- Part 2: For the preceding part double click ID:nRSV9939Va
(1,641) (5,815)
Gross loss (1,765) (5,950)
Administrative expenses (4,480) (5,606)
Other income 5 135 9
Operating loss (6,110) (11,547)
Net foreign exchange loss (4,721) (409)
Gain on available-for-sale investments 18 - 1,186
Finance income 8 38 1,909
Finance costs 9 (4,332) (2,369)
Profit on disposal of subsidiaries 18 53 -
Profit on disposal of subsidiary/associate 15 92 -
Loss before tax (14,980) (11,230)
Tax charge 10 (30) (18)
Loss for the year (15,010) (11,248)
Loss attributable to:
- Owners of the parent (15,010) (11,246)
- Non-controlling interests - (2)
(15,010) (11,248)
Loss per share from operations attributable to owners of the parent during the year :
Basic and fully diluted loss per share (expressed in cents per share) 11 (17.9) (25.5)
Loss for the year (15,010) (11,248)
Other comprehensive income:
Change in value of available-for-sale investments 18 (682) (202)
Total comprehensive loss for the year (15,692) (11,450)
Attributable to:
- Owners of the parent (15,692) (11,448)
- Non-controlling interests - (2)
Total comprehensive loss for the year (15,692) (11,450)
.
Statements of financial position
As at 31 December As at 31 December
(Euro 000's) Note The Group2015 The Company 2015 The Group2014 The Company2014
Assets
Non-current assets
Property, plant and equipment 12 168,424 41 65,314 58
Intangible assets 13 20,158 - 17,655 -
Investment in subsidiaries 14 - 3,572 - 3,576
Investment in associate 15 10 4 - -
188,592 3,617 82,969 3,634
Current assets
Trade and other receivables 17 16,632 130,081 2,226 22,606
Available-for-sale investments 18 302 302 984 984
Cash and cash equivalents 19 18,618 4,246 21,050 19,391
35,552 134,629 24,260 42,981
Total assets 224,144 138,246 107,229 46,615
Equity and liabilities
Equity attributable to owners of the parent
Share capital 20 11,632 11,632 4,409 4,409
Share premium 20 277,238 277,238 149,823 149,823
Other reserves 21 5,508 5,508 5,815 5,815
Accumulated losses (118,012) (156,349) (103,002) (146,829)
176,366 138,029 57,045 13,218
Non-controlling interests - - (116) -
Total equity 176,366 138,029 56,929 13,218
LiabilitiesNon-current liabilities
Trade and other payables 22 1,896 - 4,631 -
Provisions 23 3,971 - - -
5,867 - 4,631 -
Current liabilities
Convertible note - debt component 24 - - 13,952 13,952
Convertible note - derivative component 24 - - 130 130
Bridge loan facility 25 - - 18,547 18,547
Trade and other payables 22 41,911 217 13,040 768
41,911 217 45,669 33,397
Total liabilities 47,778 217 50,300 33,397
Total equity and liabilities 224,144 138,246 107,229 46,615
The consolidated financial statements were authorised for issue by the board of directors on 22 April 2016 and were signed
on its behalf.
Roger Davey Alberto Lavandeira
Chairman Managing Director
Consolidated statements of changes in equity
Years ended 31 December 2015 and 2014
Attributable to owners of the parent
(Euro 000's) Share capital Sharepremium Other reserves Accumulatedlosses Total Non-controllinginterest Total equity
At 1 January 2014 3,830 134,316 5,724 (91,951) 51,919 (114) 51,805
Total comprehensive loss for the year - - - (11,246) (11,246) (2) (11,248)
Issue of share capital 566 15,845 - - 16,411 - 16,411
Share issue costs - (338) - - (338) - (338)
Bonus shares issued in escrow 13 - 239 - 252 - 252
Bonus shares released from escrow - - (195) 195 - - -
Change in value of available-for-sale investments - - (202) - (202) - (202)
Recognition of share based payments - - 249 - 249 - 249
At 31 December 2014/1 January 2015 4,409 149,823 5,815 (103,002) 57,045 (116) 56,929
Total comprehensive loss for the year - - - (15,010) (15,010) - (15,010)
Issue of share capital 7,223 130,017 - - 137,240 - 137,240
Share issue costs - (2,920) - - (2,920) - (2,920)
Derivative element of conversion of convertible note - 440 - - 440 - 440
Purchase of minority interest shares - - - - - 116 116
Bonus shares issued in escrow - - 101 - 101 - 101
Change in value of available-for-sale investments - - (682) - (682) - (682)
Recognition of share based payments - - 152 - 152 - 152
Warrants issue costs - (122) 122 - - - -
At 31 December 2015 11,632 277,238 5,508 (118,012) 176,366 - 176,366
Company statements of changes in equity
Years ended 31 December 2015 and 2014
(Euro 000's) Share capital Sharepremium Otherreserves Accumulatedlosses Total
At 1 January 2014 3,830 134,316 5,724 (143,399) 471
Total comprehensive loss for the year - - - (3,625) (3,625)
Issue of share capital 566 15,845 - - 16,411
Share issue costs - (338) - - (338)
Bonus shares issued in escrow 13 - 239 - 252
Bonus shares released from escrow - - (195) 195 -
Change in value of available-for-sale investments - - (202) - (202)
Recognition of share based payments - - 249 - 249
At 31 December 2014/1 January 2015 4,409 149,823 5,815 (146,829) 13,218
Total comprehensive loss for the year - - - (9,520) (9,520)
Issue of share capital 7,223 130,017 - - 137,240
Share issue costs - (2,920) - - (2,920)
Derivative element of conversion of convertible note - 440 - - 440
Bonus shares issued in escrow - - 101 - 101
Change in value of available-for-sale investments - - (682) - (682)
Recognition of share based payments - - 152 - 152
Warrants issue cost - (122) 122 - -
At 31 December 2015 11,632 277,238 5,508 (156,349) 138,029
Consolidated statements of cash flows
Years ended 31 December 2015 and 2014
(Euro 000's) Note 2015 2014
Cash flows from operating activities
Loss before tax (14,980) (11,230)
Adjustments for:
Depreciation of property, plant and equipment 12 152 110
Amortisation of intangible assets 13 123 -
Share-based payments 21 152 249
Bonus share issue 101 252
Gain on available-for-sale investments 18 - (1,186)
Interest income 8 (38) (5)
Interest expense 9 239 369
Loss / (gain) on fair value on the conversion feature of the convertible note 8/9 310 (1,904)
Accretion expense on convertible note 9 31 691
Convertible note interest expense 9 1,178 1,309
Bridge loan interest expense 9 1,232 -
Bridge loan financing expenditure 9 1,342 -
Foreign exchange loss on repayment of borrowings 5,304 -
(Profit) / loss on disposal of property, plant and equipment (1) 4
Profit on disposal of subsidiaries 18 (53) -
Profit on disposal of subsidiary/associate 15 (92) -
Profit on disposal of investment - (37)
Unrealised foreign exchange loss on financing activities 286 685
Cash outflows from operating activities before working capital changes (4,714) (10,693)
Changes in working capital:
Trade and other receivables (14,406) (1,502)
Trade and other payables 26,127 5,562
Cash flows from/(used in) operations 7,007 (6,633)
Interest paid (768) (369)
Financing expenditure paid (164) -
Tax paid (21) (34)
Net cash from/(used in) operating activities 6,054 (7,036)
Cash flows from investing activities
Purchases of property, plant and equipment (99,290) (12,384)
Purchases of intangible assets 13 (2,503) (2,834)
Proceeds from sale of property, plant and equipment 1 8
Proceeds from sale of subsidiaries 88 -
Proceeds from sale of investment - 37
Interest received 8 38 5
Net cash used ininvesting activities (101,666) (15,168)
Cash flows from financing activities
Proceeds from issue of share capital 90,435 16,411
Listing and issue costs 20 (2,920) (338)
Proceeds from bridge loan - net 5,665 18,547
Net cash from financing activities 93,180 34,620
Net increase in cash and cash equivalents (2,432) 12,416
Cash and cash equivalents:
At beginning of the year 19 21,050 8,634
At end of the year 19 18,618 21,050
Company statements of cash flows
Years ended 31 December 2015 and 2014
(Euro 000's) Note 2015 2014
Cash flows from operating activities
Loss before tax (9,520) (3,625)
Adjustments for:
Depreciation of property, plant and equipment 12 18 24
Share-based payments 39 249
Bonus share issue - 252
Gain on available-for-sale investments 18 - (157)
Interest income (2) (4)
Loss / (gain) on fair value on the conversion feature of the convertible note 310 (1,904)
Accretion expense on convertible note 31 691
Convertible note interest expense 1,178 1,309
Bridge loan interest expense 1,232 -
Bridge loan financing expenditure 1,342 -
Foreign exchange loss on repayment of borrowings 5,304 -
Zero coupon interest rate (1,411) (1,311)
Intercompany balances previously impaired 451 -
Impairment of receivables from subsidiaries - 81
Impairment of investment in subsidiaries 8 895
Profit on sale of investments - (9)
Profit on disposal of property, plant and equipment (1) -
Unrealised foreign exchange loss on financing activities (78) 685
Cash outflows used in operating activities before working capital changes (1,099) (2,824)
Changes in working capital:
Trade and other receivables (106,064) (21,027)
Trade and other payables (552) 390
Cash flows used in operations (107,715) (23,461)
Interest paid (529) -
Financing expenditure paid (164)
Net cash used inoperating activities (108,408) (23,461)
Cash flows from investing activities
Purchases of property, plant and equipment 12 (1) (1)
Proceeds from disposal of property, plant and equipment 1 -
Purchase of investment (7) -
Proceeds from sale of subsidiaries 88 -
Proceeds from sale of investment - 37
Interest received 2 4
Net cash from / (used in) investing activities 83 40
Cash flows from financing activities
Proceeds from issue of share capital 90,435 16,411
Listing and issue costs 20 (2,920) (338)
Proceeds from bridge loan - net 5,665 18,547
Net cash from financing activities 93,180 34,620
Net (decrease)/increase in cash and cash equivalents (15,145) 11,199
Cash and cash equivalents:
At beginning of the year 19 19,391 8,192
At end of the year 19 4,246 19,391
Notes to the consolidated financial statements
Years ended 31 December 2015 and 2014
1. Incorporation and principal activities
Country of incorporation
Atalaya Mining Plc was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the
Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered office
is at 1 Lampousa Street, Nicosia, Cyprus. The Company was listed on AIM of the London Stock Exchange in May 2005 and on
the TSX on 20 December 2010.
Change of name and share consolidation
Following the Company's EGM on 13 October 2015, the change of name from EMED Mining Public Limited to Atalaya Mining Plc
became effective on 21 October 2015. On the same day, the consolidation of ordinary shares came into effect, whereby all
shareholders received one new ordinary share of nominal value Stg £0.075 for every 30 existing ordinary shares of nominal
value Stg £0.0025.
Principal activities
The principal activity of the Company and its subsidiaries is to explore for and develop metals production operations in
Europe, with an initial focus on copper. The strategy is to evaluate and prioritise metal production opportunities in
several jurisdictions throughout the well-known belts of base and precious metal mineralisation in the European region.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation and going concern
The consolidated financial statements of Atalaya Mining have been prepared in accordance with International Financial
Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union and the requirements of the Cyprus
Companies Law, Cap.113. The consolidated financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in Note 3.4.
These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going
concern which assumes that the Company will realize its assets and discharge its liabilities in the normal course of
business. Management has carried out an assessment of the going concern assumption and has concluded that the Company's
available cash and cash equivalents will be sufficient for the Company to continue operating for the ensuing twelve months.
These consolidated financial statements do not give effect to any adjustment, which would be necessary should the Company
be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in
other than the normal course of business and at amounts different than those reflected in the consolidated financial
statements.
Changes in accounting policy and disclosures
During the current year the Company adopted all the new and revised International Financial Reporting Standards (IFRS) that
are relevant to its operations and are effective for accounting periods beginning on 1 January 2015. This adoption did not
have a material effect on the accounting policies of the Company.
Up to the date of approval of the financial statements, certain new standards, interpretations and amendments to existing
standards have been published that are not yet effective for the current reporting period and which the Company has not
early adopted, as follows:
(i) Issued by the IASB and adopted by the European Union
Amendments
• IAS 19 (Amendments) ''Defined Benefit Plans: Employee Contributions'' (effective for annual periods beginning on or
after 1 February 2015).
• Annual Improvements to IFRSs 2010-2012 Cycle (issued on 12 December 2013), (effective for annual periods beginning
on or after 1 February 2015).
• Annual Improvements to IFRSs 2012-2014 Cycle (issued on 25 September 2014) (effective for annual periods beginning
on or after 1 January 2016).
• IAS 1 (Amendments) Disclosure initiative (effective for annual periods beginning on or after 1 January 2016).
• IFRS 11 (Amendments) ''Accounting for Acquisitions of Interests in Joint Operations'' (effective for annual periods
beginning on or after 1 January 2016).
• Amendments to IAS 16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation (effective
for annual periods beginning on or after 1 January 2016).
• Amendments to IAS 16 and IAS 41 - Agriculture: Bearer Plants (effective for annual periods beginning on or after 1
January 2016).
• IAS 27 (Amendments) ''Equity method in separate financial statements''' (effective for annual periods beginning on
or after 1 January 2016).
(ii) Issued by the IASB but not yet adopted by the European Union
New standards
• IFRS 9 ''Financial Instruments'' (effective for annual periods beginning on or after 1 January 2018).
• IFRS 14 ''Regulatory Deferral Accounts'' (effective for annual periods beginning on or after 1 January 2016).
• IFRS 15 ''Revenue from Contracts with Customers'' (effective for annual periods beginning on or after 1 January
2018).
• IFRS 16 ''Leases'' (effective for annual periods beginning on or after 1 January 2019).
Amendments
• Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture.
• Amendments to IFRS 10, IFRS 12 and IAS 28 - Investment entities: Applying the consolidation exception (effective for
annual periods beginning on or after 1 January 2016).
• Amendments to IAS 12 - Recognition of deferred tax asset for unrealised losses (effective for annual periods
beginning on or after 1 January 2017).
• Amendments to IAS 7 - Disclosure initiative (effective for annual periods beginning on or after 1 January 2017).
The Company is currently evaluating the effect of these standards or interpretations on its consolidated financial
statements.
2.2 Consolidation
(a) Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Group has control. Control exists when
the Group is exposed, or has rights, to variable returns for its involvement with the investee and has the ability to
affect those returns through its power over the investee. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group
also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the
financial and operating policies by virtue of de-facto control.
De-facto control may arise in circumstances where the size of the Group's voting rights relative to the size and dispersion
of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable
net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held
equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such
re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is
recognised in accordance with IAS 39 in profit or loss. Contingent consideration that is classified as equity is not
re-measured, and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of
non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower
than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits
and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.
(b) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions
- that is, as transactions with the owners in their capacity as owners. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in
equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
(c) Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when
control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying
amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial
asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are
accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income are reclassified to profit or loss.
(d) Associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity
method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is
increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of
acquisition. The Group's investment in associates includes goodwill identified on acquisition.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of
the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
The Group's share of post-acquisition profit or loss is recognised in the income statement, and its share of
post-acquisition movements in other comprehensive income is recognised in other comprehensive income, with a corresponding
adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds
its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses,
unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is
impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable
amount of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of associates'
in the income statement.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised
in the Group's consolidated financial statements only to the extent of unrelated investors' interests in the associates.
Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the
group. Dilution gains and losses arising in investments in associates are recognised in the income statement.
2.3 Investments in subsidiary companies
Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an
expense in the period in which the impairment is identified. This policy only applies to the "Company" financial
statements.
2.4 Interest in joint arrangements
A joint arrangement is a contractual arrangement whereby the Group and other parties undertake an economic activity that is
subject to joint control, that is when the strategic, financial and operating policy decisions relating to the activities
the joint arrangement require the unanimous consent of the parties sharing control.
Where a group entity undertakes its activities under joint arrangements directly, the Group's share of jointly controlled
assets and any liabilities incurred jointly with other ventures are recognised in the financial statements of the relevant
entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in
jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group's share of the
output of jointly controlled assets, and its share of joint arrangement expenses, are recognised when it is probable that
the economic benefits associated with the transactions will flow to/from the Group and their amount can be measured
reliably.
The Group undertakes joint arrangements that involve the establishment of a separate entity in which each venturer has an
interest (jointly controlled entity). The Group reports its interests in jointly controlled entities using the equity
method of accounting.
Where the Group transacts with its jointly controlled entities, unrealised profits and losses are eliminated to the extent
of the Group's interest in the joint arrangement.
2.5 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance
of the operating segments, has been identified as the CEO who makes strategic decisions.
2.6 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are
presented in Euro which is the Group's functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive
income as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate
to borrowings and cash and cash equivalents are presented in the income statement within 'finance income or costs'.
2.7 Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment
losses.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
Property, plant and equipment are depreciated to their estimated residual value over the estimated useful life of the
specific asset concerned, or the estimated remaining life of the associated mine ("LOM"), field or lease.
Depreciation commences when the asset is available for use. Land is not depreciated.
The major categories of property, plant and equipment are depreciated/amortised on a Unit of Production ("UOP") and/or
straight-line basis as follows:
· Buildings UOP
· Mineral rights UOP
· Deferred mining costs UOP
· Plant and machinery UOP
· Motor vehicles 5 years
· Furniture/fixtures/office equipment 5-10 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
'Other (losses)/gains - net' in the income statement.
Pre-commissioning sales are offset against the cost of constructing the asset.
(a) Mineral rights
Mineral reserves and resources which can be reasonably valued are recognised in the assessment of fair values on
acquisition. Mineral rights for which values cannot be reasonably determined are not recognised. Exploitable mineral rights
are amortised using the UOP basis over the commercially recoverable reserves and, in certain circumstances, other mineral
resources. Mineral resources are included in amortisation calculations where there is a high degree of confidence that they
will be extracted in an economic manner.
(b) Deferred mining costs - stripping costs
Mainly comprises of certain capitalised costs related to pre-production and in-production stripping activities as outlined
below.
Stripping costs incurred in the development phase of a mine (or pit) before production commences are capitalised as part of
the cost of constructing the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a UOP basis.
In-production stripping costs related to accessing an identifiable component of the ore body to realise benefits in the
form of improved access to ore to be mined in the future (stripping activity asset), are capitalised within deferred mining
costs provided all the following conditions are met:
(i) it is probable that the future economic benefit associated with the stripping activity will be realised;
(ii) the component of the ore body for which access has been improved can be identified; and
(iii) the costs relating to the stripping activity associated with the improved access can be reliably measured.
If all of the criteria are not met, the production stripping costs are charged to the consolidated statement of income as
they are incurred.
(c) Restoration, rehabilitation and decommissioning
Restoration, rehabilitation and decommissioning costs arising from the installation of plant and other site preparation
work, discounted using a risk adjusted discount rate to their net present value, are provided for and capitalised at the
time such an obligation arises.
The costs are charged to the consolidated statement of income over the life of the operation through depreciation of the
asset and the unwinding of the discount on the provision. Costs for restoration of subsequent site disturbance, which are
created on an ongoing basis during production, are provided for at their net present values and charged to the consolidated
statement of income as extraction progresses.
Changes in the estimated timing of the rehabilitation or changes to the estimated future costs are accounted for
prospectively by recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to
which it relates, provided the reduction in the provision is not greater than the depreciated capitalised cost of the
related asset, in which case the capitalised cost is reduced to nil and the remaining adjustment recognised in the
consolidated statement of income. In the case of closed sites, changes to estimated costs are recognised immediately in the
consolidated statement of income.
2.8 Intangible assets
(a) Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the
acquired interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree
and the fair value of the non-controlling interest in the acquiree.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value
in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not
subsequently reversed.
(b) Permits
Permits are capitalised as intangible assets which relate to projects that are at the pre-development stage. No
amortisation charge is recognised in respect of these intangible assets. Once the Group receives those permits, the
intangible assets relating to permits will be depreciated on a UOP basis.
2.9 Impairment of non-financial assets
Assets that have an indefinite useful life - for example, goodwill or intangible assets not ready to use - are not subject
to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
2.10 Financial assets
2.10.1 Classification
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and
receivables, and available for sale. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also
categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current
assets if expected to be settled within 12 months, otherwise they are classified as non-current.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities greater than 12 months after the end of the
reporting period. These are classified as non-current assets. The Group's loans and receivables comprise 'trade and other
receivables' and 'cash and cash equivalents' in the statement of financial position (Notes 2.13 and 2.14).
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in
any of the other categories. They are included in non-current assets unless the investment matures or management intends
to dispose of it within 12 months of the end of the reporting period.
2.10.2 Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date - the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial
assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are
initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are
derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group
has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets
at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently
carried at amortised cost using the effective interest method.
Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss'
category are presented in the income statement within 'other (losses)/gains - net' in the period in which they arise.
Dividend income from financial assets at fair value through profit or loss is recognised in the income statement as part of
other income when the Group's right to receive payments is established.
Changes in the fair value of monetary securities classified as available for sale are recognised in other comprehensive
income.
When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in
equity are included in the income statement as 'gains and losses from investment securities'. Interest on
available-for-sale securities calculated using the effective interest method is recognised in the income statement as part
of finance income. Dividends on available-for-sale equity instruments are recognised in the income statement as part of
other income when the group's right to receive payments is established.
2.11 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there
is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously.
2.12 Impairment of financial assets
(a) Assets carried at amortised cost
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group
of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are
incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the
initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future
cash flows of the financial asset or group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter
bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For the loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying
amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset's original effective interest rate.
The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement.
If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss
is the current effective interest rate determined under the contract. As a practical expedient, the group may measure
impairment on the basis of an instrument's fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of
the previously recognised impairment loss is recognised in the consolidated income statement.
(b) Assets classified as available for sale
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a
group of financial assets is impaired. For debt securities, the group uses the criteria referred to in (a) above. In the
case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the
security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale
financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value,
less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and
recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are
not subsequently reversed. If, in a subsequent period, the fair value of a debt instrument classified as available for
sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised
in the income statement, the impairment loss is reversed through the income statement.
2.13 Trade and other receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of
business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they
are classified as current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
At Company level, other receivables include intercompany balances.
2.14 Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand and in bank including deposits
held at call with banks.
2.15 Share capital
Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the
Company and the nominal value of the share capital being issued is taken to the share premium account.
Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax,
from the proceeds in the share premium account.
2.16 Trade and other payables
- More to follow, for following part double click ID:nRSV9939Vc