Responsibility statement
Each of the Directors whose names and functions appear on pages 52 and 53 of the Annual Report confirms to the best of such person’s knowledge and belief:
• the consolidated financial statements for the financial year ended 31 December 2015, prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position of the Group and the undertakings included in the consolidation taken as a whole, as at that date and its loss for the financial year then ended;
• the Company financial statements for the financial year ended 31 December 2015, prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the Companies Act 2014, give a true and fair view of the assets, liabilities, financial position of the Company;
• the Business and Strategy Review and Principal Risks and Uncertainties, which are incorporated into the Directors’ Report, include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
• the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group’s performance, business model and strategy.
On behalf of the Board:
M. Carvill Director T. McCluskey Director 29 April 2016
Opinion on Consolidated Financial Statements of Kenmare Resources plc
In our opinion, the financial statements:
• give a true and fair view of the assets, liabilities and financial position of the Group and the Company as at 31 December 2015 and of the Group’s loss for the financial year then ended; and
• have been properly prepared in accordance with the relevant financial reporting framework and in particular, with the requirements of the Companies Act 2014 and, as regards the Group Financial Statements, Article 4 of the IAS Regulation.
The financial statements comprise the Group Financial Statements: Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity and the Parent Company Financial Statements: Parent Company Statement of Financial Position, Parent Company Statement of Cash Flows, Parent Company Statement of Changes in Equity and related notes 1 to 37. The financial reporting framework that has been applied in the preparation of the Group and parent company financial statements is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Emphasis of matter- Going concern and the directors’ assessment of the principal risks that would threaten the solvency or liquidity of the Group
As required by the Listing Rules we have reviewed the Directors’ statement regarding the appropriateness of the going concern basis contained within the Directors’ report on page 90 and the Directors’ statement on the viability of the Group on page 90.
Without modifying our opinion on the financial statements, we draw your attention to Note 1 of the financial statements in relation to Going Concern and Note 23 in relation to Bank Loans. In Note 1, the Directors set out their assessment of the Group’s ability to continue as a going concern. Note 1 outlines that in April 2015 the Group entered into an amended loan agreement with its lenders, the details of which are set out in Note 23. The amended loan agreement required that the Group deliver a deleveraging plan, acceptable to the lenders, no later than 31 January 2016 to enable it to draw down committed loan facilities. A deleveraging plan was submitted but was not approved by lenders by that date. At 31 December 2015, the Group was in breach of its loan covenants, and continues to be in breach of loan covenants to date. The Directors note that the Group is currently in discussion with its lenders and potential new and existing investors, to agree a deleveraging plan which would result in new equity investment, amendment of loan facilities, debt discharge and potentially debt to equity conversion, as disclosed in Note 1.
The Group’s ability to continue as a going concern is dependent on the successful completion of the deleveraging plan as outlined in Note 1 and on the Group achieving its cashflow projections. The deleveraging plan involves multiple counterparties and is subject to a number of risks including; the risk that one or more parties may withdraw support for the plan; legal and execution risk and the risk that the completion of the plan could be delayed resulting in the Group exhausting available cash resources prior to completion.
These matters indicate the existence of a material uncertainty relating to the successful execution of the deleveraging plan and which may cast doubt on the Groups ability to continue as a going concern and meet its liabilities as they fall due in the normal course of business. The Directors expect that the deleveraging plan and the cashflow projections will be achieved and that the Group will continue as a going concern. Accordingly, the financial statements do not include any adjustments to the carrying amounts or classification of assets and liabilities that would result if the Group was unable to continue as a going concern.
We have nothing further to draw attention to in relation to:
• the Directors’ confirmation on page 44 that they have carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity;
• the disclosures on pages 44 to 48 that describe those risks and explain how they are being managed or mitigated;
• the Directors’ statement in Note 1 to the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them and their identification of any material uncertainties to the Group’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
• the Directors’ explanation in the viability statement on page 90 as to how they have assessed the prospects of the Group, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.