Iluka Resources Limited · ASX:ILU
Iluka Resources — Investor Presentation (August 2005)
16 slides from Iluka Resources's investor presentation, Aug 18, 2005
Slide 1: Adoption of the Australian Equivalent of International Financial Reporting Standards (AIFRS)
© ILUKA Iluka Resources Adoption of the Australian Equivalent of International Financial Reporting Standards (AIFRS)
Slide 2: Introduction
@ Introduction ILUKA 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 T
Slide 3: Agenda
© Agenda ILUKA 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
Slide 4: Synopsis
© Synopsis ILUKA « 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 Inco
Slide 5: Transitional Matters
@ Transitional Matters ILUKA « 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 J
Slide 6: Rehabilitation and Mine Closure — Key Principles
@ Rehabilitation and Mine Closure — Key Principles ILUKA « 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 disc
Slide 7: Rehab & Mine Closure: Financial Statement Impact
Rehab & Mine Closure: Financial Statement Impact ILUK A 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 Cinc)/dec (2.6) (8.0) (13.6) Provisions — Non inc)/dec Current Greve (63
Slide 8: Taxation — Key Principles
@ Taxation — Key Principles ILUIKA Under AGAAP: ~ income tax expense was calculated by reference to accounting prdfit +/- permanent differences. (i.e. the Income Statement approach). ~ deferred tax assets were only recognised in respect of genuine timing differences and tax losses considered virtual
Slide 9: Taxation: Financial Statement Impact
Taxation; Financial Statement Impact @ ILUKA At As at 30 | As at 31 BALANCE SHEET tne June | Dec. 2003 2004 2004 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) - pefered Tex liabilities - (inc)/dec (131.0) (101.8) (9
Slide 10: Hedge Accounting — Key Principles
@ Hedge Accounting — Key Principles ILUKA * 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 r
Slide 11: Hedge Accounting — Iluka Impact
@ Hedge Accounting — Iluka Impact ILUKA Key Iluka impacts of Hedge Accounting under AIFRS are as follows: « Tluka effectiveness testing and documentation compliance indicates continued qualification for hedge accounting post 1 January 2005. * 1 January 2005 increase in Shareholders Funds primarily d
Slide 12: Secondary Areas of Impact — at a glance
@ Secondary Areas of Impact — at a glance ILUKA « 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. »
Slide 13: Appendices
@ Appendices ILUKA * 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 Ba
Slide 14: Appendix 1: 30.6.04 Income Statement Reconciliation AGAAP to AIFRS
Appendix 1 & 30.6.04 Income Statement Reconciliation AGAAP to AIFRS ILUKA >N EF >s4| oF om >N SS) a2 | FR FF |F2 | 2 | BS Be | ee | eg) eh |22| 8 | gs or | Be = 3a ac = ae S s9| 37 & 2 & 5 © 2 @ 8 = -% Revenue & . . Other Income 407.0 - - (1.5) | 405.5 Expenses (321.5)] 2.8 - (1.5) | (0.3) | 1.5 | (
Slide 15: Appendix 2: 31.12.04 Income Statement Reconciliation AGAAP to AIFRS
Appendix 2 & 31.12.04 Income Statement Reconciliation AGAAP to AIFRS ILUKA Bele!) FR FP 22) 2 8 e 4 go So 35 ® g 3° 5 a 5 Fd * a=] Dg = 3a 2c 2 gs | a7] gw | 8 ae |e id 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: Appendix 3: 2005 Opening Balance Sheet Reconciliation AGAAP to AIFRS
Appendix 3 & 2005 Opening Bal. Sheet Reconciliation AGAAP to AIFRS wuKa PNO| 7B >a NO |e Ps Ne Sek Gr GE) gage yislae: e Blas (ag | © |@°Blya*|are sa |g ae 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 | (918.0) NET ASSETS 988.1] (
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