## (j) Security Deposits 

Certain financial assets have been pledged as security for performance guarantees, performance bonds and bank guarantees related to exploration permits and operating lease rental agreements. Their realisation may be restricted subject to terms and conditions attached to the relevant exploration permit agreements or operating lease rental agreements. 

Security deposits are non-derivative financial assets that are not quoted in an active market. Security deposits are initially recognised at cost. Such assets are subsequently carried at amortised cost using the effective interest method. They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period which are classified as non-current assets. 

Security deposits are derecognised when the terms and conditions attached to the relevant exploration permit agreements or operating lease rental agreements have expired or been transferred. 

Security deposits are tested for impairment in accordance with the accounting policy described in Note 1(n). 

## (k) Plant and Equipment 

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised as an expense in the consolidated statement of comprehensive income as incurred. 

Commencing from the time the plant and equipment is held ready for use, depreciation expense is calculated on a straight-line basis to allocate their cost amount, net of their residual values, over their estimated useful lives ranging from two to ten years. 

Plant and equipment residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at the end of each reporting period. 

Gains and losses on disposals are determined by comparing proceeds with the net carrying amount. These gains and losses are included in the consolidated statement of comprehensive income. 

Plant and equipment are tested for impairment in accordance with the accounting policy described in Note 1(n). 

## (l) Intangibles 

## Computer Software 

Computer software is stated at cost less accumulated amortisation and any accumulated impairment losses. Computer software costs have a finite life. 

Commencing from the time the computer software is held ready for use, amortisation expense is calculated on a straight-line basis to allocate their cost amount, net of their residual values, over their estimated useful lives ranging from two to two and half years. 

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at the end of each reporting period. 

Computer software is tested for impairment in accordance with the accounting policy described in Note 1(n). 

## Goodwill 

Goodwill recognised in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. 

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised. 

