Share-based payments expense
The recognition of share-based payments expense is based on factors which require management to make estimates on factors such as volatility and forfeiture rates. Changes in the estimates may have a material impact on the amount of share-based payments expense.
Basis of consolidation: The consolidated financial statements comprise the accounts of Touchstone Gold, the parent company and its wholly-owned controlled subsidiaries, after the elimination of all material intercompany balances and transactions.
Subsidiaries are all entities (including special purpose entities) over which the Company, either directly or indirectly, has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Where the group does not directly hold more than one half of the voting rights, significant judgment is used to determine whether control exists. These significant judgments include assessing whether the group can control the operating policies through the group's ability to appoint the majority of directors to the board. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group until the date on which control ceases.
The accounts of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. A list of subsidiaries are noted below.
Jurisdiction 2012 2011 ----------------------------Touchstone Atlantis Mining Inc. Canada 100% -Touchstone Gold Holdings S.A. Panama 100% 100%Touchstone Colombia (foreign branch) Colombia 100% 100%Placencia Corp. Panama 100% -Saint Miguel Mining S.A.S Colombia 100% -Concesiones United Gold S.A.S Colombia 100% -
Touchstone Atlantis Mining Inc. is a wholly owned direct subsidiary, of the Company, which in turn owns 100% of Placencia Corp, which in turn owns Saint Miguel Mining S.A.S and Concesiones United Gold S.A.S.
Touchstone Gold Holdings is a wholly owned direct subsidiary of the Company which directs Touchstone Colombia.
Financial Instruments: Financial instruments are classified into one of the following five categories: fair value through profit or loss assets or liabilities, held to maturity investments, loans and receivables, available for sale financial assets or other financial liabilities. Fair value through profit or loss financial instruments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available for sale financial instruments are measured at fair value upon initial recognition and at fair value at each reporting period, with revaluation gains and losses included in accumulated other comprehensive income until the instruments are derecognized or impaired. Loans and receivables, investments held to maturity and other financial liabilities are measured at amortized cost using the effective interest method.