Prospectus - Kingsrose Mining

Section 9
Investigating Accountant’s Report
Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired
and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for
each individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less
costs to sell and it does not generate cash inflows that are largely independent of those from other assets
or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to
which the asset belongs.
(g)
(h)
Impairment
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessment of the time value or money and the risks
specific to the asset or group of assets being assessed.
Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received, whether
or not billed to the company. Trade accounts are normally settled within 60 days.
Payables to related parties are initially recognised at fair value and subsequently measured at amortised
cost.
(i)
(j)
(k)
Employee benefits
Provision is made for the company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled plus related on costs.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
company and revenue can be reliably measured.
Issued capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a
reduction of the proceeds received.
2. PROFORMA TRANSACTIONS
Proforma Unaudited represents Unaudited 31 August 2007 figures adjusted to reflect:-
(a)
The effect of the proposed subscription issue of 30,000,000 fully paid ordinary shares at an issue price
of 20c per share to raise $6,000,000.
(b) The estimated capital raising costs of the prospectus of $400,000.
(c)
(d)
(e)
(f)
(g)
The issue in October 2007 of 8,800,000 fully paid ordinary shares for cash to raise seed capital of
$63,000.
The proposed issue of 6,250,000 fully paid ordinary shares at an issue price of 20c per share to repay
$1,250,000 of the loan from Airedale (Asia) Limited.
The proposed issue of 5,000,000 convertible notes at an issue price of 20c each to repay $1,000,000 of
the loan from Airedale (Asia) Limited.
The proposed issue of 6,000,000 convertible notes at an issue price of 20c each to repay $1,200,000 of
the loan from JW Phillips.
The proposed payment of estimated stamp duty of $144,000 on the asset sale agreement.
(h) The proposed payment of the bank equipment loans of $251,212.
(i)
The proposed payment by cash from the proceeds of the issue of the balance of the loan accounts
totalling $631,472.
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