Good Mining (International) Limited

Transcription

1 Good Mining (International) Limited International GAAP Illstrative financial statements for the year ended 31 December 2014 Based on International Financial Reporting Standards in isse at 31 Agst 2014

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3 Contents Abbreviations and key... 2 Introdction... 3 General information Independent aditors report to shareholders of Good Mining (International) Limited Consolidated statement of profit or loss and other comprehensive income Consolidated statement of financial position Consolidated statement of changes in eqity Consolidated statement of cash flows Notes to the consolidated financial statements Appendix A Consolidated statement of cash flows direct method Appendix B Information in other illstrative financial statements available Glossary Notes Good Mining (International) Limited 1

4 Abbreviations and key The following styles of abbreviation are sed in this set of International GAAP Illstrative Financial Statements: IAS International Acconting Standard No. 33, paragraph 41 IAS 1.BC.13 International Acconting Standard No. 1, Basis for Conclsions, paragraph 13 IFRS 2.44 International Financial Reporting Standard No. 2, paragraph 44 SIC 29.6 Standing Interpretations Committee Interpretation No. 29, paragraph 6 IFRIC 4.6 IAS 39.IG.G.2 IAS 39.AG71 IFRS Interpretations Committee (formerly the International Financial Reporting Interpretations Committee) Interpretation No. 4, paragraph 6 International Acconting Standard No. 39 Implementation gidance for IAS 39 Section G: Other, paragraph G.2 International Acconting Standard No. 39 Appendix A Application Gidance, paragraph AG71 ISA International Standard on Aditing No. 700, paragraph 25 Commentary GAAP IASB Interpretations Committee SIC The commentary explains how the reqirements of IFRS have been implemented in arriving at the illstrative disclosre Generally Accepted Acconting Principles/Practice International Acconting Standards Board IFRS Interpretations Committee (formerly the International Financial Reporting Interpretations Committee (IFRIC)) Standing Interpretations Committee Good Mining (International) Limited 2

5 Introdction This pblication contains an illstrative set of consolidated financial statements that is prepared in accordance with International Financial Reporting Standards (IFRS) for Good Mining (International) Limited (Good Mining) and its sbsidiaries (the Grop), a fictitios grop of mining companies for the year ended 31 December The Grop is a gold and copper exploration, development and prodction entity whose activities inclde the exploration for and development of gold and copper mineral deposits and the prodction and sale of gold bllion and gold and copper metal concentrate. All of its operations are located in Metalville (a fictitios contry). Objective This set of illstrative financial statements is one of many prepared by EY to assist yo in preparing yor own financial statements. This pblication is intended to reflect transactions, events and circmstances which are common to entities in the mining sector and is intended to illstrate IFRS disclosres specific to companies in the mining sector. Therefore, some common transactions and their disclosres have been deliberately omitted or simplified becase they are illstrated in other EY illstrative financial statement pblications, sch as Good Grop (International) Limited We refer readers to the other pblications for a greater nderstanding of other presentation and disclosre reqirements that are not specific to the mining sector. Acconting for extractive activities is complex, with a variety of acconting policy choices available for transactions in the exploration and evalation phase. Moreover, the lack of specific gidance for certain transactions and arrangements presents the sector with a challenge to prodce sefl financial statements throgh effective presentation and disclosre. However, differences in acconting policies and their application redces comparability and increases complexity. IFRS prescribes minimm standards of disclosre; it is important to provide additional disclosres to explain any nsal circmstances faced by the mining entity. In addition, acconting policy choices made by the entity need to be disclosed in detail to aid the reader in comparing entities in the mining sector. This pblication illstrates what we consider to be relevant disclosre and focses on those areas of IFRS reporting that rely on the professional jdgement of management. For illstrative prposes only, some disclosres have been provided even thogh they may not be relevant or material for the Grop. For instance, disclosres are provided for acconting policies that may not be relevant and/or certain disclosres are provided for items that are not material to the financial statements of the Grop. We strongly encorage entity-specific presentation and disclosres. These illstrative financial statements are therefore only meant to serve as a sefl reference. How to se these illstrative financial statements to prepare entity-specific disclosres Users of this pblication are encoraged to prepare entity-specific disclosres, for which these illstrative financial statements may serve as a sefl reference. Transactions and arrangements other than those addressed by the Grop may reqire additional disclosres. It shold be noted that the illstrative financial statements of the Grop are not designed to satisfy any stock market or contry-specific reglatory reqirements in any given jrisdiction, nor is this pblication intended to reflect disclosre reqirements that apply mainly to reglated or specialised indstries. It is essential to refer to the relevant acconting standards and/or specific jrisdictional reqirements and, when necessary, to seek appropriate professional advice where there may be dobt as to the reqirements. Notations shown on the right-hand margin of each page are references to IFRS paragraphs that describe the specific disclosre reqirements. Commentaries are provided to explain the basis for the disclosre or to address alternative disclosres not inclded in the illstrative financial statements. In case of dobt as to the IFRS reqirements, it is essential to refer to the relevant sorce material and, where necessary, to seek appropriate professional advice. Improving disclosre effectiveness The terms disclosre overload and ctting the cltter describe an acte problem in financial reporting that has become a priority isse for the International Acconting Standards Board (IASB or Board), local standard setters, and reglatory bodies. The growth and complexity of financial disclosre is also drawing significant attention from financial statement preparers, and most importantly, the sers of financial statements. Even thogh there is no formal definition of the disclosre overload isse, from the different discssions and debates among stakeholders, three common themes have appeared, namely financial statements format or strctre, tailoring and materiality. Good Mining (International) Limited 3

6 Introdction contined Considering the prpose, activities and operations of Good Mining, for the 31 December 2014 illstrative financial statements, the ordering of the notes has been changed from the strctre sed in prior years and as sggested in paragraph 114 of IAS 1. As part of the process of improving the effectiveness of the financial statements and to enable sers to more easily obtain the relevant information, some of the notes have been reorganised according to their natre and perceived importance. The ordering of the notes is now based on nine different notes sections and is smmarised in the table below: Sections Comprising the following notes: 1. Corporate and Grop information Corporate information (Note 1A) 2. Basis of preparation and other significant acconting policies Basis of preparation (Note 2A.1) Basis of consolidation (Note 2A.2) Significant acconting jdgements, estimates and assmptions (nless inclded with the associated acconting policy note and inclded in sections below) (Note 2B) Changes in acconting policies and disclosres (Note 2C) Smmary of significant acconting policies (Note 2D) 3. Grop strctre Interests in joint arrangements (Note 3A) Grop information and related party disclosres (Note 3B) 4. Significant transactions and events Bsiness combinations acqisitions (Note 4A) 5. Reslts for the year Segment information (Note 5A) Operating profit/(loss) (Note 5B) Revene (Note 5C) Income tax (Note 5D) Earnings per share (Note 5E) 6. Invested capital Exploration and evalation assets (Note 6A) Mine properties (Note 6B) Property, plant and eqipment (Note 6C) Intangible assets (Note 6D) Impairment losses (Note 6E) Commitments (Note 6F) 7. Capital and debt strctre Capital management (Note 7A) Issed capital (Note 7B) Financial instrments inclding interest-bearing loans and borrowings, derivative financial instrments and financial risk management objectives and policies (Note 7C) Dividends paid and proposed (Note 7D) 8. Working capital Inventories (Note 8A) Trade and other receivables (Note 8B) Cash and short-term deposits (Note 8C) 9. Other Provisions (Note 9A) Acconts payable and accred liabilities (Note 8D) Contingencies (Note 9B) Events after the reporting date (Note 9C) Standards issed bt not yet effective (Note 9D) The above order and groping of notes reflects how those charged with governance of the Grop viewed and managed the Grop dring the crrent period. This order and groping also reflects the views of key stakeholders that we engaged with in the formlation of this year s financial statements. Good Mining (International) Limited 4

7 Introdction contined By strctring the notes according to their natre and perceived importance, a ser may more easily be able to extract the more relevant information soght. In addition, the significant acconting policies cold alternatively be placed within the same note as the related qalitative and qantitative disclosres to provide a more holistic discssion for sers of the financial statements. Entities may find that other strctres are better at enhancing disclosre effectiveness. The approach smmarised above and throghot these illstrative financial statements is only meant to illstrate that IFRS allows for alternative strctres. Examples of sch alternate strctres may inclde the aggregation of acconting policies, as well as key jdgements and estimates, and the impact of new standards with qantitative disclosres. Entities may also consider re-writing their acconting policies in plain English in order to improve readability of the financial report. Entities shold careflly assess their entity-specific circmstances and nderstand the preferences of the primary sers before deciding on the notes strctre. Applying the concept of materiality reqires jdgement, in particlar, in relation to matters of presentation and disclosre, and may be another case of the perceived disclosre overload problem. IFRS provide a set of minimm disclosre reqirements, which in practice, is too often complied with withot consideration of the information s relevance for the specific entity. That is, if the transaction or item is immaterial to the entity, then it is not relevant to sers of financial statements, in which case, IFRS does not reqire that the item be disclosed. If immaterial information is inclded in the financial statements, the amont of information can potentially redce the transparency and seflness of the financial statements as the material, and ths relevant information, lose prominence. As explained above, the primary prpose of these financial statements is to illstrate how the most commonly applicable disclosre reqirements can be met. Therefore, they inclde disclosres that may, in practice, be deemed not material to Good Mining. It is therefore essential that entities consider their entity-specific circmstances when determining which disclosres to inclde. These financial statements are not intended to act as gidance for making the materiality assessment; they mst always be tailored to ensre that an entity s financial statements reflect and portray the entity s specific circmstances and the entity s own materiality considerations. Only then will the financial statements provide decision-sefl financial information. For more gidance on how to improve disclosre effectiveness, please refer to EY s pblication Applying IFRS: Improving Disclosre Effectiveness (Jly 2014). Other illstrative financial statements We provide a nmber of indstry-specific illstrative financial statements and illstrative financial statements addressing specific circmstances that yo may consider. The entire series of illstrative financial statements comprises: Good Grop (International) Limited Good Grop (International) Limited Illstrative interim condensed consolidated financial statements Good First-time Adopter (International) Limited Good Insrance (International) Limited Good Investment Fnd Limited (Eqity) Good Investment Fnd Limited (Liability) Good Real Estate Grop (International) Limited Good Constrction Grop (International) Limited Good Mining (International) Limited Good Petrolem (International) Limited Good Mining (International) Limited 5

8 Introdction contined International Financial Reporting Standards The abbreviation IFRS is defined in paragraph 5 of the Preface to International Financial Reporting Standards to inclde standards and interpretations approved by the IASB, and International Acconting Standards (IASs) and Standing Interpretations Committee interpretations issed nder previos Constittions. This is also noted in paragraph 7 of IAS 1 Presentation of Financial Statements and paragraph 5 of IAS 8 Acconting Policies, Changes in Acconting Estimates and Errors. Ths, when financial statements are described as complying with IFRS, it means that they comply with the entire body of prononcements sanctioned by the IASB. This incldes the IAS, IFRS and Interpretations originated by the IFRS Interpretations Committee, or the former SIC. International Acconting Standards Board (IASB) The IASB is the independent standard-setting body of the IFRS Fondation (an independent, not-for-profit private sector organisation working in the pblic interest). The IASB members (crrently 16 fll-time members) are responsible for the development and pblication of IFRSs, inclding International Financial Reporting Standard for Small and Medim-sized Entities (IFRS for SMEs) and for approving interpretations of IFRS as developed by the IFRS Interpretations Committee. In flfilling its standard-setting dties, the IASB follows a de process of which the pblication of consltative docments, sch as discssion papers and exposre drafts, for pblic comment is an important component. The IFRS Interpretations Committee (Interpretations Committee) The Interpretations Committee is a committee appointed by the IFRS Fondation Trstees that assists the IASB in establishing and improving standards of financial acconting and reporting for the benefit of sers, preparers and aditors of financial statements. The Interpretations Committee addresses isses of reasonably widespread importance, rather than isses of concern to only a small set of entities. These inclde any newly identified financial reporting isses not addressed in IFRS. The Interpretations Committee also advises the IASB on isses to be considered in the annal improvements to IFRS project. Acconting policy choices Acconting policies are broadly defined in IAS 8 and incldes not jst the explicit elections provided for in some standards, bt also other conventions and practices that are adopted in applying principle-based standards. In some cases, IFRS permits more than one acconting treatment for a transaction or event. Preparers of financial statements shold select the treatment that is most appropriate to their bsiness and the relevant circmstances as their acconting policy. IAS 8 reqires an entity to select and apply its acconting policies consistently for similar transactions, events and/or conditions, nless an IFRS specifically reqires or permits categorisation of items for which different policies may be appropriate. Where an IFRS reqires or permits sch categorisation, an appropriate acconting policy is selected and applied consistently to each category. Therefore, once a choice of one of the alternative treatments has been made, it becomes an acconting policy and mst be applied consistently. Changes in acconting policy shold be made only if reqired by a standard or interpretation, or if the change reslts in the financial statements providing reliable and more relevant information. In this pblication, when a choice is permitted by IFRS, the Grop has adopted one of the treatments as appropriate to the circmstances of the Grop. In these cases, the commentary provides details of which policy has been selected, describes the reasons for this policy selection, and smmarises the difference in the disclosre reqirements. Financial review by management Many entities present a financial review by management that is otside the financial statements. IFRS does not reqire the presentation of sch information, althogh IAS 1.13 gives a brief otline of what may be inclded in sch a report. The IASB issed an IFRS Practice Statement, Management Commentary, in December 2010, which provides a broad non-binding framework for the presentation of a management commentary that relates to financial statements prepared in accordance with IFRS. If an entity decides to follow the gidance in the Practice Statement, management is encoraged to explain the extent to which the Practice Statement has been followed. A statement of compliance with the Practice Statement is permitted only if it is followed in its entirety. Frther, the content of a financial review by management is often determined by local market reqirements or isses specific to a particlar jrisdiction. No financial review by management has been inclded for the Grop. Good Mining (International) Limited 6

9 Introdction contined IFRS as at 31 Agst 2014 As a general approach, these illstrative financial statements do not early adopt standards or amendments before their effective date. The standards and interpretations applied in these illstrative financial statements are those that were in isse as at 31 Agst 2014 and effective for annal periods beginning on or after 1 Janary Standards issed, bt not yet effective, as at 1 Janary 2014, have not been early adopted. For details of other standards and interpretations issed bt not yet effective that may apply to yor particlar entity, refer to either the commentary sections contained herein, or to Good Grop (International) Limited 2014 illstrative financial statements, for frther details and the appropriate illstrative disclosres. It is important to note that these illstrative financial statements will reqire continal pdating as standards are issed and/or revised. Users of this pblication are cationed to check that there has been no change in reqirements of IFRS between 31 Agst 2014 and the date on which their financial statements are athorised for isse. In accordance with paragraph 30 of IAS 8, specific disclosre reqirements apply for standards and interpretations issed bt not yet effective (see Note 9D of these illstrative financial statements). Frthermore, if the financial year of an entity is other than the calendar year, new and revised standards applied in these illstrative financial statements may not be applicable. For example, the Grop has applied IFRIC 21 Levies for the first time in these illstrative financial statements. An entity with a financial year that commences from, for example, 1 Jly and ends on 30 Jne mst apply IFRIC 21 for the first time in the annal financial statements beginning on 1 Jly Therefore, IFRIC 21 is not applicable in the financial statements with a year-end of 30 Jne 2014, nless it volntarily chooses to early-adopt. Changes in the 2014 edition of Good Mining (International) Limited annal financial statements The standards and interpretations listed below have become effective since 30 September 2013 for annal periods beginning 1 Janary While the list of new standards is provided below, not all of these new standards will have an impact on these illstrative financial statements. To the extent that these illstrative financial statements have changed since the 2013 edition de to changes in standards and interpretations, we have indicated what has changed in Note 2C. Also, as explained above, as part of the process of improving the effectiveness of the financial statements and to enable sers to more easily obtain the relevant information, the notes in Good Mining have been reordered according to their natre and perceived importance. Other changes from the 2013 edition have been made in order to reflect practice developments and to improve the overall qality of the illstrative financial statements. Changes to IFRS The following new standards and amendments became effective as of 1 Janary 2014: Investment Entities Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosre of Interests in Other Entities and IAS 27 Separate Financial Statements Offsetting Financial Assets and Financial Liabilities Amendments to IAS 32 Financial Instrments: Presentation Recoverable Amont Disclosres for Non-Financial Assets Amendments to IAS 36 Impairment of Assets Novation of Derivatives and Contination of Hedge Acconting Amendments to IAS 39 Financial Instrments: Recognition and Measrement IFRIC 21 Levies Improvements to IFRSs Cycle: Amendments to IFRS 13 Short-term receivables and payables Improvements to IFRSs Cycle: Amendments to IFRS 1 Meaning of effective IFRSs Not all of these standards and amendments impact the Grop s consolidated financial statements. If a standard or amendment affects the Grop, it is described, together with the impact, in Note 2C of these financial statements. Good Mining (International) Limited 7

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11 Good Mining (International) Limited Consolidated Financial Statements 31 December 2014 Good Mining (International) Limited 9

12 General information Directors T Warington (Chairman) B Dogger (Chief Exective Officer) M Hopester R Bemberton M Toolman M Herbert T Whelands K Choppington L Higglay F MacGillson Company Secretary V Tidiman Registered Office Homefire Hose Ashdown Sqare, Metalcity Metalville Solicitor Solicitors & Co. 7 Scott Street, Metalcity Metalville Bankers Bank Plc 10 George Street, Metalcity Metalville Aditor Chartered Accontants & Co. 17 Metalville High Street, Metalcity Metalville Good Mining (International) Limited 10

13 Independent aditors report to shareholders of Good Mining (International) Limited We have adited the accompanying consolidated financial statements of Good Mining (International) Limited and its sbsidiaries (the Grop), which comprise the consolidated statement of financial position as at 31 December 2014 and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in eqity and consolidated statement of cash flows for the year then ended, and a smmary of significant acconting policies and other explanatory information. Management s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for sch internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether de to frad or error. Aditors responsibility Or responsibility is to express an opinion on these consolidated financial statements based on or adit. We condcted or adit in accordance with International Standards on Aditing. Those standards reqire that we comply with ethical reqirements and plan and perform the adit to obtain reasonable assrance abot whether the financial statements are free from material misstatement. An adit involves performing procedres to obtain adit evidence abot the amonts and disclosres in the consolidated financial statements. The procedres selected depend on the aditors jdgement, inclding the assessment of the risks of material misstatement of the consolidated financial statements, whether de to frad or error. In making those risk assessments, the aditors consider internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design adit procedres that are appropriate for the circmstances, bt not for the prpose of expressing an opinion on the effectiveness of the entity s internal control. An adit also incldes evalating the appropriateness of acconting policies sed and the reasonableness of acconting estimates made by management, as well as evalating the overall presentation of the consolidated financial statements. We believe that the adit evidence we have obtained is sfficient and appropriate to provide a basis for or adit opinion. Opinion In or opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Grop as of 31 December 2014, and of its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards. Chartered Accontants & Co. 27 Janary 2015 Metalcity Metalville Commentary The adit report has been prepared in accordance with ISA 700 Forming an Opinion and Reporting on Financial Statements. The aditor s report may differ depending on the reqirements specific to a relevant jrisdiction. Good Mining (International) Limited 11

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15 Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2014 Year ended Revene 31 December December 2013 Notes US$ million US$ million 5C 3,828 2,917 IAS 1.49 IAS 1.51(b) IAS 1.10(b) IAS 1.10A IAS 1.51(c) IAS 1.51(d)(e) IAS 18.35(b)(i) IAS 1.82(a) Cost of sales (1,616) (1,232) IAS Gross profit 2,212 1,685 IAS 1.85,103 Other income IAS Share of profit of joint ventre 3A IAS 1.82(c) Selling and distribtion expenses 5B (133) (94) Other operating expenses 5B (75) (45) IAS General and administrative expenses 5B (180) (205) IAS Operating profit 1,894 1,451 IAS 1.85 Finance revene 5C IAS 1.82(a) Finance costs (94) (40) IAS 1.82(b) Profit before income tax 1,824 1,436 IAS 1.85 Income tax expense 5D (779) (525) IAS 1.82(d), IAS Profit for the year 1, IAS 1.81A(a) Other comprehensive income - - IAS 1.81A(b) Total comprehensive income 1, IAS 1.81A(c) Basic and dilted earnings per ordinary share (US$ per share) 5E IAS Good Mining (International) Limited 13

16 Consolidated statement of profit or loss and other comprehensive income contined Commentary The above disclosre is an illstration of an entity that elects to present a single statement of profit or loss and other comprehensive income. It is also acceptable to present a separate statement of profit or loss and statement of other comprehensive income. The Grop does not have any items of other comprehensive income. The nil line item for other comprehensive income is inclded for illstrative prposes only. The Grop may have omitted the line item as this is nil and, hence, not material. Please refer to Good Grop (International) Limited 2014 illstrative financial statements for additional details and examples of items to be inclded in other comprehensive income. IAS 1.10 sggests titles for the primary financial statements, sch as statement of profit or loss and other comprehensive income or statement of financial position. However, entities are permitted to se other titles, e.g., income statement or balance sheet. In this set of financial statements, the Grop applies the titles sggested in IAS 1. IAS 1.99 reqires expenses to be analysed either by natre or by their fnction in the statement of profit or loss, whichever provides information that is reliable and more relevant. If expenses are analysed by fnction, information abot the natre of expenses mst be disclosed in the notes. The Grop has presented the analysis of expenses by fnction. The Grop presents operating profit in the statement of profit or loss and other comprehensive income; this is not reqired by IAS 1. The terms operating profit or operating income are not defined in IFRS. IAS 1.BC56 states that the IASB recognises that an entity may elect to disclose the reslts of operating activities, or a similar line item, even thogh this term is not defined. The entity shold ensre the amont disclosed is representative of activities that wold normally be considered to be operating. In practice, other titles, sch as EBIT, are sometimes sed to refer to an operating reslt. The Grop has presented its share of profit of a joint ventre sing the eqity method nder IAS 28 Investments in Associates before the line-item operating profit. IAS 1.82(c) reqires share of the profit or loss of associates and joint ventres acconted for sing the eqity method to be presented in a separate line item on the face of the statement profit or loss. Reglators or standard-setters in certain jrisdictions recommend or accept share of the profit/loss of eqity method investees being presented with reference to whether the operations of the investees are closely related to that of the reporting entity. This can reslt in the share of profit/loss of certain eqity method investees being inclded in the operating profit, while share of profit/loss of other eqity method investees being exclded from operating profit. In other jrisdictions, reglators or standard-setters believe that IAS 1.82(c) reqires that share of profit/loss of eqity method investees to be presented as one line item (or, alternatively, as two or more adjacent line items, with a separate line for the sbtotal). This may case diversity in practice. IAS reqires presentation of basic and dilted earnings per share (EPS) for discontined operations either on the face of the statement of profit or loss or in the notes to the financial statements. The Grop does not have any discontined operations so these disclosres are not relevant. The EPS information for contining operations is disclosed on the face of the statement of profit or loss and other comprehensive income. Good Mining (International) Limited 14

17 Consolidated statement of financial position as at 31 December 2014 Assets Non-crrent assets IAS 1.10(a) IAS 1.51(b)(c) Notes US$ million US$ million IAS 1.51(d)(e) IAS 1.60 IAS 1.66 IAS 1.54(a), IFRS 6.15 IFRS 6.23 Exploration and evalation assets 6A Mine properties 6B 4,664 3,493 IAS 1.54(a) Property, plant and eqipment 6C IAS 1.54(a) Intangible assets 6D IAS 1.54(c) Inventories 8A 3 3 IAS 1.54(g) Investment in joint ventre 3A IAS 1.54(e) Restricted cash 8C IAS Deferred tax assets 5D Total non-crrent assets 5,964 4,456 IAS 1.54(o), 56 Crrent assets IAS 1.60 IAS 1.66 Inventories 8A IAS 1.54(g) Trade and other receivables 8B IAS 1.54(h) IFRS 7.8(f) Cash and short-term deposits 8C IAS 1.54(i) Derivative financial assets 7C Total crrent assets 1,221 1,220 Total assets 7,185 5,676 IAS 1.54(d) IFRS 7.8(a) Eqity and liabilities Eqity Issed capital 7B 1,564 1,564 Retained earnings 3,020 2,325 Total shareholders eqity 4,584 3,889 Non-crrent liabilities Interest-bearing loans and borrowings 7C Deferred tax liabilities 5D IAS 1.54(r) IAS 1.78(e) IAS 1.54(r) IAS 1.78(e) IAS 1.60 IAS 1.69 IAS 1.54(m) IFRS 7.8(f) IAS 1.54(o) IAS 1.56 Provisions 9A IAS 1.54(l) Total non-crrent liabilities 1,536 1,018 Crrent liabilities IAS 1.60, 69 Acconts payable and accred liabilities 8D IAS 1.54(k) Taxes payable IAS 1.54(n) Interest-bearing loans and borrowings 7C IAS 1.54(m) IFRS 7.8(f) Provisions 9A IAS 1.54(l) Total crrent liabilities 1, Total liabilities 2,601 1,787 Total shareholders eqity and liabilities 7,185 5,676 Good Mining (International) Limited 15

18 Consolidated statement of financial position contined Commentary IAS 1 reqires an entity to present a statement of financial position at the beginning of the earliest comparative period when it applies an acconting policy retrospectively, makes a retrospective restatement of items in its financial statements, or reclassifies items in its financial statements (IAS 1.10(f)), and the change has a material effect on the statement of financial position. In these sitations, IAS 1.40A states that an entity mst present, at a minimm, three statements of financial position, two of each of the other primary statements and the related notes. The three statements of financial position inclde the statement of financial position as at the crrent annal period year-end, the statement of financial position as at the previos annal period year-end, and the statement of financial position as at the beginning of the previos annal period ( the opening balance sheet, often referred to as the third balance sheet). There are no new standards applied dring the crrent year which reqire the presentation of a third balance sheet. In accordance with IAS 1.60, the Grop has presented crrent and non-crrent assets, and crrent and non-crrent liabilities, as separate classifications in the statement of financial position. IAS 1 does not reqire a specific order of the two classifications. The Grop has elected to present non-crrent assets and liabilities before crrent assets and liabilities. IAS 1 reqires entities to present assets and liabilities in order of liqidity when this presentation is reliable and more relevant. Good Mining (International) Limited 16

19 Consolidated statement of changes in eqity for the year ended 31 December 2014 Issed capital Retained earnings Total eqity IAS 1.10(c) IAS 1.51(b)(c) Notes US$ million US$ million US$ million IAS 1.51(d)(e) Balance at 1 Janary B 836 1,554 2,390 Profit for the year Other comprehensive income IAS 1.106(d)(i) IAS 1.106(d)(ii) Total comprehensive income IAS 1.106(a) Isse of share capital 7B Dividends paid 7D - (140) (140) Balance at 1 Janary ,564 2,325 3,889 Profit for the year - 1,045 1,045 Other comprehensive income IAS 1.106(d)(iii) IAS 1.106(d) (iii), 107 IAS 1.106(d)(i) IAS 1.106(d)(ii) Total comprehensive income - 1,045 1,045 IAS 1.106(a) Dividends paid 7D - (350) (350) Balance at 31 December ,564 3,020 4,584 IAS 1.106(d)(iii), 107 Good Mining (International) Limited 17

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21 Consolidated statement of cash flows for the year ended 31 December December December 2013 IAS 1.51(b)(c) IAS 1.10(d) Notes US$ million US$ million IAS 1.51(d)(e) Cash flows from operating activities IAS 7.10, 18(b) Profit before income tax from operations 1,824 1,436 Adjstments to reconcile profit before tax to net cash flows: IAS 7.20(b) Depreciation, depletion and amortisation 5B Impairment of mine properties 5B 33 9 Impairment of exploration and evalation assets 5B 5 6 Impairment of goodwill 6E 15 Reversal of previosly impaired exploration and evalation assets 5B (16) Unsccessfl exploration and evalation expenditres 6A (Gain) on sale of mine properties 5B (39) (58) (Gain)/loss on sale of property, plant and eqipment 5B (11) 11 (Gain) on sale of exploration and evalation assets 5B (1) Unrealised gain on derivative financial instrments (2) (9) Unwinding of discont on rehabilitation 9A Share of joint ventre profit (16) (25) Other non-cash income and expenses 4 2 Add: finance expense (disclosed in financing activities) IAS 7.20(c) Dedct: finance revene (disclosed in investing activities) (24) (25) IAS 7.20(c) Working capital adjstments: IAS 7.20(a) Change in trade and other receivables 20 (399) Change in inventories 3 (21) Change in trade and other payables relating to operating activities (71) 33 Income tax paid (584) (375) IAS 7.35 Net cash flows from operating activities 2,123 1,134 Cash flows from investing activities IAS 7.21 IAS 7.16(a) Investment in exploration and evalation assets 6A (358) (293) Expenditres on mine development (1,246) (1,539) IAS 7.16(a) Expenditres on other intangible assets 6D (5) (4) IAS 7.16(a) Expenditres on property, plant and eqipment 6C (1) (32) IAS7.16(a) Acqisition of a sbsidiary, net of cash acqired 4A (439) - IAS 7.39 Proceeds on disposal of exploration and evalation assets 23 - IAS 7.16(b) Proceeds on disposal of mine properties IAS 7.16(b) Proceeds on disposal of property, plant and eqipment assets IAS 7.16(b) Finance income from investing activities IAS 7.31 Net cash sed in investing activities (1,914) (1,721) Cash flow from financing activities IAS 7.21 Proceeds from issance of shares 7B IAS 7.17(a) Proceeds from loans and borrowings IAS 7.17(c) Payments of loans and borrowings (114) (32) IAS 7.17(d) Interest paid (64) (12) IAS 7.31 Dividends paid 7D (350) (140) IAS 7.31 Net cash (sed in)/from financing activities (197) 544 Net increase/(decrease) in cash 12 (43) Cash and cash eqivalents, beginning of period Cash and cash eqivalents, end of period 8C IAS 7.45 Good Mining (International) Limited 19

22 Consolidated statement of cash flows contined Commentary IAS 7.18 allows entities to report cash flows from operating activities sing either the direct method or the indirect method. The Grop presents its cash flows sing the indirect method. An example of the direct method is inclded at Appendix A. The Grop has reconciled profit before tax to net cash flows from operating activities. However, a reconciliation from profit after tax is also acceptable nder IAS 7 Statement of Cash Flows. IAS 7.33 permits interest paid to be shown as operating, financing or investing activities and interest received to be shown as operating or investing activities, as deemed relevant for the entity. The Grop has elected to classify interest received as cash flows from investing activities and interest paid as cash flows from financing activities. IAS 7.16 states that only expenditres that reslt in a recognised asset in the statement of financial position are eligible for classification as investing activities. Therefore, if an entity adopted a policy of expensing exploration and/or evalation costs, the related cash flows cold not be classified as part of investing activities. Instead, they wold need to be classified as part of operating activities. The Grop capitalises exploration and evalation assets in certain sitations. Therefore, the related cash flows have been classified as investing cash flows. Good Mining (International) Limited 20

23 Index to notes to the consolidated financial statements Section 1: Corporate and grop information 1A. Corporate and grop information...24 Section 2: Basis of preparation and significant acconting policies 2A.1 Basis of preparation A.2 Basis of consolidation B. Significant acconting jdgements, estimates and assmptions C. Changes in acconting policies and disclosres D. Smmary of significant acconting policies...30 Section 3: Grop strctre 3A. Interests in joint arrangements B. Grop information and related party disclosres...61 Section 4: Significant transactions and events 4A. Bsiness combinations acqisitions...63 Section 5: Reslts for the year 5A. Segment information B. Operating profit/(loss) C. Revene D. Income tax E. Earnings per share...71 Section 6: Invested capital 6A. Exploration and evalation assets B. Mine properties C. Property, plant and eqipment D. Intangible assets E. Impairment losses F. Commitments and other contingencies...78 Section 7: Capital and debt strctre 7A. Capital management B. Issed capital C. Financial instrments C.1 Interest-bearing loans and borrowings C.2 Derivative financial instrments C.3 Fair vales C.4 Financial risk management objectives and policies D. Dividends paid and proposed...86 Good Mining (International) Limited 21

24 Index to notes to the consolidated financial statements contined Section 8: Working capital 8A. Inventories B. Trade and other receivables C. Cash and short-term deposits D. Acconts payable and accred liabilities...88 Section 9: Other 9A. Provisions B. Contingencies C. Events after the reporting date D. Standards issed bt not yet effective...90 Good Mining (International) Limited 22

25 Notes to the consolidated financial statements Section 1: Corporate and grop information 1A. Corporate information The consolidated financial statements of the Grop, which comprise Good Mining (International) Limited (Good Mining, as the parent) and all of its sbsidiaries for the year ended 31 December 2014, were athorised for isse in accordance with a resoltion of the directors on 27 Janary Good Mining is a limited company incorporated and domiciled in Metalville whose shares are pblicly traded. The registered office is located at Homefire Hose, Ashdown Sqare, Metalcity, Metalville. The Grop is principally engaged in the exploration for, development of and prodction of gold bllion and gold/copper concentrate. Information on the Grop s parent and other related party relationships is presented in Note 3B. Section 2: Basis of preparation and other significant acconting policies This section provides additional information abot the overall basis of preparation that the directors consider is sefl to be relevant in nderstanding these financial statements. 2A. Basis of preparation 2A.1 Overview The consolidated financial statements of the Grop have been prepared in accordance with International Financial Reporting Standards (IFRS) as issed by the International Acconting Standards Board (IASB). The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instrments that have been measred at fair vale. The consolidated financial statements are presented in US dollars, and all vales are ronded to the nearest million (US$ million), except where otherwise indicated. Commentary Entities in certain jrisdictions may be reqired to comply with IFRS, as approved by local laws and reglations. For example, listed companies in the Eropean Union (EU) are reqired to comply with either IFRS as endorsed by the EU or IFRS as issed by the IASB. These financial statements only illstrate compliance with IFRS as issed by the IASB. 2A.2 Basis of consolidation The consolidated financial statements comprise the financial statements of the Grop as at 31 December Control is achieved when the Grop is exposed, or has rights, to variable retrns from its involvement with the investee and has the ability to affect those retrns throgh its power over the investee. Specifically, the Grop controls an investee if, and only if, the Grop has all of the following: Power over the investee (i.e., existing rights that give it the crrent ability to direct the relevant activities of the investee) Exposre, or rights, to variable retrns from its involvement with the investee The ability to se its power over the investee to affect its retrns When the Grop has less than a majority of the voting, or similar, rights of an investee, it considers all relevant facts and circmstances in assessing whether it has power over an investee, inclding: The contractal arrangement(s) with the other vote holders of the investee Rights arising from other contractal arrangements The Grop s voting rights and potential voting rights The Grop reassesses whether or not it controls an investee if facts and circmstances indicate that there are changes to one or more of the three elements of control. Consolidation of a sbsidiary begins when the Grop obtains control over the sbsidiary and ceases when the Grop loses control of the sbsidiary. Assets, liabilities, income and expenses of a sbsidiary acqired or disposed of dring the year are inclded in the consolidated statement of profit or loss and other comprehensive income from the date the Grop gains control ntil the date the Grop ceases to control the sbsidiary. Profit or loss and each component of other comprehensive income (OCI) are attribted to the eqity holders of the parent of the Grop and to the non-controlling interests, even if this reslts in the non-controlling interests having a deficit balance. When necessary, adjstments are made to the financial statements of sbsidiaries to bring their acconting policies into line with the Grop s acconting policies. All intragrop assets and liabilities, eqity, income, expenses and cash flows relating to transactions between members of the Grop are eliminated in fll on consolidation. A change in the ownership interest of a sbsidiary, withot a loss of control, is acconted for as an eqity transaction. IAS 1.10(e) IAS 1.139(a)(c) IAS 1.51(a),(b), (c) IAS (a) IAS IAS 1.138(b) IAS 1.138(c) IAS 1.112(a) IAS 1.16 IAS 1.117(a) IAS 1.51(d), (e) IFRS 10.7 IFRS 10.B38 IFRS 10.B80 IFRS 10.B86 IFRS 10.B99 IFRS 10.B94 IFRS 10.B87 IFRS 10.B86 IFRS 10.B96 IFRS 10.B98 IFRS 10.B99 Good Mining (International) Limited 23

26 Notes to the consolidated financial statements contined 2A. Basis of preparation contined 2A.3 Foreign crrencies The consolidated financial statements are presented in US dollars, which is also the parent entity s fnctional crrency and the Grop s presentation crrency. The Grop does not have any foreign operations. Transactions in foreign crrencies are initially recorded in the fnctional crrency at the rate of exchange rling at the date of the transaction. Monetary assets and liabilities denominated in foreign crrencies are translated to the spot rate of exchange rling at the reporting date. All differences are taken to the statement of profit or loss and other comprehensive income. Non-monetary items that are measred at historical cost in a foreign crrency are translated sing the exchange rates at the date of the initial transaction. Non-monetary items measred at a revaled amont in a foreign crrency are translated sing the exchange rates at the date when the fair vale was determined. Significant jdgement IAS 1.51(d) IAS IAS 21.23(a) IAS IAS 21.23(b) IAS 21.23(c) The fnctional crrency for the parent entity, each of its sbsidiaries and joint ventres, is the crrency of the primary economic environment in which the entity operates. The parent entity has determined the fnctional crrency of each entity is the US dollar. Determination of fnctional crrency may involve certain jdgements to determine the primary economic environment and the parent entity reconsiders the fnctional crrency of its entities if there is a change in events and conditions which determined the primary economic environment. Commentary Many mining bsinesses have fond that determining the fnctional crrency of their operations is complicated. Determining the fnctional crrency correctly is important becase it will, for example: (1) affect volatility of revene and operating profit reslting from exchange rate movements; (2) determine whether transactions can be hedged or not; (3) inflence the identification of embedded crrency derivatives; and (4) may give rise to temporary differences that affect profit or loss. While nder IAS 21 The Effects of Changes in Foreign Exchange Rates, an entity may select any presentation crrency, it does not have a free choice in determining its fnctional crrency. Instead, IAS 21 reqires an entity to consider the following factors in determining its fnctional crrency: a) The crrency that mainly inflences sales prices for goods and services (this will often be the crrency in which sales prices for its goods and services are denominated and settled) b) The crrency of the contry whose competitive forces and reglations mainly determine the sales prices of its goods and services c) The crrency that mainly inflences labor, material and other costs of providing goods or services (this will often be the crrency in which sch costs are denominated and settled) While the crrency referred to in (a) above will often be the crrency in which sales prices for its goods and services are denominated and settled, this is not always the case. In the mining sector, the US dollar is often sed as the contract or settlement crrency in transactions (e.g., iron ore), bt the pricing of transactions is often driven by factors nrelated to the US dollar (e.g., demand from China). When this is the case, management may conclde that the US dollar is not the crrency that mainly inflences the sales price. In the mining sector, which is international in natre, it is often difficlt to determine the crrency of the contry whose competitive forces and reglations mainly determine the sales prices of its goods and services. Therefore, (b) above will often prove to be inconclsive when a particlar mineral is mined in many different contries. It will generally be fairly straightforward to identify the crrency that mainly inflences an entity s key inpts (e.g., (c) above). In developing contries, an entity will often need to import a significant proportion of its key inpts (e.g., fel, eqipment and expatriate workers) and even local inpts in an economy with a high inflation rate will often be linked to the US dollar. In sch a case, the local crrency is less likely to be the main crrency that inflences an entity s key inpts. In most developed contries, however, the inpts tend to be denominated in the local crrency, althogh some inpts (e.g., mining eqipment) may be denominated in another crrency. As the mining sector is capital intensive, the cost of eqipment often far exceeds the operating expenses incrred. Given that eqipment is often prchased in US dollars, even in developed contries, there is a general bias towards the US dollar as the fnctional crrency. When the factors (a) to (c) above are mixed, as they often are in practice, and the fnctional crrency is not obvios, management shold se its jdgement to determine the fnctional crrency that most faithflly represents the economic effects of the nderlying transactions, events and conditions [IAS 21.12]. If the above factors are inconclsive, then an entity shold also consider the following secondary factors: Crrency in which fnds from financing activities (i.e., issing debt and eqity instrments) are generated Crrency in which receipts from operating activities are sally retained Fnctional crrency of the reporting entity that has the foreign operation as its sbsidiary, branch, associate or joint ventre Even after considering both the primary and secondary factors, the fnctional crrency of a mining entity may still not be obvios becase, for example, its revene is denominated in US dollars while virtally all expenses are denominated in its local crrency. Nevertheless, even in that sitation, management may conclde that revene, while denominated in US dollars, is in fact, inflenced by a basket of crrencies. It is therefore possible that mining companies operating in a similar environment can reach different conclsions abot their fnctional crrency. From observation, it wold appear that abot half of the mining companies otside the United States have conclded that the US dollar is their fnctional crrency. Good Mining (International) Limited 24