Annual Report 2011 - QuamIR

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Notes to the Consolidated Financial StatementsFor the year ended 31 March 201119. Exploration and Evaluation AssetsGroupHK$’000CostAcquired on acquisition of subsidiaries (Note 37(b)) 1,016,859Additions 2,828Effect of foreign currency exchange differences 1,385Balance at 31 March 2010 1,021,072Additions 17,758Effect of foreign currency exchange differences 45,072Balance at 31 March 2011 1,083,902The exploration and evaluation assets include geological and geophysical costs, and drilling and explorationexpenses directly attributable to exploration activities.The Group’s exploration and evaluation assets were acquired mainly through the acquisition of NiceThink Group Limited (“Nice Think”) as set out in note 37(b).During the year ended 31 March 2010, Nice Think through its subsidiary, Victor Bright InvestmentLimited, owns 65% of the registered and paid up capital of Heilongjiang Zhongyi Weiye which was anon-state owned enterprise and has become an equity joint venture established under the PRC lawson 1 April 2009. On 3 August 2010, the Group completed the acquisition of an additional 27% equityinterest in Heilongjiang Zhongyi Weiye for a purchase consideration of RMB24 million as set out in note38. Following completion of the increase in the registered capital, the corporate nature of HeilongjiangZhongyi Weiye was amended to become a sino-foreign cooperative joint venture enterprise.Heilongjiang Zhongyi Weiye is the holder of the exploration permits of five mines located in the PRCwith initial licence period of 3 years at date of issue which will be expired in year 2011 and 2012, therenewal is subject to the approval by the relevant PRC authorities. In the opinion of the directors, afterobtaining opinion from its legal counsel, the Group will be entitled to renew its exploration permitsupon the expiration at minimal costs.Sino Prosper State Gold Resources Holdings Limited90
Notes to the Consolidated Financial StatementsFor the year ended 31 March 201120. GoodwillGroupHK$’000CostBalance at 1 April 2009, 31 March 2010 and 1 April 2010 –Amount recognized on acquisition of subsidiariesoccurring during the year (Note 37(a)) 87,435Effect of foreign currency exchange differences 2,898Balance at 31 March 2011 90,333Impairment testing of goodwillFor the purpose of impairment review, goodwill set out above is allocated to the cash-generating unit(“CGU”), the subsidiaries operating gold mining activities in the PRC as follows:2011HK$’000Gold mining activities 90,333The recoverable amount of the gold mining activities’ CGU is determined on the basis of value in usecalculation. Value in use calculation is based on a discount rate of 35.4% and cash flow projectionsprepared from financial forecasts approved by the directors of the Group covering a period of 6 yearsuntil the mine reserve run out. The directors consider that this assumption is applicable as afterobtaining opinion from its legal counsel, the Group will be entitled to renew its mining rights upon theexpiration at minimal cost.Key assumptions used in the value in use calculation for the year ended 31 March 2011 are asfollows:Gold outputThe basis used to determine the values assigned to the future revenues is estimated based on the annualore output and gold production, which is in line with the processing capacity of the CGU, taking intoconsideration of the expected future capital expenditure and capacity expansion.Mining costsThe basis used to determine the values assigned to the mining costs is the input requirements inaccordance with the mining plan at real unit costs.Annual Report 201191
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Sino Prosper State Gold Resources H
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Year in Review2010-2011April 2010HK
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Chairman’s MessageOver the course
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Chairman’s MessageFor its part, A
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Management Discussion & AnalysisAft
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Management Discussion & AnalysisInv
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Management Discussion & AnalysisTar
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Management Discussion & AnalysisDur
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Directors’ and Management Profile
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Directors’ and Management Profile
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Corporate Governance ReportDIRECTOR
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Corporate Governance ReportREMUNERA
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Directors’ ReportThe directors (t
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Directors’ ReportMr. Cai Wei Lun
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Directors’ ReportNotes:1. This pe
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Directors’ ReportThe emolument of
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Independent Auditors’ ReportWe be
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Consolidated Statement of Financial
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Page 125 and 126: Financial SummaryFor the year ended
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Annual Report 2011 - QuamIR

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