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AXIOM MINING LIMITED
ANNUAL REPORT 2015
Notes to the
financial statements
for the year ended 30 September 2015
COMPANY FINANCIAL REPORT
4. Summary of significant accounting
policies (continued)
Foreign currency transactions
Transactions in foreign currencies are translated into
the functional currency of the Company using the
exchange rates prevailing at the dates of the transactions.
Exchange differences arising from the settlement of
such transactions and from the retranslation at the year-
end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit
or loss.
Employee benefits
Salaries, annual bonuses, paid annual leave,
contributions to superannuation and the cost of non-
monetary benefits are accrued in the year in which the
associated services are rendered by employees. Where
payment or settlement is defined and the effect would be
material, these amounts are stated at their present values.
Superannuation is paid in accordance with applicable
local government legislation.
Short-term employee benefits
Provision is made for the Company’s obligation for
short-term employee benefits. Short-term employee
benefits are benefits (other than termination benefits)
that are expected to be settled wholly before 12 months
after the end of the annual reporting period in which the
employees render the related service, including wages,
salaries and sick leave. Short-term employee benefits are
measured at the (undiscounted) amounts expected to be
paid when the obligation is settled.
The Company’s obligations for short-term employee
benefits such as wages, salaries and sick leave are
recognised as a part of current trade and other payables
in the statement of financial position. The Company’s
obligations for employees’ annual leave and long service
leave entitlements are recognised as provisions in the
statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and
annual leave entitlements not expected to be settled
wholly within 12 months after the end of the annual
reporting period in which the employees render the
related service. Other long-term employee benefits are
measured at the present value of the expected future
payments to be made to employees. Expected future
payments incorporate anticipated future wage and salary
levels, durations of service and employee departures
and are discounted at rates determined by reference
to market yields at the end of the reporting period
on government bonds that have maturity dates that
approximate the terms of the obligations. Any
re-measurements for changes in assumptions of
obligations for other long-term employee benefits are
recognised in profit or loss in the periods in which the
changes occur.
The Company’s obligations for long-term employee
benefits are presented as non-current provisions in
its statement of financial position, except where the
Company does not have an unconditional right to defer
settlement for at least 12 months after the end of the
reporting period, in which case the obligations are
presented as current provisions.
Share-based compensation
The fair value of share options granted to employees is
recognised as an employee cost with a corresponding
increase in a reserve within equity. The fair value of shares
granted to service providers is recognised as an expense.
The fair value is measured at grant date using the
binomial lattice model or the Black Scholes option pricing
model, as appropriate, taking into account the terms and
conditions upon which the options were granted. Where
the employees have to meet vesting conditions before
becoming unconditionally entitled to the options, the
total estimated fair value of the options is spread over the
vesting period, taking into account the probability that the
options will vest.
During the vesting period, the number of share options
that is expected to vest is reviewed. Any adjustment
to the cumulative fair value recognised in prior years
is charged or credited to the profit or loss for the year
of the review, unless the original employee expenses
qualify for recognition as an asset, with a corresponding
adjustment to the reserve. On vesting date, the amount
recognised as an expense is adjusted to reflect the
actual number of options that vest (with a corresponding
adjustment to the reserve) except where forfeiture is
only due to not achieving vesting conditions that relate
to the market price of the Company’s shares. The equity
amount is recognised in the reserve until either the
option is exercised (when it is transferred to the share
premium account) or the option expires (when released
to accumulated losses).
Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset
or as part of the expenses. Receivables and payables are
stated with the amount of GST included. The net amount
of GST recoverable from, or payable to, the taxation
authority is included as a current asset or liability in the
end of the reporting period.
Cash flows are included in the statement of cash flows
on a gross basis. The GST components of cash flows
arising from investing and financing activities which are
recoverable from, or payable to, the taxation authority are
classified as operating cash flows.