Axiom Mining 2015 Annual Report

GROUP FINANCIAL REPORT

Notes to the financial statements for the year ended 30 September 2015

58

13. Borrowings

2015 $000

2014 $000

1,132

678

Convertible notes (includes embedded derivative component)

Other borrowings

–

8

1,132

686

On 22 May 2015, the Company raised $1 million through the issue of six Convertible Notes, pursuant to a number of Convertible Note Agreements. The Convertible Notes were issued on the following terms: – Each Convertible Note has a term of 18 months and can be converted at any time by the noteholder – A coupon rate of 8% per annum applies to the Convertible Notes, which is quarterly – A conversion price of $0.30 applies to each Convertible Note; and – For every $5.00 worth of Convertible Notes, the Noteholder will be entitled to 10 free attaching Options, with an exercise price of $0.30, expiring 12 months from the date of issue. One Note with face value of $100,000 was converted on 9 June 2015 at $0.30 cents with issue of 333,333 shares. The convertible notes are considered to be a hybrid financial instrument with an amortised financial liability component and an embedded derivative liability component that are disclosed separately. The value of the embedded derivative liability at reporting date was $581,350 (initial recognition was $1,000,000 with the balance of $567,267 recognised as a financial liability). The amortised cost of the financial liability at reporting date was $550,547. 14. Capitalised lease liabilities On 22 February 2011 the Group through its subsidiary Axiom KB Limited entered into a long term lease agreement (50 years) over land on Santa Isabel Island in the Solomon Islands. As at 30 September 2015, the Group had obligations under the finance lease as follows:

AXIOM MINING LIMITED ANNUAL REPORT 2015

2015

2014

Present value of the minimum lease payments $000

Present value of the minimum lease payments $000

Total minimum lease payments $000

Total minimum lease payments $000

Within one year

516 375

596 794

377 363

436 698

After one year but within five years

After five years

1,957 2,332 2,848

7,993 8,787 9,383 (6,535)

1,595 1,958 2,335

7,194 7,892 8,328 (5,993)

Less: total interest expenses

–

–

2,848

2,848

2,335

2,335