KGL RESOURCES LIMITED — Annual Report 2005

Mar 15, 2005

$\chi^2 \to \ell^4$

Тķ.

KENTOR GOLD N.L.

A.B.N. 52 082 658 080

AND CONTROLLED ENTITY

FINANCIAL REPORT FOR THE YEAR ENDED 30TH JUNE 2002

KENTOR GOLD N.L.

A.B.N. 52 082 658 080

AND CONTROLLED ENTITY

CONTENTS

Directors' Report Directors' Declaration Statement of Financial Performance Statement of Financial Position Statement of Cash Flows Notes to the Financial Statements Auditors Report

りとり

KENTOR GOLD N.L. A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2002.

The directors present their report on the company and its controlled entity for the financial year ended 30 June 2002.

DIRECTORS

The names of the directors in office at any time during or since the end of the year are:

Charles Allen Moir Hider (Chairman - resigned 10 November 2004) David Royle (Managing Director - appointed 1 March 2004) Hugh McKinnon (Managing Director) Robin Clive Wightman (Resigned 4 July 2003) K Brent Cook (Appointed 4 July 2003 - resigned 10 November 2004) (an Ennis (Alternate for Mr. C.A.M. Hider - appointment terminated 10 November 2004) Heather Joyce Wightman (Alternate for Mr. H. McKinnon) Heather Joyce Wightman (Alternate for Mr. RC Wightman - appointment terminated 4 July 2003) John Barr (appointed 10 November 2004) Andrew Daley (appointed 10 November 2004)

Directors have been in office since the start of the financial year to the date of this report uniess otherwise stated.

PRINCIPAL ACTIVITIES

The principal activity of the economic entity during the financial year was the exploration for gold and base metals.

There were no significant changes in the nature of the principal activities of the company during the financial year.

OPERATING RESULTS

The consolidated loss of the economic entity for the financial year after providing for income tax and eliminating outside equity interests amounted to \$200,468.

DIVIDENDS

No dividends were paid during the year, nor are any dividends recommended.

REVIEW OF OPERATIONS

During the year, the economic entity continued its exploration program in the Kyrgyz Republic.

SIGNIFICANT CHANGES

For the year ended 30 June 2002, the following share and option issues took place:

(A) 24 July 2001 - 30,000 ordinary shares were issued at 4 cents per share

(B) 17 August 2001 - 20,000 ordinary shares were issued at 4 cents per share

(C) 18 September 2001 - 680,000 ordinary shares were issued at 4 cents per share

(D) 11 December 2001 - 123,600 ordinary shares were issued at 2 cents per share (E) 21 December, 2001 - 750,000 ordinary shares were issued at 6 cents per share to a director-

(F) 28 December 2001 - 200,000 ordinary shares were issued at 4 cents per share

(G) 24 January 2002 - 1,726,562 ordinary shares were issued at 4 cents per share

(H) 20 March 2002 - 1,344,600 ordinary shares were issued at 6 cents per share

(I) 18 June 2002 - 29,131 ordinary shares were issued at 6 cents per share

(J) 30 June 2002 - 999,750 ordinary shares were issued at 4 cents per share to a director

KENTOR GOLD N.L. A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE, 2002 (CONTINUED)

SIGNIFICANT CHANGES (continued)

(K) 30 June 2002 - 2,150,000 ordinary shares were issued at 2 cents per share to a director related entity

A General Meeting of members was held on 25 October 2004. A resolution was passed to:

• (a) change its company type from a public no liability company to a public company limited by shares; and
• (b) change its name from Kentor Gold NL to Kentor Gold Ltd

No other significant changes in the state of affairs of the company occurred during the financial year.

FUTURE DEVELOPMENTS

Likely developments in the operations of the company and the expected results of those operations have not been included in this report as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the company.

AFTER BALANCE DATE EVENTS

After balance date, additional capital has been raised for working capital purposes.

INFORMATION ON DIRECTORS

. Charles Hider	Mr. Hider was previously a Senior Partner at Rigby Cooke, Solicitors, Melbourne, and a Barrister and Solicitor since 1959. He has had extensive experience in Australia and South East Asia in respect of both minerals and oil. He is presently the Chairman of Landex Realty Limited, (an unlisted public company) and Action Hydrocarbons Limited (also an unlisted public company). He was formerly a director of Geo2 Limited, St Barbara Mines Ltd and a number of other resource companies.
Interest in shares	9,012,486 ordinary shares in Kentor Gold N.L. and options to acquire a further 5,654,718 ordinary shares.
Hugh McKinnon	Mr. McKinnon is a mining engineer with over twenty-five years experience in the management and development of many operations and exploration programs in Australia, Africa and Central Asia. He is also a director of Action Hydrocarbons Limited (an unlisted public company).
Interest in shares	12,200,000 ordinary shares in Kentor Gold N.L. and options to acquire a further 13,450,000 ordinary shares.

$\frac{1}{4}$ , $\frac{1}{2}$

$\mathbf{r}$

大都 などころ 大阪のよう

KENTOR GOLD N.L. A, B.N. 52 082 658 080
AND CONTROLLED ENTITY

J

DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE, 2002 (CONTINUED)

Robin Wightman	Mr. Wightman is an independent businessman with experience in the development of business ventures in China as well as in the sports and leisure industries in Australia. He is a director of Action Hydrocarbons Limited (an unlisted public company), and is married to Mrs. Heather Wightman.
Interest in shares	Nil
lan Ennis	Mr. Ennis is involved in the mining industry with particular emphasis on business development and marketing of mineral processing technology internationally. He graduated with a Mineral Processing Diploma in 1991. He is also a Director of Action Hydrocarbons Ltd (an unlisted public company) and has wide experience in gold mining.
Interest in shares	3,704,875 in Kentor Gold N.L. and options to acquire a further 3,655,125 ordinary shares.
Heather Wightman	Mrs. Wightman has been a company director for over fifteen years. She is married to Mr. Wightman, a director of the parent entity, and has been involved in the administration of sporting bodies. She is also a director of Action Hydrocarbons Limited (an unlisted public company).
Interest in shares	Nil
John Barr	Mr. Barr has had a long involvement with the Australian minerals and metals industry having been Managing Director of Metallgesellschaft's Australian subsidiary since the company's inception in 1974 until his retirement in 1994. He is Chairman of Utilities of Australia Pty Ltd, a major infrastructure investment fund, a Director of lluka Resources Limited and a former Director of Oxiana Limited.
Interest in shares	Nil
Andrew Daley	Mr. Daley is a mining engineer and resources finance executive. Mr. Daley spent several years working on mining projects in Africa before relocating to Australia as Senior Engineer with Fluor Australia in 1981. In late 1983 he joined the National Australia Bank resources project finance team in Melbourne. Since then he has been Executive Director and State Manager of NAB's Investment Bank in Sydney, head of Barclays Australia's resource team in Sydney, Director of Chase Manhattan's project finance team in Melbourne and more recently Director of Barclays Capital mining team in London. He is a Chartered Engineer, a former Director of Oxiana Limited, a Director of Pan Australian Resources Limited, a Member of IOM3 and a Fellow of the Australasian Institute of Mining and Metallurgy.

$\sim$

KENTOR GOLD N.L. A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE, 2002 (CONTINUED)

Andrew Daley (continued)

Interest in shares

1,144,410 ordinary shares in Kentor Gold N.L. and options to acquire a further 291,149 ordinary shares.

MEETINGS OF DIRECTORS

During the financial year, 3 meetings of directors were held and attended by the following directors:

	MEENNAS
	Attended
CAM Hider	З
H McKinnon	З.
R Wightman	3

In addition, all directors issued ten circulatory resolutions for ratification.

DIRECTORS' EMOLUMENTS

Mr. Hugh McKinnon receives a remuneration of \$36,000 per annum.

ENVIRONMENTAL ISSUES

The economic entity, at this stage, operates only as an exploration company, and only in the Kyrgyz Republic. Accordingly, its environmental issues are covered by the laws of that country. No drilling operations had commenced at 30 June 2002. There have been no breaches of environmental requirements or laws.

DIRECTORS' AND AUDITOR'S INDEMNIFICATION

The economic entity has not, during or since the end of the financial year, in respect of any person who is or has been a director or auditor of the Company or of a related body corporate:

• indemnified or made any relevant agreement for indemnifying against a liability including costs and expenses in successfully defending legal proceedings; or
• paid or agreed to pay a premium in respect of a contract insuring against a liability for the costs or expenses to defend legal proceedings.

KENTOR GOLD N.L. A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE, 2002 (CONTINUED)

OPTIONS

No options were issued to directors or director related entities during the year.

No person entitled to exercise the options had or has any right by virtue of the options to participate in any share issue of any other body corporate.

No shares have been issued by virtue of the exercise of an option during the year or to the date of this report and there are 28,981,632 unissued ordinary shares for which options are outstanding at the date of this report.

PROCEEDINGS ON BEHALF OF COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the economic entity or intervene in any proceedings to which the economic entity is a party for the purpose of taking responsibility on behalf of the economic entity for all or any part of those proceedings.

The economic entity was not a party to any such proceedings during the year.

Dated at Melbourne on this $\cancel{\lambda} \lambda$ day of December, 2004 Signed in accordance with a resolution of the Board of Directors,

RECTOR

می در مورد به مورد از این مورد و این مورد از این مورد با این مورد و مورد در در مورد از این این مورد با مورد با

الماعلين والراوا حبسا الدرازي والمتراهين والمترافع والمتحدث والمتحدث والمتعلق ومستقليهم

KENTOR GOLD N.L. A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

DIRECTORS' DECLARATION

The directors of the company declare that:

• the financial statements and notes are in accordance with the Corporations Act 2001: 1
• comply with Accounting Standards and the Corporations Regulations 2001; and $(a)$
• give a true and fair view of the financial position as at 30 June 2002 and of the $(b)$ performance for the year ended on that date of the company,
• In the directors' opinion, there are reasonable grounds to believe that the Company will $\mathbf{z}$ be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors,

day of December 2004 Dated this $22$

OHM BARR DIRECTOR

$\frac{1}{2}$ .

ż

. KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

$\mathcal{L}_{\mathcal{A}}$

STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30TH JUNE 2002

	Note	Economic Entity 2002	Parent Entity 2002
CLASSIFICATION OF EXPENSES BY NATURE
Revenues from ordinary activities Other expenses from ordinary activities Foreign Exchange Gain/(Loss)	$\frac{2}{2}$ $\overline{\mathbf{3}}$	6,827 (66,018) (141, 277)	(13,688) (24.367)
Loss from ordinary activities before income tax expense Total changes in equity other than those	3	(200, 468)	(38,055)
resulting from transactions with owners as owners		(200, 468)	(38,055)

The accompanying notes form part of these financial statements.

医皮肤 医心理

a a manazira

$\sim 10$

ć

$\bar{e}$

÷

Common School

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2002

	Note	Economic Entity 2002 \$	Parent Entity 2002 s.
CURRENT ASSETS Cash assets Receivables Other	6 7 Ş.	33,126 65,719 930	28,756 46,880
TOTAL CURRENT ASSETS		99,775	75,636
NON-CURRENT ASSETS Other financial assets Property, plant and equipment Intangible assets	8 9 10	240,813 29 4 54 10.871	789,567 11,839 1,570
TOTAL NON-CURRENT ASSETS		281.138	802,976
TOTAL ASSETS		380,913	878,612
CURRENT LIABILITIES Payables	11	25,901	23,268
TOTAL CURRENT LIABILITIES		25,901	23,268
TOTAL LIABILITIES		25,901	23,268
NET ASSETS		355,012	.855,344
EQUITY Contributed equity Accumulated losses Outside Equity Interest	12 5 13	1,007,945 (558, 293) (94, 640)	1,007,945 (152, 601)
TOTAL EQUITY		355,012	855,344

The accompanying notes form part of these financial statements.

$\mathcal{L}^{\mathcal{A}}$

للعبد والمعاملة والمنهورة والمعاملين في المتعلقة المستقرة المتعلقة المستقرة المتحدة المتحدة المتحدة المتحدة ال

والمتحملات بالبوه الأمواد ودعيتها والتنبيذ فواضح ومستقيلة وأدرد المحادر

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

المسورين وأورد

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30TH JUNE 2002

	Economic Entity 2002 \$	Parent Entity 2002 Ŝ
CASH FLOW FROM OPERATING ACTIVITIES Payment to Suppliers and employees	(90, 443)	(96, 187)
Net Cash (used in) / provided by operating activities	(90, 443)	(96, 187)
CASH FLOWS FROM INVESTING ACTIVITIES Payment for Exploration Costs USD Funds Advanced to Subsidiary AUD Funds Advanced to Subsidiary Purchase of Minor Items Payment for Intangibles Payment for Property, Plant & Equipment Proceeds on Disposal of Property, Plant & Equipment Proceeds to Action Hydrocarbons Ltd Proceeds from Other Debtors Payment to Related Parties	(169, 915) (9) (13) (14.539) 24 3 86 (46, 880) 19 0 3 9 (7.940)	(49, 127) (90, 452) (46, 880) (7, 940)
Net Cash used in investing activities	(195, 871)	(194, 399)
CASH FLOW FROM FINANCING ACTIVITIES Proceeds from share issue Net Cash provided by financing activities	319,148 319,148	319,148 319,148
Net increase in cash held Cash at beginning of year	32,834 292	28,562 194
Cash at end of year	33,126	28,756

The accompanying notes form part of these financial statements.

ż

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2002

	Economic Entity 2002 \$	Parent Entity 2002 \$
Notes to the Statement of Cash Flows
Reconcillation of Cash
Cash at the end of financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:
Cash on Hand Cash at Bank	33,125	28,755
	33.126	28,756
Reconciliation of Net Cash provided by Operating Activities to profit from ordinary activities after Income Tax
Operating loss after income tax	(200, 468)	(38,055)
Depreciation Amortisation of Intangible Assets Foreign Exchange Translation Loss	8,111 1,482 134 450	3,436 24,367
Changes in Assets and Liabilities: (Decrease) Increase in trade and other creditors	(34, 018)	(85,935)
Cash flows from operations	(90, 443)	(96, 187)

The accompanying notes form part of these financial statements.

$\hat{\mathcal{A}}$

7

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

Statement of Significant Accounting Policies

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers the economic entity of Kentor Gold N.L. and controlled entities, and Kentor Gold N.L. as an individual parent entity. Kentor Gold N.L. is a company incorporated and domiciled in Australia.

The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

The following is a summary of the material accounting policies adopted by the economic entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a) Principals of Consolidation

A controlled entity is any entity controlled by Kentor Gold N.L. Control exists where Kentor Gold N.L. has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Kentor Gold N.L. to achieve the objectives of Kentor Gold N.L. A list of controlled entities is contained in Note 17 to the financial statements.

All inter-company balances and transactions between entities in the economic entity. including any unrealized profits or losses, have been eliminated on consolidation.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased.

Outside interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

(b) Income Tax

The economic entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the profit from ordinary activities adjusted for any permanent differences.

Timing differences, which arise due to the different accounting periods in which items of revenue and expense are included in the determination of accounting profit and taxable income, are brought to account as either a provision for deferred income tax or as future income tax benefit at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable.

Future income tax benefits are not brought to account unless realisation of the asset is assured beyond any reasonable doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual certainty of realisation of the benefit.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

(c) Investments

Non-current investments are measured on the cost basis. The carrying amount of investments is reviewed annually by directors to ensure it is not in excess of the recoverable amount of the investments. The recoverable amount is assessed from the quoted current market value for shares in listed companies or the underlying net assets for other non-listed corporations. The expected net cash flows from investments have not been discounted to their present value in determining the recoverable amounts.

(d) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation.

Property

Freehold land and buildings are measured on the fair value basis, being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction. It is the policy of the economic entity to have an independent valuation every three years, with annual appraisals being made by the directors.

The revaluation of freehold land and buildings has not taken account of the potential capital gains tax on assets acquired after the introduction of capital gains tax.

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount of those assets. The recoverable amount is assessed on the basis of expected net cash flows which will be received from the assets' employment and subsequent disposal. The expected net cash flows have not been discounted to present values in determining recoverable amounts.

Depreciation

The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, are depreciated on straight line basis over their estimated useful lives to the economic entity commencing from the time the asset is held ready for use. Properties held for investment purposes are not subject to a depreciation charge.

(e) Employee Benefits

Contributions are made by the economic entity to an employee superannuation fund and are charged as expenses when incurred.

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

(f) Cash

For purposes of the statement of cash flows, cash includes deposits at call with financial institutions and other highly liquid investments with maturity within less than 3 months which are readily convertible to cash on hand at the investor's opinion and are subject to an insignificant risk of changes in value, and borrowings which are integral to the cash management function and which are not subject to a term facility.

(g) Revenue

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

All revenue is stated net of the amount of goods and services tax (GST).

(h) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the assets or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

(i) Preliminary Expenses

Preliminary expenses have been carried forward to be written off in the first year of income received from trading.

(j) Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profits in the year in which the decision to abandon the area is made.

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.

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.

(k) Foreign Currency Transactions and Balances

Foreign currency transactions during the year are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currencies at balance date are converted at the rates of exchange ruling at that date.

The gains and losses from conversion of assets and liabilities, whether realised or unrealised, are included in profit from ordinary activities as they arise.

The assets and liabilities of the overseas controlled entities, which are intergrated, are translated in accordance with AASB 1012 Foreign Currency Translation, and the operating results are translated using the average exchange rate for the year. Gains and losses arising on translation are taken directly to the profit and loss statement.

$\lambda$

$\frac{1}{2}$

$\mathcal{L}_{\rm{max}}$

$\pm$

$\bar{z}$

$\ddot{\phantom{0}}$

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

	Economic Entity 2002 S	Parent Entity 2002 \$
Revenue & Expenses 2
Operating Revenues Other revenue	6,827
	6,827
Operating Expenses Depreciation	8,111	3,436
Amortisation	1,482
Audit Remuneration	2,145	2,145
Consulting Services	(8,672)	(8,672)
Printing & Stationery	1,959	1,959
Rental	750	750
Travel	12,787	12,787
Other	47,456	1,283
	66,018	13,688
Profit from ordinary activities before income tax expense has been determined after: Expenses:
Foreign Exchange Loss on revaluation of USD Loan Receivable from foreign controlled entity		24,367
Net Exchange difference recognised on translation of foreign controlled entity	141,277
Income Tax Expense 4
Future income tax benefits are not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1 occur.
- Tax losses	200,468	38,055

$\bar{z}$

$\bar{.}$

$\bar{\beta}$

$\sim$

the contract of a series of states

$\overline{a}$

$\sim$

$\Delta$

$\mathcal{L}_{\mathcal{A}}$

$\ddot{\mathrm{r}}$

KENTOR GOLD NL A.B.N. 52 082 658 080
AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

		Economic Entity 2002 \$	Parent Entity 2002 Ŝ.
5	Accumulated Losses
	Accumulated losses at the beginning of the financial year	(390, 308)	(114, 546)
	Net loss attributable to members of the company Net Loss attributable to Outside Equity Interest	(200, 468) 32,483	(38,055)
	Accumulated losses at the end of the financial year	(558, 293)	(152,601)
6	Cash Assets
	Cash on Hand Cash at Bank	33,125	28,755
		33,126	28,756
7	Receivables
	CURRENT Loan (unsecured) - Action Hydrocarbons Limited Other Receivable	46,880 18,839	46,880
		65,719	46,880
8	Other Financial Assets
	CURRENT Raw Materials Items of Little Value	15 915
		930
	Exploration Expenditure Costs carried forward in respect of areas of interest in exploration and evaluation phases	240,813
	USD Loan Receivable from foreign controlled entity AUD Loan Receivable from foreign controlled entity investment in foreign controlled entity		243,233 519,199 27,135
		240,813	789,567

$\sim$

$\ddot{\phantom{a}}$

9

المعارف والمستحدث والمتعلق ويستعشر سأنتفض وتوصيت والمربى

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

	Economic Entity 2002	Parent Entity 2002
Property, Plant and Equipment
Plant & Equipment Less: Accumulated Depreciation	49.266 31.651
	17.615
Motor Vehicle - at Cost Less: Accumulated Depreciation	32,040 20,201	32,040 20,201
	11.839	11,839
Total Plant and Equipment	29,454	11,839

Movement in Carrying Amounts:

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year

	Freehold Land	Buildings	Plant and Equipment	Motor Vehicles	Total Б
Economic Entity	\$	s			47,412
Balance at beginning of the year			32,137	15,275	14.539
Additions			14,539		(24.386)
Disposals			(24, 386)
Revaluation increments/
(decrements)				(3,436)	(8, 111)
Depreciation expense			(4, 675)
Carrying amount at the end			17,615	11,839	29.454
of the year
	Freehold		Plant and	Motor
	Land	Buildings	Equipment	Vehicles	Total
Parent Entity	£	\$	\$		S.
Balance at beginning of the year				15,275	15,275
Additions
Disposals
Revaluation increments/
(decrements)
Depreciation expense				(3, 436)	(3, 436)
Carrying amount at the end				11.839	11,839
of the vear

.
. . . . . . . . . . . . . . . . . . .

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

		Economic Entity 2002 \$	Parent Entity 2002 \$
10	intangibles Assets
	Preliminary Expenses (at cost) Geological Information & Licenses	1,570 9,301	1,570
		10,871	1,570
11	Payables
	CURRENT Trade Creditors Unsecured loans from director related entities Unsecured Ioans - Director	20,201 5,500 200	17,568 5,500 200
		25,901	23,268
12	Contributed Equity
	Paid Up Capital: 36, 387, 487 (2001 - 28, 333, 844) Fully Paid Ordinary Shares	1,007,945	1,007,945
	At the beginning of the reporting period Shares issued during the period (as listed below)	688,797 319,148	688,797 319,148
		1,007,945	1,007,945

During the year the following capital transactions occurred:

(A) 24 July 2001 - 30,000 ordinary shares were issued at 4 cents per share

(B) 17 August 2001 - 20,000 ordinary shares were issued at 4 cents per share

(c) 18 September 2001 - 680,000 ordinary shares were issued at 4 cents per share.

$(D)$ 11 December 2001 - 123,600 ordinary shares were issued at 2 cents per share.

(E) 21 December 2001 - 750,000 ordinary shares were issued at 6 cents per share to a director.

(F) 28 December 2001 - 200,000 ordinary shares were issued at 4 cents per share.

(G) 24 January 2002 - 1,726,562 ordinary shares were issued at 4 cents per share.

(H) 20 March 2002 - 1,344,600 ordinary shares were issued at 6 cents per share.

(I) 18 June 2002 - 29,131 ordinary shares were issued at 6 cents per share.

$(j)$ 30 June 2002 - 999,750 ordinary shares were issued at 4 cents per share to a director.

$(K)$ 30 June 2002 - 2,150,000 ordinary shares were issued at 2 cents per share to a director related ý entity.

ومراجع والمستشر محمودها المحرجة فيربع المعتسر كالجروق ويتناوح ويسومها المرادين والمتحدث

. KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

		Economic Entity 2002 s	Parent Entity 2002
13	Outside Equity Interest
	Outside Equity Interest comprises Share Capital Reserves Retained Profits/(Losses)	6,784 $\mathbf{r}$ . (101, 424)
		(94, 640)

Directors' and Executives' Remuneration $14$

(a) Names and positions held of parent entity directors at any time during the financial year

Parent Entity Directors

Charles Allen Moir Hider	Chairman
Hugh McKinnon	Managing Director
Robin Clive Wightman lan Ennis Heather Joyce Wightman Heather Joyce Wightman	Alternate for Mr. C.A.M. Hider Alternate for Mr. H. McKinnon - appointed 4/2/02 Alternate for Mr. RC Wightman - appointed 7/11/02

(b) Parent Entity Directors' Remuneration

Income paid or payable to all directors of the parent entity by the parent entity	36,000
Number of directors whose income from the company was within the following bands: $$0 - $9,999$ \$10,000 - \$29.999 \$30,000 - \$39,999

Parent Entity Related Party Transactions $15$

Transactions between parent entity related parities are on normal commercial terms and conditions no more favourable than those available to other persons unless otherwise stated.

PARENT ENTITY DIRECTOR RELATED ENTITIES

Action Hydrocarbons Limited - a company in which Messrs CAM Hider, ID Ennis, H McKinnon, RC Wightman, and Mrs HJ Wightman are directors - for net movement in loan funds relating to payments for exploration and other costs.

Torrington Investments Pty Ltd - in which Mr CAM Hider is a Director - accrued consultancy fees for 1998 and 1999 of \$50,000 (adjusted by subsequent AGM Minute) and satisfied by issue of shares at \$0.02 cents

团021

$(7,000)$

55,020

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

		Economic Entity 2002	Parent Entity 2002
15.	Parent Entity Related Party Transactions (continued)
	Mr Ian Ennis - accrued consultancy fees for 1998 and 1999

Of \$50,000 (adjusted by subsequent AGM Minute) and Satisfied by the issue of shares at \$0.04 cents

$(10,010)$

$\ddot{\cdot}$

The names of the directors who have held office during the year are: Messrs CAM Hider, ID Ennis, H McKinnon, RC Wightman and HJ Wightman (appointed 4 February 2002).

Financial Instruments 16

(a) interest Rate Risk

The economic entity's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on those financial assets and liabilities, is as follows:

Financial Instruments	Floating Interest Rate	Non Interest Bearing	Total Carrying Amount as per Statement of Financial Position	Weighted Average Effective Interest Rate
	June 2002 \$	Juna 2002 \$	June 2002 \$	June 2002 5
(I) Financial Assets
Cash at Bank Receivables	33,126	65,719	33,126 65,719	5.0
Total Financial Assets	33,126	65,719	98,845
(ii) Financial Liabilities
Trace Creditors Other Payables		20,201 5,700	20,201 5,700
Total Financial Liabilities	0	25,901	25,901

(b) Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security at balance date, to recognised financial assets is the carrying amount of those assets, net of any provisions for doubtful debts, as disclosed in the statement of financial position and notes to the financial statements.

The economic entity does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the economic entity.

and the complete the continues and distribution with a state

KENTOR GOLD NL A.B.N. 52 082 658 080 AND CONTROLLED ENTITY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2002

Economic Entity	Parent Entity
2002	2002

Financial Instruments (continued) 16

(c) Net Fair Values

The net fair values of financial assets and liabilities approximate their carrying values. No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments. Financial assets where the carrying amount exceeds net fair values have not been written down as the economic entity intends to hold these assets to maturity.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and in the notes to the financial statements.

Controlled Entities 17

ż

	Country of Incorporation	Percentage Owned (%) 2002
Parent Entity: Kentor Gold N.L.	Australia	۰
Subsidiaries of Kentor Gold N.L.
Closed Joint-Stock Company Kentor	The Kyrgyz Republic	80%

Company Details 18

The registered address and principal place of business of the parent entity is:

Kentor Gold N.L. Level 1 524 Malvern Road Prahran Vic 3181

LEVEL 2, 50 BURWOOD ROAD, HAWTHORN P.O. Box 325, Hawthorn, Victoria 3122. Australia Tel +513 9819 4011 Fax +613 9819 5780 Web www.raggwair.com.au Email raggweir@raggweir.com.au

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF KENTOR GOLD NL

كالمتعادي كركا المجرعة معتمدة الهمعقعف والمستعان وإيع

Scope

We have audited the financial report of Kentor Gold NL for the financial year ended 30 June 2002. The financial report comprises the Statement of Financial Position, Statement of Financial Performance, Statement of Cash Flows, accompanying notes to the financial statements and the directors' declaration for the year ended 30 June 2002. The consolidated entity comprises both the company and the entity it controlled during the year.

The company's directors are responsible for the financial report.

We have conducted an independent audit of the financial report in order to express an opinion on it to the members of Kentor Gold NL. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting requirements and statutory requirements in Australia so as to present a view which is consistent with our understanding of the company's and consolidated entity's financial position and performance as represented by the results of their operations and cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Qualification

The operations of the subsidiary are funded by loans from the parent entity as indicated in Note 8 to the financial statements. As the subsidiary is in a net asset deficiency position this means that there is a diminution in the carrying value of the loans receivable from and investment in the subsidiary as stated in the parent company's accounts. The parent entity has not recognised the diminution in value as indicated by the accounts of the parent entity disclosing a higher net assets position than the economic entity at 30 June 2002. In our opinion a provision of \$405,692 should have been recognised in the accounts of the parent entity. Had this been done the parent company accounts would show a loss for the year of \$443,747, an accumulated loss of \$558,293 and other non current financial assets of \$383,875.

Comparative figures for the year ended 30 June 2001 have not been disclosed in the financial statements as required by Australian Accounting Standards.

Qualified Audit Opinion

In our opinion, except for the effects on the financial report of the matters referred to in the qualification paragraph the financial report of Kentor Gold Ltd is in accordance with:

• a. the 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 2002 and of their performance for the year ended on that date; and
• ii. complying with Accounting Standards in Australia and the Corporation Regulations 2001; and

b. other mandatory professional reporting requirements in Australia.

MSI Hagy Alen

MSI RAGG WEIR CHARTERED ACCOUNTANTS

' place.

G.D. WOOD PARTNER

Melbourne: 22 December 2004