Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
The acquisition of UMC Energy PLC has been accounted for as a
group reconstruction as explained in Note 1 and 28 of the financial
statements.
Non-controlling interests
Non-controlling interests are that part of the net results of
operations and of net assets of a subsidiary attributable to
interests which are not owned directly or indirectly by the Group.
They are measured at the non-controlling interests' share of the
fair value of the subsidiary's identifiable assets and liabilities
at the date of acquisition by the Group and the non-controlling
interests' share of changes in equity since the date of
acquisition. Profit or loss and each component of other
comprehensive income are attributed to the owners of the parent and
to non-controlling interests. Total comprehensive income is
attributed to the owners of the parent and to the non-controlling
interests even if this results in the non-controlling interests
having a deficit balance as non-controlling interests are
considered to participate proportionally in the risks and rewards
of an investment in the subsidiary whether or not they have a legal
obligation to make any further investment.
Investments in associates
An associate is an entity over which the Group is in a position
to exercise significant influence, but not control or joint
control, through participation in the financial and operating
policy decisions of the investee.
The results and assets and liabilities of associates are
incorporated in these financial statements using the equity method
of accounting. Investments in associates are carried in the
statement of financial position at cost as adjusted by
post-acquisition changes in the Group's share of net assets of the
associate, less any impairment in the value of individual
investments. Losses of the associates in excess of the Group's
interest in those associates are not recognised.
Where a Group company transacts with an associate of the Group,
unrealised profits and losses are eliminated to the extent of the
Group's interest in the relevant associate. Losses may provide
evidence of an impairment of the asset transferred, in which case
appropriate provision is made for impairment.
The Group and its associated undertakings have complied with the
requirements of IFRS 6 - Exploration for and evaluation of mineral
resources.
Revenue recognition
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset, to that asset's net carrying amount.
Other operating income represents the amounts receivable for the
provision of consultancy, management and office services provided
in the normal course of business, net of VAT.
Segmental reporting
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components. All
operating segments' operating results are regularly reviewed by the
Board of Directors to make decisions about resources to be
allocated to the segment and assess its performance, and for which
discrete financial informational is available.
Segment results that are reported to the Board of Directors
include items directly attributable to the segment as well as those
that can be allocated on a reasonable basis.
Foreign currencies
Transactions in currencies other than US dollars are recorded at
the rates of exchange prevailing on the dates of the individual
transactions. For practical reasons, a rate that approximates to
the actual rate at the date of the transaction is often used. At
each year end date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the year end date. Non-monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at historical rates. Gains and losses arising on
retranslation are included in the income statement for the period.
On consolidation, the assets and liabilities of the Group's
overseas operations are translated at exchange rates prevailing on
the year end date. Income and expense items are translated at the
average exchange rates for the period unless exchange rates
fluctuate significantly. Exchange differences arising, if any, are
classified as equity and transferred to the Group's translation
reserve. Such translation differences are recognised as income or
as expenses in the period in which the operation is disposed
of.
Non-current intangible assets
Non-current intangible assets have a finite life and are shown
at cost less any provisions made in respect of impairment.
Costs relating to the acquisition, exploration and development
of mining projects are capitalised under intangible assets. When it
is determined that such costs will be recouped through successful
development and exploitation or alternatively by sale of such
interests acquired, the expenditure will be transferred to tangible
assets and depreciated over the expected productive life of the
asset. Whenever a project is considered no longer viable, the
associated exploration expenditure is written off to the income
statement.
Impairment of tangible and intangible assets
At each year end date, the Group reviews the carrying amounts of
its tangible and intangible 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 the asset does not generate cash flows that
are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset
belongs. An intangible asset with an indefinite useful life is
tested for impairment annually and whenever there is an indication
that the asset may be impaired.
The recoverable amount is the higher of fair value less costs to
sell and value in use. Value in use is assessed by reference to the
net present value of expected future cash flows of the relevant
income generating unit or disposal value, if higher. If an asset is
impaired, a provision is made to reduce the carrying amount to its
estimated recoverable amount. An impairment loss is recognised as
an expense immediately.
Non-current asset investments
Loan investments are shown at cost less provision for any
permanent diminution in value. Loan investments are recognised as
an asset when sums are advanced.
Property, plant and equipment
Equipment and furniture are shown at cost less accumulated
depreciation and any recognised impairment loss. Depreciation is
charged so as to write off the cost of assets over their estimated
useful lives, using the straight line method on the following
basis:
Equipment 25% -100%
Furniture 25% - 100%
Financial instruments
Financial assets and financial liabilities are recognised on the
statement of financial position when the Company becomes a party to
the contractual provisions of the instrument.
Cash and cash equivalents
Cash and cash equivalents comprise cash held at bank and on
short term deposits.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangement entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Company after deducting all
of its liabilities.
Trade payables
Trade payables are not interest bearing and are stated at their
nominal value.
Trade receivables
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
Borrowing costs
Borrowing costs on loans payable are recognised in the income
statement in the period in which they are incurred.
Equity instruments
Equity instruments issued by the Company are recorded at the
proceeds received except where those proceeds appear to be less
than the fair value of the equity instruments issued, in which case
the equity instruments are recorded at fair value. The difference
between the proceeds received and the fair value is reflected in
the share based payments reserve.
Share based payments
The Group has applied the requirements of IFRS 2 Share-based
Payments.
The Group issues equity-settled based payments to Directors and
certain professional advisors of the Group. Equity-settled
share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of
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.
Fair value is measured by use of a 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.
Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
In the process of applying the Company's accounting policies
above, management necessarily makes judgements and estimates that
have a significant effect on the amounts recognised in the
financial statements. Changes in the assumptions underlying the
estimates could result in a significant impact to the financial
statements. The most critical of these accounting judgement and
estimation areas are as follows:
UMC Energy (LSE:UEP)
Historical Stock Chart
From May 2024 to Jun 2024
UMC Energy (LSE:UEP)
Historical Stock Chart
From Jun 2023 to Jun 2024
