NOTES TO THE FINANCIAL STATEMENTS 2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED) (e) Intangible assets (continued) (iii) Exploration and evaluation assets (continued) Costs incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward in relation to each area of interest to the extent that the following conditions are satisfied: • The rights to the tenure of an area of interest are current; and • At least one of the following conditions is also met: • Exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or • Evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the areas of interest are continuing. Exploration and evaluation assets are not amortised prior to the conclusion of evaluation activities. At completion of evaluation activities, if technical feasibility is demonstrated and commercial reserves are discovered then, following development sanction, the carrying value of the exploration and evaluation asset is reclassified as a development and production asset, but only after the carrying value is assessed for impairment and where appropriate its carrying value adjusted. If, after completion of evaluation activities in an area, it is not possible to determine technical feasibility and commercial viability or if the legal right to explore expires or if the Group decides not to continue exploration and evaluation activity, then the costs of such unsuccessful exploration and evaluation are written off to profit or loss in the period the relevant events occur. MFRS 6 Exploration for and Evaluation of Mineral Resources requires exploration and evaluation assets to be assessed for impairment when facts and circumstances suggest that the carrying amounts may exceed the recoverable amounts. One or more of the following facts and circumstances indicate that an impairment test should be conducted: • The period for which the right to explore in the specific area has expired during the period or will expire in the near future, and it is not expected to be renewed; • Substantive expenditure on further exploration in the specific area is neither budgeted or planned; • Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue activities in the specific area; and • Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. DNeX INTEGRATED REPORT 2025 150 ABOUT THIS REPORT LEADERSHIP VALUE CREATION @DNeX LEADERSHIP INSIGHTS OVERVIEW OF DAGANG NeXCHANGE BERHAD
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