9
Finance Report
Finance Report
Finance costs
Finance costs increased to $18.8 million (2012: 
$9.4 million). Finance costs comprise interest on 
borrowings the Group has in place, unwinding of 
discount on provisions as required by Accounting 
Standards and amortisation of borrowings set-up 
costs. The main contributor to the increase in 
finance costs was accelerated amortisation of 
borrowing costs required due to debt restruc-
tures undertaken during the year and planned for 
the next financial year. Borrowing costs relating 
to the previous finance facilities were expensed 
in full prior to new facilities being put in place.
Income Tax
Kingsgate’s Thai subsidiary company, Akara 
Resources Public Company Limited (“Akara”), 
has received approval from The Royal Thai Board 
of Investment (BOI) of the Office of the Prime 
Minister for promotion of Chatree. Subject to 
meeting the BOI conditions and based on an 
annual production limit of 178,416 ounces of 
gold and 583,733 ounces of silver, Akara’s 
Chatree Gold Mine is entitled to:
a) an eight year full corporate tax holiday 
commencing at first gold pour on metal 
sales. The full tax holiday expired in 
November 2009;
b) a further five years half tax holiday following  
a) above; and
c) other benefits.
The start of the promotion period was  
27 November 2001.
Akara also received on 18 June 2010 a BOI 
promotion for the Chatree Plant #2. Based on 
annual production limit from the new processing 
plant of 185,200 ounces of gold and 1,080,400 
ounces of silver, Akara is entitled to:
a) an eight year tax holiday on income derived 
from the new processing plant with tax 
savings limited to the capital cost of the new 
treatment plant;
b) 25% investment allowance on the capital 
cost of certain assets of the new processing 
plant; and
c) other benefits.
The taxable loss from the Australian operations 
has not been recognised as a deferred tax asset 
though has been added to the Group’s brought 
forward tax losses, leaving a balance of $212 
million of taxable losses (unrecognised tax asset 
of $63 million) to be carried forward to future 
years.
Cash Flow
Net operating cash inflow was $85.0 million. 
Investing cash outflow for property, plant, 
equipment and exploration, evaluation and 
development was $133.7 million. Net cash 
outflows from financing activities was  
$1.7 million, including a net drawdown (net  
of transaction costs) of $36.7 million of the 
multi-currency and syndicated loan facilities 
following a loan restructure by the Group’s  
Thai subsidiary, Akara, net repayment (net of 
transaction costs) of $20.0 million corporate 
loan facility, and $19.4 million dividends paid 
during the year. Income tax paid increased to 
$15.6 million due primarily to the timing of  
tax payments in Thailand with a significant 
amount of the prior year’s tax charge being paid 
this year in addition to payment of the current 
year’s tax charge.
-20 -14
19 37 18
-48
46
-32
Operating Cash Flow
2012/132006/07 2007/08 2008/09 2009/10 2010/11
34
-108
165
-221
85
-142
2011/12
Investing Cash Flow
-250
-300
-200
-150
-100A$ Million-50
0
50
100
150
200
250
120
-13  -20  
 36   19  
 73  
 46   25   33   18  
Proﬁt/(loss)
2006/07 2007/08 2008/09 2009/10 2010/11
 21 34 28
 75
 165
 19
-324
85
 19
2011/12 2012/13
Operating Cash Flow Cash Dividend Paid
-40
-80
-120
-160
-200
-240
-280
-320
-360
0
40
A$ Million
80
160
200
240
Operating and Investing Cash Flow
Operating Profit and Cash Flow