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6.0 Financial Information 6.0 Financial Information Document Transcript

  • 6.0 Financial Information 6.1 Introduction This Section contains the following financial information: • The Historical Consolidated Balance Sheet, Historical Consolidated Income Statement, Historical Consolidated Statement of Changes in Equity and Historical Consolidated Cash Flow Statement of Global Gold and its controlled entity and applicable notes to these statements for the three-month period ended 30 September 2007 (the “period”); and • The Pro-forma Consolidated Financial Information comprising the Pro-forma Consolidated Balance Sheet, Pro-forma Consolidated Income Statement, Pro-forma Consolidated Statement of Changes in Equity and Pro-forma Consolidated Cash Flow Statement of Global Gold and its controlled entity and applicable notes to these statements for the three-month period ended 30 September 2007 which assumes completion of the contemplated transactions as at that date as set out in Section 6.2. 6.2 Assumptions used in preparing the pro-forma Financial Information The Pro-forma Consolidated Financial Information of Global Gold has been prepared as if the following transactions had taken place as at 30 September 2007: • the issue of 10,000,000 Shares at $0.20 per Share pursuant to this Prospectus to raise $2,000,000; • the payment of a further $174,102 as estimated costs relating to the Offer, including $75,541 against payables; • recognition of total costs relating to the Offer amounting to $343,412 directly against issued capital; and • the repayment of a Director loan of $251,755 related to funding of costs associated with the preparation of this Prospectus and the Offer. 6.3 Historical and pro-forma Consolidated Balance Sheet Reviewed Historical Reviewed pro-forma at 30 September at 30 September note 2007 2007 CURREnT ASSETS Cash and cash equivalents 2 140,564 1,714,707 Inventories 4 24,484,138 24,484,138 Other current assets 5 244,851 - Total current assets 24,869,553 26,198,845 nOn CURREnT ASSETS Available for sale financial asset 6 1,770,000 1,770,000 Total non current asset 1,770,000 1,770,000 TOTAL ASSETS 26,639,553 27,968,845 CURREnT LIABILITIES Trade and other payables 7 192,370 116,829 Loans 8 258,343 6,588 Total current liabilities 450,713 123,417 TOTAL LIABILITIES 450,713 123,417 Global Gold Holdings Limited - Prospectus nET ASSETS 26,188,840 27,845,428 EQUITY Issued capital 9 26,492,931 28,149,519 Reserves 10 (229,560) (229,560) Accumulated losses 11 (74,531) (74,531) TOTAL EQUITY 26,188,840 27,845,428 The balance sheet should be read in conjunction with the accompanying notes. 22
  • 6.4 Historical and pro-forma Consolidated Income Statement Reviewed Historical Reviewed pro- period from 1 forma period from July 2007 to 30 1 July 2007 to 30 September September 2007 2007 Revenue Interest Income 7,741 7,741 Expenses Accounting fees (15,718) (15,718) Consultancy fees (2,394) (2,394) Directors’ fees (14,025) (14,025) Travel expenses (1,413) (1,413) Other (248) (248) Loss before income tax (26,057) (26,057) Income tax - - net loss for the period attributable to equity (26,057) (26,057) holders of the parent company Basic and diluted loss per Share (cents) (0.01) (0.01) 6.5 Historical and pro-forma Consolidated Statement of Cash Flows Cash Flows from Operating Activities Payments to suppliers (24,514,117) (24,514,117) Interest received 7,741 7,741 net cash flows used in operating activities (24,506,376) (24,506,376) Cash Flows from Investing Activities Investments (2,000,000) (2,000,000) net cash flows used in investing activities (2,000,000) (2,000,000) Cash Flows from Financing Activities Proceeds from issue of shares 26,492,930 28,492,930 Capital raising costs (34,003) (208,105) Proceeds from borrowings 120,000 120,000 Repayment of borrowings - (251,755) net cash flows from financing activities 26,578,927 28,153,070 Net increase in cash held 72,551 1,646,694 Add: opening cash brought forward 67,573 67,573 Effect of exchange rate fluctuations on cash held 440 440 Cash at the end of the period 140,564 1,714,707 Global Gold Holdings Limited - Prospectus 23
  • 6.0 Financial Information Continued 6.6 Historical Consolidated Statement of Changes in Equity Set out below is the Statement of Change in Equity of Global Gold for the period from 1 July 2007 to 30 September 2007. Reviewed Historical period from 1 July 2007 to 30 September 2007 Issued Reserves Accumulated Total Capital Losses $ $ $ $ Balance at 1 July 2007 1 - (48,474) (48,473) Issue of share capital 29,196,230 - - 29,196,230 Transaction costs arising from the issue of shares (2,703,300) - - (2,703,300) Foreign currency translation differences - 440 - 440 Net loss on available for sale financial asset - (230,000) - (230,000) Loss for the Period - - (26,057) (26,057) Balance as at 30 September 2007 26,492,931 (229,560) (74,531) 26,188,840 Reviewed pro-forma period from 1 July 2007 to 30 September 2007 Issued Reserves Accumulated Total Capital Losses $ $ $ $ Balance at 1 July 2007 1 - (48,474) (48,473) Issue of share capital 31,196,230 - - 31,196,230 Transaction costs arising from the issue of shares (3,046,712) - - (3,046,712) Foreign currency translation differences - 440 - 440 Net loss on available for sale financial asset - (230,000) - (230,000) Loss for the Period - - (26,057) (26,057) Balance as at 30 September 2007 28,149,519 (229,560) (74,531) 27,845,428 Global Gold Holdings Limited - Prospectus 24
  • 6.7 Accompanying notes 1. STATEmEnT OF SIGnIFICAnT ACCOUnTInG pOLICIES The significant policies, which have been adopted in the preparation of the historical and pro-forma consolidated financial information are as follows: Basis of preparation of consolidated financial information The financial report is a special purpose financial report which has been prepared in accordance with the measurement and recognition but not the disclosure requirements, of applicable Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS) and other mandatory professional reporting requirements in Australia. The consolidated financial information has also been prepared on a historical cost basis, except for available for sale financial assets that have been measured at fair value. This financial report is for the period from 1 July 2007 to 30 September 2007. A general purpose financial report for the period ended 30 June 2007 is available on the Company's website. Significant accounting judgements, estimates and assumptions In applying the Group’s accounting policies management continually evaluates judgments, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group. All judgments, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgments, estimates and assumptions, significant judgments made by management in the preparation of these financial statements are outlined below: (i) Significant accounting judgments Classification of and valuation of investments The Group has decided to classify investments in Yikon Corporation Berhad as ‘available for sale’ investments and movements in fair value are recognised directly in equity. The fair value of listed shares has been determined by reference to the published price quotations in an active market. principles of consolidation Subsidiaries Subsidiaries are entities controlled by the consolidated entity. Control exists when the consolidated entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date control commences until the date control ceases. In the Company’s financial statements, investments in subsidiaries are carried at cost. Transactions eliminated on consolidation Inter-entity balances, and any unrealised income and expenses arising from inter-entity transactions, are eliminated in preparing the consolidated financial statements. Global Gold Holdings Limited - Prospectus 25
  • 6.0 Financial Information Continued Foreign currency translation Both the functional and presentation currency of Global Gold Holdings Limited is Australian Dollars ($). Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All exchange differences in the consolidated financial report are taken to the income statement. The functional currency of the overseas subsidiary (Rimbun Teratai Sdn Bhd) is Malaysian Ringgit (MYR). As at the reporting date the assets and liabilities of these overseas subsidiaries are translated into the presentation currency of Global Gold Holdings Limited at the rate of exchange ruling at the balance sheet date and the income statements are translated at the average exchange rates for the period. The exchange differences arising on the retranslation are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the income statement. Revenue Revenue is recognised and measured the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Interest Income Revenue is recognised as interest accrues using the effective interest method. Sale of goods Revenue is recognised when the significant risk and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Income tax and other taxes Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Global Gold Holdings Limited - Prospectus 26
  • Income tax and other taxes (cont’d) Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except when the deferred income tax assets relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affect neither the accounting profit nor taxable profit or loss. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow that deferred tax asset to be recovered. Deferred income tax assets are measured at the tax rate that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Goods and Services Tax 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 Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. Cash and cash equivalents Cash and cash equivalents in the balance sheet compromise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject an insignificant risk of change in value. For the purpose of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Trade and other receivables Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible monies. An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified. Inventories Inventories are valued at the lower of cost and net realisable value. Cost represents purchased cost on a first in, first out basis. Global Gold Holdings Limited - Prospectus 27
  • 6.0 Financial Information Continued Investments and other financial assets Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to- maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end. (i) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. (ii) Available-for-sale investments Available-for-sale investments are those non-derivative financial assets that are designated as available-for- sale or are not classified. After initial recognition available-for-sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss. The fair value of investments of that actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. For investments with no active market, fair values are determined using valuation techniques. Such techniques include: recent arms length market transactions; reference to current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible and keeping judgemental inputs to a minimum. (iii) Financial assets at fair value through profit and loss Financial assets classified as held for trading are included in the category ‘financial assets at fair value though profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as help for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss. (iv) Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held- to-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts . For investments carried at amortised cost, gains and losses when the investments are derecognised or impaired, as well as through the amortisation process. Trade and other payables Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of those goods and services. Loans and borrowings Global Gold Holdings Limited - Prospectus All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. 28
  • Borrowing costs Borrowing costs are capitalised when incurred in the construction of qualifying assets. provisions A provision is recognised when a legal or constructive obligation exists as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The time value of money is not material to the currently recognised provisions and they are not discounted to expected future cash flows at a pre-tax rate. Employee benefits - wages, salaries and annual leave Liabilities for wages and salaries, including non-monetary benefits and annual leave in respect of employees’ services up to the reporting date and expected to be settled within 12 months of the reporting date are recognised in current provisions and are measured at amounts expected to be paid when liabilities are settled. Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Loss per Share Basic loss per Share is determined by dividing net loss after income tax attributable to members of the parent, 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 any bonus element. Diluted loss per Share is calculated as net loss attributable to members of the parent, adjusted for: • cost of servicing equity and preference share dividends; • the after effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and • other non discretionary charges in revenue and expenses during the period that result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive ordinary shares, adjusted for any bonus element. Share Based payment Transactions The Company provides benefits to employees and consultants (including Directors) of the Company in the form of share based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date which they are granted. In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Global Gold (‘market conditions’). The cost of equity-settled transactions is recognised together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant directors, consultants and employees become fully entitled to the award (‘vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date, reflects (i) the extent to which the vesting period has expired; and (ii) the number of awards that, in the Global Gold Holdings Limited - Prospectus opinion of the Directors of Global Gold, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions 29
  • 6.0 Financial Information Continued 2. RECOnCILIATIOn OF ADJUSTmEnTS TO CASH AnD CASH EQUIvALEnTS $ Balance as at 30 September 2007 140,564 Issue of 10,000,000 Shares at 20 cents per Share pursuant to the Offer 2,000,000 Payment of a further $98,561 as estimated costs associated with the listing and payment of payables amounting to $75,541 (174,102) Repayment of loans (251,755) Pro-forma balance as a 30 September 2007 1,714,707 The cash balance at 30 September 2007 earns interest and is available at call. The carrying value approximates fair value. 3. InCOmE TAX $ (a) Income tax benefit - (b) numerical reconciliation between tax benefit and pre-tax net loss Loss before income tax benefit (26,057) Income tax benefit calculated at rates noted in (e) below (7,565) Tax effect on amounts which are not tax deductible - Deferred tax asset not brought to account 7,565 Income tax expense reported in the income statement - (c) Tax losses Unused tax losses for which no deferred tax asset has been recognised (75,293) (d) Unrecognised temporary differences Temporary differences for which deferred tax assets have not been recognised: Accrued expenses 1,200 Capital raising cost 71,466 Unrecognised deferred tax assets relating to the above temporary differences 72,666 In the Reviewed Proforma Period, the temporary difference of capital raising cost amounted to $103,024. (e) Tax Rates The potential tax benefit at 30 June 2007 in respect of tax losses not brought into account has been calculated at 30% for the Australian parent company and 27% for the Malaysian controlled entity. Deferred tax assets have not been recognised in respect of these amounts as it is not considered probable that future taxable income will arise against which these assets may be offset. Global Gold Holdings Limited - Prospectus 30
  • 4. InvEnTORIES Reviewed Historical Reviewed pro-forma 30 September 2007 30 September 2007 $ $ Inventory – at cost 24,484,138 24,484,138 5. OTHER CURREnT ASSETS Current Deferred capital raising costs 244,851 - 6. AvAILABLE FOR SALE FInAnCIAL ASSETS Non current Available-for-sale investments 1,770,000 1,770,000 Available for sale investments consist of investments in ordinary shares, and therefore have no fixed maturity date or coupon date. The fair value of listed available for sale investments have been determined directly by referenced to published price quotations in an active market. 7. TRADE AnD OTHER pAYABLES Trade creditors (a) 167,370 167,370 Other creditors and accruals (b) 25,000 25,000 Settlement of payables - (75,541) 192,370 116,829 (a) Trade creditors are non-interest bearing and are normally settled on 30 day terms. (b) Other creditors and accruals are non-interest bearing and have an average of term of 2 months. 8. LOAnS Unsecured loan 258,343 6,588 This unsecured loan is repayable within 7 days of the Company listing on ASX. The effective interest rate was 10%. Global Gold Holdings Limited - Prospectus 31
  • 6.0 Financial Information Continued 9. ISSUED CApITAL Reviewed Historical Reviewed pro-forma 30 September 2007 30 September 2007 $ $ Fully paid ordinary shares 26,492,931 28,149,519 number of Shares $ Reconciliation of share capital: Balance as at 1 July 2007 1 1 Issue of Shares at $0.0001 per Share (a) 61,300,000 2,709,430 Issue of Shares at $0.02 per Share 179,060,000 3,581,200 Issue of Shares at $0.06 per Share 381,760,000 22,905,600 Costs associated with the capital raisings - (2,703,300) Historical balance as at 30 September 2007 622,120,001 26,492,931 Issue of Shares at 20 cents per Share pursuant to the Prospectus 10,000,000 2,000,000 Costs associated with the Offer - (343,412) Pro-forma balance at 30 September 2007 632,120,001 28,149,519 a) The value ascribed to these Shares included an amount of $0.0441 per Share in respect of capital raisings. b) The rights attaching to Shares are set out in Section 10.8 to the Prospectus. 10. RESERvES Balance at the beginning of the Period - - Decline in fair value of Available-for-sale (230,000) (230,000) investments (a) Foreign currency translation differences (b) 440 440 Balance at the end of the Period (229,560) (229,560) (a) This reserve is used to record the difference in fair value of the Available-for-sale investment to its market value at balance date. (b) This reserve is used to record the value of exchange differences arising on translation of the foreign controlled entity. 11. ACCUmULATED LOSSES Balance at the beginning of the Period (48,474) (48,474) Loss for the Period (26,057) (26,057) Balance at end of the Period (74,531) (74,531) 12. pRO-FORmA nET ASSETS pER SHARE Net assets ($) 27,845,428 Number of Shares on issue 632,120,001 Global Gold Holdings Limited - Prospectus Net assets per Share (cents) 4.41 32
  • 13. RECOnCILIATIOn OF CASH FLOWS USED In OpERATInG ACTIvITIES Reviewed Historical Reviewed pro-forma 30 September 2007 30 September 2007 $ $ Cash flows from operating activities Loss for the Period (26,057) (26,057) Changes in assets and liabilities: Change in receivables 5,837 5,837 Change in inventories (24,484,138) (24,484,138) Change in trade and other creditors (2,018) (2,018) Net cash flow used in operating activities (24,506,376) (24,506,376) 14. COnTInGEnT ASSETS AnD LIABILITIES The Company has no contingent assets and liabilities. 15. COmmITmEnTS a) The Company has entered into an employment agreement with Mr Giap Ch’ng Ooi to act as its Executive Director for a two-year term at a salary of $140,000 per annum inclusive of superannuation. The commitment under this agreement, which is with effect from the listing of the Company on ASX, is as follows: Reviewed Reviewed Historical pro-forma 30 September 2007 30 September 2007 $ $ Due 1 year - 140,000 Due 1 to 2 years - 140,000 - 280,000 b) The Company has entered into a company secretarial services agreement with Townshend York Pty Ltd for the provision of Mr Anthony Ho to act as the Secretary of the Company and company secretarial services for a three-year term at a fee of $65,000 per annum exclusive of GST. The commitment under this agreement, which is with effect from the listing of the Company on ASX, is as follows: Reviewed Reviewed Historical pro-forma 30 September 2007 30 September 2007 $ $ Due 1 year - 65,000 Due 1 to 2 years - 65,000 Due 3 to 5 years - 65,000 - 195,000 Global Gold Holdings Limited - Prospectus 33
  • 6.0 Financial Information Continued 16. SEGmEnT InFORmATIOn The Group’s gold trading activities are predominantly located in Malaysia. More than 90% of the Group’s revenue from ordinary activities and assets relate to these operations. Further details of the Group's activities are set out in Section 3.0 to the Prospectus. 17. SUBSEQUEnT EvEnTS Subsequent to 30 September 2007, the Company sold approximately 410 kilograms of gold for a consideration of approximately $10,700,000 generating a profit before income tax of approximately $700,000. 18. RELATED pARTY DISCLOSURES Further details of Directors’ interests and related party interests (including transactions with Matrix Synergy Limited) are set out in Sections 10.2 and 10.5 of this Prospectus. 19. FInAnCIAL InSTRUmEnTS DISCLOSURE The Group’s main risks arising from the financial instruments are interest rate risk and credit risk. The board has no formal risk management committee due to the size of the Group and the number of directors, however the board does recognise that all directors and employees have a responsibility to recognise risks and actively apply controls to manage the risk. All controls in place are considered appropriate for the current position of the Group. Interest Rate Risk The Group’s exposure to interest risk is minimal. Other than cash, all of the Group’s financial assets and liabilities are non-interest bearing. Cash comprises funds held in operating accounts or as cash on hand. Funds held in the operating account earned interest during the Period at rates between 1.25% and 5.85% per annum, depending on account balances. Credit Risk The Group’s exposure to credit risk arises from default of counter party, with a maximum exposure equal to the carrying amount of the financial assets of the Group, which comprises cash and cash equivalents. Foreign currency risk The Group has transactional currency exposures. Such exposures arise from sales or purchases by an operating entities in currencies other than the functional currency. Fair values All financial assets and liabilities have been recognised at the balance sheet date at their carrying value. It is considered that the carrying value of financial assets and liabilities is their net fair value. 20. LOSS pER SHARE Reviewed Historical 30 September 2007 $ Loss used in calculating basic loss per Share (LPS) (26,057) Weighted number of Shares outstanding during the Period used in the calculation of basic LPS 225,887,936 Basic and diluted loss per Share (cents) (0.01) 21. DIRECTORS AnD EXECUTIvE DISCLOSURES Global Gold Holdings Limited - Prospectus The details of Directors are set out in Section 4.1. There were no executives since the incorporation of the Company on 12 February 2007 and other than as disclosed in Section 10.5. The Company has not yet established a formal compensation policy. Section 10.5 sets out details of the remuneration agreement entered into with Mr Ooi as the Executive Director of the Company. Section 10.5 also sets out the Directors’ shareholdings. 34