Annual Results for the 12 months ended 31 Dec 2015

Notes to the consolidated financial statements

1          General information

 

Eurasia Mining Plc (the "Company") is a public limited company incorporated and domiciled in Great Britain with its registered office and principal place of business at 2^nd Floor, 85-87 Borough High Street, London SE1 1NH. The Company's shares are listed on the AIM Market of the London Stock Exchange plc. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of platinum group metals, gold and other minerals in Russia.

Eurasia Mining Plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.

2          Going concern

 

The Directors have a reasonable expectation based on a review of the Group's budgets, plans, cash flow forecasts and the ability to flex their forecast spending to suit prevailing circumstances, that the Group is a going concern for a period of at least 12 months from the date of signing the financial statements.

3          Changes in accounting policies

3.1 New and revised relevant standards that are effective for annual periods commencing on or after 1 January 2015

 

Annual Improvements to IFRSs 2010-2012 and 2011-2013 cycles)

In December 2013, the IASB has made the following amendments:

·      IFRS 1 - confirms that first-time adopters of AASs can adopt standards that are not yet mandatory, but do not have to do so.

·      IFRS 2 - clarifies the definition of 'vesting condition' and now distinguishes between 'performance condition' and 'service condition'.

·      IFRS 3 - clarifies that an obligation to pay contingent consideration is classified as financial liability or equity under the principles in IAS 32 and that all non-equity contingent consideration (financial and non-financial) is measured at fair value at each reporting date.

·      IFRS 3 - clarifies that IFRS 3 does not apply to the accounting for the formation of any joint arrangement.

·      IFRS 8 - requires disclosure of the judgements made by management in aggregating operating segments and clarifies that a reconciliation of segment assets must only be disclosed if segment assets are reported.

·      IFRS 13 confirms that short-term receivables and payables can continue to be measured at invoice amounts if the impact of discounting is immaterial.

·      IFRS 13 - clarifies that the portfolio exception in IFRS 13 (measuring the fair value of a group of financial assets and financial liabilities on a net basis) applies to all contracts within the scope of IAS 39 or IFRS 9.

·      IAS 16 and IAS 38 - clarifies how the gross carrying amount and accumulated depreciation are treated where an entity measures its assets at revalued amounts

·      IAS 24 - where an entity receives management personnel services from a third party (a management entity), the fees paid for those services must be disclosed by the reporting entity, but not the compensation paid by the management entity to its employees or directors.

·      IAS 40 - clarifies that IAS 40 and IFRS 3 are not mutually exclusive when distinguishing between investment property and owner-occupied property and determining whether the acquisition of an investment property is a business combination.

 

Defined benefit Plans: Employee Contributions (IAS 19)

The amendments clarify the accounting for defined benefit plans that require employees or third parties to contribute towards the cost of the benefits.

Under the previous version of IAS 19, most entities deducted the contributions from the cost of the benefits earned in the year the contributions were paid. However, the treatment under the 2011 revised standard was not so clear. It could be quite complex to apply, as it requires an estimation of the future contributions receivable and an allocation over future service periods.

To provide relief, changes were made to IAS 19. These allow contributions that are linked to service, but that do not vary with the length of employee service (eg a fixed % of salary), to be deducted from the cost of benefits earned in the period that the service is provided. Therefore many entities will be able to (but not be required) continue accounting for employee contributions using their existing accounting policy.

 

The adoption of these Standards and Interpretations has had no material impact on the financial statements of the Group

 

 

3.2 Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group

 

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the IASB but are not yet effective, and have not been adopted early by the Group.

Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's financial statements.

 

IFRS 9 Financial Instruments (effective 1 January 2018)

IFRS 9 represents the completion of its project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. The new standard introduces extensive changes to IAS 39's guidance on the classification and measurement of financial assets and introduces a new 'expected credit loss' model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting.

 

IFRS 15 Revenue from contracts with customers (effective 1 January 2017)

The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contracts for goods and services and IAS 11 which covers construction contracts.

The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer - so the notion of control replaces the existing notion of risks and rewards.

 

Amendments to IFRS 11 Joint Arrangements (effective 1 January 2016)

These amendments provide guidance on the accounting for acquisitions of interests in joint operations constituting a business. The amendments require all such transactions to be accounted for using the principles on business combinations accounting in IFRS 3 'Business Combinations' and other IFRSs except where those principles conflict with IFRS 11. Acquisitions of interests in joint ventures are not impacted by this new guidance.

 

IFRS 16 Leases (effective 1 January 2019)

IASB released IFRS 16 'Leases', which will require lessees to account for leases 'on-balance sheet' by recognising a 'right-of-use' asset and a lease liability.

IFRS 16 also:

·      •changes the definition of a lease;

·      •sets requirements on how to account for the asset and liability, including complexities such as non-lease elements, variable lease payments and option periods;

·      •provides exemptions for short-term leases and leases of low value assets;

·      •changes the accounting for sale and leaseback arrangements;

·      •largely retains IAS 17's approach to lessor accounting;

·      •introduces new disclosure requirements.

 

Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38 (effective 1 January 2016)

The IASB has amended IAS 16 Property, Plant and Equipment to clarify that a revenue-based method should not be used to calculate the depreciation of items of property, plant and equipment.

IAS 38 Intangible Assets now includes a rebuttable presumption that the amortisation of intangible assets based on revenue is inappropriate. This presumption can be overcome if either

·      The intangible asset is expressed as a measure of revenue (ie where a measure of revenue is the limiting factor on the value that can be derived from the asset), or

·      It can be shown that revenue and the consumption of economic benefits generated by the asset are highly correlated.

 

Equity method in separate financial statements - Amendments to IAS 27 (effective 1 January 2016)

The IASB has made amendments to IAS 27 Separate Financial Statements which will allow entities to use the equity method in their separate financial statements to measure investments in subsidiaries, joint ventures and associates.

IAS 27 currently allows entities to measure their investments in subsidiaries, joint ventures and associates either at cost or as a financial asset in their separate financial statements. The amendments introduce the equity method as a third option. The election can be made independently for each category of investment (subsidiaries, joint ventures and associates). Entities wishing to change to the equity method must do so retrospectively.

 

Sale or contribution of assets between an investor and its associate or joint venture - Amendments to IFRS 10 and IAS 28 (effective 1 January 2016)

The IASB has made limited scope amendments to IFRS 10 Consolidated financial statements and IAS 28 Investments in associates and joint ventures, which clarify the accounting treatment for sales or contribution of assets between an investor and its associates or joint ventures. They confirm that the accounting treatment depends on whether the non-monetary assets sold or contributed to an associate or joint venture constitutes a 'business' (as defined in IFRS 3 Business Combinations).

Where the non-monetary assets constitute a business, the investor will recognise the full gain or loss on the sale or contribution of assets. If the assets do not meet the definition of a business, the gain or loss is recognised by the investor only to the extent of the other investor's investors in the associate or joint venture. The amendments apply prospectively.

 

Annual Improvements to IFRSs 2012-2014 cycle (effective 1 January 2016)

The latest annual improvements clarify:

·      IFRS 5 - when an asset (or disposal group) is reclassified from 'held for sale' to 'held for distribution' or vice versa, this does not constitute a change to a plan of sale or distribution and does not have to be accounted for as such

·      IFRS 7 - specific guidance for transferred financial assets to help management determine whether the terms of a servicing arrangement constitute 'continuing involvement' and, therefore, whether the asset qualifies for derecognition

·      IFRS 7 - that the additional disclosures relating to the offsetting of financial assets and financial liabilities only need to be included in interim reports if required by IAS 34

·      IAS 19 - that when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important and not the country where they arise

·      IAS 34 - what is meant by the reference in the standard to 'information disclosed elsewhere in the interim financial report' and adds a requirement to cross-reference from the interim financial statements to the location of that information

 

Disclosure Initiative - Amendments to IAS 1 (effective 1 January 2016)

The amendments to IAS 1 Presentation of Financial Statements are made in the context of the IASB's Disclosure Initiative, which explores how financial statement disclosures can be improved. The amendments provide clarifications on a number of issues, including:

·      Materiality - an entity should not aggregate or disaggregate information in a manner that obscures useful information. Where items are material, sufficient information must be provided to explain the impact on the financial position or performance.

·      Disaggregation and subtotals - line items specified in IAS 1 may need to be disaggregated where this is relevant to an understanding of the entity's financial position or performance. There is also new guidance on the use of subtotals.

·      Notes - confirmation that the notes do not need to be presented in a particular order.

·      OCI arising from investments accounted for under the equity method - the share of OCI arising from equity-accounted investments is grouped based on whether the items will or will not subsequently be reclassified to profit or loss. Each group should then be presented as a single line item in the statement of other comprehensive income.

 

Investment entities: Applying the consolidation exception - Amendments to IFRS 10, IFRS 12 and IAS 28 (effective 1 January 2016)

Amendments made to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in associates and joint ventures clarify that:

·      The exception from preparing consolidated financial statements is also available to intermediate parent entities which are subsidiaries of investment entities.

·      An investment entity should consolidate a subsidiary which is not an investment entity and whose main purpose and activity is to provide services in support of the investment entity's investment activities.

·      Entities which are not investment entities but have an interest in an associate or joint venture which is an investment entity have a policy choice when applying the equity method of accounting. The fair value measurement applied by the investment entity associate or joint venture can either be retained, or a consolidation may be performed at the level of the associate or joint venture, which would then unwind the fair value measurement.

4          Summary of significant accounting policies

4.1 Basis of preparation

The consolidated financial statements of the Group and the Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) as adopted by the EU.

These financial statements have been prepared under the historical cost convention. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these consolidated financial statements.

4.2 Presentation of financial statements

The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements. The Group has elected to present the "Statement of comprehensive income" in one statement.

4.3 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved where the Company has all of the following:

·           Power over investee;

·           Exposure, or rights, to variable returns from its involvement with the investee;

·           The ability to use its power over the investee to affect the amount of investor's returns.

The results of subsidiaries acquired or disposed of are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling party's share of changes in equity since the date of the combination.

4.4 Business combinations

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a bargain purchase) is recognised as a profit or loss immediately.

In a business combination achieved in stages, the Group remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss or other comprehensive income, as appropriate.

4.5 Interests in joint arrangements

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The considerations made in determining significant influence or joint controls are similar to those necessary to determine control over subsidiaries.

The Group reports its interests in jointly controlled entities using the equity method of accounting, except when the investment is classified as held for sale.

Under the equity method, investments in joint ventures are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the joint venture, less any impairment in the value of individual investments. Losses of a joint venture in excess of the Group's interest in that joint venture are not recognised, unless the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture.

Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the joint venture recognised at the date of acquisition is recognised as goodwill.

The goodwill, if any is included within the carrying amount of the investment and is assessed annually for impairment as part of the investment. Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately as a profit or loss.

Unrealised gains on transactions between the Group and its joint venture are eliminated to the extent of the Group's interest in the joint venture. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

4.6 Foreign currencies

Functional and presentation currency

The individual financial statements of each group entity are prepared in the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in GBP, which is the functional and the presentation currency of the Company.

 

Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

 

Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

• income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

• all resulting exchange differences are recognised as a separate component of other comprehensive income.

 

4.7 Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.

Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

All equity-settled share-based payments are ultimately recognised as an expense in the profit or loss with a corresponding credit to "Share-based payments reserve".

Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate share premium. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting or if the share options vest but are not exercised.

When share options lapse or are forfeited the respective amount recognised in the Share-based payment reserve is reversed and credited to accumulated profit and loss reserve.

4.8 Revenue

Revenue comprises project management services to external customers (excluding VAT). Consideration receivable from customers is only recorded as revenue to the extent that the Company has performed its contractual obligations in respect of that consideration.

4.9 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

 

Current tax

The tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the statement of financial position date.

 

Deferred tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill, initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date  and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

4.10 Property, plant and equipment

Freehold properties held for administrative purposes, are stated in the statement of financial position at cost.

Fixtures and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

The estimated useful lives are as follows:

Property                                 30 years

Office equipment                    3 years

Furniture and fittings              5 years

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

4.11 Intangible assets

Exploration and evaluation of mineral resources

 

Exploration and evaluation expenditure comprises costs that are directly attributable to:

• researching and analysing existing exploration data;

• conducting geological studies, exploratory drilling and sampling;

• examining and testing extraction and treatment methods; and/or

• compiling prefeasibility and feasibility studies.

Exploration expenditure relates to the initial search for deposits with economic potential. Evaluation expenditure arises from a detailed assessment of deposits that have been identified as having economic potential.

Such capitalised evaluation expenditure is reviewed for impairment at each statement of financial position date. The review is based on a status report regarding the Group's intentions for development of the undeveloped property. Subsequent recovery of the resulting carrying value depends on successful development of the area of interest or sale of the project.

If a project does not prove viable, all irrecoverable costs associated with the project net of any related impairment provisions are written off.

4.12 Impairment testing intangible assets and property, plant and equipment

At each statement of financial position date, the Group reviews the carrying amounts of the assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell 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 for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.

A reversal of an impairment loss of the assets is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

4.13 Financial instruments

Financial assets and liabilities are recognised on the group's statement of financial position when the group has become a party to the contractual provisions of the instrument.

 

Financial assets

 

Loans and receivables

Trade receivables, loans, cash and cash equivalents, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured initially fair value plus transaction costs and subsiquently at amortised cost using the effective interest method less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables where the recognition of interest would be immaterial.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and on deposit with banks.

 

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each statement of financial position date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account.

When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement. Impairment losses recognised previously on debt securities are reversed through the income statement when the increase can be related objectively to an event occurring after the impairment loss was recognised in the income statement.

 

Revision in timing of cash flows

Where there is a change in the planned timing of repayment of loans or receivables the carrying amount of these financial assets or liabilities are adjusted to reflect the revised estimated cash flows. The present value of the estimated future cash flows is computed by reference to the effective interest rate of the item, the adjustment is recognised in profit or loss as income or expense.

 

Financial liabilities and equity instruments issued by the Group

 

Classification as debt or equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Where the contractual liabilities of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities, and are presented as such in the statement of financial position. Finance costs and gains or losses relating to financial liabilities are included in the income statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any features meeting the definition of a financial liability then such capital is classed as an equity instrument.  Dividends and distributions relating to equity instruments are debited direct to equity.

 

Other financial liabilities

Other financial liabilities, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

4.14 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive directors of the Group that make the operating decisions.

5          Critical accounting judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

5.1 Investments in subsidiaries

The Company has a holding of 48.33% in the BVI registered company Energy Resources Asia Limited (the "ERA").

Directors consider the ERA to be a subsidiary of the Company despite holding less than 50% of the voting power of the entity based on the fact that the Company has the ability to use its power over the investee to affect the amount of the investor's returns.

5.2 Key sources of estimation uncertainty

The following are the key assumptions / uncertainties at the statement of financial position date, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

5.2.1 Share-based payments

The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Group has made estimates as to the volatility of its own shares, the probable life of options granted and the time of exercise of those options. The model used by the Group is the Black-Scholes valuation model.

5.2.2 Recoverability of other financial assets

The majority of other financial assets represent loans provided to subsidiary and joint venture, which are associated with funding of mineral exploration and development projects. The recoverability of such loans is dependent upon the discovery of economically recoverable reserves, obtaining of regulatory approval for the extraction of such reserves, the ability of the Company to maintain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.

 

5.2.3 Valuation of projects

The Group reported acquisition of additional interest in another company, which previously was accounted as interest in the joint arrangements. Following the acquisition the acquiree was reclassified to a Group's subsidiary. On the acquisition the Group estimated fair values of the net assets acquired by applying (i) net present value ("NPV") method to the parts of the business projects in which is at advance stage and cash flows are imminent subject to regulatory approvals and (ii) zero value to the parts of the business projects in which require further significant investments before they get to the stage where they will be able to generate cash flows.

In assessment of NPV the Group estimated future cash flows using commodity prices and currency exchange rates prevailing at the time of acquisition. Rate to discount future cash flows was adjusted for various risks including country and political risks.

6          Segmental information

 

During the year under review Management identified the group as one operating segment being investing in exploration for and development of platinum group metals, gold and other minerals in Russia. This one segment is monitored and strategic decisions are made based upon it and other non-financial data collated from the on-going exploration activities.

The formats of financial reports that are reported to the Chief Operating Decision Maker are consistent with those presented in the annual financial statements.

7          Employees

 

Average number of staff (excluding non-executive directors) employed throughout the year was as follows:

	2015	2014
By the Company	5	5
By the Group	19	19

8          Loss for the year

 

Loss for the year has been arrived at after charging:

	Year to 31 December 2015		Year to 31 December 2014
	Group	Company	Group	Company
	£	£	£	£
Staff benefits expense:
Wages, salaries and directors fees (note 22 )	314,432	249,651	316,604	255,957
Social security costs	26,429	10,425	31,718	16,243
Other short term benefits	16,141	16,141	19,000	19,000
	357,002	276,217	367,322	291,200
Audit fees payable to the company's auditor for the audit of the annual Group's accounts	28,487	31,424	31,424	31,424
	28,487	31,424	31,424	31,424

 

 

9          Other gains and losses

	Year to 31 December 2015		Year to 31 December 2014
	Group	Company	Group	Company
	£	£	£	£
Loss on disposal of investments*	-	-	(168,942)	(173,872)
Bargain purchase gain**	-	-	1,327,356	-
Net foreign exchange (loss)/profit	(1,019,838)	564	(2,020,368)	(9,337)
	(1,019,838)	564	(861,954)	(183,209)

 

*Within the loss on disposal of investments amount of £157,370 was recognised by the Group (£162,300 by the Company) as a loss on disposal of the 20% interest in the ZAO Terskaya Mining Company in exchange for the introduction of a strategic investor providing funding at a significant premium to the share price at the time of the deal.

**Bargain purchase gain represents the gain recognised by the Group on the acquisition of the remaining 50% of jointly controlled Urals Alluvial Platinum Limited from its joint venture partner.

10        Income taxes

	Year to 31 December 2015		Year to 31 December 2014
	Group	Company	Group	Company
	£	£	£	£
(Loss)/profit before tax	(1,687,808)	(522,174)	(502,500)	158,357
Current tax at 20% (2014: 21%)	(337,562)	(104,435)	(105,525)	33,255
Adjusted for the effect of:
Expenses not deductible for tax purposes		-		-
Profits not subject to tax	-	-	-	-
Tax losses carried forward	(337,562)	(104,435)	(105,525)	33,255
Tax liability	-	-	-	-

There was no tax payable for the year ended 31 December 2015 (2014: £nil) due to the Group and the Company having taxable losses.

The Group's business operations currently comprise mining projects in Russia, which are all currently at an exploration stage. The Group has tax losses of £15,024,814 carried forward on which no deferred tax asset is recognised. These losses may affect the future tax position by way of offset against profits as and when mining projects reach a development stage.

 

The deferred asset arising from the accumulated tax losses has not been recognised due to insufficient evidence of timing of suitable taxable profits against which it can be recovered.

 

 

 

11        Property, plant and equipment

 

Group property, plant and equipment

	Property	Plant and machinery	Office fixture and fittings	Total
	£	£	£	£
Cost
Balance at 1 January 2014	23,391	-	43,812	67,203
Acquisitions through business combinations	5,135	110,621	18,945	134,701
Disposals	-	-	(174)	(174)
Exchange differences	(4,417)	(38,137)	(7,727)	(50,281)
Balance at 31 December 2014	24,109	72,484	54,856	151,449
Additions	-	-	633	633
Disposals	-	-	(1,162)	(1,162)
Exchange differences	(1,461)	(13,910)	(2,789)	(18,160)
Balance at 31 December 2015	22,648	58,574	51,538	132,760
Depreciation
Balance at 1 January 2014	-	-	(41,645)	(41,645)
Acquisitions through business combinations	(540)	(106,938)	(17,533)	(125,011)
Disposals	-	-	174	174
Depreciation expense	(50)	(524)	(1,123)	(1,697)
Exchange differences	186	36,893	7,250	44,329
Balance at 31 December 2014	(404)	(70,569)	(52,877)	(123,850)
Disposals	-	-	1,162	1,162
Depreciation expense	(82)	(805)	(1,049)	(1,936)
Exchange differences	78	13,543	2,618	16,239
Balance at 31 December 2015	(408)	(57,831)	(50,146)	(108,385)
Carrying amount:
at 31 December 2015	22,240	743	1,392	24,375
at 31 December 2014	23,705	1,915	1,979	27,599

 

 

 

Company's office fixture and fittings

		2015	2014
		£	£
Cost
Balance at 1 January		40,447	40,447
Additions		633	-
Disposal		(1,162)	-
Balance at 31 December		39,918	40,447
Depreciation
Balance at 1 January		(39,362)	(38,280)
Depreciation expense		(1,013)	(1,082)
Disposals		1,162	-
Balance at 31 December		(39,213)	(39,362)
Carrying amount		705	1,085

 

The Group's and Company's property, plant and equipment are free from any mortgage or charge.

 

12        Intangible assets

 

In 2015 intangible assets represented only capitalised costs associated with Group's exploration, evaluation and development of mineral resources.

		2015	2014
		£	£
Cost
Balance at 1 January		3,276,976	-
Acquisitions through business combinations		-	4,652,378
Additions		516,701	228,512
Exchange differences		(592,951)	(1,603,914)
Balance at 31 December		3,200,726	3,276,976

 

The Company did not directly own any intangible assets at 31 December 2015 (2014 - nil)

 

 

 

13        Significant subsidiaries

 

Details of the Company's significant subsidiaries at 31 December 2015 are as follows:

 

Name of subsidiary	Place of incorporation	Proportion of ordinary shares held	Principal activity
Urals Alluvial Platinum Limited	Cyprus	100%	Holding Company
ZAO Eurasia Mining Service	Russia	100%	Holding Company
ZAO Kosvinsky Kamen	Russia	75%	Mineral Evaluation
ZAO Terskaya Mining Company	Russia	80%	Mineral Evaluation
ZAO Yuksporskaya Mining Company	Russia	100%	Mineral Evaluation
Eurasia Mining (UK) Limited	UK	100%	Holding Company
Energy Resources Asia Limited*	BVI	48.33%	Mineral Evaluation

 

* In 2011 the Group signed the Memorandum of Understanding (the "MOU") to acquire an interest in the Kamushanovsky uranium project in Kyrgyzstan. To facilitate the MOU, the Group has nominated Energy Resources Asia Limited (the "ERA"), a British Virgin Islands registered company. During 2011 the Group raised $486,000 (£299,960) net of expenses on the market to fund acquisition and during the same period the Group invested $602,000 (£389,392) (note 14 ) towards the acquisition of interest in the company holding Kamushanovsky licence. Following this investment work has continued on completing a feasibility study for the mining of this project. The legal holder of the Kamushanovsky licence is negotiating a sale of all or part of the deposit and it is expected that the investment made by the Group will be refunded to the Group at profit.

 

Directors consider ERA to be a subsidiary of the Company despite holding only 48.33% of the voting power of the entity based on the fact that the Company has the ability to use its power over the investee to affect the amount of the Company's returns.

 

The Company's investments in subsidiaries presented on the basis of direct equity interest and represent the following:

		2015	2014
		£	£
Investment in subsidiaries		1,277,489	145,243
		1,277,489	145,243

The Company increased investment in subsidiaries following optimisation of its structure and closing its intermediary Cyprus subsidiary Eurasia Investments Limited (the "EIL"). The Company provided EIL with the loan to invest into the then joint venture Urals Alluvial Platinum (the "UAP"). In 2014 the UAP became 100% subsidiary of the Company and in 2015 after closing of the EIL the loan to the EIL was converted into Investment into the UAP.

 

 

Subsidiary with material non-controlling interests ("NCI")

 

Summary of non-controlling interest

		2015	2014
		£	£
As at 1 January		(592,761)	261,947
NCI arising on the acquisition of subsidiary		-	(377,352)
Loss attributable to NCI		(315,342)	(597,765)
Exchange differences		110,925	120,409
As at 31 December 2014		(797,178)	(592,761)

 

Non controlling interest on subsidiary basis

		2015	2014
		£	£
Energy Resources Asia Limited		286,558	278,013
ZAO Kosvinsky Kamen		(494,610)	(284,487)
ZAO Terskaya Mining Company		(589,126)	(586,287)
		(797,178)	(592,761)

 

Energy Resources Asia Limited

		2015	2014
		£	£
Non-current assets		406,702	387,637
Current assets		-	139
Total assets		406,702	387,776
Current liabilities		(2,946)	(1,698)
Total liabilities		(2,946)	(1,698)
Net assets		403,756	386,078
Equity attributable to owners of the parent		117,198	108,065
Non-controlling interests		286,558	278,013
Loss for the year attributable to owners of the parent		(657)	(111)
Loss for the year attributable to NCI		(613)	(118)
Loss for the year		(1,270)	(229)
Total comprehensive income for the year attributable to owners of the parent		9,133	15,027
Total comprehensive income for the year attributable to NCI		8,545	16,066
Total comprehensive income for the year		17,678	31,093

 

 

 

ZAO Kosvinsky Kamen

		2015	2014
		£	£
Non-current assets		2,655,286	3,123,829
Current assets		133,514	135,934
Total assets		2,788,800	3,259,763
Non-current liabilities		(4,781,766)	(4,415,526)
Current liabilities		(7,133)	(7,860)
Total liabilities		(4,788,899)	(4,423,386)
Net assets		(2,000,099)	(1,163,623)
Equity attributable to owners of the parent		(1,505,489)	(879,136)
Non-controlling interests		(494,610)	(284,487)
Loss for the year attributable to owners of the parent		(923,317)	(1,911,551)
Loss for the year attributable to NCI		(307,773)	(594,485)
Loss for the year		(1,231,090)	(2,506,036)
Total comprehensive income for the year attributable to owners of the parent		(578,203)	(1,533,459)
Total comprehensive income for the year attributable to NCI		(210,123)	(499,962)
Total comprehensive income for the year		(788,326)	(2,033,421)

 

ZAO Terskaya Mining Company

		2015	2014
		£	£
Non-current assets		280,526	22,440
Current assets		41,710	1,459
Total assets		322,236	23,899
Non-current liabilities		(299,920)	(26,591)
Current liabilities		(118,541)	(79,332)
Total liabilities		(418,461)	(105,923)
Net assets		(96,225)	(82,024)
Equity attributable to owners of the parent		499,901	504,263
Non-controlling interests		(589,126)	(586,287)
Loss for the year attributable to owners of the parent		(27,824)	(17,493)
Loss for the year attributable to NCI		(6,956)	(2,155)
Loss for the year		(34,780)	(19,648)
Total comprehensive income for the year attributable to owners of the parent		(63,822)	31,017
Total comprehensive income for the year attributable to NCI		(2,839)	7,547
Total comprehensive income for the year		(66,661)	38,564

 

14        Other financial assets

	2015		2014
	Group	Company	Group	Company
	£	£	£	£
Loans to subsidiaries	-	4,915,081	-	5,352,720
Advanced to acquire interest in uranium project	406,702	-	387,637	-
	406,702	4,915,081	387,637	5,352,720

 

The monies advanced to the subsidiary enterprises by the Company are on an interest free basis with no fixed date for repayment. As such these amounts represent a net investment in the other members of the Group and are recognised at their full value as there are no indications of impairment.

 

In prior years the Group advanced $602,000 with the intention to acquire an interest in the Kyrgyzstan company holding the Kamushanovsky uranium exploration licences (note 13 ). This amount is equivalent to £406,702 using the prevailing rate of exchange at the year end (2014: £387,637).

The maximum exposure to credit risk at the reporting date is the carrying value of each class of assets mentioned above.

Recoverability of the loans is dependent on the borrower's ability to (i) transform them into cash generating units through discovery of economically recoverable reserves and their development into profitable production or (ii) to complete a sale of all or part of the deposit, which is currently being negotiated.

 

15        Trade and other receivables

	2015		2014
	Group	Company	Group	Company
	£	£	£	£
Trade receivables	-	-	-	-
Other receivables	178,554	14,711	156,896	28,603
Prepayments	32,241	17,297	13,436	13,383
Due from subsidiaries	-	38,913	-	23,196
	210,795	70,921	170,332	65,182

The fair value of trade and other receivables is not materially different to the carrying values presented. None of the receivables are secured or past due.

 

 

16        Issued capital

		2015	2014
Issued and fully paid ordinary shares with a nominal value of 0.1p
Number		1,269,042,780	1,108,219,874
Nominal value(£)		1,269,043	1,108,220
Issued and fully paid deferred shares  with a nominal value of 4.9p
Number		143,377,203	143,377,203
Nominal value (£)		7,025,483	7,025,483
Share premium
Value (£)		15,890,910	15,046,077
Total issued capital (£)		24,185,436	23,179,780

 

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

 

Deferred shares have attached to them the following rights and restrictions:

- they do not entitle the holders to receive any dividends and distributions;

- they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company;

- on return of capital on a winding up the holders of the deferred shares are only entitled to receive the amount paid up on such shares after the holders of the ordinary shares have received the sum of 0.1p for each ordinary share held by them and do not have any other right to participate in the assets of the Company.

 

Issue of ordinary share capital in 2015:

	Price in pence per share	Number	Nominal value £
As at 1 January 2015		1,108,219,874	1,108,220
03 February 2015	0.55	21,490,910	21,491
06 February 15	0.55	3,500,000	3,500
22 April 15	0.55	93,763,638	93,764
09 July 2015	0.63	12,068,358	12,068
09 July 2015	1.00	30,000,000	30,000
		160,822,906	160,823
As at 31 December 2015		1,269,042,780	1,269,043

 

 

 

17        Contingent shares

 

Share options and warrants outstanding at the end of the year have the following expiry date and exercise prices:

 

Expiry date		Exercise price in pence per share	Number of options as at 31 December 2015	Number of options as at 31 December 2014
Share options
22 December 2015		1.20	-	14,500,000
22-December 2015		1.45	-	17,000,000
21 December-2017		7.00	250,000	250,000
			250,000	31,750,000
Weighted average exercise price			7.00	1.38
Warrants
11 July 2017		1.50	500,000	500,000
28 December 2017		1.00	-	30,000,000
12 November 2018		0.57	950,000	-
05 May 2019		0.63	-	12,068,358
			1,450,000	42,568,358
Weighted average exercise price			0.89	0.90
Total contingently issuable shares at 31 December			1,700,000	73,818,358

 

All listed options and warrants were exercisable as at 31 December 2015 and 2014 respectively.

 

18        Other reserves

 

	2015		2014
	Group	Company	Group	Company
	£	£	£	£
Capital redemption reserve	3,539,906	3,539,906	3,539,906	3,539,906
Foreign currency translation reserve:
At 1 January	(294,935)	-	(670,495)	-
Recognised in the period	282,733	-	375,560	-
At 31December	(12,202)	-	(294,935)	-
Share-based payments reserve:
At 1 January	399,235	399,235	399,235	399,235
Recognised in the period	2,788	2,788
Lapsed in the period (note 20 )	(399,235)	(399,235)	-	-
At 31December	2,788	2,788	399,235	399,235
	3,530,492	3,542,694	3,644,206	3,939,141

 

The capital redemption reserve was created as a result of a share capital restructure in early years.

The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies of the Group's foreign subsidiaries into GBP.

The share-based payments reserve represents (i) reserve arisen on the grant of share options to employees under the employee share option plan and (ii) reserve arisen on the grant of warrants under terms of professional service agreements.

 

19        Trade and other payables

 

	2015		2014
	Group	Company	Group	Company
	£	£	£	£
Accruals	79,620	72,932	60,473	51,676
Social security and other taxes	5,188	1,785	9,361	7,898
Other payables	229,348	153,326	98,583	81,489
Due to related party	-	198,583	-	198,583
	314,156	426,626	168,417	339,646

 

The fair value of trade and other payables is not materially different to the carrying values presented. The above listed payables were all unsecured.

20        Share-based payments

Share options

No share options had been granted by the Group in 2015 (2014: nil).

 

Movement in number of share options and their related weighted average exercise prices are as follows:

 

(Price expressed in pence per share)	2015		2014
	Average exercise price	No. of options	Average exercise price	No. of options
Share options
At 1 January	1.38	31,750,000	1.52	32,500,000
Granted	-	-	-	-
Lapsed	1.33	(31,500,000)	7.25	(750,000)
At 31 December	7.00	250,000	1.38	31,750,000

The exercise price of all outstanding options at 31 December 2015 was 7p.

Other than those options which either expired or were forfeited during the year all options were exercisable as at 31 December 2015 and 2014 respectively.

 

Warrants

950,000 warrants were granted by the Group in 2015 (2014: 42,068,358).

Movement in number of warrants outstanding and their related weighted average exercise prices are as follows:

 

(Price expressed in pence per share)	2015		2014
	Average exercise price	No. of warrants	Average exercise price	No. of warrants
Warrants
At 1 January	0.90	42,568,358	1.50	500,000
Granted			0.63	12,068,358
Granted			1.00	30,000,000
Granted	0.57	950,000
Exercised	0.63	(12,068,358)
Exercised	1.00	(30,000,000)
At 31 December	0.89	1,450,000	0.90	42,568,358

All listed warrants were exercisable as at 31 December 2015 and 2014 respectively.

 

21        Profit per share

 

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

		2015	2014
		£	£
(Loss)/profit attributable to equity holders of the company		(1,372,466)	95,265
Weighted average number of ordinary shares in issue		1,216,456,798	995,597,073
Basic profit/(loss) per share (pence)		(0.11)	0.01

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

			2014
			£
Profit/(loss) attributable to equity holders of the company			95,265
Weighted average number of ordinary shares in issue			995,597,073
Share options and warrants			73,818,358
Weighted average number of ordinary shares for  diluted earnings per share			1,069,415,431
Diluted profit per share(pence)			0.009

 

There was no dilutive effect of share options or warrants in 2015.

 

22        Related party transactions

 

Transactions with subsidiaries and joint venture

In the normal course of business, the Company provides funding to its subsidiaries for reinvestment into exploration projects and manages funds received from partners in joint venture.

		2015	2014
		£	£
Receivables from subsidiaries		38,913	23,196
Loans provided to subsidiaries		4,915,081	5,352,720
Payables to subsidiaries		(198,583)	(198,583)
Service charges to subsidiary		120,000	60,000
Compensation of management expenses recharged to joint venture		-	74,304

 

The amounts owed by subsidiaries are unsecured and receivable on demand but are not expected to be fully received within the next twelve months but when the project reaches such an advanced stage of development that it can be repaid out of the proceeds of either the project's cash flow or through the direct or indirect disposal to a third party of an interest in the project.

 

 

Transactions with key management personnel

The Group considers that the key management personnel are the directors of the Company.

 

The following amounts were paid and accrued to the directors of the Company who held office at 31 December 2015:

		2015	2014
		£	£
Short-term benefits		135,008	137,877
		135,008	137,877

 

The remuneration of the directors is determined by the remuneration committee having regard to the performance of individuals and market trends. No pension contribution has been made for the directors in 2015 (2014: nil).

 

An analysis of remuneration for each director of the company in the current financial year:

 

Name	Position	Salaries	Directors fees
		£	£
M. Martineau	Non-Executive Chairman	-	20,000
C. Schaffalitzky	Managing Director	85,008	-
G. FitzGerald	Non-Executive Director	-	15,000
D. Suschov	Non-Executive Director		15,000
		85,008	50,000

 

23        Operating lease arrangements

Operating leases relate to the office premises with lease terms up to one year. The Group does not have an option to purchase the leased asset at the expiry of the lease period.

 

	2015		2014
	Group	Company	Group	Company
	£	£	£	£
Payments recognised as an expense:
Minimum lease payments	17,586	11,417	22,748	15,000
Non-cancellable operating lease commitments:
No longer than one year	33,011	27,250	32,606	24,500
Longer than one year and not longer than five years	63,583	90,833	90,833	90,833
Longer than five years	-	-	-	-
	96,594	118,083	123,439	115,333

 

Minimum lease payment was adjusted for the office premises sub-lease receipts received by the Company in 2015.

Operating lease commitments represent full commitment by the Company under office lease arrangements. Expected sub-lease receipts are not included and hence do not reduce amount of the Company's commitments.

 

 

24        Commitments

 

The Group has no material commitments.

 

25        Contingent liabilities and contingent assets

 

The Group has no material contingent liabilities and assets (2014 - £nil).

 

26        Risk management objectives and policies

Financial risk management objectives

The Group's operations are limited at present to investing in entities that undertake mineral exploration. All investments in exploration are capitalised on project basis, which are funded by shareholders funds, fixed rate borrowings and contributions from the partners in joint ventures. The Group's activities expose it to a variety of financial risks including currency, fair value and liquidity risk. The Group seeks to minimise the effect of these risks on daily basis, though due to its limited activities the Group has not applied policy of using any financial instruments to a hedge these risks exposures.

Risk management is carried out by the Company under close board supervision.

Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US Dollars and Russian Roubles. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The Group's policy is not to enter into currency hedging transactions.

 

The following significant exchange rates have been applied during the year:

 

GBP	Average rate		Reporting date spot rate
	2015	2014	2015	2014
USD	1.528	1.648	1.480	1.553
RUB	93.392	63.154	108.489	87.681

 

Sensitivity analysis

A reasonably possible strengthening (weakening) of the USD and RUB, as indicated below, against GBP at 31 December would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss before taxes by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

	Strengthening		Weakening
	Equity	Profit or loss	Equity	Profit or loss
	USD	USD	USD	USD
31 December 2015
USD (5% movement)	(6,303)	12,642	5,702	(11,436)
RUB (5% movement)	(107,421)	(67,601)	97,193	61,162
31 December 2014
USD (5% movement)	(220,591)	20,964	199,581	(18,969)
RUB (5% movement)*	-	-	-	-

 

Interest rate risk

As the Group has no significant interest-bearing assets, the group's operating cash flows are substantially independent of changes in market interest rates.

 

Fair values

In the opinion of the directors, there is no significant difference between the fair values of the Group's and the Company's assets and liabilities and their carrying values.

Credit risk

The Group's exposure to credit risk is limited to the carrying amount of financial assets recognised at the statement of financial position date, as summarised below:

 

	2015		2014
	Group	Company	Group	Company
	£	£	£	£
Non-current loans and advances	406,702	4,915,081	387,637	5,352,720
Trade and other receivables	210,795	70,921	170,332	65,182
Cash and cash equivalents	104,925	83,444	224,863	210,160
	722,422	5,069,446	782,832	5,628,062

 

The Group's risk is on cash at bank is mitigated by holding of majority of funds at "A" rated bank.

No significant amounts are held at banks rated less than "B". Cash is held either on current account or on short-term deposit at floating rate. Interest determined by the relevant prevailing base rate. The fair value of cash and cash equivalents at 31 December 2015 are not materially different from its carrying value.

 

Recoverability of the loans is dependent on the borrower's ability to transform them into cash generating units through discovery of economically recoverable reserves and their development into profitable production.

 

The Company continuously monitors defaults by the counterparties, identified either individually or by group, and incorporates this information into its credit risk control. Management considers that all of the above financial assets that are not impaired are of good credit quality.

Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, borrowing facilities, cash and cash equivalent by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

 

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities.

 

	Current		Non-current
	within 6 months	6 to 12 months	1 to 5 years	later than 5 years
	£	£	£	£
2015
Trade and other payables	314,156	-	-	-
	314,156	-	-	-
2014
Trade and other payables	168,417	-	-	-
	168,417	-	-	-

 

The following table details the Company's remaining contractual maturity for its non-derivative financial liabilities.

	Current		Non-current
	within 6 months	6 to 12 months	1 to 5 years	later than 5 years
	£	£	£	£
2015
Trade and other payables	228,043	198,583	-	-
	228,043	198,583		-
2014
Trade and other payables	141,063	198,583	-	-
	141,063	198,583	-	-

 

The tables above have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

The contractual maturities reflect the gross cash flows, which may differ to the carrying values of the liabilities at the statement of financial position date.

Capital risk

At present the Group's capital management objective is to ensure the Group's ability to continue as a going concern.

Capital is monitored on the basis of its carrying amount and summarised as follows:

	2015		2014
	Group	Company	Group	Company
	£	£	£	£
Total borrowings	-	-	-	-
Less cash and cash equivalents	(104,925)	(83,444)	(224,863)	(210,160)
Net debt	-	-	-	-
Total equity	4,430,763	5,921,014	4,512,052	5,434,744
Total capital	4,430,763	5,921,014	4,512,052	5,434,744
Gearing	0%	0%	0%	0%

Capital structure is managed depending on economic conditions and risk characteristics of underlying assets. In order to maintain or adjust capital structure, the Group may issue new shares and debt financial instruments or sell assets to reduce debt.

 

27        Events after the statement of financial position date

 

Subsequent to the reporting date the Company raised the following funds:

 

Date	Total raised £	No of shares issued / warrants granted	Nominal value £
23 February 2016	123,878	22,523,357	22,523
05 April 2016	103,088	13,388,100	13,388
12 May 2016	500,000	90,909,091	90,909
Total	726,966	126,820,548	126,820

 

No other adjusting or significant non-adjusting events have occurred between the statement of financial position date and the date of authorisation of the financial statements.

 

28       Annual Report Accounts and AGM

The annual report and accounts will be dispatched to shareholders today and are available from the Company's website www.eurasiamining.co.uk from that date.

 

The Company's Annual General Meeting is due to be held at the East India Club, 16 St James's Square, London, SW1Y 4LH on 30 June 2016 at 11.00am.