report 2008
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INDEPENDENT AUDIT REPORT TO THE MEMBERS OF KAGARA LIMITED
Report on Financial Report We have audited the accompanying financial report of Kagara Ltd (the company) and Kagara Ltd and its controlled Entities (the consolidated entity), which comprises the balance sheet as at 30 June 2008, and the income statement, statement of recognised income and expense and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directorsí declaration of the consolidated entity comprising the company and the entities it controlled at the yearí s end or from time to time during the financial year.
Directorsí Responsibility for the Financial Report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards (IFRS) ensures that the financial report, comprising the financial statements and notes, complies with IFRS.
Auditorí s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditorí s judgment, 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 entityí s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entityí s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Total Financial Solutions
Horwath refers to Horwath International Association, a Swiss verein. Each member of the Association is a separate and independent legal entity.
Member Horwath International WHK Horwath Perth Audit Partnership ABN 96 844 819 235 Level 6, 256 St Georges Terrace Perth WA 6000 Australia GPO Box P1213 Perth WA 6844 Australia Telephone +61 8 9481 1448 Facsimile +61 8 9481 0152 Email [email protected] www.whkhorwath.com.au A WHK Group firm
i n d e p e n d e n t a u d i t r e p o r t
Auditorí s Opinion In our opinion, the financial report of Kagara Ltd is in accordance with the Corporations Act 2001 including:
(a) (i) giving a true and fair view of the companyí s and consolidated entityí s financial position as at 30 June 2008 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1 of the financial report.
Report on the Remuneration Report We have audited the Remuneration Report included in pages 7 to 9 of the directorsí report for the year ended 30 June 2008. 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.
Auditorí s Opinion In our opinion the Remuneration Report of Kagara Ltd for the year ended 30 June 2008, complies with section 300A of the Corporations Act 2001.
WHK HORWATH PERTH AUDIT PARTNERSHIP
CYRUS PATELL Principal
Perth, WA
Dated this 20th day of August 2008
76 Kagara Limited annual report 2008 77 Kagara Limited annual report 2008
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AUDITORí S INDEPENDENCE DECLARATION
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Kagara Limited and its controlled entities for the year ended 30 June 2008, I declare that, to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit. WHK HORWATH PERTH AUDIT PARTNERSHIP
CYRUS PATELL Principal
Perth, WA
Dated this 20th day of August 2008
Total Financial Solutions
Horwath refers to Horwath International Association, a Swiss verein. Each member of the Association is a separate and independent legal entity.
Member Horwath International WHK Horwath Perth Audit Partnership ABN 96 844 819 235 Level 6, 256 St Georges Terrace Perth WA 6000 Australia GPO Box P1213 Perth WA 6844 Australia Telephone +61 8 9481 1448 Facsimile +61 8 9481 0152 Email [email protected] www.whkhorwath.com.au A WHK Group firm
1. numBers of hoLders of equIty securItIes:
(a) ordinary share capital
216,399,775 fully paid ordinary shares are held by 10,422 individual shareholders.•
(b) unlisted options
7,400,000 unlisted options exercisable at $6.00 each and expiring 30 June 2010 held by employees;•
3,000,000 unlisted options exercisable at $6.00 each expiring 30 June 2009 held by executive directors and •Senior executives;
4,220,000 unlisted options exercisable at $6.50 each and expiring 30 June 2009 held by employees.•
(c) distribution of holders of equity securities
fuLLy pAID ORDINARy ShARES
uNLISTED OpTIONS
1-1,000 3,329 -
1,001-5,000 4,906 -
5,001-10,000 1,207 -
10,001-100,000 868 581
100,001-and over 112 7
total 10,422 588
holdings less than a marketable parcel 331
(d) substantial shareholders
those shareholders who have lodged a notice under S671B of the Corporations act 2001, with the Company during the financial
year and to date, advising of a substantial shareholding or a change in substantial shareholding, are as follows:
DATE LODGED ShARES
CBa 17 august 2007 12,802,680
CBa 31 January 2008 11,193,862
CBa 29 february 2008 10,724,560
CBa 29 July 2008 11,265,165
the percentage of a notified holding may vary from the register of members because shareholders are only required to advise
the Company when there has been a notifiable change under the Corporations act 2001. a notifiable change is one that is an
increase or decrease greater than 1% of the shares in that class.
(e) other Information
the voting rights attached to the ordinary shares are governed by the Constitution. on a show of hands every person present (1) who is a Member or representative of a Member shall have one vote and on a poll, every Member present in person or by proxy or by attorney or duly authorised representative shall have one vote for each share held. none of the options have any voting rights.
the name of the Company Secretary is david Peterson.(2)
a d d i t i o n a l s e c u r i t i e s e x c h a n g e i n f o r m a t i o n a S at 1 5 S e P t e M B e r 2 0 0 8
78 Kagara Limited annual report 2008 79 Kagara Limited annual report 2008
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the address of the principal registered office in australia is:(3)
Second floor
24 outram Street
WeSt Perth Wa 6005
telephone +61 8 9481 1211
facsimile +61 8 9481 1233
the register of securities is held at:(4)
Security transfer registrars Pty Ltd
770 Canning highway
aPPLeCroSS Wa 6153
Securities exchange Listing: Quotation has been granted for the ordinary shares of the Company on all member exchanges of (5) the australian Securities exchange Limited and trade under the symbol KZL.
directors’ interest in share capital is disclosed in the directors report.(6)
2. tWenty LarGest sharehoLders:
NumbER pERCENTAGE
1. Korea Zinc Company 30,560,890 14.1%
2. Mr Kim robinson 18,265,530 8.4%
3. Colonial first State - Growth australia 9,021,080 4.2%
4. aMP Capital Investors 7,402,520 3.4%
5. Perennial Value Mgt 7,325,551 3.4%
6. Pictet & Cie 5,797,527 2.7%
7. JPMorgan asset Mgt 4,692,429 2.2%
8. Barclays Global Investors 4,484,082 2.1%
9. orion asset Mgt 4,223,456 2.0%
10. Portfolio Partners 3,781,703 1.7%
11. InVeSCo australia 3,475,177 1.6%
12. Mr Joseph treacy 3,316,865 1.5%
13. deans Knight Capital Mgt 3,137,925 1.5%
14. Blackrock Investment Mgt 2,728,100 1.3%
15. Vanguard Investments australia 2,467,807 1.1%
16. Mr rodney W rutherford 2,460,577 1.1%
17. Goldman Sachs JBWere asset Mgt 2,262,744 1.0%
18. State Street Global advisors 2,148,347 1.0%
19. universities Superannuation Scheme 2,098,638 1.0%
20. dimensional fund advisors 2,048,549 0.9%
total 121,699,497 56.2%
2. restrIcted securItIes
nil.
a d d i t i o n a l s e c u r i t i e s e x c h a n g e i n f o r m a t i o n a S at 1 5 S e P t e M B e r 2 0 0 8
80 Kagara Limited annual report 2008
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