Iluka Resources Limited · ASX:ILU
Iluka Resources — Corporate Update (2005)
16 slides from Iluka Resources's corporate update, 2005
Slide 1: Adoption of the Australian Equivalent of International Financial Reporting Standards (AIFRS)
Iluka Resources Adoption of the Australian Equivalent of International Financial Reporting Standards (AIFRS)
Slide 2: Introduction
Introduction Iluka has today reported under AIFRS for the first time in respect of the Half Year ended 30 June 2005. The purpose of this presentation is to provide a user friendly, high level guide to the key impacts of the Adoption of AIFRS on Iluka’s Financial Statements. Cautionary Note This pres
Slide 3: Agenda
Agenda This presentation overviews the following: § Synopsis (slide 3); § Transitional Matters (slide 4); § Primary areas of impact: – Accounting for Rehabilitation and Closure costs (slide 5-6); – Accounting for Taxation (slide 7-8); and – Accounting for Hedges (slide 9-10). § Secondary Areas of Im
Slide 4: Synopsis
Synopsis § Adoption of AIFRS has no material economic impact on Iluka § Financial Statement impacts do not impact compliance with borrowing covenants § Transitional adjustments affecting Retained Earnings are not expected to impact future dividend capability § 2004 Comparative Full Year Income State
Slide 5: Transitional Matters
Transitional Matters § December balance date companies must report under AIFRS for the first time for the 2005 financial year (i.e. half year reporting for the six months ended 30 June 2005 then full year reporting for the year ended 31 December 2005). § However formal transition date is 1 January 2
Slide 6: Rehabilitation and Mine Closure – Key Principles
Rehabilitation and Mine Closure – Key Principles § Under previous AGAAP, rehabilitation and closure costs were prospectively provided for over the life of the mine or item of plant. – The Income Statement impact of these provisions were included in cost of goods sold. § Under AIFRS, the discounted p
Slide 7: Rehab & Mine Closure: Financial Statement Impact
Rehab & Mine Closure: Financial Statement Impact At Transition As at 30 As at 31 BALANCE SHEET 31 Dec June 2004 Dec. 2004 2003 Inventory Inc/(dec) (1.2) (2.4) (3.6) PP&E Inc/(dec) 29.2 29.2 24.9 Provisions – Current (Inc)/dec (2.6) (8.0) (13.6) Provisions – Non (Inc)/dec (63.4) (60.1) (38.7) Current
Slide 8: Taxation – Key Principles
Taxation – Key Principles § Under AGAAP: – income tax expense was calculated by reference to accounting profit +/- permanent differences. (i.e. the Income Statement approach). – deferred tax assets were only recognised in respect of genuine timing differences and tax losses considered virtually cert
Slide 9: Taxation; Financial Statement Impact
Taxation; Financial Statement Impact At Transition As at 30 As at 31 BALANCE SHEET June Dec. 31 Dec 2004 2004 2003 Tax Assets – Current Inc/(dec) - 0.2 0.1 Deferred Tax Assets Inc/(dec) 33.6 9.1 (2.7) Tax Liabilities – Current (Inc)/dec - (0.2) - Deferred Tax liabilities - (Inc)/dec (131.0) (101.8)
Slide 10: Hedge Accounting – Key Principles
Hedge Accounting – Key Principles § To qualify for hedge accounting AIFRS requires a high correlation between the financial instrument and the future transaction to be hedged (i.e. “effectiveness”), plus rigorous hedge documentation. § The mark-to-market value of a qualifying hedge book is recognise
Slide 11: Hedge Accounting – Iluka Impact
Hedge Accounting – Iluka Impact Key Iluka impacts of Hedge Accounting under AIFRS are as follows: § Iluka effectiveness testing and documentation compliance indicates continued qualification for hedge accounting post 1 January 2005. § 1 January 2005 increase in Shareholders Funds primarily due to th
Slide 12: Secondary Areas of Impact – at a glance
Secondary Areas of Impact – at a glance § Asset Sales – Profit on sale disclosed as other income rather than proceeds being disclosed as revenue per AGAAP. § Research and Development – Qualifying “development” may be capitalised but “research” costs must be expensed in the period incurred. § Equity
Slide 13: Appendices
Appendices § Summarised reconciliations of previously reported 2004 financials to those restated under AIFRS are set out in Appendix 1-3 as follows: – Appendix 1: 2004 Half Year Income Statement (slide 13) – Appendix 2: 2004 Full Year Income Statement (slide 14) – Appendix 3: 2004 Closing Balance Sh
Slide 14: 30.6.04 Income Statement Reconciliation AGAAP to AIFRS
Appendix 1 30.6.04 Income Statement Reconciliation AGAAP to AIFRS Restoration Rehab & Accounting Tax effect Development Research & Payments Equity based Other AIFRS 2004 H1 AGAAP 2004 H1 Revenue & 407.0 - - - - (1.5) 405.5 Other Income Expenses (321.5) 2.8 - (1.5) (0.3) 1.5 (319.0) Financing Costs (
Slide 15: 31.12.04 Income Statement Reconciliation AGAAP to AIFRS
Appendix 2 31.12.04 Income Statement Reconciliation AGAAP to AIFRS Restoration Rehab & Accounting Tax effect Development Research & Payments Equity based Other 2004 AIFRS AGAAP 2004 Revenue 849.6 - - - - (4.6) 845.0 Expenses (698.9) 18.3 - (3.5) (0.6) 4.6 (680.1) Financing Costs (32.7) (11.8) - - -
Slide 16: 2005 Opening Balance Sheet Reconciliation AGAAP to AIFRS
Appendix 3 2005 Opening Bal. Sheet Reconciliation AGAAP to AIFRS Other 1 Jan 2005 Accounting Hedge AGAAP 2004 Dec 31, Restoration Rehab and Accounting Tax Effect AIFRS 2004 Dec 31, AIFRS 2005 Jan 1, Assets 1831.0 21.3 (2.6) (5.4) 1844.3 6.3 1850.6 Liabilities (842.9) (52.3) (92.2) 0.6 (986.8) 68.8 (