NOTES TO FINANCIAL STATEMENTS
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31 DECEMBER 2015
GEO
ENERGY
RESOURCES
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2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
The Group as lessor
ZĞŶƚĂů ŝŶĐŽŵĞ ĨƌŽŵ ŽƉĞƌĂƟŶŐ ůĞĂƐĞƐ ŝƐ ƌĞĐŽŐŶŝƐĞĚ ŽŶ Ă ƐƚƌĂŝŐŚƚͲůŝŶĞ ďĂƐŝƐ ŽǀĞƌ ƚŚĞ ƚĞƌŵ ŽĨ ƚŚĞ ƌĞůĞǀĂŶƚ ůĞĂƐĞ ƵŶůĞƐƐ
ĂŶŽƚŚĞƌ ƐLJƐƚĞŵĂƟĐ ďĂƐŝƐ ŝƐ ŵŽƌĞ ƌĞƉƌĞƐĞŶƚĂƟǀĞ ŽĨ ƚŚĞ ƟŵĞ ƉĂƩĞƌŶ ŝŶ ǁŚŝĐŚ ƵƐĞ ďĞŶĞĮƚ ĚĞƌŝǀĞĚ ĨƌŽŵ ƚŚĞ ůĞĂƐĞĚ
ĂƐƐĞƚ ŝƐ ĚŝŵŝŶŝƐŚĞĚ͘ /ŶŝƟĂů ĚŝƌĞĐƚ ĐŽƐƚƐ ŝŶĐƵƌƌĞĚ ŝŶ ŶĞŐŽƟĂƟŶŐ ĂŶĚ ĂƌƌĂŶŐŝŶŐ ĂŶ ŽƉĞƌĂƟŶŐ ůĞĂƐĞ ĂƌĞ ĂĚĚĞĚ ƚŽ ƚŚĞ
ĐĂƌƌLJŝŶŐ ĂŵŽƵŶƚ ŽĨ ƚŚĞ ůĞĂƐĞĚ ĂƐƐĞƚ ĂŶĚ ƌĞĐŽŐŶŝƐĞĚ ĂƐ ĂŶ ĞdžƉĞŶƐĞ ŽǀĞƌ ƚŚĞ ůĞĂƐĞ ƚĞƌŵ ŽŶ ƚŚĞ ƐĂŵĞ ďĂƐŝƐ ĂƐ ƚŚĞ
lease income.
The Group as lessee
ƐƐĞƚƐ ŚĞůĚ ƵŶĚĞƌ ĮŶĂŶĐĞ ůĞĂƐĞƐ ĂƌĞ ƌĞĐŽŐŶŝƐĞĚ ĂƐ ĂƐƐĞƚƐ ŽĨ ƚŚĞ 'ƌŽƵƉ Ăƚ ƚŚĞŝƌ ĨĂŝƌ ǀĂůƵĞ Ăƚ ƚŚĞ ŝŶĐĞƉƟŽŶ ŽĨ ƚŚĞ ůĞĂƐĞ
or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included
ŝŶ ƚŚĞ ĐŽŶƐŽůŝĚĂƚĞĚ ƐƚĂƚĞŵĞŶƚ ŽĨ ĮŶĂŶĐŝĂů ƉŽƐŝƟŽŶ ĂƐ Ă ĮŶĂŶĐĞ ůĞĂƐĞ ŽďůŝŐĂƟŽŶ͘ >ĞĂƐĞ ƉĂLJŵĞŶƚƐ ĂƌĞ ĂƉƉŽƌƟŽŶĞĚ
ďĞƚǁĞĞŶ ĮŶĂŶĐĞ ĐŚĂƌŐĞƐ ĂŶĚ ƌĞĚƵĐƟŽŶ ŽĨ ƚŚĞ ůĞĂƐĞ ŽďůŝŐĂƟŽŶ ƐŽ ĂƐ ƚŽ ĂĐŚŝĞǀĞ Ă ĐŽŶƐƚĂŶƚ ƌĂƚĞ ŽĨ ŝŶƚĞƌĞƐƚ ŽŶ ƚŚĞ
ƌĞŵĂŝŶŝŶŐ ďĂůĂŶĐĞ ŽĨ ƚŚĞ ůŝĂďŝůŝƚLJ͘ &ŝŶĂŶĐĞ ĐŚĂƌŐĞƐ ĂƌĞ ĐŚĂƌŐĞĚ ĚŝƌĞĐƚůLJ ƚŽ ƉƌŽĮƚ Žƌ ůŽƐƐ͕ ƵŶůĞƐƐ ƚŚĞLJ ĂƌĞ ĚŝƌĞĐƚůLJ
ĂƩƌŝďƵƚĂďůĞ ƚŽ ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚƐ͕ ŝŶ ǁŚŝĐŚ ĐĂƐĞ ƚŚĞLJ ĂƌĞ ĐĂƉŝƚĂůŝƐĞĚ ŝŶ ĂĐĐŽƌĚĂŶĐĞ ǁŝƚŚ ƚŚĞ 'ƌŽƵƉ͛Ɛ ŐĞŶĞƌĂů ƉŽůŝĐLJ ŽŶ
borrowing costs (see below).
ZĞŶƚĂůƐ ƉĂLJĂďůĞ ƵŶĚĞƌ ŽƉĞƌĂƟŶŐ ůĞĂƐĞƐ ĂƌĞ ĐŚĂƌŐĞĚ ƚŽ ƉƌŽĮƚ Žƌ ůŽƐƐ ŽŶ Ă ƐƚƌĂŝŐŚƚͲůŝŶĞ ďĂƐŝƐ ŽǀĞƌ ƚŚĞ ƚĞƌŵ ŽĨ ƚŚĞ
ƌĞůĞǀĂŶƚ ůĞĂƐĞ ƵŶůĞƐƐ ĂŶŽƚŚĞƌ ƐLJƐƚĞŵĂƟĐ ďĂƐŝƐ ŝƐ ŵŽƌĞ ƌĞƉƌĞƐĞŶƚĂƟǀĞ ŽĨ ƚŚĞ ƟŵĞ ƉĂƩĞƌŶ ŝŶ ǁŚŝĐŚ ĞĐŽŶŽŵŝĐ ďĞŶĞĮƚƐ
from the leased asset are consumed.
/Ŷ ƚŚĞ ĞǀĞŶƚ ƚŚĂƚ ůĞĂƐĞ ŝŶĐĞŶƟǀĞƐ ĂƌĞ ƌĞĐĞŝǀĞĚ ƚŽ ĞŶƚĞƌ ŝŶƚŽ ŽƉĞƌĂƟŶŐ ůĞĂƐĞƐ͕ ƐƵĐŚ ŝŶĐĞŶƟǀĞƐ ĂƌĞ ƌĞĐŽŐŶŝƐĞĚ ĂƐ Ă
ůŝĂďŝůŝƚLJ͘ dŚĞ ĂŐŐƌĞŐĂƚĞ ďĞŶĞĮƚ ŽĨ ŝŶĐĞŶƟǀĞƐ ŝƐ ƌĞĐŽŐŶŝƐĞĚ ĂƐ Ă ƌĞĚƵĐƟŽŶ ŽĨ ƌĞŶƚĂů ĞdžƉĞŶƐĞ ŽŶ Ă ƐƚƌĂŝŐŚƚͲůŝŶĞ ďĂƐŝƐ͕
ĞdžĐĞƉƚ ǁŚĞƌĞ ĂŶŽƚŚĞƌ ƐLJƐƚĞŵĂƟĐ ďĂƐŝƐ ŝƐ ŵŽƌĞ ƌĞƉƌĞƐĞŶƚĂƟǀĞ ŽĨ ƚŚĞ ƟŵĞ ƉĂƩĞƌŶ ŝŶ ǁŚŝĐŚ ĞĐŽŶŽŵŝĐ ďĞŶĞĮƚƐ ĨƌŽŵ
the leased asset are consumed.
^ĂůĞ ĂŶĚ ůĞĂƐĞďĂĐŬ
&Žƌ ƐĂůĞ ĂŶĚ ůĞĂƐĞďĂĐŬ ƚƌĂŶƐĂĐƟŽŶ ƚŚĂƚ ƌĞƐƵůƚƐ ŝŶ Ă ĮŶĂŶĐĞ ůĞĂƐĞ͕ ĂŶLJ ĞdžĐĞƐƐ ŽĨ ƐĂůĞƐ ƉƌŽĐĞĞĚƐ ŽǀĞƌ ƚŚĞ ĐĂƌƌLJŝŶŐ
ĂŵŽƵŶƚ ŽĨ ƚŚĞ ĂƐƐĞƚ ŝƐ ĚĞĨĞƌƌĞĚ ĂŶĚ ĂŵŽƌƟƐĞĚ ŽǀĞƌ ƚŚĞ ůĞĂƐĞ ƚĞƌŵ͘ /Ĩ ƚŚĞ ƐĂůĞƐ ƉƌŽĐĞĞĚƐ ŝƐ ůĞƐƐ ƚŚĂŶ ƚŚĞ ĐĂƌƌLJŝŶŐ
ĂŵŽƵŶƚ͕ ƚŚĞ ĚĞĮĐŝƚ ǁŝůů ďĞ ĚĞĨĞƌƌĞĚ ŝŶ ƚŚĞ ƐĂŵĞ ŵĂŶŶĞƌ ĂƐ Ă ƉƌŽĮƚ ĂŶĚ ĂŵŽƌƟƐĞĚ ŽǀĞƌ ƚŚĞ ůĞĂƐĞ ƚĞƌŵ͕ ƵŶůĞƐƐ ƚŚĞƌĞ
is an impairment in value, in which case the carrying amount is reduced to its recoverable amount.
/Es EdKZ/ ^ Ͳ /ŶǀĞŶƚŽƌŝĞƐ ĂƌĞ ĐůĂƐƐŝĮĞĚ ĂƐ ĨŽůůŽǁƐ͗
z
ŽĂů ͗ dŚĞƐĞ ĂƌĞ ĐŽĂůƐ ƚŚĂƚ ĂƌĞ ĞdžƚƌĂĐƚĞĚ ĨƌŽŵ ŵŝŶŝŶŐ ĂĐƟǀŝƟĞƐ ĂŶĚ ĂǀĂŝůĂďůĞ ĨŽƌ ƐĂůĞ͘
z
ŽŶƐƵŵĂďůĞƐ ͗ dŚĞƐĞ ĂƌĞ ŐŽŽĚƐ Žƌ ƐƵƉƉůŝĞƐ ƚŽ ďĞ ĞŝƚŚĞƌ ĚŝƌĞĐƚůLJ Žƌ ŝŶĚŝƌĞĐƚůLJ ĐŽŶƐƵŵĞĚ ŝŶ ƚŚĞ ƉƌŽĚƵĐƟŽŶ
process.
z
DĂƌŬĞƟŶŐ ĐŽĂů ͗ dŚĞƐĞ ĂƌĞ ĐŽĂůƐ ƉƵƌĐŚĂƐĞĚ ǁŝƚŚ ƚŚĞ ŝŶƚĞŶƟŽŶ ƚŽ ƐĞůů ŝŶ ƚŚĞ ŶĞĂƌ ĨƵƚƵƌĞ͘
Consumables and coal inventories are stated at the lower of cost and net realisable value. The cost of coal
inventories is determined using the weighted average cost method. Costs include direct material, overburden
ƌĞŵŽǀĂů͕ ŵŝŶŝŶŐ͕ ƉƌŽĐĞƐƐŝŶŐ͕ ůĂďŽƵƌ ŝŶĐƵƌƌĞĚ ŝŶ ƚŚĞ ĞdžƚƌĂĐƟŽŶ ƉƌŽĐĞƐƐ ĂŶĚ ĂŶ ĂƉƉƌŽƉƌŝĂƚĞ ƉƌŽƉŽƌƟŽŶ ŽĨ ǀĂƌŝĂďůĞ
ĂŶĚ ĮdžĞĚ ŽǀĞƌŚĞĂĚ ĐŽƐƚƐ ĚŝƌĞĐƚůLJ ƌĞůĂƚĞĚ ƚŽ ŵŝŶŝŶŐ ĂĐƟǀŝƟĞƐ͘ EĞƚ ƌĞĂůŝƐĂďůĞ ǀĂůƵĞ ŝƐ ƚŚĞ ĞƐƟŵĂƚĞĚ ƐĞůůŝŶŐ ƉƌŝĐĞ ŝŶ ƚŚĞ
ŽƌĚŝŶĂƌLJ ĐŽƵƌƐĞ ŽĨ ďƵƐŝŶĞƐƐ͕ ůĞƐƐ ƚŚĞ ĞƐƟŵĂƚĞĚ ĐŽƐƚƐ ŽĨ ĐŽŵƉůĞƟŽŶ ĂŶĚ ĂƉƉůŝĐĂďůĞ ǀĂƌŝĂďůĞ ƐĞůůŝŶŐ ĞdžƉĞŶƐĞƐ͘
DĂƌŬĞƟŶŐ ĐŽĂů ŝŶǀĞŶƚŽƌŝĞƐ ĂƌĞ ƌĞĐŽƌĚĞĚ Ăƚ ĨĂŝƌ ǀĂůƵĞ ůĞƐƐ ĐŽƐƚƐ ƚŽ ƐĞůů͘ hŶƌĞĂůŝƐĞĚ ŐĂŝŶƐ ĂŶĚ ůŽƐƐĞƐ ĨƌŽŵ ĐŚĂŶŐĞƐ ŝŶ
fair values are reported in cost of goods sold.
