Table of Contents Table of Contents
Previous Page  47 / 112 Next Page
Show Menu
Previous Page 47 / 112 Next Page
Page Background




Notes to the

financial statements

for the year ended 30 September 2015


2. Significant accounting policies


The fair value of liabilities and the entity’s own equity

instruments (excluding those related to share-based

payment arrangements) may be valued, where there is no

observable market price in relation to the transfer of such

financial instruments, by reference to observable market

information where such instruments are held as assets.

Where this information is not available, other valuation

techniques are adopted and, where significant, are

detailed in the respective note to the financial statements.

f. Property, plant and equipment

Property, plant and equipment are stated in the

balance sheet at cost or revaluation less accumulated

depreciation and impairment losses. Leasehold land

is stated at its fair value, which has been determined

considering future lease payments, term of the lease and

implied interest.

Revaluations are performed with sufficient regularity to

ensure that the carrying amount of these assets does not

exceed their recoverable amount at balance sheet date.

Changes arising on the revaluation of property, plant

and equipment are generally dealt with in other

comprehensive income and are accumulated separately

in equity in the asset revaluation reserve. The only

exceptions are as follows:

when a deficit arises on revaluation, it will be charged

to profit or loss to the extent that it exceeds the

amount held in the reserve in respect of that same

asset immediately prior to the revaluation; and

when a surplus arises on revaluation, it will be credited

to profit or loss to the extent that a deficit in respect of

that same asset had previously been charged to profit

or loss.

Gains or losses arising from the retirement or disposal of

an item of property, plant and equipment are determined

as the difference between the net disposal proceeds and

the carrying amount of the item and are recognised in

profit or loss in the period in which they arise. Any related

revaluation surplus is transferred from the revaluation

reserve to accumulated losses. Depreciation is calculated

to write off the cost or revaluation of items of property,

plant and equipment, less their estimated residual value,

if any, using the straight line method over their estimated

useful lives. The principal annual rates used for this

purpose are as follows:

Leasehold land

over the lease term

Leasehold improvements

over the lease term

Plant and equipment

20% – 33%

Both the useful life of an asset and its residual value, if

any, are reviewed annually, and adjusted if appropriate, at

the end of each reporting period.

g. Mineral exploration expenditure

Mineral exploration, evaluation and development

expenditures incurred are capitalised in respect of

each identifiable area of interest. These costs are only

capitalised to the extent that they are expected to be

recovered through the successful development of the

area or where activities in the area have not yet reached

a stage that permits reasonable assessment of the

existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area

are written-off in full against profit or loss in the year

in which the decision to abandon the area is made.

When production commences, the accumulated costs

for the relevant area of interest are amortised over the

life of the area according to the rate of depletion of the

economically recoverable reserves.

A regular review is undertaken of each area of interest to

determine the appropriateness of continuing to capitalise

costs in relation to that area.

Costs of site restoration are provided for over the life

of the project from when exploration commences and

are included in the costs of that stage. Site restoration

costs include the dismantling and removal of mining

plant, equipment and building structures, waste removal,

and rehabilitation of the site in accordance with local

laws and regulations and clauses of the permits. Such

costs have been determined using estimates of future

costs, current legal requirements and technology on an

undiscounted basis.

Any changes in the estimates for the costs are accounted

for on a prospective basis. In determining the costs of site

restoration, there is uncertainty regarding the nature and

extent of the restoration due to community expectations

and future legislation. Accordingly, the costs have been

determined on the basis that the restoration will be

completed within one year of abandoning the site.

h. Leases

An arrangement, comprising a transaction or a series

of transactions, is or contains a lease if the Group

determines that the arrangement conveys a right to a

specific asset or assets for an agreed period of time in

return for a payment or a series of payments. Such a

determination is made based on an evaluation of the

substance of the arrangement regardless of whether the

arrangement takes the legal form of a lease.

Assets that are held by the Group under leases that

transfer to the Group substantially all the risks and

rewards of ownership are classified as being held under

finance leases. Leases which do not transfer substantially

all the risks and rewards of ownership to the Group

are classified as operating leases, with the following

exception: land held for own use under an operating

lease, the fair value of which cannot be measured

separately from the fair value of a building situated

thereon at the inception of the lease, is accounted for

as being held under a finance lease, unless the building

is also clearly held under an operating lease. For these

purpose, the inception of the lease is the time that the

lease was first entered into by the Group, or taken over

from the previous lessee.