Material Accounting Policies DISTRIBUTION OF PROSPECTUS AND SHARE SUBSCRIPTION ORDER
Fixed Assets Fixed assets except for land, are stated based on the
acquisition cost, but excluding the daily maintenance cost, minus accumulated depreciation and accumulated impairment
losses, if any. Land is not depreciated and is stated based on the acquisition cost minus accumulated impairment, if any.
The initial acquisition cost of fixed assets includes the acquisition price including import duties and purchase taxes
that should not be credited and the costs attributable directly to bring assets to the desired location and condition
in accordance with the determined intended use. Expenses incurred after the fixed assets being used, such
as repair and maintenance expenses, would be charged to the consolidated statement of income as incurred. If the expenses
cause increase in future economic benefits from the use of the fixed assets which might exceed their normal performance, then
the expenses are capitalized as additional acquisition cost of fixed
assets. Depreciation
is calculated
based on
the straight-line method over the useful lives of the assets as
follows: Year
Building 5 - 20
Machineries and heavy equipment 4 - 8
Vehicles 4 - 8
Furniture and office equipment 4
The carrying value of fixed assets are reviewed and would be impaired if there are events or changes in certain
circumstances which indicate that the carrying value is not recoverable fully.
In every significant inspection, the inspection cost is recognized in the carrying value of fixed assets as a
replacement if
it meets
the recognition
criteria. The
capitalized significant inspection cost is amortized over the period until the next significant inspection.
The carrying amount of fixed assets is derecognized upon disposal or when no future economic benefits are expected from
its use or disposal. An item of fixed assets which is being sold or disposed, is removed from the fixed assets group along
with the accumulated depreciation and accumulated impairment associated with it. Any gain or loss arising on derecognition
of the asset is determined by the difference between the net disposal proceeds, if any, and the carrying amount the asset
and recognized in profit or loss consolidated in the year the asset is derecognized. The residual values, useful lives and
methods of depreciation and amortization are reviewed at each financial year end and will be adjusted if the study results
differ from previous estimations. Asset under construction is stated at cost and not
depreciated. Asset under construction in this case includes the entire cost including borrowing costs to make the asset
under construction works and ready for its intended use. The accumulated cost will reclassified to the appropriate fixed
asset account and depreciated when the constructed asset is completed and ready to be used for its intended use.
Deferred Stripping Costs Stripping costs are stated as production cost based on
average overburden ratio. In circumstances where the actual ratio of overburden that is the ratio between the quantity of
stripped soilrock at a certain period and the quantity of reserve portion which are produced in the same period is not
far different from the average ratio, then the stripping cost that occurs during this period is stated as production cost.
In circumstances where the actual ratio is far different from the average ratio, when the actual ratio is greater than
the average ratio, the excess of stripping cost is deferred and recorded as “deferred stripping cost”. Later, this
deferred cost will be charged as the production cost in the period when the actual ratio is much smaller than the average
ratio.
Deferred Exploration and Development Costs The exploration and development costs of significant
potential area of interests associated with mineral deposits where the mining rights is still applicable, and i the costs
are expected to be recouped through exploitation or proven reserves sales, or ii the activities have not reached the
stage when it is possible to ensure the determination of economically proven deposits or when active and significant
activities in or in connection with that area of interest are still in progress, are deferred and amortized since the
commencement of commercial production by using the method of production unit. The exploration and development costs will be
charged in the period when the Company and its subsidiaries determine the absence of future expected benefits in the area
of interest. The deferred exploration and development costs include
accumulated costs associated with the general investigation, administration and licensing, geological and geophysical, and
other costs that occur in developing a mining area before the commencement of commercial production.
The Company reviews the carrying value of exploration and development costs annually. When the carrying value exceeds
the current value of estimated production for the remaining life of the mine or mining rights period whichever is shorter,
the difference is charged to the current period. The costs associated with operating mining units and the
development cost for ongoing productions are charged at the time of occurrence.
Impairment of Assets The
Company reviews
the presence
or absence
of indications of impairment of assets at each balance sheet date
and possible adjustments to the recoverable amount whenever the circumstances indicate impairment of the assets.
Impairment loss is recognized if, and only if, the recoverable amount of assets is less than the carrying amount.
Recoverable value is the fair value minus selling cost or use value, whichever is higher. Impairment loss is recognized in
the income statement, unless the assets are presented in revalued amount recognized in other comprehensive income, as
long as the impairment loss does not exceed the revaluation surplus for that same asset.
After recognition of impairment loss, amortization of assets is adjusted in later period to allocate the revised
carrying amount of assets, net of residual value if any systematically over the remaining useful lives.
Impairment loss recognized in prior periods for assets other than goodwill may be reversed if, and only if, there is
a change in estimation used to determine the amount of recoverable
asset since
the last
impairment loss
is recognized, thus, the carrying amount of the asset is
increased to its recoverable amount. Increased carrying amount of asset which is caused by reversed impairment loss should
not exceed the carrying amount net of amortization or
depreciation if only the assets do not experience impairment loss in previous years. Reversed impairment loss is recognized
in the income statement unless the asset is presented in revalued amount which is treated as a revaluation increase.
Revenue and Expense Recognition Revenue from domestic sales is recognized when the goods
are delivered and ownership right has been moved to the customer.
Revenue from
export sales
is recognized
in accordance with the terms of sales, when the goods are shipped
FOB Shipping Point. Expenses are recognized when incurred accrual basis.
Rent revenue is recognized on the straight-line basis over the rental period.