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Notes to the

financial statements

for the year ended 30 September 2015


2. Significant accounting policies


ii. Impairment of mineral exploration expenditure

The carrying amount of the mineral exploration

expenditure is reviewed annually and adjusted for

impairment whenever one of the following events or

changes in circumstances indicates that the carrying

amount may not be recoverable:

The period for which the Group has the right to explore

in the specific area has expired during the period or

will expire in the near future, and is not expected to be


Substantive expenditure on further exploration for and

evaluation of mineral resources in the specific area is

neither budgeted nor planned;

Exploration for and evaluation of mineral resources

in the specific area have not led to the discovery of

commercially viable quantities of mineral resources and

the Group has decided to discontinue such activities in

the specific area; or

Sufficient data exist to indicate that, although a

development in the specific area is likely to proceed,

the carrying amount of the mineral exploration

expenditure is unlikely to be recovered in full from

successful development or by sale.

An impairment loss is recognised in profit or loss

whenever the carrying amount of an asset exceeds its

recoverable amount.

iii. Impairment of other assets

Internal and external sources of information are reviewed

at each balance sheet date to identify indications that

the following assets may be impaired or an impairment

loss previously recognised no longer exists or may have


Property, plant and equipment

Investments in subsidiaries in the parent company’s

balance sheet.

If any such indication exists, the asset’s recoverable

amount is estimated.

Calculation of recoverable amount

The recoverable amount of an asset is the greater of

its net selling price and value in use. In assessing value

in use, the estimated future cash flows are discounted

to their present value using a pre-tax discount rate

that reflects current market assessments of the time

value of money and the risks specific to the asset.

Where an asset does not generate cash inflows largely

independent of those from other assets, the recoverable

amount is determined for the smallest group of assets

that generates cash inflows independently (i.e. a cash-

generating unit).

Recognition of impairment losses

An impairment loss is recognised in profit or loss

whenever the carrying amount of an asset, or the

cash-generating unit to which it belongs, exceeds its

recoverable amount. Impairment losses recognised in

respect of cash-generating units are allocated to reduce

the carrying amount of assets in the unit (or group of

units) on a pro rata basis, except that the carrying value of

an asset will not be reduced below its individual fair value

less costs to sell, or value in use, if determinable.

Reversal of impairment losses

An impairment loss is reversed if there has been a

favourable change in the estimates used to determine the

recoverable amount.

A reversal of an impairment loss is limited to the asset’s

carrying amount that would have been determined had

no impairment loss been recognised in prior years.

Reversals of impairment losses are credited to profit or

loss in the year in which the reversals are recognised.

j. Income tax

The income tax expense/(benefit) for the year comprises

current income tax expense/(benefit) and deferred tax


Current income tax expense charged to profit or loss is

the tax payable on taxable income. Current tax liabilities/

(assets) are measured at the amounts expected to be

paid to/(recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in

deferred tax asset and deferred tax liability balances

during the year as well as unused tax losses.

Current and deferred income tax expense/(benefit) are

charged or credited outside profit or loss when the tax

relates to items that are recognised outside profit or loss.

Except for business combinations, no deferred income

tax is recognised from the initial recognition of an asset or

liability, where there is no effect on accounting or taxable

profit or loss.

Deferred tax assets and liabilities are calculated at

the tax rates that are expected to apply to the period

when the asset is realised or the liability is settled and

their measurement also reflects the manner in which

management expects to recover or settle the carrying

amount of the related asset or liability. With respect to

non-depreciable items of property, plant and equipment

measured at fair value and items of investment property

measured at fair value, the related deferred tax liability

or deferred tax asset is measured on the basis that the

carrying amount of the asset will be recovered entirely

through sale.

Deferred tax assets relating to temporary differences and

unused tax losses are recognised only to the extent that

it is probable that future taxable profit will be available

against which the benefits of the deferred tax asset can

be utilised.