SCULLY ROYALTY LTD., 20-F filed on 5/11/2020
Annual and Transition Report (foreign private issuer)
v3.20.1
DOCUMENT AND ENTITY INFORMATION
12 Months Ended
Dec. 31, 2019
shares
Document And Entity Information  
Entity Registrant Name Scully Royalty Ltd.
Entity Central Index Key 0000016859
Trading Symbol srl
Entity Current Reporting Status Yes
Entity Filer Category Non-accelerated Filer
Current Fiscal Year End Date --12-31
Entity Voluntary Filers No
Entity Well-known Seasoned Issuer No
Entity Interactive Data Current Yes
Entity Common Stock, Shares Outstanding 12,554,801
Document Type 20-F
Document Registration Statement false
Document Annual Report true
Document Transition Report false
Document Shell Company Report false
Document Period End Date Dec. 31, 2019
Amendment Flag false
Document Fiscal Year Focus 2019
Document Fiscal Period Focus FY
Entity Emerging Growth Company false
Entity Shell Company false
v3.20.1
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current Assets    
Cash and cash equivalents $ 78,274 $ 67,760
Securities 14,174 7,400
Securities - derivatives   209
Trade receivables 4,158 5,343
Tax receivables 188 104
Other receivables 8,104 8,675
Inventories 2,388 11,406
Restricted cash 85 281
Deposits, prepaid and other 1,124 828
Total current assets 108,495 102,006
Non-current Assets    
Securities 3,809 4,702
Real estate held for sale 13,040 13,830
Investment property 38,205 37,804
Property, plant and equipment 55,413 58,325
Interests in resource properties 270,070 273,250
Tax receivables   488
Deferred income tax assets 14,295 15,735
Other 22 773
Total non-current assets 394,854 404,907
Total Assets 503,349 506,913
Current Liabilities    
Account payables and accrued expenses 19,161 26,315
Financial liabilities - derivatives   37
Income tax liabilities 728 855
Total current liabilities 19,889 27,207
Long-term Liabilities    
Bond payables 35,418  
Loan payable 4,769 3,981
Decommissioning obligations 15,018 13,641
Deferred income tax liabilities 65,307 66,421
Other 934 1,257
Total long-term liabilities 121,446 85,300
Total liabilities 141,335 112,507
Equity    
Capital stock, fully paid 16 16
Additional paid-in capital 312,471 312,132
Treasury stock (2,643) (2,643)
Contributed surplus 16,627 16,735
Retained earnings 1,009 19,333
Accumulated other comprehensive income 26,132 40,803
Shareholders' equity 353,612 386,376
Non-controlling interests 8,402 8,030
Total equity 362,014 394,406
Total liabilities and equity $ 503,349 $ 506,913
v3.20.1
CONSOLIDATED STATEMENTS OF OPERATIONS - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
CONSOLIDATED STATEMENTS OF OPERATIONS      
Revenue $ 113,267 $ 139,751 $ 274,035
Costs and expenses:      
Costs of sales and services 96,561 95,209 228,357
Selling, general and administrative 22,573 26,365 45,472
Share-based compensation - selling, general and administrative 0 69 2,876
Loss on settlement   5,600  
Finance costs 1,243 2,125 8,415
Credit losses 13,398 34,985 23,923
Reversal of impairment of hydrocarbon, resource properties and property, plant and equipment, net   (188,203) (8,945)
Exchange differences on foreign currency transactions, net (gain) loss (3,724) (4,228) (12,344)
Total 130,051 (28,078) 312,442
(Loss) income before income taxes (16,784) 167,829 (38,407)
Income tax (expense) recovery:      
Income taxes (482) (56,105) (6,885)
Resource property revenue taxes (1,137) 487 (1,773)
Resource property (expense) recovery (1,619) (55,618) (8,658)
Net (loss) income for the year (18,403) 112,211 (47,065)
Net (income) loss attributable to non-controlling interests (150) 65 (790)
Net (loss) income attributable to owners of the parent company $ (18,553) $ 112,276 $ (47,855)
(Loss) earnings per share:      
Basic (in dollars per share) $ (1.48) $ 8.96 $ (3.81)
Diluted (in dollars per share) $ (1.48) $ 8.96 $ (3.81)
Weighted average number of common shares outstanding      
- Basic (in shares) 12,543,271 12,534,801 12,544,141
- Diluted (in shares) 12,543,271 12,534,801 12,544,141
v3.20.1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME      
Net (loss) income for the year $ (18,403) $ 112,211 $ (47,065)
Items that will be reclassified subsequently to profit or loss      
Exchange differences arising from translating financial statements of foreign operations (13,197) 2,440 7,002
Reclassification adjustment for exchange differences to statements of operations for subsidiaries deconsolidated (see Note 19) (1,758) 672 (11,306)
Net exchange difference (14,955) 3,112 (4,304)
Fair value gain on available-for-sale securities     542
Reclassification of fair value gain on available-for-sale securities to statements of operations for securities disposed of or impaired     (52)
Net fair value gain on available-for-sale securities     490
Fair value loss on securities at fair value through other comprehensive income (70) (75)  
Reclassification of reversal of impairment charge to statement of operations 66 (3)  
Net fair value loss on securities at fair value through other comprehensive income (4) (78)  
Items that will not be reclassified subsequently to profit or loss      
Remeasurement of net defined benefit liabilities     219
Other comprehensive (loss) income (14,959) 3,034 (3,595)
Total comprehensive (loss) income for the year (33,362) 115,245 (50,660)
Comprehensive loss (income) attributable to non-controlling interests 138 (277) (683)
Comprehensive (loss) income attributable to owners of the parent company $ (33,224) $ 114,968 $ (51,343)
v3.20.1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CAD ($)
$ in Thousands
Capital Stock and additional paid-in capital
Treasury Stock
Share-based Compensation
Contingently Issuable Shares
Accumulated (Deficit) Retained Earnings
Available-for-sale Securities
Securities at Fair Value Through Other Comprehensive Income
Defined Benefit Obligations
Currency Translation Adjustment
Share-holders' Equity
Non-controlling Interests
Total
Balance at Dec. 31, 2016 $ 419,916 $ (61,085) $ 13,790 $ 1,627 $ (88,920) $ (29)   $ (307) $ 42,528 $ 327,520 $ 1,910 $ 329,430
Balance (in shares) at Dec. 31, 2016 17,315,673 (4,687,218)                    
Repurchase and cancellation of shares and cancellation of shares and equity instruments $ (2,856)     (1,627) 3,165         (1,318)   (1,318)
Repurchase and cancellation of shares and cancellation of shares and equity instruments (in shares) (90,000)                      
Plan of arrangement - purchase of fractional shares $ (41)                 (41)   (41)
Plan of arrangement - purchase of fractional shares (in shares) (3,654)                      
Plan of arrangement - cash distributions $ (2)                 (2)   (2)
Plan of arrangement - offsetting deficit (87,850)       87,850              
Plan of arrangement - share capital restructuring $ (17,019) $ 58,442     (41,423)              
Plan of arrangement - share capital restructuring (in shares) (4,621,571) 4,621,571                    
Shares issued to non-controlling interests                     1,177 1,177
Net (loss) income         (47,855)         (47,855) 790 (47,065)
Dividends paid                     (1,601) (1,601)
Share based compensation     2,876             2,876   2,876
Loss on disposition of shares in a subsidiary               88   88   88
Net fair value (loss) gain           490       490   490
Net (loss) gain on remeasurements               219   219   219
Net exchange differences                 (4,197) (4,197) (107) (4,304)
Balance at Dec. 31, 2017 $ 312,148 $ (2,643) 16,666   (87,183) 461     38,331 277,780 2,169 279,949
Balance (in shares) at Dec. 31, 2017 12,600,448 (65,647)                    
Balance at Dec. 31, 2016 $ 419,916 $ (61,085) 13,790 $ 1,627 (88,920) (29)   $ (307) 42,528 327,520 1,910 329,430
Balance (in shares) at Dec. 31, 2016 17,315,673 (4,687,218)                    
Balance at Dec. 31, 2018 $ 312,148 $ (2,643) 16,735   19,333   $ (141)   40,944 386,376 8,030 394,406
Balance (in shares) at Dec. 31, 2018 12,600,448 (65,647)                    
Balance at Dec. 31, 2017 $ 312,148 $ (2,643) 16,666   (87,183) 461     38,331 277,780 2,169 279,949
Balance (in shares) at Dec. 31, 2017 12,600,448 (65,647)                    
Change in accounting policy (see Note 2B(i))         524 $ (461) (63)          
Net (loss) income         112,276         112,276 (65) 112,211
Dividends paid                     (805) (805)
Return of capital                     (52) (52)
Share based compensation     69             69   69
Loss on disposition of shares in a subsidiary         (6,284)       (157) (6,441) 6,441  
Net fair value loss             (78)     (78)   (78)
Net exchange differences                 2,770 2,770 342 3,112
Balance at Dec. 31, 2018 $ 312,148 $ (2,643) 16,735   19,333   (141)   40,944 386,376 8,030 394,406
Balance (in shares) at Dec. 31, 2018 12,600,448 (65,647)                    
Shares issued to non-controlling interests         229         229 510 739
Net (loss) income         (18,553)         (18,553) 150 (18,403)
Exercise of stock options $ 339   (108)             231   231
Exercise of stock options (in shares) 20,000                      
Net fair value loss             (4)     (4)   (4)
Net exchange differences                 (14,667) (14,667) (288) (14,955)
Balance at Dec. 31, 2019 $ 312,487 $ (2,643) $ 16,627   $ 1,009   $ (145)   $ 26,277 $ 353,612 $ 8,402 $ 362,014
Balance (in shares) at Dec. 31, 2019 12,620,448 (65,647)                    
v3.20.1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - Components of Capital Stock - CAD ($)
$ in Thousands
Capital Stock
Common Shares
Capital Stock
Preferred Shares
Capital Stock
Total
Balance at Dec. 31, 2016 $ 402,897 $ 17,019 $ 419,916 $ 329,430
Balance (in shares) at Dec. 31, 2016 12,694,102 4,621,571 17,315,673  
Disclosure of classes of share capital [line items]        
Issuance of contingently issuable shares $ (2,856)   $ (2,856)  
Issuance of contingently issuable shares (in shares) (90,000)   (90,000)  
Plan of arrangement $ (87,893) $ (17,019) $ (104,912)  
Plan of arrangement (in shares) (3,654) (4,621,571) (4,625,225)  
Exercise of stock options $ 339   $ 339  
Exercise of stock options (in shares) 20,000   20,000  
Balance at Dec. 31, 2018 $ 312,148   $ 312,148 394,406
Balance (in shares) at Dec. 31, 2018 12,600,448   12,600,448  
Disclosure of classes of share capital [line items]        
Exercise of stock options       231
Balance at Dec. 31, 2019 $ 312,487   $ 312,487 $ 362,014
Balance (in shares) at Dec. 31, 2019 12,620,448   12,620,448  
v3.20.1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - Components of Common Shares - CAD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2019
Dec. 31, 2017
Components of Common Shares      
Capital stock, at par value and fully paid $ 16 $ 16 $ 16
Additional paid-in capital 312,132 312,471 312,132
Capital Stock and additional paid-in capital, total $ 312,148 $ 312,487 $ 312,148
v3.20.1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - Components of Contributed Surplus - CAD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2019
Dec. 31, 2017
Components of Contributed Surplus      
Share-based compensation $ 16,735 $ 16,627 $ 16,666
v3.20.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities:      
Net (loss) income for the year $ (18,403) $ 112,211 $ (47,065)
Adjustments for:      
Amortization, depreciation and depletion 8,287 5,712 6,732
Exchange differences on foreign currency transactions (3,724) (4,228) 12,344
(Gain) loss on short-term securities (931) (3,856) 1
Gain on dispositions of subsidiaries, net (2,243) (25,099) (1,087)
Reversal of impairment of hydrocarbon and resource properties and property, plant and equipment   (188,203) (8,945)
Share-based compensation   69 2,876
Deferred income taxes 98 55,238 3,141
Market value decrease (increase) on commodity inventories (160) 109 (400)
Interest accretion 743 373 412
Change in fair value of investment property and real estate held for sale (3,122)    
Change in fair value of a loan payable measured at FVTPL 979 167  
Credit losses 13,398 34,985 23,923
Write-downs of inventories 1,822    
Write-offs of intangible assets and prepaid 18 2,129  
Gains on settlements and derecognition of liabilities (1,168) (9,502) (3,779)
Loss on settlement   5,600  
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:      
Short-term cash deposits   197  
Short-term securities (6,384) (1,050)  
Receivables (466) 10,264 30,188
Inventories 1,551 (1,429) 19,588
Restricted cash 159 (275)  
Deposits, prepaid and other (468) 70 8,361
Assets held for sale 396   12,636
Short-term bank borrowings   (1,621) (34,513)
Account payables and accrued expenses (157) 435 (26,513)
Income tax liabilities (35) (1,046) 21
Accrued pension assets, net of obligations     (54)
Other 3 1,559 (1,064)
Cash flows (used in) provided by operating activities (9,807) (7,191) (3,197)
Cash flows from investing activities:      
Purchases of securities   (1,199)  
Purchases of property, plant and equipment, net (720) (198) (4,783)
Acquisition of intangible assets     (765)
Proceeds from sales of investments, net     526
Proceeds from sales of investment property   1,018  
Increase in loan receivables (843)   (590)
Decrease in loan receivables     725
Acquisition of indemnification asset (6,737)    
Acquisitions of subsidiaries, net of cash and cash equivalents acquired     (44)
Dispositions of subsidiaries, net of cash and cash equivalents disposed of (1,902) (825) (8,384)
Other   (77) 255
Cash flows used in investing activities (10,202) (1,281) (3,494)
Cash flows provided by (used in) financing activities:      
Issuance of bond payables 36,511    
Payments of commissions, fees and expenses on issuance of bond payable (1,078)    
Reductions in lease liabilities (872)    
Debt repayment     (42,253)
Exercise of stock options 231    
Cash paid under the plan of arrangement     (43)
Shares issued to non-controlling interests     1,177
Return of capital to non-controlling interests   (52)  
Dividends paid to non-controlling interests   (805) (1,601)
Cash flows provided by (used in) financing activities 34,792 (857) (42,720)
Exchange rate effect on cash and cash equivalents (4,269) 2,219 3,605
Decrease in cash and cash equivalents 10,514 (7,110) (45,806)
Cash and cash equivalents, beginning of year 67,760 74,870 120,676
Cash and cash equivalents, end of year 78,274 67,760 74,870
Supplemental cash flows disclosure (for additional information, see Note 25)      
Interest received 1,282 906 1,079
Dividends received   168  
Interest paid (342) (1,198) (4,575)
Income taxes paid $ (780) $ (2,626) $ (1,704)
v3.20.1
Nature of Business
12 Months Ended
Dec. 31, 2019
Nature of Business  
Nature of Business

Note 1.  Nature of Business

Scully Royalty Ltd. (“Scully” or the “Company”) is incorporated under the laws of the Cayman Islands. Scully and the entities it controls are collectively known as the “Group” in these consolidated financial statements. The Group is a merchant bank that provides financial services and has an interest in the Scully iron ore mine in Newfoundland & Labrador, Canada. In addition, the Group owns other merchant banking assets and seeks to invest in businesses or assets whose intrinsic value is not properly reflected. The Group’s investing activities are generally not passive. The Group actively seeks investments where its financial expertise and management can add or unlock value.

v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Basis of Presentation and Summary of Significant Accounting Policies  
Basis of Presentation and Summary of Significant Accounting Policies

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

A. Basis of Presentation

Basis of Accounting

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”). Scully complies with all the requirements of IFRS. The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied with the exception of the adoption of IFRS 9, Financial Instruments (“IFRS 9”), IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) and the amendments to IFRS 2, Share-Based Payment from January 1, 2018, and IFRS 16, Leases, the amendments to IAS 23, Borrowing Costs, and IFRIC 23, Uncertainty over Income Tax Treatment from January 1, 2019. See Note 2B.

These consolidated financial statements were prepared using going concern, accrual (except for cash flow information) and historical cost (except for investment property and certain financial assets and financial liabilities which are measured at fair value and certain inventories that are measured at fair value less costs to sell) bases.

The presentation currency of these consolidated financial statements is the Canadian dollar ($), rounded to the nearest thousand (except per share amounts).

Certain amounts have been reclassified so as to conform with the presentation in the current year (see Notes 19 and 27).

Restatement

 

During the fiscal year ended December 31, 2019, the Group re-assessed the presentation of its consolidated statement of operations and concluded that it was necessary to restate its previously issued financial statements for the fiscal year ended December 31, 2017 for the correction of an error in presentation relating to reclassifications of foreign exchange translation gains. In accordance with IFRS 10, Consolidated Financial Statements, amounts reclassified to profit and loss that had previously been recognised in other comprehensive income in relation to disposed subsidiaries are required to be recognised in “gain or loss on dispositions of subsidiaries” and therefore these amounts which historically have been included in “exchange differences on foreign currency transactions, net (gain) loss” are required to be represented within the gain or loss on disposal, which is included in “costs of sales and services”. Below is a reconciliation to the historically reported amounts for the year ended December 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2017

 

2017

 

 

 

Original

 

 

Reclassification

 

 

As Restated

Costs and expenses:

 

 

 

 

 

 

 

 

 

Costs of sales and services

 

 

239,663

 

 

(11,306)

 

 

228,357

Exchange differences on foreign currency transactions, net (gain) loss

 

 

1,038

 

 

11,306

 

 

12,344

 

Such restatement also affected the cash flows from operating activities in the cash flow statement. Below is a reconciliation of the historically reported amounts for the year ended December 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2017

 

2017

 

 

 

Original

 

 

Reclassification

 

 

As Restated

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Exchange differences on foreign currency transactions, net (gain) loss

 

 

1,038

 

 

(11,306)

 

 

12,344

(Gain) loss on dispositions of subsidiaries

 

 

10,219

 

 

11,306

 

 

(1087)

 

The restatement of the items included within the statement of operations and cash flows from operating activities has had no effect on the financial position, net loss or total cash flows used in operating activities of the Group for any period presented.

 

Amounts related to the year ended December 31, 2018 of $672 have also been reclassified for consistency with comparative information.

 

Certain amounts have also been reclassified so as to conform with the presentation in the current year (see Notes 15, 19 and 27).

 

Principles of Consolidation

These consolidated financial statements include the accounts of Scully and entities it controls. The Company controls an investee if and only if it has all the following: (a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability to use its power over the investee to affect the amount of its returns. When the Group holds, directly or indirectly, more than 50% of the voting power of an investee, it is presumed that the Group controls the investee, unless it can be clearly demonstrated that this is not the case. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All intercompany balances and transactions, including unrealized profits arising from intragroup transactions, have been eliminated in full. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

On the acquisition date, a non-controlling interest is measured at either its fair value or its proportionate share in the recognized amounts of the subsidiary’s identifiable net assets, on a transaction-by-transaction basis. Subsequently, the non-controlling interest increases or decreases for its share of changes in equity since the acquisition date.

After initial consolidation of a subsidiary, when the proportion of equity held by non-controlling interests changes, the Group, as long as it continues to control the subsidiary, adjusts the carrying amounts of the controlling and non-controlling interests to reflect the changes in their relative interests in the subsidiary. The Group recognizes directly in equity any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received and attributes such difference to the owners of Scully.

When the Group loses control of a subsidiary it: (a) derecognizes (i) the assets (including any goodwill) and liabilities of the subsidiary at their carrying amounts at the date when control is lost and (ii) the carrying amount of any non-controlling interests in the former subsidiary at the date when control is lost (including any components of other comprehensive income attributable to them); (b) recognizes (i) the fair value of the consideration received, if any, from the transaction, event or circumstances that resulted in the loss of control, (ii) if the transaction, event or circumstances that resulted in the loss of control involves a distribution of shares of the subsidiary to owners in their capacity as owners, that distribution and (iii) any investment retained in the former subsidiary at its fair value at the date when control is lost; (c) reclassifies to profit or loss, or transfers directly to retained earnings if required by IFRS, the amounts recognized in other comprehensive income in relation to the subsidiary; and (d) recognizes any resulting difference as a gain or loss under costs of sales and services in profit or loss attributable to the owners of Scully.

The financial statements of Scully and its subsidiaries used in the preparation of the consolidated financial statements are prepared as of the same date, using uniform accounting policies for like transactions and other events in similar circumstances.

Foreign Currency Translation

The presentation currency of the Group’s consolidated financial statements is the Canadian dollar.

Scully conducts its business throughout the world through its foreign operations. Foreign operations are entities that are subsidiaries or branches, the activities of which are based or conducted in countries or currencies other than those of Scully. Functional currency is the currency of the primary economic environment in which an entity operates and is normally the currency in which the entity primarily generates and expends cash. Foreign currency is a currency other than the functional currency of the entity. The functional currencies of the Company and its subsidiaries and branches primarily comprise the Canadian dollar, Euro (“EUR” or “€”) and United States dollar (“US$”).

Reporting foreign currency transactions in the functional currency

A foreign currency transaction is a transaction that is denominated or requires settlement in a foreign currency. A foreign currency transaction is recorded, on initial recognition in an entity’s functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of each reporting period: (a) foreign currency monetary items are translated using the closing rate; (b) non-monetary items denominated in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction; and (c) foreign currency non-monetary items that are measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous periods are recognized in profit or loss in the period in which they arise, except for exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation which are initially recorded in other comprehensive income in the consolidated financial statements and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

Use of a presentation currency other than the functional currency

When an entity presents its financial statements in a currency that differs from its functional currency, the results and financial position of the entity are translated into the presentation currency using the following procedures: (a) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position; (b) income and expenses for each statement of operations presented are translated at exchange rates at the dates of the transactions or, for practical reasons, the average exchange rates for the periods when they approximate the exchange rates at the dates of the transactions; (c) individual items within equity are translated at either the historical exchange rates when practical or at the closing exchange rates at the date of the statement of financial position; and (d) all resulting exchange differences are recognized in other comprehensive income.

The following table sets out exchange rates for the translation of the Euro and United States dollar, which represented the major trading currencies of the Group, into the Canadian dollar:

 

 

 

 

 

 

 

    

EUR

    

US$

Closing rate at December 31, 2019

 

1.4583

 

1.2988

Average rate for the year 2019

 

1.4856

 

1.3269

Closing rate at December 31, 2018

 

1.5613

 

1.3642

Average rate for the year 2018

 

1.5302

 

1.2957

Closing rate at December 31, 2017

 

1.5052

 

1.2545

Average rate for the year 2017

 

1.4650

 

1.2986

 

Fair Value Measurement

Certain assets and liabilities of the Group are measured at fair value (see Note 2B).

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement is for a particular asset or liability. Therefore, when measuring fair value, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:

(a)  in the principal market for the asset or liability; or

(b)  in the absence of a principal market, in the most advantageous market for the asset or liability.

The Group measures the fair value of an asset or a liability using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. IFRS 13, Fair Value Measurement (“IFRS 13”),  establishes a fair value hierarchy that categorizes the inputs to valuation techniques used to measure fair value into three levels:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

Non-current Assets Held for Sale

A non-current asset (or disposal group) is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for the sale of such asset (or disposal group), the appropriate level of management must be committed to a plan to sell the asset (or disposal group) and an active program to locate a buyer and complete the plan must have been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value and the sale is highly probable to complete within one year from the date of classification, except as permitted under certain events and circumstances. If the aforesaid criteria are no longer met, the Group ceases to classify the asset (or disposal group) as held for sale.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amounts and fair values less costs to sell. The Group does not depreciate or amortize a non-current asset while it is classified as held for sale.

Use of Estimates and Assumptions and Measurement Uncertainty

The timely preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management’s best estimates are based on the facts and circumstances available at the time estimates are made, historical experience, general economic conditions and trends and management’s assessment of probable future outcomes of these matters. Actual results could differ from these estimates and such differences could be material. For critical judgments in applying accounting policies and major sources of estimation uncertainty. See Notes 2C and 2D.

B. Significant Accounting Policies

(i) Financial Instruments

IFRS 9

The Group adopted IFRS 9 with a date of initial application of January 1, 2018.

Financial assets and financial liabilities are recognized on the consolidated statement of financial position when the Group becomes a party to the financial instrument contract. A financial asset is derecognized either when the Group has transferred the financial asset and substantially all the risks and rewards of ownership of the financial asset or when  the contractual rights to the cash flows expire. A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expired.

The Group classifies its financial assets into the following measurement categories: (a) subsequently measured at fair value (either through other comprehensive income (“FVTOCI”) or through profit or loss (“FVTPL”) and (b) subsequently measured at amortized cost. The classification of financial assets depends on the Group’s business model for managing the financial assets and the terms of the contractual cash flows. The Group classifies its financial liabilities as subsequently measured at amortized cost, except for financial liabilities at FVTPL. Change in the fair value of a loan payable measured at FVTPL is included in costs of sales and services.

Initial Adoption of IFRS 9

IFRS 9 does not require restatement of comparative periods. Accordingly, the Group has reflected the retrospective impact of the adoption of IFRS 9 due to the change in accounting  policy for investments in equity securities as an adjustment to opening  deficit as at January 1, 2018. Under IFRS 9, the Group’s investments in equity securities, which were previously classified as available for sale or at cost under IAS 39, Financial Instruments: Recognition and Measurement (“IAS 39”), are measured at FVTPL. The retrospective adjustment, which represented the fair value gain adjustment on investments in equity securities as of January 1, 2018, was $524 and debited to other comprehensive income.

Upon the initial adoption of IFRS 9 on January 1, 2018, the financial assets which were previously classified at fair value through profit or loss, held-to-maturity, loans and receivables and available-for-sale have been transferred to, financial assets measured at FVTPL, FVTOCI or amortized cost.

IAS 39 (Accounting Policies Applicable Prior to January 1, 2018)

All financial assets and financial liabilities were classified by characteristic and/or management intent. Except for certain financial instruments which were excluded from the scope, all financial assets were classified into one of four categories: (a) at fair value through profit or loss; (b) held-to-maturity; (c) loans and receivables; and (d) available-for-sale, and all financial liabilities were classified into one of two categories: (a) at fair value through profit or loss; and (b) at amortized cost.

A financial asset or financial liability at fair value through profit or loss was a financial asset or financial liability that met either of the following conditions: (a) it was classified as held for trading if it was (i) acquired or incurred principally for the purpose of selling or repurchasing it in the near term, (ii) part of a portfolio of identified financial instruments that were managed together and for which there was evidence of a recent actual pattern of short-term profit taking, or (iii) a derivative, except for a derivative that was a designated and effective hedging instrument; or (b) it was designated by the Group upon initial recognition as at fair value through profit or loss when certain conditions were met.

Available-for-sale financial assets were those non-derivative financial assets that were designated as available for sale, or that were not classified as loans and receivables, held-to-maturity investments, or at fair value through profit or loss.

Non-derivative financial liabilities were classified as financial liabilities measured at amortized cost.

After initial recognition, the Group measured financial assets, including derivatives that were assets, at their fair values, without any deduction for transaction costs it might incur on sale or other disposal, except for the following financial assets: (a) held-to-maturity investments which were measured at amortized cost using the effective interest method; (b) loans and receivables which were measured at amortized cost using the effective interest method; and (c) investments in equity instruments that did not have a quoted market price in an active market and whose fair value could not be reliably measured and derivatives that were linked to and had to be settled by delivery of such unquoted equity instruments which were measured at cost. All financial assets except those measured at fair value through profit or loss were subject to review for impairment.

Common to Both IFRS 9 and IAS 39

Regular way purchases and sales of financial assets are accounted for at the settlement date.

When a financial asset or financial liability is recognized initially, the Group measures it at its fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs related to the acquisition or issue of a financial asset or financial liability at fair value through profit or loss are expensed as incurred. The subsequent measurement of a financial instrument and the recognition of associated gains and losses are determined by the financial instrument classification.

A gain or loss on a financial asset or financial liability classified as at fair value through profit or loss is recognized in profit or loss for the period in which it arises. A gain or loss on an asset measured at FVTOCI or classified as available for sale is recognized in other comprehensive income, except for impairment losses, until the financial asset is derecognized, at which time the cumulative gain or loss previously recognized in accumulated other comprehensive income is recognized in profit or loss for the period. For financial assets and financial liabilities carried at amortized cost, a gain or loss is recognized in profit or loss when the financial asset or financial liability is derecognized or impaired and through the amortization process.

Net gains or net losses on financial instruments at fair value through profit or loss do not include interest or dividend income.

Whenever quoted market prices are available, bid prices are used for the measurement of fair value of financial assets while ask prices are used for financial liabilities. When the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available; reference to the current fair value of another financial instrument that is substantially the same; discounted cash flow analysis; option pricing models; and other valuation techniques commonly used by market participants to price the financial instrument.

(ii) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and cash at banks. They have maturities of three months or less from the date of acquisition and are generally interest-bearing.

Restricted cash refers to money that is held for a specific purpose and therefore not available to the Group for immediate or general business use. Restricted cash is accounted for as a separate item from cash and cash equivalents on the Group’s consolidated statements of financial position.

(iii) Securities

IFRS 9

Investments in equity securities are measured at FVTPL.

Debt securities which are held within a business model whose objective is to collect the contractual cash flows and sell the debt securities, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are measured at FVTOCI.

IAS 39 (Accounting Policies Applicable Prior to January 1, 2018)

Securities were classified as at fair value through profit or loss (i.e. held for trading) or short-term or long-term available-for-sale securities.

Publicly-traded securities (debt and equity) which were acquired principally for the purpose of selling in the near term were classified as held for trading.

Available-for-sale securities consisted of publicly-traded securities and unlisted equity securities which were not held for trading and not held to maturity. Long-term available-for-sale securities were purchased with the intention to hold until market conditions render alternative investments more attractive. Short-term available-for-sale securities were held with the intention of management to sell within the current operating cycle but did not meet the definition of trading securities.

When a decline in the fair value of an available-for-sale security had been recognized in other comprehensive income and there was objective evidence that the asset is impaired, the cumulative loss that had been recognized in other comprehensive income was reclassified from equity to profit or loss as a reclassification adjustment even though the security had not been derecognized. A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost is an objective evidence of impairment. The Group considered a decline in excess of 25 percent generally as significant and a decline in a quoted market price that persisted for 15 months as prolonged. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available for sale would not be reversed through profit or loss.

Gains and losses on sales of securities are calculated on the average cost basis.

(iv) Securities and Financial Liabilities – Derivatives

A derivative is a financial instrument or other contract with all three of the following characteristics: (a) its value changes in response to the change in a specified interest rate, financial instrument price, product price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; (b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and (c) it is settled at a future date. A derivative financial instrument is either exchange-traded or negotiated. A derivative financial instrument is included in the consolidated statement of financial position as a security (i.e. financial asset) or a financial liability and measured at FVTPL. The recognition and measurement of a derivative financial instrument under both IFRS 9 and IAS 39 does not apply to a contract that is entered into and continues to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the Group’s expected purchase, sale or usage requirements, unless the Group, as allowed under IFRS 9, designates the contract as measured at FVTPL if it eliminates or significantly reduces a measurement inconsistency.

Where the Group has both the legal right and intent to settle derivative assets and liabilities simultaneously with the counterparty, the net fair value of the derivative financial instruments is reported as an asset or liability, as appropriate.

Changes in the fair values of derivative financial instruments that do not qualify for hedge accounting are recognized in profit or loss as they arise.

(v) Financial Liabilities

The Group measures financial liabilities at either amortized cost or FVTPL. Financial liabilities are measured at amortized cost, unless either it is held for trading and hence required to be measured at FVTPL or the group elects to measure the financial liability at FVTPL.

(vi) Receivables

Receivables are measured at amortized cost under both IFRS 9 and IAS 39.

Receivables are net of an allowance for credit losses, if any. The Group performs ongoing credit evaluations of its customers and recognizes a loss allowance for expected credit losses. Receivables are considered past due on an individual basis based on the terms of the contracts.

(vii) Allowance for Credit Losses

IFRS 9

The Group recognizes and measures a loss allowance for expected credit losses on a financial asset which is measured at amortized cost or at FVTOCI, including a lease receivable, a contract asset or a loan commitment and a financial guarantee contract. The impairment methodology applied depends on whether there has been a significant increase in credit risk since initial recognition. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportive forward-looking information.

When there is significant increase in credit risk or for credit-impaired financial assets, the loss allowance equals the lifetime expected credit losses which is defined as the expected credit losses that result from all possible default events over the expected life of a financial instrument. If, at the reporting date, the credit risk on a financial asset has not increased significantly since initial recognition, the Group measures the loss allowance for the financial instrument at an amount equal to the 12‑month expected credit losses which is defined as the portion of lifetime expected credit losses that represent the expected credit losses that result from default events on the financial instrument that are possible within the 12 months after the reporting date.

As required by IFRS 9, the Group always measures the loss allowance at an amount equal to lifetime expected credit losses for trade receivables and contract assets that result from transactions that are within the scope of IFRS 15.

IAS 39 (Accounting Policies Applicable Prior to January 1, 2018)

The Group applied credit risk assessment and valuation methods to its trade and other receivables. Credit losses arose primarily from receivables but might also relate to other credit instruments issued by or on behalf of the Group, such as guarantees and letters of credit. Specific provisions were established on an individual receivable basis.

Common to Both IFRS 9 and IAS 39

The Group’s allowance for credit losses is maintained at an amount considered adequate to absorb expected or estimated credit-related losses. Such allowance reflects management’s best estimate of the losses in the Group’s financial assets and judgments about economic conditions. Estimates and judgments could change in the near term, and could result in a significant change to a recognized allowance. An allowance for credit losses is increased by provisions, which are recognized in profit or loss and reduced by write-offs net of any recoveries. Write-offs are generally recorded after all reasonable restructuring or collection activities have taken place and there is no realistic prospect of recovery.

(viii) Inventories

Inventories principally consist of raw materials, work-in-progress, and finished goods. Inventories, other than commodities products, are recorded at the lower of cost and net realizable value. Cost, where appropriate, includes an allocation of manufacturing overheads incurred in bringing inventories to their present location and condition and is assigned by using the first-in, first-out or weighted average cost formula, depending on the class of inventories. Net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The reversal of a write-down of inventories arising from an increase in net realizable value is recognized as a reduction in the amount of costs of sales and services in the period in which the reversal occurs.

Commodity products acquired by the Group as a broker-trader in the Group’s merchant banking activities with the purpose of selling in the near future and generating a profit from fluctuations in price or broker-traders’ margin are measured at fair value less costs to sell. Fair values of the Group’s inventories are determined by reference to their contractual selling prices or quoted prices in marketplaces in the absence of a contract (Level 1 fair value hierarchy), in accordance with guidance on fair value in IFRS 13.

(ix) Real Estate Held for Sale

Real estate held for sale is real estate intended for sale in the ordinary course of business or in the process of construction or development for such sale. The Group's real estate held for sale forms part of the security package for the €25,000 in principal amount of bonds (see Note 16) issued by Merkanti Holding plc in the year ended December 31, 2019, and to the extent that any sales of these properties, in whole or in part, cause the security to fall below a certain ratio, proceeds of said sale, up to an amount of the collateral shortfall, are required to be placed as cash collateral with the bondholder trustee until maturity.

Real estate held for sale is measured at the lower of cost (on a specific item basis) and net realizable value. Net realizable value is estimated by reference to sale proceeds of similar properties sold in the ordinary course of business less all estimated selling expenses around the reporting date, or by management estimates based on prevailing market conditions. The amount of any write-down of properties to net realizable value is recognized as an expense in the period the write-down occurs. The reversal of a write-down arising from an increase in net realizable value is recognized in the period in which the reversal occurs.

All of the Group’s real estate is located in Europe.

(x) Investment Property

Investment property is property that is held for generating rental income or for capital appreciation or both, rather than for: (a) use in the production or supply of goods or services or for administrative purposes; or (b) sale in the ordinary course of business. The Group’s investment property comprises freehold land and buildings. Investment property is initially recognized at cost including related transaction costs. After initial recognition, investment property is measured at fair value, with changes in fair value recognized in profit or loss in the period in which they arise.

The Group determines fair value without any deduction for transaction costs it may incur on sale or other disposal. Fair value of the Group’s investment property is based on valuations prepared annually by external evaluators in accordance with guidance issued by the International Valuation Standard Committee and reviewed by the Group, or these valuations are updated by management when there are no significant changes in the inputs to the valuation prepared by external evaluators in the preceding year, in accordance with guidance on fair value in IFRS 13.

(xi) Property, Plant and Equipment

Property, plant and equipment are carried at cost, net of accumulated depreciation and, if any, accumulated impairment losses. The initial cost of an item of property, plant and equipment comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of any decommissioning obligation, if any, and, for qualifying assets, borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Where an item of property, plant and equipment or part of the item that was separately depreciated is replaced and it is probable that future economic benefits associated with the replacement item will flow to the Group, the cost of the replacement item is capitalized and the carrying amount of the replaced asset is derecognized. All other replacement expenditures are recognized in profit or loss when incurred.

Inspection costs associated with major maintenance programs are capitalized and amortized over the period to the next inspection. All other maintenance costs are expensed as incurred.

When a right-of-use asset is acquired under a lease contract, the asset is measured at cost at the commencement date. The cost of the right-of-use asset comprises: (a) the amount of the initial measurement of the lease liability; (b) any lease payments made at or before the commencement date, less any lease incentives received; (c) any initial direct costs incurred by the Group; and (d) an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. After the commencement date, the Group measures the right-of-use asset applying a cost model whereby the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses and adjusts it for any remeasurement of the lease liabilities reflecting any reassessment, lease modifications or revised in-substance fixed lease payments. See Significant Accounting Policy (xiv) below.

The Group elected to apply IFRS 16 retrospectively, with the cumulative effect of the initial application of the new standard recognized at the date of initial application, being January 1, 2019. For further discussion, see Note 2B(xiv) below. The difference between the carrying amount of property, plant and equipment applying IAS 17 at the end of 2018 immediately preceding the date of initial application and the carrying amount in the consolidated statement of financial position at the date of initial application is reconciled as follows:

 

 

 

 

 

 

 

 

 

Carrying amount of property, plant and equipment as at December 31, 2018

 

$

58,325

Adjustment for the lease liabilities under IFRS 16 on the date of initial application

 

 

2,911

Carrying amount of property, plant and equipment recognized on the initial adoption of IFRS 16 as at January 1, 2019

 

$

61,236

 

The depreciable amounts of the Group’s property, plant, and equipment (i.e. the costs of the assets less their residual values) are depreciated according to the following estimated useful lives and methods:

 

 

 

 

 

 

 

    

Lives

    

Method

Buildings

 

20 years

 

straight-line

Processing plant and equipment

 

5 to 20 years

 

straight-line

Refinery and power plants

 

20 to 30 years

 

straight-line

Office equipment and other

 

3 to 10 years

 

straight-line

Office premises

 

2 to 10 years

 

straight-line

 

Depreciation expense is included in costs of sales and services or selling, general and administrative expense, whichever is appropriate.

The residual value and the useful life of an asset are reviewed at least at each financial year-end and, if expectations differ from previous estimates, the changes, if any, are accounted for as a change in an accounting estimate in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The depreciation method applied to an asset is reviewed at least at each financial year-end and, if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset, the method is changed to reflect the changed pattern.

The carrying amount of an item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is derecognized.

(xii) Interests in Resource Properties

The Group’s interests in resource properties are mainly comprised of an interest in the Scully iron ore mine, and to a lesser extent exploration and evaluation assets (comprising hydrocarbon probable reserves and hydrocarbon undeveloped lands), hydrocarbon development and production assets.

(a) Exploration and evaluation assets

Exploration and evaluation costs, including the costs of acquiring undeveloped land and drilling costs are initially capitalized until the drilling of the well is complete and the results have been evaluated in order to determine the technical feasibility and commercial viability of the asset. Technical feasibility and commercial viability are considered to be determinable when proved and/or probable reserves are determined to exist. When proved and/or probable reserves are found, the drilling costs and the costs of associated hydrocarbon undeveloped lands are reclassified to hydrocarbon development and production assets or from hydrocarbon undeveloped lands to hydrocarbon probable reserves. The cost of hydrocarbon undeveloped land that expires or any impairment recognized during a period is charged to profit or loss. Pre-licence costs are recognized in profit or loss as incurred.

(b) Hydrocarbon development and production assets and an interest in an iron ore mine

The Group’s interests in resource properties are mainly comprised of an interest in the Scully iron ore mine, and to a lesser extent, hydrocarbon development and production assets.

(1) Recognition and measurement

Interests in resource properties are initially measured at cost and subsequently carried at cost less accumulated depletion and, if any, accumulated impairment losses.

The cost of an interest in resource property includes the initial purchase price and directly attributable expenditures to find, develop, construct and complete the asset. This cost includes reclassifications from exploration and evaluation assets, installation or completion of infrastructure facilities such as platforms, pipelines and the drilling of development wells, including unsuccessful development or delineation wells. Any costs directly attributable to bringing the asset to the location and condition necessary to operate as intended by management and result in an identifiable future benefit are also capitalized. These costs include an estimate of decommissioning obligations and, for qualifying assets, capitalized borrowing costs.

(2) Subsequent costs

Costs incurred subsequent to the determination of technical feasibility and commercial viability and the costs of replacing parts of property are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. Such capitalized costs generally represent costs incurred in developing proved reserves and bringing in, or enhancing production from, such reserves and are accumulated on a field or geotechnical area basis. All other expenditures are recognized in profit or loss as incurred. The costs of periodic servicing of the properties are recognized in costs of sales and services as incurred.

The carrying amount of any replaced or sold component is derecognized.

(3) Depletion

The carrying amount of an interest in a resource property is depleted using the unit of production method by reference to the ratio of production in the period to the related reserves.

For interests in hydrocarbon development and production assets, depletion is calculated based on proved producing reserves, taking into account estimated future development costs necessary to bring those reserves into production and the estimated salvage values of the assets at the end of their estimated useful lives. Future development costs are estimated taking into account the level of development required to continue to produce the reserves. Reserves for hydrocarbon development and production assets are estimated annually by independent qualified reserve evaluators and represent the estimated quantities of natural gas, natural gas liquids and crude oil which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future years from known reservoirs and which are considered commercially producible. For depletion purposes, relative volumes of petroleum and natural gas production and reserves are converted at the energy equivalent conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil.

For the interest in an iron ore mine, depletion is calculated based on proved and probable reserves. The estimate of the reserves of iron ore is reviewed whenever significant new information about the reserve is available, or at least at each financial year-end.

(xiii) Impairment of Non-financial Assets

The Group reviews the carrying amounts of its non-financial assets at each reporting date to determine whether there is any indication of impairment. If any such indication exists, an asset’s recoverable amount is estimated.

The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. Where an individual asset does not generate separately identifiable cash flows, an impairment test is performed at the cash-generating unit (“CGU”) level. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Where the carrying amount of an asset (or CGU) exceeds its recoverable amount, the asset (or CGU) is considered impaired and written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, an appropriate valuation model is used. These calculations are corroborated by external valuation metrics or other available fair value indicators wherever possible.

An assessment is made at the end of each reporting period whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, an estimate of the asset’s (or CGU’s) recoverable amount is reviewed. A previously recognized impairment loss is reversed to the extent that the events or circumstances that triggered the original impairment have changed. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, depletion and amortization, had no impairment loss been recognized for the asset in prior periods. A reversal of an impairment loss for a CGU is allocated to the assets of the CGU pro-rata with the carrying amounts of those assets.

Hydrocarbon probable reserves are tested for impairment when they are reclassified to hydrocarbon development and production assets or when indicators exist that suggest the carrying amount may exceed the recoverable amount. For purposes of impairment testing, hydrocarbon probable reserves are grouped with related producing resource properties as a CGU with common geography and geological characteristics.

Undeveloped lands are evaluated for indicators separately from hydrocarbon development and production assets and hydrocarbon probable reserves. Impairment is assessed by comparing the carrying amount of undeveloped lands to values determined by an independent land evaluator based on recent market transactions. Management also takes into account future plans for those properties, the remaining terms of the leases and any other factors that may be indicators of potential impairment.

(xiv) Leases

The Group adopted IFRS 16 with a date of initial application of January 1, 2019.

At the commencement date of a lease contract under which the Group is the lessee, the Group recognizes a right-of-use asset and a lease liability which is measured at the present value of the lease payments that are not paid at that date, discounted using the interest rate implicit in the lease (or if the rate cannot be readily determined, the Group company's incremental borrowing rate). After the commencement date, the Group (a) measures the lease liability by (i) increasing the carrying amount to reflect interest on the lease liability; (ii) reducing the carrying amount to reflect the lease payments made; and (iii) remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments; and (b) recognizes in profit or loss, unless the costs are included in the carrying amount of another asset, both (i) interest on the lease liability and (ii) variable lease payments not included in the measurement of the lease liability in the period in which the event or condition that triggers those payment occurs.

The Group elects not to apply IFRS 16 to short-term leases and leases for which the underlying asset is of low value and, as such, recognizes the lease payments associated with those leases as an expense on a straight-line basis.

The right-of-use assets are included in property, plant and equipment (see Note 2B (xi)) and the lease liabilities are included in account payables and accrued expense under current liabilities and/or other long-term liabilities.

Initial Adoption of IFRS 16

The Group elected to apply IFRS 16 retrospectively, with the cumulative effect of the initial application of the new standard recognized at the date of initial application, subject to permitted and elected practical expedients. Pursuant to the transitional requirements, the Group chose to measure that right-of-use asset at an amount equal to the lease liability immediately before the date of initial application and elected not to recognize a lease liability or right-of-use asset for which the lease term ended within 12 months of the date of initial application. As a result, the Group recognized an adjustment of $2,911,  $843 and $2,068 to property, plant and equipment, account payables and accrued expenses and other long-term liabilities, respectively, on January 1, 2019. The Group's weighted average incremental borrowing rate applied to lease liabilities recognized in the consolidated statement of financial position was 4.01% at the date of initial application. The difference between operating lease commitments disclosed applying IAS 17 at the end of 2018 immediately preceding the date of initial application and lease liabilities recognized in the consolidated statement of financial position at the date of initial application is reconciled as follows.

 

 

 

 

Operating leases as at December 31, 2018*

    

$

4,786

Exemptions for short term leases for which the underlying assets are of low value

 

 

(1,505)

Discounting

 

 

(370)

Lease liabilities recognized on the initial adoption of IFRS 16 as at January 1, 2019

 

$

2,911


*  Represents undiscounted lease commitments

IAS 17 (Accounting Policies Applicable Prior to January 1, 2019)

Under IAS 17, a lease was classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of the leased asset. Operating lease payments were expensed in profit or loss over the term of the lease on a straight-line basis.

Common to Both IFRS 16 and IAS 17

Under both IFRS 16 and IAS 17, lease income from operating leases is recognized in income on a straight-line basis over the term of the lease.

(xv) Provisions, Financial Guarantee Contracts and Contingencies

Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the reporting date. Where appropriate, the future cash flow estimates are adjusted to reflect risks specific to the liability. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recorded as accretion and included in finance costs.

A financial guarantee contract is initially recognized at fair value. If the guarantee is issued to an unrelated party on a commercial basis, the initial fair value is likely to equal the premium received. If no premium is received, the fair value must be determined using a method that quantifies the economic benefit of the guarantee to the holder. At the end of each subsequent reporting period, financial guarantees are measured at the higher of: (i) the amount of the loss allowance, and (ii) the amount initially recognized less cumulative amortization, where appropriate.

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Group. Contingent liabilities, other than those assumed in connection with business combinations which are measured at fair value at the acquisition date, are not recognized in the consolidated financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. Legal costs in connection with a loss contingency are recognized in profit or loss when incurred.

The Group does not recognize a contingent or reimbursement asset unless it is virtually certain that the contingent or reimbursement asset will be received.

(xvi) Decommissioning Obligations

The Group provides for decommissioning, restoration and similar liabilities (collectively, decommissioning obligations) on its resource properties, facilities, production platforms, pipelines and other facilities based on estimates established by current legislation and industry practices. The decommissioning obligation is initially measured at fair value and capitalized to interests in resource properties or property, plant and equipment as an asset retirement cost. The liability is estimated by discounting expected future cash flows required to settle the liability using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The estimated future asset retirement costs are adjusted for risks such as project, physical, regulatory and timing. The estimates are reviewed periodically. Changes in the provision as a result of changes in the estimated future costs or discount rates are added to or deducted from the asset retirement cost in the period of the change. The liability accretes for the effect of time value of money until it is settled. The capitalized asset retirement cost is amortized through depreciation, depletion and amortization over the estimated useful life of the related asset. Actual asset retirement expenditures are recorded against the obligation when incurred. Any difference between the accrued liability and the actual expenditures incurred is recorded as a gain or loss in the settlement period.

(xvii) Own Equity Instruments

The Group’s holdings of its own equity instruments, including common stock and preferred stock, are presented as “treasury stock” and deducted from shareholders’ equity at cost and in the determination of the number of equity shares outstanding. No gain or loss is recognized in profit or loss on the purchase, sale, re-issue or cancellation of the Group’s own equity instruments.

(xviii) Revenue Recognition

IFRS 15

Effective January 1, 2018, the Group adopted IFRS 15. Pursuant to IFRS 15, the Group recognizes revenue, excluding interest and dividend income and other such income from financial instruments recognized in accordance with IFRS 9, upon transfer of promised goods or services to customers in amounts that reflect the consideration to which the Group expects to be entitled in exchange for those goods or services based on the following five step approach:

Step 1: Identify the contracts with customers;

Step 2: Identify the performance obligations in the contract;

Step 3: Determine the transaction price;

Step 4: Allocate the transaction price to the performance obligations in the contract; and

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The Group typically satisfies its performance obligations upon shipment of the goods, or upon delivery as the services are rendered or upon completion of services depending on whether the performance obligations are satisfied over time or at a point in time. The Group primarily acts as principal in contracts with its customers. The Group does not have material obligations for returns, refunds and other similar obligations, nor warranties and related obligations.

For performance obligations that the Group satisfies over time, the Group typically uses time-based measures of progress because the Group is providing a series of distinct services that are substantially the same and have the same pattern of transfer.

For performance obligations that the Group satisfies at a point in time, the Group typically uses shipment or delivery of goods and/or services in evaluating when a customer obtains control of promised goods or services.

A significant financing component exists and is accounted for if the timing of payments agreed to by the parties to the contract provides the customer or the Group with a significant benefit of financing the transfer of goods and services to the customer. As a practical expedient, the Group does not adjust the promised amount of consideration for the effects of a significant financing component if the Group expects, at contract inception, that the period between when the Group transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

The incremental costs of obtaining contracts with customers and the costs incurred in fulfilling contracts with customers that are directly associated with the contract are recognized as an asset (hereinafter, “assets arising from contract costs”) if those costs are expected to be recoverable, which are included in other long-term assets in the consolidated statements of financial position. The incremental costs of obtaining contracts are those costs that the Group incurs to obtain a contract with a customer that they would not have incurred if the contract had not been obtained. As a practical expedient, the Group recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Assets arising from contract costs are amortized using the straight-line method over their estimated contract periods.

The Group exercises judgments in determining the amount of the costs incurred to obtain or fulfill a contract with a customer, which includes, but is not limited to (a) the likelihood of obtaining the contract, (b) the estimate of the profitability of the contract, and (c) the credit risk of the customer. An impairment loss will be recognized in profit or loss to the extent that the carrying amount of the asset exceeds (a) the remaining amount of consideration that the entity expects to receive in exchange for the goods or services to which the asset relates, less (b) the costs that relate directly to providing those goods or services and that have not been recognized as expenses.

Initial Adoption of IFRS 15

Pursuant to the transition arrangement permitted under IFRS 15, the Group applied IFRS 15 retrospectively with the cumulative effect of initially applying IFRS 15 recognized at the date of initial application. There were no revisions on the accounts in the consolidated statement of financial position on January 1, 2018 upon the adoption of IFRS 15.

Moreover, there were no financial statement line items affected in the year ended December 31, 2018 by the application of IFRS 15 as compared to the presentation under IAS 18, Revenue ("IAS 18")  and related interpretations.

IAS 18, Revenue (Accounting Policies Applicable Prior to January 1, 2018)

The Group accounted for revenues under IAS 18 and other related international accounting standards and interpretations for the recognition and measurement of revenue until December 31, 2017.

Revenue included proceeds from sales of merchant banking products and services, real estate properties, medical instruments and supplies, rental income on investment property, interest and dividend income and net gains on securities. In an agency relationship, revenue was the amount of commission earned.

Revenue from the sale of goods was recognized when: (a) the Group had transferred to the buyer the significant risks and rewards of ownership of the goods (which generally coincided with the time when the goods were delivered to the buyer and title had passed); (b) the Group retained neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of revenue could be measured reliably; (d) it was probable that the economic benefits associated with the transaction would flow to the Group; and (e) the costs incurred or to be incurred in respect of the transaction could be measured reliably.

Revenue from the rendering of services was recognized when: (a) the amount of revenue could be measured reliably; (b) it was probable that the economic benefits associated with the transaction would flow to the Group; (c) the stage of completion of the transaction at the reporting date could be measured reliably; and (d) the costs incurred for the transaction and the costs to complete the transaction could be measured reliably.

Revenue was measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, customs duties and sales taxes. When the Group charged shipping and handling fees to customers, such fees were included in sales revenue. Where the Group acted as an agent on behalf of a third party to procure or market goods, any associated fee income was recognized and no purchase or sale was recorded.

Interest, royalty and dividend income were recognized when it was probable that economic benefits will flow to the Group and the amount of income could be measured reliably.

(xix) Costs of Sales and Services

Costs of sales and services include the costs of goods (merchant banking products and services, real estate properties, medical instruments and supplies) sold. The costs of goods sold include both the direct cost of materials and indirect costs, freight charges, purchasing and receiving costs, inspection costs, distribution costs and a provision for warranty when applicable.

Costs of sales and services also include write-downs of inventories, net loss on securities, credit losses on financial assets, gains or losses on dispositions of subsidiaries, and fair value gain and loss on investment property, commodity inventories and derivative contracts.

The reversal of write-downs of inventories and credit losses reduces the costs of sales and services.

(xx) Employee Benefits

Wages, salaries, bonuses, social security contributions, paid annual leave and sick leave are accrued in the period in which the associated services are rendered by employees of the Group. The employee benefits are included in costs of sales and services or selling, general and administrative expenses, as applicable.

(xxi) Share-Based Compensation

The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments on the date at which the equity instruments are granted and is recognized as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award. Fair value is determined by using an appropriate valuation model. At each reporting date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions and the number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous reporting date is recognized in profit or loss, with a corresponding amount in equity.

When the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognized over the original vesting period. In addition, an expense is recognized over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognized if this difference is negative. When an equity-settled award is cancelled other than by forfeiture when the vesting conditions are not satisfied, it is treated as if it had vested on the date of cancellation and any cost not yet recognized in profit or loss for the award is expensed immediately.

Share-based compensation expenses are included in selling, general and administrative expenses. When stock options are exercised, the exercise price proceeds together with the amount initially recorded in contributed surplus are credited to capital stock.

(xxii) Finance Costs

Finance costs comprise interest expense on borrowings, accretion of the discount on provisions, decommissioning obligations and other liabilities and charges and fees relating to factoring transactions.

Capital stock and debt are recorded at the amount of proceeds received, net of direct issue costs (transaction costs). The transaction costs attributable to debt issued are amortized over the debt term using the effective interest method.

(xxiii) Income Taxes

Income tax expense (recovery) comprises current income tax expense (recovery) and deferred income tax expense (recovery) and includes all domestic and foreign taxes which are based on taxable profits. The current income tax provision is based on the taxable profits for the period. Taxable profit differs from income before income taxes as reported in the consolidated statements of operations because it excludes items of income or expense that are taxable or deductible in other periods and items that are never taxable or deductible. The Group’s liability for current income tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date. Deferred income tax is provided, using the liability method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the consolidated statement of financial position.

Deferred income tax liabilities are recognized for all taxable temporary differences:

-      except where the deferred income tax liability arises on goodwill that is not tax deductible or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

-      in respect of taxable temporary differences associated with investments in subsidiaries and branches, except where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized:

-      except where the deferred income tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

-      in respect of deductible temporary differences associated with investments in subsidiaries and branches, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future.

On the reporting date, management reviews the Group’s deferred income tax assets to determine whether it is probable that the benefits associated with these assets will be realized. The Group also reassesses unrecognized deferred income tax assets. The review and assessment involve evaluating both positive and negative evidence. The Group recognizes a previously unrecognized deferred income tax asset to the extent that it has become probable that future taxable profit will allow the deferred income tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Tax relating to items recognized in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assets against current income tax liabilities, and when they relate to income tax levied by the same taxation authority and the Group intends to settle its current income tax assets and liabilities on a net basis.

Withholding taxes (which include withholding taxes payable by a subsidiary on distributions to the Group) are treated as income taxes when they have the characteristics of an income tax. This is considered to be the case when they are imposed under government authority and the amount payable is calculated by reference to revenue derived.

The Group includes interest charges and penalties on current income tax liabilities as a component of interest expense.

(xxiv) Earnings Per Share

Basic earnings per share is determined by dividing net income attributable to ordinary equity holders of Scully by the weighted average number of common shares outstanding during the period, net of treasury stock.

Diluted earnings per share is determined using the same method as basic earnings per share, except that the weighted average number of common shares outstanding includes the effect of dilutive potential ordinary shares. For the purpose of calculating diluted earnings per share, the Group assumes the exercise of its dilutive options with the assumed proceeds from these instruments regarded as having been received from the issue of common shares at the average market price of common shares during the period. The difference between the number of common shares issued and the number of common shares that would have been issued at the average market price of common shares during the period is treated as an issue of common shares for no consideration and added to the weighted average number of common shares outstanding. The amount of the dilution is the average market price of common shares during the period minus the issue price and the issue price includes the fair value of services to be supplied to the Group in the future under the share-based payment arrangement. Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations.

When share-based payments are granted during the period, the shares issuable are weighted to reflect the portion of the period during which the payments are outstanding. The shares issuable are also weighted to reflect forfeitures occurring during the period. When stock options are exercised during the period, shares issuable are weighted to reflect the portion of the period prior to the exercise date and actual shares issued are included in the weighted average number of shares outstanding from the exercise date.

(xxv) Business Combinations

The Group accounts for each business combination by applying the acquisition method. Pursuant to the acquisition method, the Group, when a business combination occurs and it is identified as the acquirer, determines the acquisition date (on which the Group legally transfers the consideration, acquires the assets and assumes the liabilities of the acquiree), recognizes and measures the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree, and recognizes and measures goodwill or a gain from a bargain purchase (i.e. negative goodwill). The identifiable assets acquired and the liabilities assumed are measured at their acquisition-date fair values. A non-controlling interest is measured at either its fair value or its proportionate share in the recognized amounts of the subsidiary’s identifiable net assets, on a transaction-by-transaction basis.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, the liabilities incurred by the Group to former owners of the acquiree and the equity interests issued by the Group.

In a business combination achieved in stages, the Group remeasures its previously held equity interest in the acquiree at its acquisition-date fair value and recognizes the resulting gain or loss, if any, in profit or loss.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Group retrospectively adjusts the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, the Group also recognizes additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as the Group receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. However, the measurement period does not exceed one year from the acquisition date.

Acquisition-related costs are costs the Group incurs to effect a business combination. Those costs include finder’s fees; advisory, legal, accounting, valuation and other professional or consulting fees; general administrative costs, including the costs of maintaining an internal acquisitions department; and costs of registering and issuing debt and equity securities. The Group accounts for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, except for the costs to issue debt or equity securities (see Significant Accounting Policy Item (xxii) above).

C. Critical Judgments in Applying Accounting Policies

In the process of applying the Group’s accounting policies, management makes various judgments, apart from those involving estimations under Note 2D below, that can significantly affect the amounts it recognizes in the consolidated financial statements. The following are the critical judgments that management has made in the process of applying the Group’s accounting policies and that have the most significant effects on the amounts recognized in the consolidated financial statements:

(i) Identification of Cash-generating Units

The Group’s assets are aggregated into CGUs, for the purpose of assessing and calculating impairment  of non-financial assets, based on their ability to generate largely independent cash flows. The determination of CGUs requires judgment in defining the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. CGUs have been determined based on similar geological structure, shared infrastructure, geographical proximity, product type and similar exposure to market risks. In the event facts and circumstances surrounding factors used to determine the Group’s CGUs change, the Group will re-determine the groupings of CGUs.

(ii) Impairment and Reversals of Impairment on Non-Financial Assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at the end of each reporting period to determine whether there is an indication of impairment or reversal of previously recorded impairment. If such indication exists, the recoverable amount is estimated.

Determining whether there are any indications of impairment or impairment reversals requires significant judgment of external factors, such as an extended change in prices or margins for hydrocarbon commodities or refined products, a significant change in an asset’s market value, a significant revision of estimated volumes, revision of future development costs, a change in the entity’s market capitalization or significant changes in the technological, market, economic or legal environment that would have an impact on the Company’s CGUs. Given that the calculations for recoverable amounts require the use of estimates and assumptions, including forecasts of commodity prices, marketing supply and demand, product margins and in the case of the Group's iron ore interest, power plant and hydrocarbon properties, expected production volumes, it is possible that the assumptions may change, which may impact the estimated life of the CGU and may require a material adjustment to the carrying value of goodwill and non-financial assets.

Impairment losses recognized in prior years are assessed at the end of each reporting period for indications that the impairment has decreased or no longer exists. An impairment loss is reversed only to the extent that the carrying amount of the asset or CGU does not exceed the carrying amount that would have been determined, net of depletion, depreciation and amortization, if no impairment loss had been recognized.

(iii) Valuation of Investment Property

Investment properties are included in the consolidated statement of financial position at their market value, unless their fair value cannot be reliably determined at that time. The market value of investment properties is assessed annually by an independent qualified valuer, who is an authorized expert for the valuation of developed and undeveloped land in Germany, after taking into consideration the net income with inputs on realized basic rents, operating costs and damages and defects. The assumptions adopted in the property valuations are based on the market conditions existing at the end of the reporting period, with reference to current market sales prices and the appropriate capitalization rate. Changes in any of these inputs or incorrect assumptions related to any of these items could materially impact these valuations.

(iv) Assets Held for Sale and Discontinued Operations

The Group applies judgment to determine whether an asset (or disposal group) is available for immediate sale in its present condition and that its sale is highly probable and therefore should be classified as held for sale at the balance sheet date. In order to assess whether it is highly probable that the sale can be completed within one year, or the extension period in certain circumstances, management reviews the business and economic factors, both macro and micro, which include the industry trends and capital markets, and the progress towards a sale transaction. It is also open to all forms of sales, including exchanges of non-current assets for other non-current assets when the exchange will have commercial substance in accordance with IAS 16, Property, Plant and Equipment.

A discontinued operation is a component of an entity (which comprises operations and cash flows that can be clearly distinguished, operationally and, for financial reporting purposes, from the rest of the entity) that either has been disposed of or is classified as held for sale. The discontinued operation must represent a separate major line of business or a separate major geographical area of operations of the Group and the Group applies judgment to determine whether the thresholds are met. Generally, management determines whether a component is a discontinued operation or not based on the contribution of the component to the Group's net income (loss), net assets, or gross assets. Management does not view revenue as a major factor in determining whether a component is a discontinued operation or not because the revenue factor does not contribute any real economic benefits to the Group. While a component of the entity has distinguished financial data, judgments must be exercised on the presentation of inter-company transactions between components that are presented as discontinued operations and those that are presented as continuing operations. Furthermore, the allocation of income tax expense (recovery) also involves the exercise of judgments as the tax position of continuing operations may have an impact on the tax position of discontinued operations, or vice versa.

In 2019, the Group disposed of its interests in two product lines in Europe which management considered not to be discontinued operations because (i) they did not form separate segments or cash generating units, (ii) they did not have financial results which could be clearly identified from the rest of the Group, (iii) each of them was not a separate major geographical area, and (iv) the dispositions were not part of a single coordinated plan to dispose of them. Management, when exercising its judgments in terms of their respective contribution to the Group's net loss, total assets and net assets, concluded that these disposed components were not separate major lines of business or geographical area of operations. Based on the Group's consolidated financial statements as of June 30, 2019 (the latest publicly available financial results prior to their dispositions), the net income or loss of these disposed units represented 2% and 7%,  of the combined reported loss of all entities that reported a loss and each of them represented 1% of consolidated total assets and less than 1% of consolidated net assets of the Group. The combined revenue (third parties only), loss before taxes, income tax expense and net loss, respectively, was $81,766,  ($63),  ($575) and ($638) during the year of 2019 to the dates of their dispositions, which were included in the Group's continuing operations for the year ended December 31, 2019. The net gain on dispositions of these entities was $207.

(v) Purchase Price Allocations

There was a business combination in 2017. For every business combination, the Group measured the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The determination of fair value required the Group to make assumptions, estimates and judgments regarding future events, including the profit forecast of the new subsidiary in the future. The allocation process is inherently subjective and impacts the amounts assigned to individual identifiable assets and liabilities, including the fair value of long-lived assets, the recognition and measurement of any unrecorded intangible assets and/or contingencies and the final determination of the amount of goodwill or bargain purchase. The inputs to the exercise of judgments include legal, contractual, business and economic factors. As a result, the purchase price allocation impacts the Group’s reported assets and liabilities and future net earnings due to the impact on future depreciation, depletion and amortization and impairment tests.

(vi) Credit Losses and Impairment of Receivables

On January 1, 2018, the Group adopted IFRS 9. As a result, the Group applies credit risk assessment and valuation methods to its trade and other receivables under IFRS 9 which establishes a single forward-looking expected loss impairment model to replace the incurred impairment model under IAS 39.

The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on the financial instrument has increased significantly since initial recognition. The objective of the impairment requirements is to recognize lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition — whether assessed on an individual or collective basis — considering all reasonable and supportable information, including that which is forward-looking.

At each reporting date, management assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, management uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, management compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.

Allowance for credit losses is maintained at an amount considered adequate to absorb the expected credit losses. Such allowance for credit losses reflects management’s best estimate of changes in the credit risk on the Group’s financial instruments and judgments about economic conditions. The assessment of allowance for credit losses is a complex process, particularly on a looking-forward basis; which involves a significant degree of judgment and a high level of estimation uncertainty. The input factors include the assessment of the credit risk of the Group’s financial instruments, legal rights and obligations under all the contracts and the expected future cash flows from the financial instruments, which include inventories, mortgages and other credit enhancement instruments. The major source of estimation uncertainty relates to the likelihood of the various scenarios under which different amounts are expected to be recovered through the security in place on the financial assets. The expected future cash flows are projected under different scenarios and weighted by probability, which involves the exercise of significant judgment. Estimates and judgments could change in the near-term and could result in a significant change to a recognized allowance.

D. Major Sources of Estimation Uncertainty

The timely preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

The major assumptions about the future and other major sources of estimation uncertainty at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. These items require management’s most difficult, subjective or complex estimates. Actual results may differ materially from these estimates.

(i) Interests in Resource Properties and Reserve Estimates

The Group had interests in resource properties mainly comprised of an interest in the Scully iron ore mine, and to a lesser extent, hydrocarbon properties, with an aggregate carrying amount of $270,070 as at December 31, 2019.

Estimation of reported recoverable quantities of proved and probable reserves include judgmental assumptions regarding production profile, prices of products produced, exchange rates, remediation costs, timing and amount of future development costs and production, transportation and marketing costs for future cash flows. It also requires interpretation of geological and geophysical models and anticipated recoveries. The economical, geological and technical factors used to estimate reserves may change from period to period. Changes in reported reserves can impact the carrying amounts of the Group’s interests in resource properties and/or related property, plant and equipment, the recognition of impairment losses and reversal of impairment losses, the calculation of depletion and depreciation, the provision for decommissioning obligations and the recognition of deferred income tax assets or liabilities due to changes in expected future cash flows. The recoverable quantities of reserves and estimated cash flows from the Group’s hydrocarbon interests are independently evaluated by reserve engineers at least annually. During the year ended December 31, 2019, the Group did not recognize any impairment in respect of its interest in resource properties.

The Group’s hydrocarbon reserves represent the estimated quantities of petroleum, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be economically recoverable in future years from known reservoirs and which are considered commercially producible. Such reserves may be considered commercially producible if management has the intention of developing and producing them and such intention is based upon: (a) a reasonable assessment of the future economics of such production; (b) a reasonable expectation that there is a market for all or substantially all the expected hydrocarbon production; and (c) evidence that the necessary production, transmission and transportation facilities are available or can be made available. Reserves may only be considered proven and probable if producibility is supported by either production or conclusive formation tests.

Included in interests in resource properties as at December 31, 2019, were exploration and evaluation assets with an aggregate carrying amount of $17,007. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount and upon reclassification to hydrocarbon development and production assets. If such indicators exist, impairment, if any, is determined by comparing the carrying amounts to the recoverable amounts. The measurement of the recoverable amount involves a number of assumptions, including the timing, likelihood and amount of commercial production, further resource assessment plans and future revenue and costs expected from the asset, if any.

(ii) Impairment of Other Non-Financial Assets

The Group had property, plant and equipment aggregating $55,413 as at December 31, 2019, consisting mainly of a power plant and a natural gas processing facility. Impairment of the Group’s non-financial assets is evaluated at the CGU level. In testing for impairment, the recoverable amounts of the Company’s CGUs are determined as the higher of their values in use and fair values less costs of disposal. In the absence of quoted market prices, the recoverable amount is based on estimates of future production rates, future product selling prices and costs, discount rates and other relevant assumptions. Increases in future costs and/or decreases in estimates of future production rates and product selling prices may result in a write-down of the Group’s property, plant and equipment.

(iii) Taxation

The Group is subject to tax in a number of jurisdictions and judgment is required in determining the worldwide provision for income taxes. Deferred income taxes are recognized for temporary differences using the liability method, with deferred income tax liabilities generally being provided for in full (except for taxable temporary differences associated with investments in subsidiaries and branches where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future) and deferred income tax assets being recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

The Group recognized deferred income tax assets of $14,295 as at December 31, 2019. In assessing the realizability of deferred income tax assets, management considers whether it is probable that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income in Malta and Canada during the periods in which temporary differences become deductible or before tax loss and tax credit carry-forwards expire. Management considers the future reversals of existing taxable temporary differences, projected future taxable income, taxable income in prior years and tax planning strategies in making this assessment. Unrecognized deferred income tax assets are reassessed at the end of each reporting period.

The Group does not recognize the full deferred tax liability on taxable temporary differences associated with investments in subsidiaries and branches where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. The Group may change its investment decision in its normal course of business, thus resulting in additional income tax liabilities.

The operations and organization structures of the Group are complex, and related tax interpretations, regulations and legislation are continually changing. The Group companies’ income tax filings are subject to audit by taxation authorities in numerous jurisdictions. There are audits in progress and items under review, some of which may increase the Group’s income tax liabilities. In addition, the companies have filed appeals and have disputed certain issues. While the results of these items cannot be ascertained at this time, the Group believes that the Group has an adequate provision for income taxes based on available information.

(iv) Contingencies

Pursuant to IAS 37, Provisions, Contingent Liabilities and Contingent Assets, the Group does not recognize a contingent liability. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. If it becomes probable that an outflow of future economic benefits will be required for an item previously accounted for as a contingent liability, an accrual or a provision is recognized in the consolidated financial statements in the period in which the change in probability occurs. See Note 24 for further disclosures on contingencies.

(v) Pandemic COVID-19

The COVID-19 pandemic in 2020 leads the world into a new era of uncertainties. The pandemic is dynamic and expanding and its ultimate scope, duration and effects are currently uncertain.  The impact of the pandemic and the global response thereto has, among other things, significantly disrupted global economic activity, negatively impacted gross domestic product and caused significant volatility in financial markets; although, since May 2020, the pandemic seems to be under control in some regions of the world and some countries and jurisdictions are planning to ease up their lockdown measures.

 

While various countries have implemented stimulus packages and other fiscal measures to attempt to reduce the impact of the pandemic on their economies, the impact of the pandemic on global economic activity and markets both in the short and longer term is uncertain at this time. The magnitude and duration of the disruption and resulting decline in business activity resulting from the COVID-19 pandemic is currently uncertain. While the Group expects that there will likely be some negative impact on its results of operations, cash flows and financial position from the pandemic beyond the near-term, the extent to which the COVID-19 pandemic impacts the Group’s business, operations and financial results will depend on numerous evolving factors that management may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals' actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response thereto; the effect on the Group’s customers, including the borrowers and customers of the Bank (as defined herein); its impacts on suppliers; and the impact of the pandemic on counterparties and their ability to carry out their obligations to the Group.

 

The Group's results of operations, cash flows and financial position will likely be adversely affected by the pandemic beyond near-term. However management does not believe the pandemic will have significant impact on the going concern of the Group in the foreseeable future, which is considered to be 12 months from the date of approval of these financial statements, as the Group currently has sufficient cash, good working capital position and steady cash inflows from operations. Management has performed stress tests on their forecasts with various assumptions and the results showed that the Group would be able to withstand any significant impact on operations within the aforesaid timeframe.

 

Although disruption and effects of the COVID-19 pandemic may be temporary, given the dynamic nature of these circumstances and the worldwide nature of the Company’s business and operations, the duration of any business disruption and the related financial impact to us cannot be reasonably estimated at this time but could materially affect the Group’s business results of operations and financial condition. Ultimately, the severity of the impact of the pandemic on the Group's business and going concern basis will depend on a number of factors, including, the duration and severity of the pandemic and the impact and new developments concerning the global severity of, and actions to be taken to contain the outbreak.

 

Management took into consideration all of these various factors and risks when concluding on the Company’s ability to continue as a going concern and the appropriateness of this presentation when preparing these consolidated financial statements.

 

E. Accounting Changes

Future Accounting Changes

In October 2018, IASB issued amendments to its definition of material to make it easier for companies to make materiality judgements. The updated definition amends IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The amendments clarify the definition of material and how it should be applied and ensure that the definition of material is consistent across all IFRS Standards. The changes are effective from January 1, 2020, although earlier  application is permitted. Management is assessing its impacts on the Group’s financial statement presentation.

 

In October 2018, the IASB amended IFRS 3, Business Combinations, seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application is permitted. The amended standard has a narrower definition of a business, which could result in the recognition of fewer business combinations than under the current standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the current standard may now be recognized as allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity's results of operations that would differ from the effect of goodwill having been recognized). Management is currently assessing the impacts and transition provisions of the amended standard and will apply the standard prospectively from January 1, 2020.

v3.20.1
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure
12 Months Ended
Dec. 31, 2019
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure  
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure

Note 3. Capital Disclosure on the Group’s Objectives, Policies and Processes for Managing Its Capital Structure

The Group’s objectives when managing capital are to: (a) safeguard the entity’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; (b) provide an adequate return to shareholders by pricing products and services commensurately with the level of risk; and (c) maintain a flexible capital structure which optimizes the cost of capital at acceptable risk.

The Group allocates capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or issue new debt.

Consistent with others in its industry, the Group monitors its capital on the basis of the debt-to-adjusted capital ratio and long-term debt-to-equity ratio. The debt-to-adjusted capital ratio is calculated as net debt divided by adjusted capital. Net debt is calculated as total debt less cash and cash equivalents. Adjusted capital comprises all components of shareholders’ equity. The long-term debt-to-equity ratio is calculated as long-term debt divided by shareholders’ equity.

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Total debt

 

$

35,418

 

$

 —

Less: cash and cash equivalents

 

 

(78,274)

 

 

(67,760)

Net debt

 

 

Not applicable

 

 

Not applicable

Shareholders’ equity

 

 

353,612

 

 

386,376

Net debt-to-adjusted capital ratio

 

 

Not applicable

 

 

Not applicable

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Long-term debt

 

$

35,418

 

$

 —

Shareholders’ equity

 

 

353,612

 

 

386,376

Long-term debt-to-equity ratio

 

 

0.10

 

 

Not applicable

 

The above tables do not include a non-interest bearing long-term loan payable of $4,769 as at December 31, 2019 (2018: $3,981) which does not have a fixed repayment date; and (ii) long-term lease liabilities of $832 as at December 31, 2019 (2018: $nil). .

v3.20.1
Acquisitions of Consolidated Entities
12 Months Ended
Dec. 31, 2019
Acquisitions of Consolidated Entities  
Acquisitions of Consolidated Entities

Note 4. Acquisitions of Consolidated Entities

During 2019, the Group’s strategy, which was unchanged from 2018, was to maintain the debt-to-adjusted capital ratio and the long-term debt-to-equity ratio at a manageable level. The ratios changed in 2019 as a result of issuance of bond payables.

Years 2019 and 2018

There was no business combination during the years ended December 31, 2019 and 2018.

Year 2017

Effective October 1, 2017, the Group completed the acquisition of a metal processing company based in Europe. Pursuant to the transaction, the Group acquired the company which equalled the fair values of the identifiable assets acquired and the liabilities assumed on the closing date. Goodwill of $502 was recognized upon the acquisition of the metal processing company. The amount of acquisition-related costs was nominal, which was included in selling, general and administrative expenses in profit or loss. This acquisition was not considered a material business combination and did not have material impact on the Group’s financial position. The metal processing company was sold during the year ended December 31, 2019.

v3.20.1
Assets Classified as Held for Sale
12 Months Ended
Dec. 31, 2019
Assets Classified as Held for Sale  
Assets Classified as Held for Sale

Note 5. Assets Classified as Held for Sale

In March 2019, the Group commenced to liquidate a subsidiary on a voluntary basis (see Note 29). The liquidation process of the subsidiary was completed by December 31, 2019 and included in the consolidated statement of cash flows for the year ended December 31, 2019 after the commencement of its voluntary liquidation.

On December 31, 2016, the Group reclassified the assets and liabilities of a commodities trading subsidiary as held for sale, which had net assets held for sale of $15,770. The sale was completed in 2017 and included in the consolidated statement of cash flows for the year ended December 31, 2017.

v3.20.1
Business Segment Information
12 Months Ended
Dec. 31, 2019
Business Segment Information  
Business Segment Information

Note 6. Business Segment Information

The Group is primarily in the merchant banking business, which includes its iron ore royalty, financial services and other resource interests and other proprietary investments. In addition, the Group owns other merchant banking assets and seeks to invest in businesses or assets whose intrinsic value is not properly reflected. The Group's investing activities are generally not passive. The Group actively seeks investments where its financial expertise and management can add or unlock value.

In 2019, the Group revised its reporting structure, which resulted in three separate and independently managed operating subgroups underneath its corporate umbrella. In reporting to management, the Group’s operating results are currently categorized into the following operating segments: Iron Ore Royalty, Industrial Equity, Merkanti Holding, and All Other segments  which include corporate activities. Corresponding information for the comparative years have been restated to conform with the current year's presentation.

Basis of Presentation

In reporting segments, certain of the Group’s business lines have been aggregated where they have similar economic characteristics and are similar in each of the following areas: (a) the nature of the products and services; (b) the methods of distribution; and (c) the types or classes of customers/clients for the products and services.

The Group’s Iron Ore Royalty segment includes an interest in the Scully iron ore mine in Wabush, Newfoundland & Labrador, Canada. The Group's Industrial Equity segment includes multiple projects in resources and services around the globe. It seeks opportunities to benefit from long-term industrial and services assets, including natural gas, with a focus on East Asia. The Group’s Merkanti Holding segment has a subsidiary with its bonds listed on the Malta Stock Exchange and comprises regulated specialty trade finance and regulated merchant banking businesses with a focus on Europe and South America. In addition, Merkanti Holding plc owns two industrial real estate parks.

The All Other segment includes the Group’s corporate and operating segments whose quantitative amounts do not exceed 10% of any of the Group’s: (a) reported revenue; (b) net income; or (c) total assets.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in Note 2B. The chief operating decision maker evaluates performance on the basis of income or loss from operations before income taxes and does not consider acquisition accounting adjustments in assessing the performance of the Group’s reporting segments. The segment information presented below is prepared according to the following methodologies: (a) revenue and expenses directly associated with each segment are included in determining pre-tax earnings; (b) intersegment sales and transfers are accounted for as if the sales or transfers were to third parties at current market prices; (c) certain selling, general and administrative expenses paid by corporate, particularly incentive compensation and share-based compensation, are not allocated to reporting segments; (d) all intercompany investments, receivables and payables are eliminated in the determination of each segment’s assets and liabilities; (e) deferred income tax assets and liabilities are not allocated; and (f) gains or losses on dispositions of subsidiaries, write-offs of intercompany accounts, reclassification of realized cumulative translation adjustments from equity to profit or loss on disposals of subsidiaries, changes in intercompany account balances and cash used (received) in acquisition (disposition) of a subsidiary are allocated to corporate and included within the Group's All Other segment.

Segment Operating Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Revenue from external customers

 

$

5,496

 

$

100,184

 

$

7,565

 

$

22

 

$

113,267

Intersegment sale

 

 

 —

 

 

 6

 

 

3,455

 

 

948

 

 

4,409

Interest expense

 

 

 —

 

 

323

 

 

601

 

 

26

 

 

950

Income (loss) before income taxes

 

 

4,419

 

 

(15,840)

 

 

4,800

 

 

(10,163)

 

 

(16,784)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2018 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Revenue from external customers

 

$

1,732

 

$

131,614

 

$

6,405

 

$

 —

 

$

139,751

Intersegment sale

 

 

 —

 

 

25

 

 

3,546

 

 

2,760

 

 

6,331

Interest expense

 

 

 —

 

 

1,770

 

 

12

 

 

 —

 

 

1,782

Income (loss) before income taxes

 

 

185,780

 

 

(25,469)

 

 

1,199

 

 

6,319

 

 

167,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2017 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Revenue from external customers

 

$

8,868

 

$

259,682

 

$

5,484

 

$

 1

 

$

274,035

Intersegment sale

 

 

 —

 

 

361

 

 

5,244

 

 

1,843

 

 

7,448

Interest expense

 

 

 —

 

 

4,098

 

 

833

 

 

 —

 

 

4,931

Income (loss) before income taxes

 

 

7,435

 

 

(39,936)

 

 

2,647

 

 

(8,553)

 

 

(38,407)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Segment assets

 

$

222,385

 

$

162,772

 

$

117,790

 

$

402

 

$

503,349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2018 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Segment assets

 

$

224,043

 

$

195,642

 

$

86,369

 

$

859

 

$

506,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

 

All Other

    

Total

Segment liabilities

 

$

53,489

 

$

37,482

 

$

45,808

 

$

4,556

 

$

141,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2018 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Segment liabilities

 

$

55,369

 

$

48,784

 

$

7,168

 

$

1,186

 

$

112,507

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Year ended December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

    

Equity

    

Holding

    

All Other

    

Total

Cash (used in) provided by operating activities

 

$

(98)

 

$

1,678

 

$

(2,685)

 

$

(8,702)

 

$

(9,807)

Cash used in investing activities

 

 

 —

 

 

(7,262)

 

 

(1,174)

 

 

(1,766)

 

 

(10,202)

Cash (used in) provided by financing activities

 

 

 —

 

 

(532)

 

 

35,133

 

 

191

 

 

34,792

Exchange rate effect on cash and cash equivalents

 

 

 —

 

 

(2,710)

 

 

(1,771)

 

 

212

 

 

(4,269)

Change in cash and cash equivalents

 

$

(98)

 

$

(8,826)

 

$

29,503

 

$

(10,065)

 

$

10,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Year ended December 31, 2018

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

    

Equity

    

Holding

    

All Other

    

Total

Cash provided by (used in) operating activities

 

$

300

 

$

(3,345)

 

$

3,844

 

$

(7,990)

 

$

(7,191)

Cash provided by (used in) investing activities

 

 

 —

 

 

46

 

 

(286)

 

 

(1,041)

 

 

(1,281)

Cash (used in) provided by financing activities

 

 

 —

 

 

(858)

 

 

 1

 

 

 —

 

 

(857)

Exchange rate effect on cash and cash equivalents

 

 

 —

 

 

1,672

 

 

577

 

 

(30)

 

 

2,219

Change in cash and cash equivalents

 

$

300

 

$

(2,485)

 

$

4,136

 

$

(9,061)

 

$

(7,110)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Year ended December 31, 2017

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

    

Equity

    

Holding

    

All Other

    

Total

Cash provided by (used in) operating activities

 

$

5,611

 

$

(26,936)

 

$

1,749

 

$

16,379

 

$

(3,197)

Cash provided by (used in) investing activities

 

 

 —

 

 

5,375

 

 

(440)

 

 

(8,429)

 

 

(3,494)

Cash used in financing activities

 

 

 —

 

 

(42,677)

 

 

 —

 

 

(43)

 

 

(42,720)

Exchange rate effect on cash and cash equivalents

 

 

 —

 

 

(11,140)

 

 

738

 

 

14,007

 

 

3,605

Change in cash and cash equivalents

 

$

5,611

 

$

(75,378)

 

$

2,047

 

$

21,914

 

$

(45,806)

 

Geographic Information

Due to the highly integrated nature of international products and services, merchant banking activities and markets, and a significant portion of the Group’s activities requiring cross-border coordination in order to serve the Group’s customers and clients, the methodology for allocating the Group’s profitability to geographic regions is dependent on estimates and management judgment.

Geographic results are generally determined as follows:

 

 

 

Segment

    

Basis for attributing revenue

Iron Ore Royalty

 

Locations of operations

Industrial Equity

 

Locations of external customers or the reporting units, whichever is appropriate

Merkanti Holding

 

Locations of external customers or the reporting units, whichever is appropriate

All Other

 

Locations of the reporting units

 

Due to the nature of cross-border business, the Group presents its geographic information by geographic regions, instead of by countries. The following table presents revenue from external customers by geographic region of such customers, locations of operations or the reporting units, whichever is appropriate:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Canada

 

$

13,730

 

$

13,035

 

$

19,595

Africa

 

 

4,114

 

 

4,254

 

 

4,283

Americas

 

 

5,880

 

 

1,786

 

 

22,446

Asia

 

 

1,909

 

 

1,549

 

 

14,894

Europe

 

 

87,634

 

 

119,127

 

 

212,817

 

 

$

113,267

 

$

139,751

 

$

274,035

 

Except for the geographic concentrations as indicated in the above table and a customer in the Industrial Equity segment located in Slovakia representing approximately 13% and 16%, respectively, of the Group’s revenue for the years ended December 31, 2019 and 2018, there were no other revenue concentrations during the years  ended December 31, 2019, 2018 and 2017.

The following table presents non-current assets other than financial instruments, deferred income tax assets and other non-current assets by geographic area based upon the location of the assets.

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Africa

 

$

29,930

 

$

33,258

Canada

 

 

293,974

 

 

297,537

Asia

 

 

24

 

 

20

Europe

 

 

52,800

 

 

52,914

 

 

$

376,728

 

$

383,729

 

v3.20.1
Securities
12 Months Ended
Dec. 31, 2019
Securities  
Securities

Note 7. Securities

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Short-term securities

 

 

  

 

 

  

Equity securities at FVTPL, publicly traded

 

$

1,822

 

$

 4

Equity securities at FVTPL, unlisted

 

 

1,130

 

 

 —

Debt securities at FVTPL, publicly traded

 

 

2,403

 

 

1,068

Debt securities at FVOCI, publicly traded

 

 

8,819

 

 

6,328

 

 

$

14,174

 

$

7,400

Long-term securities

 

 

  

 

 

  

Equity securities at FVTPL, publicly traded

 

$

 —

 

$

701

Equity securities in an affiliate at FVTPL, unlisted

 

 

3,809

 

 

4,001

 

 

$

3,809

 

$

4,702

 

v3.20.1
Trade Receivables
12 Months Ended
Dec. 31, 2019
Trade Receivables  
Trade Receivables

Note 8. Trade Receivables

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Trade receivables, gross amount

 

$

4,204

 

$

5,654

Less: Allowance for expected credit losses

 

 

(46)

 

 

(311)

Trade receivables, net amount

 

$

4,158

 

$

5,343

 

All trade receivables comprise accounts from contracts with customers and primarily arise from merchant banking activities.

As at December 31, 2019, the Group recognized a loss allowance of $46 (2018:  $311) against its trade receivables. The movement in the loss allowance during the year ended December 31, 2019 and 2018 was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Equal to lifetime expected credit losses

 

 

 

 

 

Financial assets that

 

 

 

 

 

 

 

 

are credit-impaired

 

Other trade

 

 

 

 

    

at year-end

    

Receivables

    

Total

Loss allowance: as at January 1, 2018

 

$

 —

 

$

 —

 

$

 —

Reclassification from IAS 39 upon initial adoption of IFRS 9

 

 

8,948

 

 

 —

 

 

8,948

Additions for the year

 

 

21,817

 

 

87

 

 

21,904

Written off

 

 

(30,935)

 

 

 —

 

 

(30,935)

Exchange effect

 

 

184

 

 

10

 

 

194

Other

 

 

 —

 

 

200

 

 

200

Loss allowance: as at December 31, 2018

 

 

14

 

 

297

 

 

311

Additions for the year

 

 

443

 

 

 —

 

 

443

Reversal

 

 

 —

 

 

(83)

 

 

(83)

Written off

 

 

(409)

 

 

(199)

 

 

(608)

Exchange effect

 

 

(2)

 

 

(15)

 

 

(17)

Loss allowance: as at December 31, 2019

 

$

46

 

$

 —

 

$

46

 

In accordance with IFRS 9, management reviews the expected credit losses for the following twelve months based upon, among other things, the credit-worthiness of the exposure, collateral and other risk mitigation instruments, and the nature of the underlying business transaction. There have been no financial instruments acquired whose credit risk has increased substantially since initial recognition.

During 2017, management of the Group continued to monitor and assess the collectability of the receivables related to a former insolvent customer. As a result of such reviews, the Group reversed and credited an allowance of $1,541 to profit or loss in the third quarter. During the fourth quarter, the Group deconsolidated subsidiaries which had trade receivables due from this former customer group (see Note 29). Furthermore, the Group increased the valuation allowance by $224 based on its revision of expected future cash flows. As such, the Group had net trade receivables of $21,375 due from this former customer group as at December 31, 2017.

During 2018, management recognized a further credit loss of $21,812 and subsequently wrote off the remaining receivable balance from this former customer group as management determined the amount to be uncollectible. The maximum amount of credit risk, without taking into account any collateral or other credit enhancements, is equal to the carrying value of our receivables. The Group intends to pursue, where commercially reasonable, the recovery of receivables which have been impaired historically.

 

For further discussions on credit risk, see Note 27.

v3.20.1
Other Receivables
12 Months Ended
Dec. 31, 2019
Other Receivables  
Other Receivables

Note 9. Other Receivables

 

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

 

Interest receivables

 

$

145

 

$

83

 

Contract assets under contracts with customers

 

 

 —

 

 

295

 

Loans (net of allowance of $16 and $nil as of December 31, 2019 and 2018, respectively)

 

 

828

*

 

6,087

**

Indemnification asset (see Note 26)

 

 

6,362

 

 

 —

 

Other

 

 

769

 

 

2,210

 

 

 

$

8,104

 

$

8,675

 


*   In 2019, the Group had various amounts owing from an affiliate owned by our Chairman equal to $828 (see Note 26).

**  The loan, which was due from a former subsidiary, was written off in 2019.

 

Other receivables primarily arise in the normal course of business and are expected to be collected within one year from the reporting date.

The movement of contract assets under contracts with customers for the years ended December 31, 2019 and 2018 was as follows:

 

 

 

 

 

 

 

 

 

    

2019

 

2018

Balance, beginning of the year

 

$

295

 

$

876

A change in the time frame for a right to consideration to become unconditional

 

 

(295)

 

 

(581)

Balance, end of the year

 

$

 —

 

$

295

 

 

 

For further discussions on credit risk, see Note 27.

v3.20.1
Inventories
12 Months Ended
Dec. 31, 2019
Inventories  
Inventories

Note 10. Inventories

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Raw materials

 

$

1,877

 

$

3,640

Work-in-progress

 

 

20

 

 

3,568

Finished goods

 

 

491

 

 

1,960

Commodity inventories

 

 

 —

 

 

2,238

 

 

$

2,388

 

$

11,406

Comprising:

 

 

  

 

 

  

Inventories contracted at fixed prices or hedged

 

$

 —

 

$

9,432

Inventories – other

 

 

2,388

 

 

1,974

 

 

$

2,388

 

$

11,406

 

v3.20.1
Investment Property
12 Months Ended
Dec. 31, 2019
Investment Property  
Investment Property

Note 11. Investment Property

All of the Group’s investment property is located in Europe.

 

 

 

 

 

 

 

 

Changes in investment property included in non-current assets:

    

2019

    

2018

Balance, beginning of year

 

$

37,804

 

$

37,660

Change in fair value during the year

 

 

2,996

 

 

(274)

Disposals

 

 

 —

 

 

(976)

Currency translation adjustments

 

 

(2,595)

 

 

1,394

Balance, end of year

 

$

38,205

 

$

37,804

 

The amounts recognized in profit or loss in relation to investment property during the years ended December 31, 2019, 2018 and 2017 are as follows:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Rental income

 

$

1,652

 

$

1,611

 

$

1,510

Direct operating expenses (including repairs and maintenance) arising from investment property during the year

 

 

266

 

 

193

 

 

256

 

v3.20.1
Property, Plant and Equipment
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment  
Property, Plant and Equipment

Note 12. Property, Plant and Equipment

The following changes in property, plant and equipment were recorded during the year  ended December 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Initial adoption

 

 

 

 

 

 

 

Dispositions

 

 

 

 

Currency

 

 

 

 

 

Opening

 

of

 

 

 

 

 

 

 

of

 

 

 

 

translation

 

Ending

Costs

    

balance

    

IFRS 16

    

Additions

    

Disposals

    

subsidiaries

    

Reclassification

    

adjustments

    

balance

Refinery and power plants

 

$

68,559

 

$

 —

 

$

219

 

$

 —

 

$

 —

 

$

 —

 

$

(2,077)

 

$

66,701

Processing plant and equipment

 

 

3,761

 

 

 —

 

 

443

 

 

(326)

 

 

(1,019)

 

 

406

 

 

42

 

 

3,307

Office equipment

 

 

1,450

 

 

 —

 

 

332

 

 

(291)

 

 

(95)

 

 

(406)

 

 

(70)

 

 

920

Office premises*

 

 

 —

 

 

2,911

 

 

1,583

 

 

(278)

 

 

(2,500)

 

 

 —

 

 

(162)

 

 

1,554

 

 

$

73,770

 

$

2,911

 

$

2,577

 

$

(895)

 

$

(3,614)

 

$

 —

 

$

(2,267)

 

$

72,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Initial adoption

 

 

 

 

 

 

 

Dispositions

 

 

 

 

Currency

 

 

 

 

 

Opening

 

of

 

 

 

 

 

 

 

of

 

 

 

 

translation

 

Ending

Accumulated depreciation

    

balance

    

IFRS 16

    

Additions

    

Disposals

    

subsidiaries

    

Reclassification

    

adjustments

    

balance

Refinery and power plants

 

$

12,763

 

$

 —

 

$

2,641

 

$

 —

 

$

 —

 

$

 —

 

$

(521)

 

$

14,883

Processing plant and equipment

 

 

1,873

 

 

 —

 

 

416

 

 

(326)

 

 

(842)

 

 

387

 

 

(54)

 

 

1,454

Office equipment

 

 

809

 

 

 —

 

 

145

 

 

(136)

 

 

(36)

 

 

(387)

 

 

(29)

 

 

366

Office premises*

 

 

 —

 

 

 —

 

 

738

 

 

 —

 

 

(367)

 

 

 —

 

 

(5)

 

 

366

 

 

 

15,445

 

$

 —

 

$

3,940

 

$

(462)

 

$

(1,245)

 

$

 —

 

$

(609)

 

 

17,069

Net book value

 

$

58,325

 

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

$

55,413


*    right-of-use assets.

 

As at December 31, 2019, the net book value of right-of-use assets was $1,188.

 

The following changes in property, plant and equipment were recorded during the year ended December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions

 

 

 

 

Currency

 

 

 

 

 

Opening

 

 

 

 

 

 

 

of

 

 

 

 

translation

 

Ending

Costs

    

balance

    

Additions

    

Disposals

    

subsidiaries

    

Impairments

    

adjustments

    

balance

Refinery and power plants

 

$

92,434

 

$

 —

 

$

(148)

 

$

(27,214)

 

$

 —

 

$

3,487

 

$

68,559

Processing plant and equipment

 

 

3,703

 

 

88

 

 

(25)

 

 

 —

 

 

(42)

 

 

37

 

 

3,761

Office equipment

 

 

1,135

 

 

340

 

 

(56)

 

 

 —

 

 

(4)

 

 

35

 

 

1,450

 

 

$

97,272

 

$

428

 

$

(229)

 

$

(27,214)

 

$

(46)

 

$

3,559

 

$

73,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions

 

 

 

Currency

 

 

 

 

 

Opening

 

 

 

 

 

 

 

of

 

 

 

translation

 

Ending

Accumulated depreciation

    

balance

    

Additions

    

Disposals

    

subsidiaries

    

Impairments

    

adjustments

    

balance

Refinery and power plants

 

$

11,047

 

$

2,775

 

$

(148)

 

$

(1,668)

 

$

 —

 

$

757

 

$

12,763

Processing plant and equipment

 

 

1,626

 

 

255

 

 

(10)

 

 

 —

 

 

(27)

 

 

29

 

 

1,873

Office equipment

 

 

645

 

 

211

 

 

(60)

 

 

 —

 

 

(4)

 

 

17

 

 

809

 

 

 

13,318

 

$

3,241

 

$

(218)

 

$

(1,668)

 

$

(31)

 

$

803

 

 

15,445

Net book value

 

$

83,954

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

$

58,325

 

As of December 31, 2019, the Group owned a power plant which had a carrying amount of $29,931. Pursuant to an assessment study of which the future cash flows were discounted at 8%,  management concluded that there was no impairment loss on December 31, 2019. Numerous variables were utilized for this assessment, including inflation expectations, performance of contracts, discount rates, and maintenance costs. Any change in these assumptions and variables could have an impact on the valuation of the asset. If the discount rate had been 100 basis point higher, there would have been no change to the Group’s net loss for the year ended December 31, 2019.

During the year ended December 31, 2018, the Group deconsolidated a subsidiary which owned a power plant (see Note 29).

During the year ended December 31, 2019, 2018 and 2017 respectively, no expenditures were recognized in the carrying amounts of items of property, plant and equipment in the course of their construction.

v3.20.1
Interests in Resource Properties
12 Months Ended
Dec. 31, 2019
Interests in Resource Properties  
Interests in Resource Properties

Note 13. Interests in Resource Properties

The Group’s interests in resource properties as at December 31, 2019 and 2018 comprised the following:

 

 

 

 

 

 

 

 

 

    

2019

    

2018

Interest in an iron ore mine

 

$

216,575

 

$

218,203

Hydrocarbon development and production assets

 

 

36,488

 

 

38,040

Exploration and evaluation assets – hydrocarbon probable reserves

 

 

12,367

 

 

12,367

Exploration and evaluation assets – hydrocarbon undeveloped lands

 

 

4,640

 

 

4,640

 

 

$

270,070

 

$

273,250

 

The movements in the interest in an iron ore mine and hydrocarbon development and production assets included in non-current assets during the year ended December 31, 2019 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Opening

 

Decommissioning

 

Ending

Costs

 

balance

 

obligations

 

balance

Interest in an iron ore mine

    

$

218,203

    

$

 —

    

$

218,203

Hydrocarbon development and production assets

 

 

45,533

 

 

1,167

 

 

46,700

 

 

$

263,736

 

$

1,167

 

$

264,903

 

 

 

 

 

 

 

 

 

 

 

 

 

Opening

 

 

 

Ending

Accumulated depreciation

 

balance

 

Additions

 

balance

Interest in an iron ore mine

    

$

 —

    

$

1,628

    

$

1,628

Hydrocarbon development and production assets

 

 

7,493

 

 

2,719

 

 

10,212

 

 

 

7,493

 

$

4,347

 

 

11,840

Net book value

 

$

256,243

 

 

 

 

$

253,063

 

The movements in the interest in an iron ore mine and hydrocarbon development and production assets included in non-current assets during the year ended December 31, 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reversal of

 

 

 

 

 

Opening

 

Decommissioning

 

impairment

 

Ending

Costs

 

balance

 

obligations

 

losses

 

balance

Interest in an iron ore mine

    

$

30,000

    

$

 —

    

$

188,203

    

$

218,203

Hydrocarbon development and production assets

 

 

45,871

 

 

(338)

 

 

 —

 

 

45,533

 

 

$

75,871

 

$

(338)

 

$

188,203

 

$

263,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reversal of

 

 

 

 

 

Opening

 

 

 

impairment

 

Ending

Accumulated depreciation

 

balance

 

Additions

 

losses

 

balance

Interest in an iron ore mine

    

$

 —

    

$

 —

    

$

 —

    

$

 —

Hydrocarbon development and production assets

 

 

5,022

 

 

2,471

 

 

 —

 

 

7,493

 

 

 

5,022

 

$

2,471

 

$

 —

 

 

7,493

Net book value

 

$

70,849

 

 

 

 

 

 

 

$

256,243

 

The movements in exploration and evaluation assets presented as hydrocarbon probable reserves and undeveloped lands during the years ended December 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

 

Probable

 

Undeveloped

 

Probable

 

Undeveloped

 

 

reserves

 

lands

 

reserves

 

lands

Balance, beginning of year

    

$

12,367

    

$

4,640

    

$

12,367

    

$

9,335

Additions

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Disposal

 

 

 —

 

 

 —

 

 

 —

 

 

(4,695)

Balance, end of year

 

$

12,367

 

$

4,640

 

$

12,367

 

$

4,640

 

Interest in an iron ore mine

The Group derives revenue from a mining sub-lease of the lands upon which the Scully iron ore mine is situated in Newfoundland and Labrador, Canada. The sub-lease commenced in 1956 and expires in 2055. The iron ore deposit is currently sub-leased to a third-party entity under certain lease agreements which will also expire in 2055. Pursuant and subject to the terms of the lease agreements, the Group collects royalty payments directly from a third-party operator based on a pre-determined formula, with a minimum payment of $3,250 per year which is deferred to contract liabilities under contracts with customers until earned as defined in the underlying lease agreements.

In 2017, a third party (the new operator) acquired the mine out of proceedings under the Companies’ Creditors Arrangement Act (Canada). In 2018, the new operator announced that it had completed the financing for the mining operations on the iron ore mine and planned to recommence the operations in the summer of 2019. As a result of these new developments, management re-assessed whether there was any indication that previously recognized impairments for the asset might no longer exist or might have decreased. Pursuant to the re-assessment study of which the future cash flows were discounted at 8.3% per annum, management concluded that the previously recognized impairment loss of $188,203 should be reversed in the year ended December 31, 2018. Management performed another assessment on December 31, 2019 and concluded that there was no impairment.

Hydrocarbon properties

The Group owns hydrocarbon properties in western Canada. The majority of such operations are located in the Deep Basin fairway of the Western Canada Sedimentary Basin. The Group’s hydrocarbon development and production assets include producing natural gas wells, non-producing natural gas wells, producing oil wells and non-producing oil wells, but do not include a land position that includes net working interests in undeveloped acreage and properties containing probable reserves only, both of which are included in exploration and evaluation assets.

The recoverable amounts of the Group’s hydrocarbon CGUs are determined whenever facts and circumstances provide impairment indicators. CGUs are mainly determined based upon the geographical region of the Group’s producing properties.  An impairment is recognized if the carrying value of a CGU exceeds the recoverable amount for that CGU. The Group determines the recoverable amount by using the greater of fair value less cost to sell and the value-in-use. Value-in-use is generally the future cash flows expected to be derived from production of proven and probable reserves estimated by the Company's third party reserve evaluators. These third party reserve engineers take many data points and forecasts into consideration when estimating the value-in-use of the CGU, including best estimates of future natural gas prices, production based on current estimates of recoverable reserves and resources, exploration potential, future operating costs, non-expansionary capital expenditures and inflation.

On December 31, 2017, the Group performed an impairment assessment on its hydrocarbon properties utilizing a post-tax discount rate of 11% and recognized a net non-cash reversal of impairment losses of $15,585, of which $13,264 were allocated to development and production assets and $2,951 to probable reserves and an impairment loss of $630 was allocated to undeveloped lands. On December 31, 2018, the Group performed an impairment assessment on its hydrocarbon properties utilizing a post-tax discount rate of 9.25% and no impairments or reversals of impairments were recognized. On December 31, 2019, the Group changed its valuation methodology for these assets to value-in-use from fair value less costs to sell and performed an impairment assessment on its hydrocarbon properties utilizing a pre-tax discount rate of 10.0% and no impairments or reversals of impairments were recognized. The Group changed to use the pre-tax discount rate in 2019 so as to conform with general practices in the industry. Numerous variables were utilized for this assessment, including price forecasts, production assumptions, inflation expectations, maintenance, decommissioning obligations and capital expenditure estimates, among others. Any change in these assumptions and  variables could have an impact on the valuation of the asset. If the discount rate had been 100 basis points higher, the Group’s net loss would have been $388 higher in the year ended December 31, 2019.

v3.20.1
Deferred Income Tax Assets and Liabilities
12 Months Ended
Dec. 31, 2019
Deferred Income Tax Assets and Liabilities  
Deferred Income Tax Assets and Liabilities

Note 14. Deferred Income Tax Assets and Liabilities

The tax effect of temporary differences and tax loss carry-forwards that give rise to significant components of the Group’s deferred income tax assets and liabilities are as follows:

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Non-capital tax loss carry-forwards

 

$

27,214

 

$

26,363

Interests in resource properties

 

 

(60,589)

 

 

(56,904)

Other assets

 

 

(7,181)

 

 

(8,800)

Other liabilities

 

 

(10,456)

 

 

(11,345)

 

 

$

(51,012)

 

$

(50,686)

Presented on the consolidated statements of financial position as follows:

 

 

 

 

 

 

Deferred income tax assets

 

$

14,295

 

$

15,735

Deferred income tax liabilities

 

 

(65,307)

 

 

(66,421)

Net

 

$

(51,012)

 

$

(50,686)

 

As at December 31, 2019, the Group had estimated accumulated non-capital losses, which expire in the following countries and regions  as follows. Management is of the opinion that not all of these non-capital losses are probable to be utilized in the future.

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Amount for which

    

 

 

 

 

 

 

no deferred

 

 

 

 

 

 

 

income tax asset

 

 

Country / Region

 

Gross amount

 

is recognized

 

Expiration dates

Canada

 

$

35,359

 

$

14

 

2035‑2039

Germany

 

 

41

 

 

 —

 

Indefinite

Malta

 

 

93,203

 

 

66,129

 

Indefinite

Africa

 

 

28,880

 

 

 —

 

Indefinite

 

The utilization of the deferred tax assets is dependent on future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences and the Group companies have suffered losses in either the current or preceding period(s) in the tax jurisdictions to which the deferred tax assets relate.

The Group companies’ income tax, value-added tax and payroll tax filings are also subject to audit by taxation authorities in numerous jurisdictions. There are audits in progress and items under review, some of which may increase the Group’s income tax, value-added tax and payroll tax liability. If it is probable that management’s estimate of the future resolution of these matters changes, the Group will recognize the effects of the changes in its consolidated financial statements in the appropriate period relative to when such changes occur.

v3.20.1
Account Payables and Accrued Expenses
12 Months Ended
Dec. 31, 2019
Account Payables and Accrued Expenses  
Account Payables and Accrued Expenses

Note 15. Account Payables and Accrued Expenses

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Trade and account payables

 

$

9,921

 

$

19,993

Interest payables

 

 

486

 

 

46

Value-added, goods and services and other taxes (other than income taxes)

 

 

477

 

 

831

Compensation

 

 

206

 

 

247

Contract liabilities under contracts with customers

 

 

4,637

 

 

5,198

Lease liabilities

 

 

364

 

 

 —

Losses on corporate guarantees (see Note 19)

 

 

3,070

 

 

 —

 

 

$

19,161

 

$

26,315

 

Trade payables arise from the Group’s day-to-day activities. The Group’s expenses for services and other operational expenses are included in account payables. Generally, these payables and accrual accounts do not bear interest and have a maturity of less than one year.

On June 30, 2019, the Group recorded credit losses of $3,134 as related to losses on certain corporate guarantees. The provision amount changed to $3,070 as of December 31, 2019 due to the fluctuation of exchange rates.

In February 2018, the calling of a guarantee resulted in a provision for credit loss of $1,502 as at December 31, 2017. During the year ended December 31, 2018, the credit loss resulting from the calling of the guarantee was reduced by $833. The provision for the guarantee was no longer outstanding as at December 31, 2018.

Contract liabilities under contracts with customers

 

The movements of contract liabilities under contracts with customers for the years ended December 31, 2019 and  2018 were as follows:

 

 

 

 

 

 

 

 

 

    

2019

    

2018

Balance, beginning of the year

 

$

6,446

 

$

797

Considerations received

 

 

4,949

 

 

5,649

Reclassification to profit or loss upon satisfaction of performance obligations

 

 

(6,758)

 

 

 —

Balance, end of the year

 

$

4,637

 

$

6,446

* Reclassification from contract liabilities to trade and accounts payable.

 

The Group expects to recognize the contract liabilities as revenue upon satisfaction of performance obligations in the following years:

 

 

 

 

 

 

 

 

 

    

2019

    

2018

Year 1 after the year-end (included in current liabilities)

 

$

4,637

 

$

5,198

Year 2 after the year-end (included in long-term liabilities)

 

 

 —

 

 

1,248

 

 

$

4,637

 

$

6,446

* Reclassification from contract liabilities to trade and accounts payable.

 

Lease liabilities

 

Future lease payments included in the measurement of the lease liabilities as at December 31, 2019 are as follows:

 

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

    

Principal

 

Interest

 

Total

2020

 

$

364

 

$

49

 

$

413

2021

 

 

229

 

 

34

 

 

263

2022

 

 

196

 

 

19

 

 

215

2023

 

 

204

 

 

11

 

 

215

2024

 

 

203

 

 

 3

 

 

206

 

 

$

1,196

 

$

116

 

$

1,312

 

As at December 31, 2019, the principal amounts of the lease liabilities were presented on the statement of financial position as follows:

 

 

 

 

 

Current liabilities

    

$

364

Long-term liabilities

 

 

832

 

 

$

1,196

 

As at December 31, 2019, the lease liabilities, which principally comprised office premises (see Note 12), have varying terms and are subject to the customary practices in the local regions. The Group expects to pay for these future lease payments from the operations. Management does not expect material exposure arising from variable lease payments, extension options and termination options, residual value guarantees and leases not yet commenced to which the Group is committed.

 

The Group recognized the following associated with its lease liabilities for the year ended December 31, 2019:

 

 

 

 

 

 

    

Amount

Interest expense

 

$

71

Expense relating to short-term leases with payments directly charged to profit or losses

 

 

881

Expense relating to leases of low-value assets with payments directly charged to profit or losses

 

 

 —

Expense relating to variable lease payments not included in the measurement of lease liabilities

 

 

 —

Total cash outflows for leases

 

 

1,824

Depreciation charge for right-of-use assets (see Note 12)

 

 

738

Carrying amount of right-of-use assets at the end of the reporting period (see Note 12)

 

 

1,188

 

Minimum lease payments recognized as expenses were $2,303 (including contingent rents of $423) and $3,120 (including contingent rents of $115) for the year ended December 31, 2018 and 2017, respectively.

v3.20.1
Bond Payables
12 Months Ended
Dec. 31, 2019
Bond Payables  
Bond Payables

Note 16. Bond Payables

In August 2019, a subsidiary completed a public issue of bonds with an aggregate nominal amount of $36,511  (€25,000), less commissions and issuance costs totaling $1,078 (€738). The bonds are redeemable in August 2026, interest payable in August each year at a nominal interest rate of 4.00% (or an effective interest rate at 4.41%) and secured by the Group's investment property and real estate held for sale under the German Law Mortgages and Pledges. To the extent that any sales of these properties, in whole or in part, cause the security to fall below a certain ratio, proceeds of said sale, up to an amount of the collateral shortfall, are required to be placed as cash collateral with the bond holder trustee until maturity. As at December 31, 2019, the carrying amount of the bond payables was $35,418 (nominal amount of $36,458 or €25,000).

For the movement of bond payables in the year ended December 31, 2019, see Note 25.

As at December 31, 2019, the contractual maturities of the bond payables are as follows:

 

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

    

Principal

    

Interest

    

Total

2020

 

$

 —

 

$

1,458

 

$

1,458

2021

 

 

 —

 

 

1,458

 

 

1,458

2022

 

 

 —

 

 

1,458

 

 

1,458

2023

 

 

 —

 

 

1,458

 

 

1,458

2024

 

 

 —

 

 

1,458

 

 

1,458

Thereafter

 

 

36,458

 

 

2,916

 

 

39,374

 

 

$

36,458

 

$

10,206

 

$

46,664

 

v3.20.1
Decommissioning Obligations
12 Months Ended
Dec. 31, 2019
Decommissioning Obligations  
Decommissioning Obligations

Note 17. Decommissioning Obligations

 

 

 

 

 

 

 

 

 

    

2019

    

2018

Decommissioning obligations, beginning of year

 

$

13,641

 

$

13,699

Changes in estimates

 

 

1,167

 

 

(338)

Accretion

 

 

210

 

 

280

Decommissioning obligations, end of year

 

$

15,018

 

$

13,641

 

Decommissioning obligations represent the present value of estimated remediation and reclamation costs associated with hydrocarbon properties and property, plant and equipment. As at December 31, 2019 and 2018, management revised its estimates of the expected decommissioning obligations related to its hydrocarbon production and processing assets. The Group discounted the decommissioning obligations using an average discount rate of 1.61% (2018: 1.98%), which is the risk-free rate in Canada for blended government securities.

The Group’s decommissioning obligations are unsecured and will be funded from future cash flows from operations.

v3.20.1
Shareholders' Equity
12 Months Ended
Dec. 31, 2019
Shareholders' Equity  
Shareholders' Equity

Note 18. Shareholders’ Equity

Capital Stock

The authorized share capital of Scully is US$450,000 divided into 300,000,000 common shares of US$0.001 par value each and 150,000,000 preference shares divided into US$0.001 par value each.

Holders of common shares may receive dividends declared by the Company in accordance with the Company’s memorandum and articles of association, subject to any preferential dividend rights of any other classes or series of preference shares issued and outstanding. Holders of common shares are entitled to one vote per share at any general or special meeting of shareholders. The holders of common shares have the right on the winding up or dissolution of the Company to participate in the surplus assets of the Company in accordance with the provisions of the memorandum and articles of association of the Company, subject to the rights of any issued and outstanding preference shares.

All of the Company’s issued capital stock is fully paid.

Treasury Stock

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Total number of common shares held as treasury stock

 

 

65,647

 

 

65,647

Total carrying amount of treasury stock

 

$

2,643

 

$

2,643

 

All of the Company’s treasury stock is held by wholly-owned subsidiaries.

v3.20.1
Consolidated Statements of Operations
12 Months Ended
Dec. 31, 2019
Consolidated Statements of Operations  
Consolidated Statements of Operations

Note 19.Consolidated Statements of Operations

Revenue

The Group’s revenue comprised:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Merchant banking products and services

 

$

101,013

 

$

124,059

 

$

249,581

Interest

 

 

1,057

 

 

676

 

 

973

Dividends

 

 

 —

 

 

168

 

 

 —

Gain on securities, net

 

 

931

 

 

3,856

 

 

 —

Other, including medical and real estate sectors

 

 

10,266

 

 

10,992

 

 

23,481

Revenue

 

$

113,267

 

$

139,751

 

$

274,035

 

The revenue of $101,013 from merchant banking products and services for the year ended December 31, 2019 comprised metals of $77,527, natural gas of $7,712, royalty revenue of $5,687, power and electricity of $4,075,  fees of $3,547 and food products of $2,465. Revenue from merchant banking products are generally recognized from contracts with customers.

The revenue of $124,059 from merchant banking products and services for the year ended December 31, 2018 comprised metals of $107,540, natural gas of $10,371, change in royalty revenue estimate of ($2,437), power and electricity of $4,254 and fees of $4,331. Revenue from merchant banking products are generally recognized from contracts with customers.

The revenue of $249,581 from merchant banking products and services for the year ended December 31, 2017 comprised metals of $143,572, plastics of $98, steel products of $23,898, minerals, chemicals and alloys of $57,768, natural gas of $8,931, royalties of $8,868, power and electricity of $4,215 and fees of $2,231.

The Group’s revenue includes the revenue of the metals processing acquisition from October 1, 2017. The metals processing was disposed of in September 2019. Another metal processing line which comprised two subsidiaries was disposed of in October 2019. See Note 2C(iv).

Effective January 31, 2017, the Group completed the sale of a non-core commodities trading subsidiary which focused on Latin America. Effective October 1, 2017, the Group disposed of certain subsidiaries, including certain commodities trading subsidiaries in Europe. In September 2018, the Group disposed of certain European subsidiaries which did not have significant business activities.

During the year ended December 31, 2018, the Group reclassified certain revenue related to its iron ore royalty interest to contract liabilities. This was accounted for as a change in accounting estimates under IAS 8 and, as a result, during the year ended December 31, 2018, the Group reversed $2,437 which was previously recognized as revenue in the year ended December 31, 2017 and classified the amount to contract liabilities. During the year ended December 31, 2019, those prepayments were applied to reduce the cash inflows from the royalty earned in 2019.

During the year ended December 31, 2017, the Group recognized $5,619 for the underpayment of resource property royalties from prior years, which was included in revenue from merchant banking products and services.

Expenses

The Group’s costs of sales and services comprised:

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31:

    

2019

    

2018

    

2017

 

Merchant banking products and services

 

$

95,189

 

$

119,552

 

$

223,049

 

Market value (increase) decrease on commodity inventories

 

 

(160)

 

 

109

 

 

(400)

 

Write-down of inventories

 

 

1,822

 

 

 —

 

 

 —

 

(Gain) loss on derivative contracts, net

 

 

(122)

 

 

794

 

 

(1,934)

 

Loss on securities, net

 

 

 —

 

 

 —

 

 

619

 

(Gain) loss on dispositions of subsidiaries, net

 

 

(485)

 

 

(25,771)

 

 

10,219

 

Gains on settlements and derecognition of liabilities

 

 

(1,168)

 

 

(9,502)

 

 

(3,779)

 

Change in fair value of loan payable at FVTPL

 

 

979

 

 

167

 

 

 —

 

Other, including medical and real estate sectors

 

 

2,264

 

 

9,188

 

 

11,889

 

Total costs of sales and services

 

$

98,319

 

$

94,537

 

$

239,663

 

 

Credit losses, which were included in costs of sales and services in the years ended December 31, 2018 and 2017, were reclassified and shown separately on the current year’s consolidated statements of operations.

 

The Group's net gain on dispositions of subsidiaries comprised:

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31:

 

 

2,019

 

 

 

2,018

 

 

 

2,017

Net (liabilities) assets in excess of considerations received

 

$

(485)

 

 

$

(25,771)

 

 

$

10,219

Reclassification adjustment for the exchange differences upon dispositions of subsidiaries

 

 

(1758)

 

 

 

672

 

 

 

(11306)

Gain on dispositions of subsidiaries, net (see Note 29)

 

$

(2,243)

 

 

$

(25,099)

 

 

$

(1,087)

 

 

The Group included the following items in costs of sales and services:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Inventories as costs of goods sold (including depreciation, amortization and depletion expenses allocated to costs of goods sold)

 

$

72,414

 

$

92,138

 

$

206,644

 

The Group’s credit losses comprised:

 

 

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

 

2019

 

 

2018

 

 

2017

Credit losses on loans and receivables and guarantees, net of recoveries

 

$

13,398

 

 

$

34,985

 

 

$

23,923

 

The credit losses included losses of $6,087 on receivable due from a former consolidated entity in the year ended December 31, 2019 (2018: $9,957 and 2017: $8,585). The credit losses also included losses of $3,200 relating to the consideration from the sale of a subsidiary, which is no longer expected to be received, and $3,134 on certain corporate guarantees (see Notes 15 and 26) in the year ended December 31, 2019. The Group recognized credit losses from the write-offs of royalty income receivables of $nil,  $3,875 and $1,425 in the year ended December 31, 2019, 2018 and 2017, respectively. The credit losses were recognized on the financial assets that were credit-impaired at the reporting date.

The Group’s selling, general and administrative expenses comprised:

 

 

 

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

 

2017

Compensation (wages and salaries)

 

$

6,762

 

$

10,305

 

$

16,369

Legal and professional

 

 

5,050

 

 

4,469

 

 

8,860

Accounting

 

 

1,965

 

 

1,784

 

 

1,979

Consulting and fees

 

 

2,365

 

 

4,276

 

 

5,506

Depreciation and amortization

 

 

502

 

 

254

 

 

1,640

Office

 

 

874

 

 

1,026

 

 

1,797

Reimbursement of expenses (net of recovery)

 

 

749

 

 

(1,579)

 

 

(2,387)

Other

 

 

4,306

 

 

5,830

 

 

11,708

 

 

$

22,573

 

$

26,365

 

$

45,472

 

Additional information on the nature of costs and expenses

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31:

    

2019

    

2018

    

2017

Depreciation, amortization and depletion

 

$

8,287

 

$

5,712

 

$

6,732

Employee benefits expenses*

 

 

13,727

 

 

18,403

 

 

21,016


*     Employee benefits expenses do not include the directors’ fees. For directors’ fees, see Note 26.

During the year ended December 31, 2018, certain of the Group’s subsidiaries entered into a court-approved settlement agreement related to proceedings respecting the insolvent estate of certain of our former hydrocarbon subsidiaries. As a result of the settlement, the Group incurred a non-cash charge of $5,600, which was the carrying value of assets which the Group contributed under the settlement.

v3.20.1
Share-Based Compensation
12 Months Ended
Dec. 31, 2019
Share-Based Compensation  
Share-Based Compensation

Note 20. Share-Based Compensation

The 2017 Equity Incentive Plan, referred to as the “2017 Plan”, was adopted by the Company on July 14, 2017.

Pursuant to the terms of the 2017 Plan, the board of directors, the Compensation Committee or such other committee as is appointed by the board of directors to administer the Incentive Plan, may grant stock options, restricted stock rights, restricted stock, performance share awards, performance share units and stock appreciation rights under the 2017 Plan, establish the terms and conditions for those awards, construe and interpret the 2017 Plan and establish the rules for the 2017 Plan’s administration. Such awards may be granted to employees, non-employee directors, officers or consultants or any affiliate or any person to whom an offer of employment with the Group or any affiliate is extended. Such committee has the authority to determine which employees, non-employee directors, officers, consultants and prospective employees should receive such awards. Subject to adjustment for changes in capitalization, the total number of Common Shares subject to all awards under the 2017 Plan is 575,403 Common Shares.

Pursuant to a plan of arrangement which was completed in 2017, 40,000 options were issued under the 2017 Plan in exchange for options issued and outstanding under a previous equity incentive plan.

On December 1, 2017, the Company issued 535,000 options to directors, officers, employees and consultants with an exercise price of US$8.76 per Common Share and an expiry date of December 1, 2027.

On May 12, 2018, a Group executive surrendered for cancellation 20,000 options to purchase the Company’s common shares. On the same date, the Company granted to a different employee options to purchase 20,000 of the Company’s common shares at an exercise price of US$8.76 per share. The options vested immediately and expire on December 1, 2027.

In July 2019, stock options to purchase 20,000 of the Company's common shares at US$8.76 per share were exercised. The closing price of the Company's common share was US$14.76 per share on the date of the exercise.

The following table is a summary of the changes in stock options granted under the plans:

 

 

 

 

 

 

 

 

 

 

 

 

2017 Plan

 

2008 Plan

 

 

 

 

Weighted

 

 

 

Weighted

 

 

 

 

average

 

 

 

average

 

 

 

 

exercise

 

 

 

exercise

 

 

Number

 

price

 

Number

 

price

 

 

of

 

per share

 

of

 

per share

 

    

options

    

(US$)

    

options

    

(US$)

Outstanding as at December 31, 2016

 

 —

 

 —

 

40,000

 

40.05

Exchanged under the plan of arrangement

 

40,000

 

40.05

 

(40,000)

 

40.05

Granted

 

535,000

 

8.76

 

 —

 

 —

Outstanding as at December 31, 2017

 

575,000

 

10.94

 

 —

 

 —

Forfeited

 

(125,000)

 

13.77

 

 —

 

 —

Cancelled

 

(20,000)

 

40.05

 

 —

 

 —

Granted

 

20,000

 

8.76

 

 —

 

 —

Outstanding as at December 31, 2018

 

450,000

 

8.76

 

 —

 

 —

Forfeited

 

(4,000)

 

8.76

 

 —

 

 —

Exercised

 

(20,000)

 

8.76

 

 —

 

 

Outstanding as at December 31, 2019

 

426,000

 

8.76

 

 —

 

 

As at December 31, 2019:

 

 

 

 

 

 

 

 

Options exercisable

 

426,000

 

8.76

 

 —

 

 

Options available for granting in future periods

 

129,403

 

 

 

 —

 

 

 

The following table summarizes information about stock options outstanding and exercisable as at December 31, 2019:

 

 

 

 

 

 

 

 

Options Outstanding and Exercisable

 

 

 

 

Weighted average remaining

Exercise Price per Share (US$)

 

Number outstanding

 

contractual life (in years)

$8.76

    

426,000

    

7.92

 

The following table summarizes the share-based compensation expenses recognized by the Group:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Share-based compensation expenses arising from stock options granted by the Company

 

$

 —

 

$

69

 

$

2,876

 

The weighted average assumptions and inputs used in calculating the fair value of the stock options granted on May 12, 2018 and December 1, 2017, respectively, using the Black-Scholes-Merton formula are as follows:

 

 

 

 

 

 

 

    

2018

    

2017

Number of options granted

 

20,000

 

535,000

Vesting requirements

 

Immediately

 

Immediately

Contractual life

 

9.54 years

 

10 years

Method of settlement

 

In equity

 

In equity

Exercise price per share

 

US$8.76

 

US$8.76

Market price per share on grant date

 

US$6.30

 

US$8.40

Expected volatility

 

37.86%

 

37.74%

Expected option life

 

9.54 years

 

10 years

Expected dividends

 

0.00%

 

0.00%

Risk-free interest rate

 

2.93%

 

2.38%

Fair value of option granted (per option)

 

$3.44(US$2.69)

 

$5.38(US$4.22)

 

The expected volatility was determined based on the historical price movement over the expected option life, with adjustments for underlying businesses. The stock option holders are not entitled to dividends or dividend equivalents until the options are exercised.

The aggregate fair value of options granted was $nil,  $69 and $2,876, respectively, which was recognized as share-based compensation expense in the Group’s consolidated statement of operations, for the years ended December 31, 2019, 2018 and 2017.

v3.20.1
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Taxes  
Income Taxes

Note 21. Income Taxes

(Loss) income before income taxes comprised:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Canada

 

$

(1,691)

 

$

170,538

 

$

7,360

Outside Canada

 

 

(15,093)

 

 

(2,709)

 

 

(45,767)

 

 

$

(16,784)

 

$

167,829

 

$

(38,407)

 

The components of income tax expense comprised:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Current taxes

 

$

(384)

 

$

(867)

 

$

(3,744)

Deferred taxes

 

 

(98)

 

 

(55,238)

 

 

(3,141)

Resource property (expense) recovery

 

 

(1,137)

 

 

487

 

 

(1,773)

 

 

$

(1,619)

 

$

(55,618)

 

$

(8,658)

 

A reconciliation of (loss) income before income taxes to the provision for income taxes in the consolidated statements of operations is as follows:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

(Loss) income before income taxes

 

$

(16,784)

 

$

167,829

 

$

(38,407)

Computed recovery (expense) of income taxes

 

$

4,743

 

$

(50,137)

 

$

9,792

Decrease (increase) in income taxes resulting from:

 

 

 

 

 

 

 

 

 

Effect of change in income tax rate

 

 

891

 

 

 —

 

 

 —

Other non-taxable income

 

 

24

 

 

45

 

 

 7

Revisions to prior years

 

 

88

 

 

(1,355)

 

 

4,650

Capital gains and losses on dispositions, net

 

 

(7,663)

 

 

(5,357)

 

 

(3,150)

Resource property revenue taxes

 

 

(830)

 

 

356

 

 

(1,311)

Unrecognized losses in current year

 

 

(228)

 

 

(1,411)

 

 

(20,916)

Previously unrecognized deferred income tax assets, net

 

 

1,229

 

 

3,041

 

 

2,877

Permanent differences

 

 

(178)

 

 

(306)

 

 

(363)

Other, net

 

 

305

 

 

(494)

 

 

(244)

Provision for income taxes

 

$

(1,619)

 

$

(55,618)

 

$

(8,658)

 

The income tax recovery and expense were computed using the domestic rate in each individual jurisdiction. Scully has a zero tax rate under its tax jurisdiction.

In addition, the aggregate current and deferred income tax relating to items that are charged directly to other comprehensive income or loss was an expense of $nil for the years ended December 31, 2019, 2018 and 2017.

v3.20.1
(Loss) Earnings Per Share
12 Months Ended
Dec. 31, 2019
(Loss) Earnings Per Share  
(Loss) Earnings Per Share

Note 22. (Loss) Earnings Per Share

(Loss) earnings per share data for the years ended December 31, 2019, 2018 and 2017 are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

    

2019

    

2018

    

2017

Basic loss (income) attributable to holders of common shares

 

$

(18,553)

 

$

112,276

 

$

(47,855)

Effect of dilutive securities:

 

 

 —

 

 

 —

 

 

 —

Diluted (loss) income

 

$

(18,553)

 

$

112,276

 

$

(47,855)

 

 

 

 

 

 

 

 

 

 

Number of Shares

 

    

2019

    

2018

    

2017

Weighted average number of common shares outstanding - basic

 

12,543,271

 

12,534,801

 

12,544,141

Effect of dilutive securities:

 

 

 

 

 

 

Options

 

 —

 

 —

 

 —

Weighted average number of common shares outstanding - diluted

 

12,543,271

 

12,534,801

 

12,544,141

 

 

 

 

 

 

 

 

 

 

 

 

    

2019

    

2018

    

2017

(Loss) earnings per share - basic and diluted

 

$

(1.48)

 

$

8.96

 

$

(3.81)

 

In 2019, 2018 and 2017, the Group’s potential ordinary shares include stock options outstanding.

As at December 31, 2019, 2018  and 2017, there were 426,000,  450,000 and 575,000 stock options, respectively, outstanding that could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted earnings per share because they were antidilutive for the year ended December 31, 2019, 2018 and 2017.

v3.20.1
Dividends Paid
12 Months Ended
Dec. 31, 2019
Dividends Paid  
Dividends Paid

Note 23. Dividends Paid

The Company did not declare nor pay dividends during the years ended December 31, 2019, 2018 and 2017.

 

v3.20.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies  
Commitments and Contingencies

Note 24. Commitments and Contingencies

Litigation

The Group is subject to routine litigation incidental to its business and is named from time to time as a defendant and is a plaintiff from time to time in various legal actions arising in connection with its activities, certain of which may include large claims for punitive damages. Further, due to the size, complexity and nature of the Group’s operations, various legal and tax matters are outstanding from time to time, including periodic audit by various tax authorities.

One of the Group’s subsidiaries is disputing certain assessments by the relevant tax authorities related to expatriate staff payroll tax, and the Group has appealed these matters locally. Management believes that it is more likely than not that it will be successful in this appeal, however the timing is unknown. The total amount of the assessments is $2,996 of which $899 has been paid in dispute. The amount that has been paid has been written off due to management’s expectations of probability of recovery.

The Company and certain subsidiaries have been named as defendants in a legal action relating to an alleged guarantee of the former parent of the Group in the amount of approximately $63,874  (€43,800). The Group believes that such claim is without merit and intends to vigorously defend such claim. Currently, based upon the information available to management, management does not believe that there will be a material adverse effect on the Group's financial condition or results of operations as a result of this action. However, due to the inherent uncertainty of litigation, the Company cannot provide certainty as to the outcome.

Currently, based upon information available, management does not believe any such matters would have a material adverse effect upon the Group's financial condition or results of operations as at December 31, 2019. However, due to the inherent uncertainty of litigation, there cannot be certainty as to the eventual outcome of any case. If management's current assessments are incorrect or if management is unable to resolve any of these matters favourably, there may be a material adverse impact on the Group's financial performance, cash flows or results of operations. 

Rights to Subscribe to Shares in Subsidiaries

During 2017, two subsidiaries of the Group entered into agreements with third party employee incentive corporations whereby the latter were granted the rights to buy up to 10% of the share capital of the subsidiaries on a diluted basis at a price to be no less or more than the then existing net tangible asset value. The rights expire in 10 years.

Upon the occurrence of a change in control event as defined in the agreements, certain rights to purchase shares in the entities with pre-determined prices were issued subsequent to December 31, 2019, exercisable until 2026.

v3.20.1
Consolidated Statements of Cash Flows - Supplemental Disclosure
12 Months Ended
Dec. 31, 2019
Consolidated Statements of Cash Flows - Supplemental Disclosure  
Consolidated Statements of Cash Flows - Supplemental Disclosure

Note 25. Consolidated Statements of Cash Flows – Supplemental Disclosure

Interest paid and received, dividends received and income taxes paid are classified as operating activities. Dividends paid are classified as financing activities. Income taxes paid include the payments of advance tax prepayments and are net of tax cash refunds.

There are no circumstances in which cash and cash equivalents held by an entity are not available for use by the Group other than amounts presented as restricted cash. See "Currency Risk" in Note 27.

Consolidated cash flows statement – reconciliation of liabilities arising from financing activities

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31:

    

2019

    

2018

    

2017

Bond payables, opening balance

 

$

 —

 

$

 —

 

$

 —

Cash flows

 

 

35,433

 

 

 —

 

 

 —

Non-cash changes:

 

 

  

 

 

  

 

 

  

Accretion

 

 

533

 

 

 —

 

 

 —

Cumulative translation adjustments

 

 

(548)

 

 

 —

 

 

 —

Bond payables, ending balance (see Note 16)

 

$

35,418

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31:

    

2019

    

2018

    

2017

Lease liabilities, opening balance

 

$

 —

 

$

 —

 

$

 —

Cash flows

 

 

(943)

 

 

 —

 

 

 —

Non-cash changes:

 

 

  

 

 

  

 

 

  

Initial adoption of IFRS 16

 

 

2,911

 

 

 —

 

 

 —

Additions

 

 

1,583

 

 

 —

 

 

 —

Dispositions of subsidiaries

 

 

(487)

 

 

 —

 

 

 —

Accretion

 

 

71

 

 

 —

 

 

 —

Termination

 

 

(1,809)

 

 

 —

 

 

 —

Cumulative transaction adjustments

 

 

(130)

 

 

 —

 

 

 —

Lease liabilities, ending balance (see Note 15)

 

$

1,196

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Bank debt, opening balance

 

$

 —

 

$

43,733

 

$

116,813

Cash flows

 

 

 —

 

 

 —

 

 

(42,253)

Non-cash changes:

 

 

 

 

 

 

 

 

 

Dispositions of subsidiaries

 

 

 —

 

 

(45,465)

 

 

(34,996)

Accretion

 

 

 —

 

 

94

 

 

187

Rollover of interest expenses into principal

 

 

 —

 

 

286

 

 

 —

Cumulative translation adjustments

 

 

 —

 

 

1,352

 

 

3,982

Bank debt, ending balance

 

$

 —

 

$

 —

 

$

43,733

 

Non-cash transactions

Non-cash transactions during the year ended December 31, 2019: (1) a subsidiary of the Group settled liabilities of $1,128 by delivering shares of one of its subsidiaries; and (2) the acquisition of a noncontrolling interest in the aforementioned subsidiary by an offset of a receivable of $390.

Non-cash transactions during the year ended December 31, 2018: (1) a non-cash settlement loss of $5,600 which represented the carrying amounts of assets that the Group contributed under a court-approved settlement agreement (see Note 19); and (2) the deconsolidation of a subsidiary resulting in recognition of a long-term non-interest bearing loan payable of $3,645 (see Note 29).

Non-cash transactions during the year ended December 31, 2017: (1) sale of the shares of a non-core Latin America focused commodities trading subsidiary to a company controlled by the former President of the Company (see Note 26); (2) dispositions of subsidiaries (see Note 29); (3) offsetting of a payable of $12,264 due to a former subsidiary against a receivable due from the same entity; (4) redemption of preferred shares of $52,299 in a subsidiary held by the former subsidiary in an exchange of trade receivables with a fair value of $52,299;  and (5) offsetting of long-term deposit liabilities of $545 against finance lease receivables.

v3.20.1
Related Party Transactions
12 Months Ended
Dec. 31, 2019
Related Party Transactions  
Related Party Transactions

Note 26. Related Party Transactions

In the normal course of operations, the Group enters into transactions with related parties, which include affiliates in which the Group has a significant equity interest (10% or more) or has the ability to influence their operating and financing policies through significant shareholding, representation on the board of directors, corporate charter and/or bylaws. The related parties also include, among other things, the Company's directors, Chairman, President, Chief Executive Officer and Chief Financial Officer. This section does not include disclosure, if any, respecting open market transactions, whereby a related party acts as an investor of the Company’s securities or the bonds of Merkanti Holding plc.:

The Group had the following transactions with its related parties

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Fee income

 

$

10

 

$

 —

 

$

 —

Interest income

 

 

31

 

 

 —

 

 

 —

Dividends received

 

 

 —

 

 

168

 

 

 —

Royalty expenses

 

 

(210)

 

 

 —

 

 

 —

Credit losses on corporate guarantees

 

 

(3,134)

 

 

 —

 

 

 —

ECL allowance under IFRS 9

 

 

(16)

 

 

 —

 

 

 —

Reimbursements of expenses, primarily including employee benefits and lease and office expenses

 

 

(811)

 

 

 —

 

 

 —

 

From time to time the Group has entered into arrangements with a company owned by the Group's Chairman to assist the Group to comply with various local regulations and requirements, including the newly introduced economic substance legislation for offshore jurisdictions, as well as fiscal efficiency. These arrangements are utilized to aid in the divestment of financially or otherwise distressed or insolvent assets or businesses that are determined to be unsuitable for the Group's ongoing operations. These arrangements are implemented at cost and no economic benefit is received by, or accrued, by the Group's Chairman or the company controlled by him. Pursuant to this arrangement, as at December 31, 2019, the Group held: (i) an indemnification asset of $6,362 (see Note 9) relating to a secured indemnity provided by such company to a subsidiary of the Group to comply with local regulations and requirements, in an amount equal to the amount advanced to it, for certain short-term intercompany balances involving certain of the Group’s subsidiaries and another subsidiary that was put into dissolution by the Group in 2019; and (ii) a loan to such company of $828 (see Note 9), bearing interest at 6.3%, which was made in the year ended December 31, 2019 in order to facilitate the acquisition of securities for the Group's benefit.

In addition, pursuant to this arrangement, during the year ended December 31, 2019, the Group: (i) reimbursed such company $811 (as set forth in the table above) at cost for expenses, primarily consisting of employee benefits and lease and office expenses; and (ii) sold a non-core metals processing business to a company controlled by its Chairman for nominal consideration (€ 1.00), which represented the arm's length transaction price.  This metals processing business operated out of a leased property with leased equipment.  Over the past fifteen years, the landlord of the land and equipment refused to incur any capital expenditures or to make any necessary improvement to the facility.  Without these necessary capital upgrades and improvements, the subsidiary’s maintenance costs increased and productivity decreased such that it could no longer be operated on a profitable or sustainable basis.  After reporting a net loss in the year ended December 31, 2018, it continued to report losses in the year ended December 31, 2019, which resulted in the subsidiary having negative net equity on a consolidated basis.  As a result, the transaction did not result in the transfer of any net economic benefit to the company controlled by the Group's Chairman and the sale for nominal consideration resulted in the recognition of a non-cash accounting gain of $906 in the year ended December 31, 2019.  Subsequent to the sale, this former subsidiary entered into an insolvency administration process in Germany. The Group recognized credit losses of $3,134 on corporate guarantees issued to certain trading partners of this former subsidiary prior to its disposition.

As set forth in the table above, the Group had royalty expenses of $210 in the year ended December 31, 2019 that were paid to a company in which it holds a minority interest and that is a subsidiary of the operator of the underlying mine.

During the year ended December 31, 2019, the Group's Chairman was a subscriber in the issuance of public bonds by Merkanti Holding plc in the amount of $462  (€316), being approximately 1.25% of the total offering and total bonds outstanding as at December 31, 2019.

In January 2017, in connection with its previously announced strategy to re-allocate capital and resources and exit certain products and geographies, the Group sold the shares of a non-core Latin America focused commodities trading subsidiary to a company controlled by a former officer who resigned as the president and chief executive officer of the former holding company in March 2017 and as the director in May 2018. Under the transaction, the Group received total consideration of $14,413, including 90,000 common shares of the former holding company and the release of any further obligations to issue shares in connection with a prior share purchase agreement between the parties. See Note 29.

Key management personnel

The Group’s key management personnel comprise the members of its Board of Directors, President, Chief Executive Officer and Chief Financial Officer. The remuneration of key management personnel of the Group was as follows:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Short-term employee benefits

 

$

1,451

*

$

1,245

 

$

1,777

Directors' fees

 

 

531

 

 

594

 

 

576

Share-based compensation

 

 

 —

 

 

 —

 

 

713

Total

 

$

1,982

 

$

1,839

 

$

3,066


*    Included the net pay and expenses.

 

The share-based compensation for the year ended December 31, 2017 comprised $323 and $390, respectively, on the stock options granted to directors and other key management personnel (see Note 20).

v3.20.1
Financial Instruments
12 Months Ended
Dec. 31, 2019
Financial Instruments  
Financial Instruments

Note 27. Financial Instruments

The fair values of the Group’s financial instruments as at December 31, 2019 and 2018, other than those with carrying amounts that approximate their fair values due to their short-term nature, are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

 

Carrying

 

Fair

 

Carrying

 

Fair

As at December 31:

    

Amount

    

Value

    

Amount

    

Value

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$

6,761

 

$

6,761

 

$

4,706

 

$

4,706

Derivative assets

 

 

 —

 

 

 —

 

 

209

 

 

209

Debt securities

 

 

2,403

 

 

2,403

 

 

1,068

 

 

1,068

Fair value through other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

8,819

 

 

8,819

 

 

6,328

 

 

6,328

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities measured at amortized cost:

 

 

 

 

 

 

 

 

 

 

 

 

Bond payables

 

$

35,418

 

$

36,603

 

$

 —

 

$

 —

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 —

 

 

 —

 

 

37

 

 

37

Loan payable

 

 

4,769

 

 

4,769

 

 

3,981

 

 

3,981

 

Fair value of a financial instrument represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using a valuation technique. The price for a transaction which takes place under duress or the seller is forced to accept the price in the transaction might not represent the fair value of an asset or a liability. The best evidence of fair value is published price quotations in an active market. When the market for a financial asset or financial liability is not active, the Group establishes fair value by using a valuation technique. The valuation technique used maximizes the use of inputs observed in active markets, and minimizes the use of inputs generated by the Group. Internally generated inputs take into account factors that market participants would consider when pricing the financial instruments, such as liquidity and credit risks. Use of judgment is significantly involved in estimating fair value of financial instruments in inactive markets and actual results could materially differ from the estimates. To value longer-term transactions and transactions in less active markets for which pricing information is not generally available, unobservable inputs may be used.

The fair values of financial assets measured at FVTPL and FVTOCI are based on quoted market prices (Level 1 fair value hierarchy) or a valuation method with observable inputs (Level 2 fair value hierarchy). For investments in certain specialized investment funds which are measured at FVTPL, their fair values are based on a valuation model with inputs that are unobservable (Level 3 fair value hierarchy). The carrying amounts of cash and cash equivalents, short-term receivables and account payables and accrued expenses, due to their short-term nature and normal trade credit terms, approximate their fair values.

The fair values of derivative financial instruments are based on quoted market prices when possible; and if not available, estimates from third-party brokers. These broker estimates are corroborated with multiple sources and/or other observable market data utilizing assumptions that market participants would use when pricing the asset or liability, including assumptions about risk and market liquidity (Level 2 fair value hierarchy). Inputs may be readily observable or market-corroborated.

The fair values of the bond payables are based on the quoted market price from the Malta Stock Exchange at which the bonds are traded (Level 1 fair value hierarchy). The fair value of the loan payable is estimated using an appropriate valuation method. Inputs to the valuation technique are unobservable (Level 3 fair value hierarchy).

The following tables present the Group’s financial instruments measured at fair value on the consolidated statements of financial position classified by level of the fair value hierarchy as at December 31, 2019 and 2018, respectively:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

    

Level 1

    

Level 2

    

Level 3

    

Total

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$

1,822

 

$

3,809

 

$

1,130

 

$

6,761

Debt securities

 

 

2,403

 

 

 —

 

 

 —

 

 

2,403

Fair value through other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

8,819

 

 

 —

 

 

 —

 

 

8,819

Total

 

$

13,044

 

$

3,809

 

$

1,130

 

$

17,983

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Loan payable

 

$

 —

 

$

 —

 

$

4,769

 

$

4,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2018

    

Level 1

    

Level 2

    

Level 3

    

Total

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$

705

 

$

4,001

 

$

 —

 

$

4,706

Debt securities

 

 

1,068

 

 

 —

 

 

 —

 

 

1,068

Derivative assets

 

 

 —

 

 

209

 

 

 —

 

 

209

Fair value through other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

6,328

 

 

 —

 

 

 —

 

 

6,328

Total

 

$

8,101

 

$

4,210

 

$

 —

 

$

12,311

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

 —

 

$

37

 

$

 —

 

$

37

Loan payable

 

 

 —

 

 

 —

 

 

3,981

 

 

3,981

 

 

$

 —

 

$

37

 

$

3,981

 

$

4,018

 

As at December 31, 2019 and 2018, the Group held an investment in a privately held company which was measured at FVTPL. The fair value was determined using discounted cash flows at prevailing market rates of interest for similar instruments with observable inputs (Level 2 fair value hierarchy).

As at December 31, 2019 and 2018, a subsidiary of the Group has a loan payable with a former subsidiary which is non-interest bearing, is without recourse to the Group and has no fixed repayment date. The loan payable was measured at FVTPL at its initial recognition, as permitted under IFRS, on a fair value basis in accordance with a documented  investment strategy. The undiscounted contractual amount due out of surplus cash of the subsidiary is $54,641 (US$42,070) and is expected to be repaid in greater than 14 years. As at December 31, 2019, the difference between the carrying amount of the loan payable and the amount the Group would be contractually required to pay at maturity was $49,872.  The fair value is determined using a discount rate for similar instruments with unobservable inputs (Level 3 fair value hierarchy), which included the sale price, demand for products, production and labour costs in the future periods. The actual repayment may be significantly different from both the carrying amount and the amount due at maturity. Sensitivity to changes in the discount rate is included under “Interest Rate Risk” in this Note 27.

 

Generally, management of the Group believes that current financial assets and financial liabilities, due to their short-term nature, do not pose significant financial risks. The Group uses various financial instruments to manage its exposure to various financial risks. The policies for controlling the risks associated with financial instruments include, but are not limited to, standardized company procedures and policies on matters such as hedging of risk exposure, avoidance of undue concentration of risk and requirements for collateral (including letters of credit and bank guarantees) to mitigate credit risk. The Group has risk managers and other personnel to perform checking functions and risk assessments so as to ensure that the Group’s procedures and policies are complied with.

Many of the Group’s strategies, including the use of derivative instruments and the types of derivative instruments selected by the Group, are based on historical trading patterns and correlations and the Group’s management’s expectations of future events. However, these strategies may not be fully effective in all market environments or against all types of risks. Unexpected market developments may affect the Group’s risk management strategies during the period, and unanticipated developments could impact the Group’s risk management strategies in the future. If any of the variety of instruments and strategies the Group utilizes is not effective, the Group may incur losses.

The Group does not trade in financial instruments, including derivative financial instruments, for speculative purposes.

The nature of the risks that the Group’s financial instruments are subject to as at December 31, 2019 is set out in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risks

 

 

 

 

 

 

Market risks

Financial instrument

    

Credit

    

Liquidity

    

Currency

    

Interest rate

    

Other price

Cash and cash equivalents and restricted cash

 

X

 

 

 

X

 

X

 

 

Equity securities

 

 

 

 

 

X

 

 

 

X

Debt securities

 

X

 

 

 

 

 

X

 

X

Derivative securities and financial liabilities

 

X

 

X

 

X

 

 

 

X

Receivables

 

X

 

 

 

X

 

 

 

 

Account payables and accrued expenses

 

 

 

X

 

X

 

 

 

 

Bond payables

 

 

 

X

 

 

 

X

 

X

Loan payable

 

 

 

 

 

 

 

X

 

 

 

A sensitivity analysis for each type of market risk to which the Group is exposed on its financial instruments at the end of the reporting period is provided, showing how profit or loss and equity would have been affected by changes in the relevant risk variable that were reasonably possible at that date. These ranges of parameters are estimated by management, which are based on the facts and circumstances available at the time estimates are made, and an assumption of stable socio-economic and geopolitical states. No unusual nor exceptional events, for example, natural disasters or human-made crises and calamities, are taken into consideration when the sensitivity analysis is prepared. Actual occurrence could differ from these assumptions and such differences could be material.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments which potentially subject the Group to credit risk consist of cash and cash equivalents and restricted cash, derivative financial instruments, receivables and committed transactions (including loan commitments and financial guarantee contracts). The Group has deposited cash and cash equivalents and entered into derivative financial instrument contracts with reputable financial institutions with high credit ratings and management believes the risk of loss from these counterparties to be remote.

Most of the Group’s credit exposure is with counterparties in the merchant banking businesses and are subject to normal industry credit risk. The Group has receivables from various entities and credit risk from trade receivables is mitigated since they are credit insured, covered by letters of credit, bank guarantees and/or other credit enhancements. The Group routinely monitors credit risk exposure, including sector, geographic and corporate concentrations of credit and set and regularly review counterparties’ credit limits based on rating agency credit ratings and/or internal assessments of the customers and industry analysis. The Group also uses factoring and credit insurances to manage credit risk. Management believes that these measures minimize the Group’s overall credit risk; however, there can be no assurance that these processes will protect the Group against all losses from non-performance.

The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses or 12‑month expected credit losses (see Note 2B(vii)).

At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Group assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date.

Under IFRS 9, there is a rebuttable presumption that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due; although, this rebuttable presumption is not an absolute indicator that lifetime expected credit losses should be recognized, but is presumed to be the latest point at which lifetime expected credit losses should be recognized even when using forward-looking information (including macroeconomic factors on a portfolio level).

The credit risk on a financial instrument is considered low if the financial instrument has a low risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

Financial instruments are not considered to have low credit risk when they are regarded as having a low risk of loss simply because of the value of collateral and the financial instrument without that collateral would not be considered low credit risk. Financial instruments are also not considered to have low credit risk simply because they have a lower risk of default than the Group’s other financial instruments or relative to the credit risk of the jurisdiction within which the Group operates.

To determine whether a financial instrument has low credit risk, the Group may use its internal credit risk ratings or other methodologies that are consistent with a globally understood definition of low credit risk and that consider the risks and the type of financial instruments that are being assessed. Generally, an external rating of “investment grade” is an example of a financial instrument that may be considered as having low credit risk. Financial instruments are considered to have low credit risk from a market participant perspective taking into account all of the terms and conditions of the financial instrument.

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired include observable data about the following events: (a) significant financial difficulty of the issuer or the borrower; (b) a breach of contract, such as a default or past due event; (c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider; (d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganization; (e) the disappearance of an active market for that financial asset because of financial difficulties; or (f) the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses. It may not be possible to identify a single discrete event; instead, the combined effect of several events may have caused financial assets to become credit-impaired.

The Group adopts the presumption in IFRS 9 as its accounting policy that default does not occur later than when a financial asset is 90 days past due, unless it has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate. The definition of default used for these purposes is applied consistently to all financial instruments unless information becomes available that demonstrates that another default definition is more appropriate for a particular financial instrument.

The average contractual credit period for trade receivables is 30‑60 days and up to 180 days for certain sales.

The maximum credit risk exposure as at December 31, 2019 is as follows:

 

 

 

 

 

Cash and cash equivalents and restricted cash

 

$

78,359

Receivables

 

 

12,262

Amounts recognized in the consolidated statement of financial position

 

 

90,621

Guarantees

 

 

 —

Maximum credit risk exposure

 

$

90,621

 

In February 2016, certain guarantees related to a customer filing for insolvency were called and the Group met its obligations under these amounts. Since these guarantees were no longer contingent, but instead were probable, they were recognized as provisions of $40,677 as at December 31, 2015, which were paid during the year ended December 31, 2016. During the year ended December 31, 2016, the Group received proceeds of $39,149 from risk mitigation assets related to these guarantees, of which $35,121 was credited to profit or loss through a recovery of credit loss and the remainder was credited to trade receivables. During 2017, a net reversal of credit loss of $1,317 was credited to profit or loss. During 2018, the Group wrote off the remaining receivable balance and recognized a credit loss of $21,812 (see Note 8).

In February 2018, the calling of a guarantee resulted in a provision for credit loss of $1,502 as at December 31, 2017 (see Note 15). During the year ended December 31, 2018, the credit loss resulting from the calling of the guarantee was reduced by $833 and was no longer outstanding as at December 31, 2018.

During the year ended December 31, 2019, the Group recognized a provision of $3,134 for credit losses on guarantees in its consolidated statement of operations.

See sub-heading of “Concentration risk” in this note on credit risk concentration.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Group requires liquidity specifically to fund capital requirements, satisfy financial obligations as they become due, and to operate its merchant banking business. The Group puts in place an actively managed production and capital expenditure budgeting process for major capital programs. The Group’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when they fall due, under normal and stress conditions, without incurring unacceptable losses. The Group maintains an adequate level of liquidity, with a portion of its assets held in cash and cash equivalents. The Group also maintains adequate banking facilities, including refinancing arrangements. It is the Group’s policy to invest cash in bank  deposits  for  a period  of  less than three months. The Group may also invest in cash deposits with an original maturity date of more than three months so as to earn higher interest income.

Generally, trade payables are due within 90 days and other payables and accrued expenses are due within one year. As at December 31, 2019, the Group had long-term bond payables with interest payable annually and repayment of principal due in 2026. The timing of future payments is based on the Group’s historical payment patterns and management’s interpretation of contractual arrangements. The actual cash outflows might occur significantly earlier than indicated in the payment projection or be amounts significantly different from those indicated in the payment projection.

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group operates internationally and is exposed to risks from changes in foreign currency exchange rates, particularly the Euro, Canadian dollar and U.S. dollar.

Currency risk arises principally from future trading transactions, and recognized assets and liabilities. In order to reduce the Group’s exposure to foreign currency risk on material contracts (including intercompany loans) denominated in foreign currencies (other than the functional currencies of the Group companies), the Group may use foreign currency forward contracts and options to protect its financial positions. As at December 31, 2019 and 2018, the Group did not have any foreign currency derivative financial instruments (foreign currency forward contracts and options) outstanding.

The Group holds cash balances in renminbi (“RMB”) in the People’s Republic of China (“PRC”). The PRC imposes controls on the convertibility of RMB, the official currency of the PRC, into foreign currencies. The value of RMB is subject to changes in the central government policies and to international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (the “PBOC”).

The Group does not have any material exposure to highly inflationary foreign currencies.

Sensitivity analysis:

At December 31, 2019, if the U.S. dollar had weakened 10% against the Group companies’ functional currencies with all other variables held constant, net loss for the year ended December 31, 2019 would have been $653 lower. Conversely, if the U.S. dollar had strengthened 10% against the Group companies’ functional currencies with all other variables held constant, net loss for the year ended December 31, 2019 would have been $619 higher. The reason for such change is mainly due to certain U.S. dollar denominated financial instrument liabilities (net of assets) owed by entities whose functional currencies were not the U.S. dollar. There would have been no material impact arising from financial instruments on other comprehensive income in either case.

At December 31, 2019, if the Euro had weakened 10% against the Group companies’ functional currencies with all other variables held constant, net loss for the year ended December 31, 2019 would have been $7,554 lower. Conversely, if the Euro had strengthened 10% against the Group companies’ functional currencies with all other variables held constant, net loss for the year ended December 31, 2019 would have been $7,554 higher. The reason for such change is mainly due to certain Euro denominated financial instrument liabilities (net of assets) owed by entities whose functional currencies were not the Euro. There would have been no impact arising from financial instruments on other comprehensive income in either case.

At December 31, 2019, if the Canadian dollar had weakened 10% against the Group companies’ functional currencies with all other variables held constant, net loss for the year ended December 31, 2019 would have been $35 lower. Conversely, if the Canadian dollar had strengthened 10% against the Group companies’ functional currencies with all other variables held constant, net loss for the year ended December 31, 2019 would have been $35 higher. The reason for such change is mainly due to certain Canadian dollar denominated financial instrument liabilities (net of assets) owed by entities whose functional currencies were not the Canadian dollar. There would have been no impact arising from financial instruments on other comprehensive income in either case.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Short-term financial assets and financial liabilities are generally not exposed to significant interest rate risk because of their short-term nature. As at December 31, 2019, the Group had long-term bond payables measured at amortized cost which bear a fixed interest rate.

Sensitivity analysis:

At December 31, 2019, if benchmark interest rates (such as EURIBOR, LIBOR or prime rates) at that date had been 100 basis points (1.00%) per annum lower with all other variables held constant, net loss for the year ended December 31, 2019 would have been $551 higher. Conversely, if the benchmark interest rate had been 100 basis points per annum higher with all other variables held constant, net loss for the year ended December 31, 2019 would have been $469 lower. The reason for such change is mainly due to the loan payable measured at FVTPL. There would have been no impact arising from financial instruments on the Group’s other comprehensive income in either case.

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market. The Group’s other price risk includes equity price risk whereby the Group’s investments in equities of other entities that are classified as held for trading are subject to market price fluctuations.

Sensitivity analysis:

At December 31, 2019, if equity prices in general had weakened 10% with all other variables held constant, net loss for the year ended December 31, 2019 would have been $466 higher. Conversely, if equity prices in general had strengthened 10% with all other variables held constant, net loss for the year ended December 31, 2019 would have been $466 lower. There would have been no impact on other comprehensive income in either case.

In addition, the Group buys and sells futures contracts on the London Metal Exchange and enters into financial derivative contracts (e.g. futures and swaps) with banks, customers and brokers. Management uses the financial derivative contracts to manage the price fluctuations for its own account or for customers. As at December 31, 2019, the Group did not have any outstanding derivative financial instruments. As at December 31, 2018, the Group had outstanding derivative financial instruments with an aggregate notional amount of $9,720, primarily to hedge against the long position in inventories and the usage of energy, which resulted in a net unrealized fair value gain of $172. As these future contracts are to hedge against the Group’s physical inventory position, any change in the fair value of the future contracts will offset the change in the fair value, though in opposite direction, of the physical inventories. As a result, the sensitivity analysis of the price risk arising from the future contracts on the Group is not applicable.

Concentration risk

Management determines the concentration risk threshold amount as any single financial asset (or liability) exceeding 10% of total financial assets (or liabilities) in the Group’s consolidated statement of financial position.

In the PRC, foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by the Group in the PRC must be processed through the PBOC or other PRC foreign exchange regulatory bodies and require certain supporting documentation in order to effect the remittance. If such foreign exchange control system prevents the Group from obtaining sufficient foreign currencies to satisfy its currency demands, the Group may not be able to pay dividends in foreign currencies and the Group’s ability to fund its business activities that are conducted in foreign currencies could be adversely affected.

Except as disclosed in the preceding paragraph, at December 31, 2019, there were no customer, company or entity holding financial assets or liabilities exceeding the threshold amounts.

Additional disclosure

In addition to information disclosed elsewhere in these consolidated financial statements, the Group had significant items of income, expense, and gains and losses resulting from financial assets and financial liabilities which were included in profit or loss for the years ended December 31, 2019, 2018 and 2017 as follows:

 

 

 

 

 

 

 

 

 

 

 

 

    

2019

    

2018

    

2017

 

 

(Restated)*

Interest income on financial assets not at FVTPL

 

$

955

 

$

661*

 

$

434

Interest income on financial assets classified at FVTPL

 

 

102

 

 

15*

 

 

539

Total interest income

 

$

1,057

 

$

676*

 

$

973

Interest expense on financial liabilities not at FVTPL

 

$

710

 

$

513*

 

$

3,509

Interest expense on financial liabilities classified at FVTPL

 

 

30

 

 

989*

 

 

1,195

Total interest expense

 

$

740

 

$

1502*

 

$

4,704

Dividend income on financial assets at FVTPL

 

$

 —

 

$

168

 

$

 —

Dividend income on financial assets classified not at FVTPL

 

 

 —

 

 

 —

 

 

 —

Net gain on financial assets at FVTPL

 

 

1,142

 

 

3,785

 

 

6,825

Loss on loan payable at FVTPL

 

 

(979)

 

 

(167)

 

 

 —

Reversal of (impairment) on securities measured at FVTOCI

 

 

(3)

 

 

 3

 

 

 —


*    Correction of error.

v3.20.1
Fair Value Disclosure for Non-financial Assets
12 Months Ended
Dec. 31, 2019
Fair Value Disclosure for Non-financial Assets  
Fair Value Disclosure for Non-financial Assets

Note 28. Fair Value Disclosure for Non-financial Assets

The fair values of the Group’s financial instrument assets and liabilities which are measured at fair value on the consolidated statements of financial position are discussed in Note 27. The following tables present non-financial assets which are measured at or based on fair value in the consolidated statements of financial position, classified by level of the fair value hierarchy:

Assets measured at fair value on a recurring basis as at December 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

Investment property

 

$

 —

 

$

 —

 

$

38,205

 

Assets measured at fair value on a recurring basis as at December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

Inventories

 

$

2,238

 

$

 —

 

$

 —

Investment property

 

 

 —

 

 

 —

 

 

37,804

Total

 

$

2,238

 

$

 —

 

$

37,804

 

Commodity inventories are measured at fair value less costs to sell. The fair values are determined by reference to their contractual selling prices or quoted prices in marketplaces in the absence of a contract (level 1 fair value hierarchy). An average of past sale prices is used when there are no observable market prices or current contracts but there have been recent past sales of such goods and there are no indications that the market prices have been materially impacted (level 2 fair value hierarchy). The Group did not carry any commodity inventories as at December 31, 2019.

The fair values of investment property are measured using an income approach which includes the following inputs: land value, realized basic rents, operating costs, discount rates and damages and defects (level 3 fair value hierarchy). The valuation approach was consistent for both 2019 and 2018. Both the 2019 and 2018 valuations were performed by an independent external valuator who is an authorized expert for the valuation of developed and undeveloped land in Germany and holds recognized and relevant professional qualifications and has recent experience in the location and category of the investment property being valued.

v3.20.1
Scully and its Significant Subsidiaries
12 Months Ended
Dec. 31, 2019
Scully and its Significant Subsidiaries  
Scully and its Significant Subsidiaries

Note 29. Scully and its Significant Subsidiaries

Scully, through an affiliate, has an office at Unit 803, Dina House, Ruttonjee Centre, 11 Duddell Street, Hong Kong SAR, China.

A subsidiary is an entity that is controlled by Scully. The following table shows the Company’s direct and indirect significant subsidiaries as at December 31, 2019. The table excludes subsidiaries which only hold intercompany assets and liabilities and do not have an active business as well as subsidiaries whose results and net assets did not materially impact the consolidated results and net assets of the Group.

 

 

 

 

 

 

 

 

    

Country of

    

Proportion of

 

Subsidiaries

 

Incorporation

 

 Interest *

 

 

 

 

 

 

 

Merkanti Holding plc

 

Malta

 

100

%

1178936 B.C. Ltd.

 

Canada

 

100

%

Merkanti (A) International Ltd.

 

Malta

 

100

%

Merkanti (D) International Ltd.

 

Malta

 

100

%


* The Group's proportional voting interests are identical to its proportional beneficial interests, except that it holds a 99.72% proportional beneficial interest in each of Merkanti (A) International Ltd. and Merkanti (D) International Ltd.

 

As at December 31, 2019, the Group controlled entities in which the Group held more than 50% of the voting rights and did not control any entities in which the Group held 50% or less of the voting rights. The Group’s proportional voting interests in the subsidiaries are identical to its proportional beneficial interests.

As at December 31, 2019, none of the non-controlling interests are material to the Group. As at December 31, 2019, there were no significant restrictions (statutory, contractual and regulatory restrictions, including protective rights of non-controlling interests) on Scully’s ability to access or use the assets and settle the liabilities of the Group except for amounts presented as restricted cash. See "Currency Risk" in Note 27.

During the year ended December 31, 2019, the Group put a subsidiary into a voluntary dissolution (see Note 5), sold the shares of certain manufacturing/processing subsidiaries and abandoned certain inactive subsidiaries, resulting in a net gain of $2,243 (see Note 19) which was included in the consolidated statement of operations. In addition, the Group issued shares in a subsidiary to a third party, resulting in a gain of $229 which was credited to retained earnings directly.

During the year ended December 31, 2018, the Group completed merchant banking transactions which resulted in (i) recognition of a pre-tax gain of $25,740; (ii) recognition of deferred tax expense of $7,204; (iii) reclassification of cumulative translation loss of $672 from accumulated other comprehensive income to profit or loss; (iv) recognition of a long-term liability of $3,645; (v) recognition of non-controlling interests of $6,441 in another subsidiary and (vi) a debit adjustment of $6,284 to deficit under equity. The Group also disposed of several other subsidiaries. In aggregate, the Group recognized  a net gains of $25,099 (see Note 19) on the deconsolidation of subsidiaries during the year ended December 31, 2018.

During the year ended December 31, 2017, two subsidiaries, pursuant to the terms of respective option deeds (see Note 24), issued shares to the non-controlling interests. These share issuances were accounted for as equity transactions and were credited to non-controlling interests directly. As of December 31, 2018, such rights had been exercised in respect of less than 0.5% of the ownership of each such subsidiary.

During the year ended December 31, 2017, the Group sold the shares of a non-core Latin America focused commodities trading subsidiary, resulting in a gain of $57  (see Note 26). The Group also disposed of several other subsidiaries. In aggregate, the Group recognized a net gain of $1,087 (see Note 19) on the deconsolidation of subsidiaries during the year ended December 31, 2017.

v3.20.1
Subsequent Events
12 Months Ended
Dec. 31, 2019
Subsequent Events  
Subsequent Events

Note 30. Subsequent Events

In December 2019, the COVID-19 outbreak occurred in Asia, which subsequently, in the first quarter of 2020, spread globally. In March 2020, the World Health Organization declared the spread of the COVID-19 virus a pandemic.

While various countries have implemented stimulus packages and other fiscal measures to attempt to reduce the impact of the pandemic on their economies, the impact of the pandemic on global economic activity and markets both in the short and longer term is uncertain at this time. The magnitude and duration of the disruption and resulting decline in business activity resulting from the COVID-19 pandemic is currently uncertain. While the Group expects that there will likely be some negative impact on its results of operations, cash flows and financial position from the pandemic beyond the near-term, the extent to which the COVID-19 pandemic impacts the Group's business, operations and financial results will depend on numerous evolving factors that management may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals' actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response thereto; the effect on the Group's customers; its impacts on suppliers; and the impact of the pandemic on counterparties and their ability to carry out their obligations to the Group. 

The Group has not yet experienced a significant impact to its business, results of operations, or financial position to-date as a result of the COVID-19 pandemic. However, the pandemic is dynamic and expanding and its ultimate scope, duration and effects are currently uncertain. Because of the uncertainties surrounding these factors and the long-term impact of the pandemic on global economies and markets, the extent of the financial impact of the pandemic cannot be reasonably estimated at this time

v3.20.1
Approval of Consolidated Financial Statements
12 Months Ended
Dec. 31, 2019
Approval of Consolidated Financial Statements  
Approval of Consolidated Financial Statements

Note 31. Approval of Consolidated Financial Statements

These consolidated financial statements were approved by the Board of Directors and authorized for issue on May 11, 2020.

v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Basis of Presentation and Summary of Significant Accounting Policies  
Basis of Accounting

Basis of Accounting

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”). Scully complies with all the requirements of IFRS. The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied with the exception of the adoption of IFRS 9, Financial Instruments (“IFRS 9”), IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) and the amendments to IFRS 2, Share-Based Payment from January 1, 2018, and IFRS 16, Leases, the amendments to IAS 23, Borrowing Costs, and IFRIC 23, Uncertainty over Income Tax Treatment from January 1, 2019. See Note 2B.

These consolidated financial statements were prepared using going concern, accrual (except for cash flow information) and historical cost (except for investment property and certain financial assets and financial liabilities which are measured at fair value and certain inventories that are measured at fair value less costs to sell) bases.

The presentation currency of these consolidated financial statements is the Canadian dollar ($), rounded to the nearest thousand (except per share amounts).

Certain amounts have been reclassified so as to conform with the presentation in the current year (see Notes 19 and 27).

Restatement

Restatement

 

During the fiscal year ended December 31, 2019, the Group re-assessed the presentation of its consolidated statement of operations and concluded that it was necessary to restate its previously issued financial statements for the fiscal year ended December 31, 2017 for the correction of an error in presentation relating to reclassifications of foreign exchange translation gains. In accordance with IFRS 10, Consolidated Financial Statements, amounts reclassified to profit and loss that had previously been recognised in other comprehensive income in relation to disposed subsidiaries are required to be recognised in “gain or loss on dispositions of subsidiaries” and therefore these amounts which historically have been included in “exchange differences on foreign currency transactions, net (gain) loss” are required to be represented within the gain or loss on disposal, which is included in “costs of sales and services”. Below is a reconciliation to the historically reported amounts for the year ended December 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2017

 

2017

 

 

 

Original

 

 

Reclassification

 

 

As Restated

Costs and expenses:

 

 

 

 

 

 

 

 

 

Costs of sales and services

 

 

239,663

 

 

(11,306)

 

 

228,357

Exchange differences on foreign currency transactions, net (gain) loss

 

 

1,038

 

 

11,306

 

 

12,344

 

Such restatement also affected the cash flows from operating activities in the cash flow statement. Below is a reconciliation of the historically reported amounts for the year ended December 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2017

 

2017

 

 

 

Original

 

 

Reclassification

 

 

As Restated

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Exchange differences on foreign currency transactions, net (gain) loss

 

 

1,038

 

 

(11,306)

 

 

12,344

(Gain) loss on dispositions of subsidiaries

 

 

10,219

 

 

11,306

 

 

(1087)

 

The restatement of the items included within the statement of operations and cash flows from operating activities has had no effect on the financial position, net loss or total cash flows used in operating activities of the Group for any period presented.

 

Amounts related to the year ended December 31, 2018 of $672 have also been reclassified for consistency with comparative information.

 

Certain amounts have also been reclassified so as to conform with the presentation in the current year (see Notes 15, 19 and 27).

Principles of Consolidation

Principles of Consolidation

These consolidated financial statements include the accounts of Scully and entities it controls. The Company controls an investee if and only if it has all the following: (a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability to use its power over the investee to affect the amount of its returns. When the Group holds, directly or indirectly, more than 50% of the voting power of an investee, it is presumed that the Group controls the investee, unless it can be clearly demonstrated that this is not the case. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All intercompany balances and transactions, including unrealized profits arising from intragroup transactions, have been eliminated in full. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

On the acquisition date, a non-controlling interest is measured at either its fair value or its proportionate share in the recognized amounts of the subsidiary’s identifiable net assets, on a transaction-by-transaction basis. Subsequently, the non-controlling interest increases or decreases for its share of changes in equity since the acquisition date.

After initial consolidation of a subsidiary, when the proportion of equity held by non-controlling interests changes, the Group, as long as it continues to control the subsidiary, adjusts the carrying amounts of the controlling and non-controlling interests to reflect the changes in their relative interests in the subsidiary. The Group recognizes directly in equity any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received and attributes such difference to the owners of Scully.

When the Group loses control of a subsidiary it: (a) derecognizes (i) the assets (including any goodwill) and liabilities of the subsidiary at their carrying amounts at the date when control is lost and (ii) the carrying amount of any non-controlling interests in the former subsidiary at the date when control is lost (including any components of other comprehensive income attributable to them); (b) recognizes (i) the fair value of the consideration received, if any, from the transaction, event or circumstances that resulted in the loss of control, (ii) if the transaction, event or circumstances that resulted in the loss of control involves a distribution of shares of the subsidiary to owners in their capacity as owners, that distribution and (iii) any investment retained in the former subsidiary at its fair value at the date when control is lost; (c) reclassifies to profit or loss, or transfers directly to retained earnings if required by IFRS, the amounts recognized in other comprehensive income in relation to the subsidiary; and (d) recognizes any resulting difference as a gain or loss under costs of sales and services in profit or loss attributable to the owners of Scully.

The financial statements of Scully and its subsidiaries used in the preparation of the consolidated financial statements are prepared as of the same date, using uniform accounting policies for like transactions and other events in similar circumstances.

Foreign Currency Translation

Foreign Currency Translation

The presentation currency of the Group’s consolidated financial statements is the Canadian dollar.

Scully conducts its business throughout the world through its foreign operations. Foreign operations are entities that are subsidiaries or branches, the activities of which are based or conducted in countries or currencies other than those of Scully. Functional currency is the currency of the primary economic environment in which an entity operates and is normally the currency in which the entity primarily generates and expends cash. Foreign currency is a currency other than the functional currency of the entity. The functional currencies of the Company and its subsidiaries and branches primarily comprise the Canadian dollar, Euro (“EUR” or “€”) and United States dollar (“US$”).

Reporting foreign currency transactions in the functional currency

A foreign currency transaction is a transaction that is denominated or requires settlement in a foreign currency. A foreign currency transaction is recorded, on initial recognition in an entity’s functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of each reporting period: (a) foreign currency monetary items are translated using the closing rate; (b) non-monetary items denominated in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction; and (c) foreign currency non-monetary items that are measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous periods are recognized in profit or loss in the period in which they arise, except for exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation which are initially recorded in other comprehensive income in the consolidated financial statements and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

Use of a presentation currency other than the functional currency

When an entity presents its financial statements in a currency that differs from its functional currency, the results and financial position of the entity are translated into the presentation currency using the following procedures: (a) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position; (b) income and expenses for each statement of operations presented are translated at exchange rates at the dates of the transactions or, for practical reasons, the average exchange rates for the periods when they approximate the exchange rates at the dates of the transactions; (c) individual items within equity are translated at either the historical exchange rates when practical or at the closing exchange rates at the date of the statement of financial position; and (d) all resulting exchange differences are recognized in other comprehensive income.

The following table sets out exchange rates for the translation of the Euro and United States dollar, which represented the major trading currencies of the Group, into the Canadian dollar:

 

 

 

 

 

 

 

    

EUR

    

US$

Closing rate at December 31, 2019

 

1.4583

 

1.2988

Average rate for the year 2019

 

1.4856

 

1.3269

Closing rate at December 31, 2018

 

1.5613

 

1.3642

Average rate for the year 2018

 

1.5302

 

1.2957

Closing rate at December 31, 2017

 

1.5052

 

1.2545

Average rate for the year 2017

 

1.4650

 

1.2986

 

Fair Value Measurement

Fair Value Measurement

Certain assets and liabilities of the Group are measured at fair value (see Note 2B).

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement is for a particular asset or liability. Therefore, when measuring fair value, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:

(a)  in the principal market for the asset or liability; or

(b)  in the absence of a principal market, in the most advantageous market for the asset or liability.

The Group measures the fair value of an asset or a liability using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. IFRS 13, Fair Value Measurement (“IFRS 13”),  establishes a fair value hierarchy that categorizes the inputs to valuation techniques used to measure fair value into three levels:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

Non-current Assets Held for Sale

Non-current Assets Held for Sale

A non-current asset (or disposal group) is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for the sale of such asset (or disposal group), the appropriate level of management must be committed to a plan to sell the asset (or disposal group) and an active program to locate a buyer and complete the plan must have been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value and the sale is highly probable to complete within one year from the date of classification, except as permitted under certain events and circumstances. If the aforesaid criteria are no longer met, the Group ceases to classify the asset (or disposal group) as held for sale.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amounts and fair values less costs to sell. The Group does not depreciate or amortize a non-current asset while it is classified as held for sale.

Use of Estimates and Assumptions and Measurement Uncertainty

Use of Estimates and Assumptions and Measurement Uncertainty

The timely preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management’s best estimates are based on the facts and circumstances available at the time estimates are made, historical experience, general economic conditions and trends and management’s assessment of probable future outcomes of these matters. Actual results could differ from these estimates and such differences could be material. For critical judgments in applying accounting policies and major sources of estimation uncertainty. See Notes 2C and 2D.

Financial Instruments

(i) Financial Instruments

IFRS 9

The Group adopted IFRS 9 with a date of initial application of January 1, 2018.

Financial assets and financial liabilities are recognized on the consolidated statement of financial position when the Group becomes a party to the financial instrument contract. A financial asset is derecognized either when the Group has transferred the financial asset and substantially all the risks and rewards of ownership of the financial asset or when  the contractual rights to the cash flows expire. A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expired.

The Group classifies its financial assets into the following measurement categories: (a) subsequently measured at fair value (either through other comprehensive income (“FVTOCI”) or through profit or loss (“FVTPL”) and (b) subsequently measured at amortized cost. The classification of financial assets depends on the Group’s business model for managing the financial assets and the terms of the contractual cash flows. The Group classifies its financial liabilities as subsequently measured at amortized cost, except for financial liabilities at FVTPL. Change in the fair value of a loan payable measured at FVTPL is included in costs of sales and services.

Initial Adoption of IFRS 9

IFRS 9 does not require restatement of comparative periods. Accordingly, the Group has reflected the retrospective impact of the adoption of IFRS 9 due to the change in accounting  policy for investments in equity securities as an adjustment to opening  deficit as at January 1, 2018. Under IFRS 9, the Group’s investments in equity securities, which were previously classified as available for sale or at cost under IAS 39, Financial Instruments: Recognition and Measurement (“IAS 39”), are measured at FVTPL. The retrospective adjustment, which represented the fair value gain adjustment on investments in equity securities as of January 1, 2018, was $524 and debited to other comprehensive income.

Upon the initial adoption of IFRS 9 on January 1, 2018, the financial assets which were previously classified at fair value through profit or loss, held-to-maturity, loans and receivables and available-for-sale have been transferred to, financial assets measured at FVTPL, FVTOCI or amortized cost.

IAS 39 (Accounting Policies Applicable Prior to January 1, 2018)

All financial assets and financial liabilities were classified by characteristic and/or management intent. Except for certain financial instruments which were excluded from the scope, all financial assets were classified into one of four categories: (a) at fair value through profit or loss; (b) held-to-maturity; (c) loans and receivables; and (d) available-for-sale, and all financial liabilities were classified into one of two categories: (a) at fair value through profit or loss; and (b) at amortized cost.

A financial asset or financial liability at fair value through profit or loss was a financial asset or financial liability that met either of the following conditions: (a) it was classified as held for trading if it was (i) acquired or incurred principally for the purpose of selling or repurchasing it in the near term, (ii) part of a portfolio of identified financial instruments that were managed together and for which there was evidence of a recent actual pattern of short-term profit taking, or (iii) a derivative, except for a derivative that was a designated and effective hedging instrument; or (b) it was designated by the Group upon initial recognition as at fair value through profit or loss when certain conditions were met.

Available-for-sale financial assets were those non-derivative financial assets that were designated as available for sale, or that were not classified as loans and receivables, held-to-maturity investments, or at fair value through profit or loss.

Non-derivative financial liabilities were classified as financial liabilities measured at amortized cost.

After initial recognition, the Group measured financial assets, including derivatives that were assets, at their fair values, without any deduction for transaction costs it might incur on sale or other disposal, except for the following financial assets: (a) held-to-maturity investments which were measured at amortized cost using the effective interest method; (b) loans and receivables which were measured at amortized cost using the effective interest method; and (c) investments in equity instruments that did not have a quoted market price in an active market and whose fair value could not be reliably measured and derivatives that were linked to and had to be settled by delivery of such unquoted equity instruments which were measured at cost. All financial assets except those measured at fair value through profit or loss were subject to review for impairment.

Common to Both IFRS 9 and IAS 39

Regular way purchases and sales of financial assets are accounted for at the settlement date.

When a financial asset or financial liability is recognized initially, the Group measures it at its fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs related to the acquisition or issue of a financial asset or financial liability at fair value through profit or loss are expensed as incurred. The subsequent measurement of a financial instrument and the recognition of associated gains and losses are determined by the financial instrument classification.

A gain or loss on a financial asset or financial liability classified as at fair value through profit or loss is recognized in profit or loss for the period in which it arises. A gain or loss on an asset measured at FVTOCI or classified as available for sale is recognized in other comprehensive income, except for impairment losses, until the financial asset is derecognized, at which time the cumulative gain or loss previously recognized in accumulated other comprehensive income is recognized in profit or loss for the period. For financial assets and financial liabilities carried at amortized cost, a gain or loss is recognized in profit or loss when the financial asset or financial liability is derecognized or impaired and through the amortization process.

Net gains or net losses on financial instruments at fair value through profit or loss do not include interest or dividend income.

Whenever quoted market prices are available, bid prices are used for the measurement of fair value of financial assets while ask prices are used for financial liabilities. When the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available; reference to the current fair value of another financial instrument that is substantially the same; discounted cash flow analysis; option pricing models; and other valuation techniques commonly used by market participants to price the financial instrument.

Cash and Cash Equivalents

(ii) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and cash at banks. They have maturities of three months or less from the date of acquisition and are generally interest-bearing.

Restricted cash refers to money that is held for a specific purpose and therefore not available to the Group for immediate or general business use. Restricted cash is accounted for as a separate item from cash and cash equivalents on the Group’s consolidated statements of financial position.

Securities

(iii) Securities

IFRS 9

Investments in equity securities are measured at FVTPL.

Debt securities which are held within a business model whose objective is to collect the contractual cash flows and sell the debt securities, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are measured at FVTOCI.

IAS 39 (Accounting Policies Applicable Prior to January 1, 2018)

Securities were classified as at fair value through profit or loss (i.e. held for trading) or short-term or long-term available-for-sale securities.

Publicly-traded securities (debt and equity) which were acquired principally for the purpose of selling in the near term were classified as held for trading.

Available-for-sale securities consisted of publicly-traded securities and unlisted equity securities which were not held for trading and not held to maturity. Long-term available-for-sale securities were purchased with the intention to hold until market conditions render alternative investments more attractive. Short-term available-for-sale securities were held with the intention of management to sell within the current operating cycle but did not meet the definition of trading securities.

When a decline in the fair value of an available-for-sale security had been recognized in other comprehensive income and there was objective evidence that the asset is impaired, the cumulative loss that had been recognized in other comprehensive income was reclassified from equity to profit or loss as a reclassification adjustment even though the security had not been derecognized. A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost is an objective evidence of impairment. The Group considered a decline in excess of 25 percent generally as significant and a decline in a quoted market price that persisted for 15 months as prolonged. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available for sale would not be reversed through profit or loss.

Gains and losses on sales of securities are calculated on the average cost basis.

Securities and Financial Liabilities - Derivatives

(iv) Securities and Financial Liabilities – Derivatives

A derivative is a financial instrument or other contract with all three of the following characteristics: (a) its value changes in response to the change in a specified interest rate, financial instrument price, product price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; (b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and (c) it is settled at a future date. A derivative financial instrument is either exchange-traded or negotiated. A derivative financial instrument is included in the consolidated statement of financial position as a security (i.e. financial asset) or a financial liability and measured at FVTPL. The recognition and measurement of a derivative financial instrument under both IFRS 9 and IAS 39 does not apply to a contract that is entered into and continues to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the Group’s expected purchase, sale or usage requirements, unless the Group, as allowed under IFRS 9, designates the contract as measured at FVTPL if it eliminates or significantly reduces a measurement inconsistency.

Where the Group has both the legal right and intent to settle derivative assets and liabilities simultaneously with the counterparty, the net fair value of the derivative financial instruments is reported as an asset or liability, as appropriate.

Changes in the fair values of derivative financial instruments that do not qualify for hedge accounting are recognized in profit or loss as they arise.

Financial Liabilities

(v) Financial Liabilities

The Group measures financial liabilities at either amortized cost or FVTPL. Financial liabilities are measured at amortized cost, unless either it is held for trading and hence required to be measured at FVTPL or the group elects to measure the financial liability at FVTPL.

Receivables

(vi) Receivables

Receivables are measured at amortized cost under both IFRS 9 and IAS 39.

Receivables are net of an allowance for credit losses, if any. The Group performs ongoing credit evaluations of its customers and recognizes a loss allowance for expected credit losses. Receivables are considered past due on an individual basis based on the terms of the contracts.

Allowance for Credit Losses

(vii) Allowance for Credit Losses

IFRS 9

The Group recognizes and measures a loss allowance for expected credit losses on a financial asset which is measured at amortized cost or at FVTOCI, including a lease receivable, a contract asset or a loan commitment and a financial guarantee contract. The impairment methodology applied depends on whether there has been a significant increase in credit risk since initial recognition. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportive forward-looking information.

When there is significant increase in credit risk or for credit-impaired financial assets, the loss allowance equals the lifetime expected credit losses which is defined as the expected credit losses that result from all possible default events over the expected life of a financial instrument. If, at the reporting date, the credit risk on a financial asset has not increased significantly since initial recognition, the Group measures the loss allowance for the financial instrument at an amount equal to the 12‑month expected credit losses which is defined as the portion of lifetime expected credit losses that represent the expected credit losses that result from default events on the financial instrument that are possible within the 12 months after the reporting date.

As required by IFRS 9, the Group always measures the loss allowance at an amount equal to lifetime expected credit losses for trade receivables and contract assets that result from transactions that are within the scope of IFRS 15.

IAS 39 (Accounting Policies Applicable Prior to January 1, 2018)

The Group applied credit risk assessment and valuation methods to its trade and other receivables. Credit losses arose primarily from receivables but might also relate to other credit instruments issued by or on behalf of the Group, such as guarantees and letters of credit. Specific provisions were established on an individual receivable basis.

Common to Both IFRS 9 and IAS 39

The Group’s allowance for credit losses is maintained at an amount considered adequate to absorb expected or estimated credit-related losses. Such allowance reflects management’s best estimate of the losses in the Group’s financial assets and judgments about economic conditions. Estimates and judgments could change in the near term, and could result in a significant change to a recognized allowance. An allowance for credit losses is increased by provisions, which are recognized in profit or loss and reduced by write-offs net of any recoveries. Write-offs are generally recorded after all reasonable restructuring or collection activities have taken place and there is no realistic prospect of recovery.

Inventories

(viii) Inventories

Inventories principally consist of raw materials, work-in-progress, and finished goods. Inventories, other than commodities products, are recorded at the lower of cost and net realizable value. Cost, where appropriate, includes an allocation of manufacturing overheads incurred in bringing inventories to their present location and condition and is assigned by using the first-in, first-out or weighted average cost formula, depending on the class of inventories. Net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The reversal of a write-down of inventories arising from an increase in net realizable value is recognized as a reduction in the amount of costs of sales and services in the period in which the reversal occurs.

Commodity products acquired by the Group as a broker-trader in the Group’s merchant banking activities with the purpose of selling in the near future and generating a profit from fluctuations in price or broker-traders’ margin are measured at fair value less costs to sell. Fair values of the Group’s inventories are determined by reference to their contractual selling prices or quoted prices in marketplaces in the absence of a contract (Level 1 fair value hierarchy), in accordance with guidance on fair value in IFRS 13.

Real Estate Held for Sale

(ix) Real Estate Held for Sale

Real estate held for sale is real estate intended for sale in the ordinary course of business or in the process of construction or development for such sale. The Group's real estate held for sale forms part of the security package for the €25,000 in principal amount of bonds (see Note 16) issued by Merkanti Holding plc in the year ended December 31, 2019, and to the extent that any sales of these properties, in whole or in part, cause the security to fall below a certain ratio, proceeds of said sale, up to an amount of the collateral shortfall, are required to be placed as cash collateral with the bondholder trustee until maturity.

Real estate held for sale is measured at the lower of cost (on a specific item basis) and net realizable value. Net realizable value is estimated by reference to sale proceeds of similar properties sold in the ordinary course of business less all estimated selling expenses around the reporting date, or by management estimates based on prevailing market conditions. The amount of any write-down of properties to net realizable value is recognized as an expense in the period the write-down occurs. The reversal of a write-down arising from an increase in net realizable value is recognized in the period in which the reversal occurs.

All of the Group’s real estate is located in Europe.

Investment Property

(x) Investment Property

Investment property is property that is held for generating rental income or for capital appreciation or both, rather than for: (a) use in the production or supply of goods or services or for administrative purposes; or (b) sale in the ordinary course of business. The Group’s investment property comprises freehold land and buildings. Investment property is initially recognized at cost including related transaction costs. After initial recognition, investment property is measured at fair value, with changes in fair value recognized in profit or loss in the period in which they arise.

The Group determines fair value without any deduction for transaction costs it may incur on sale or other disposal. Fair value of the Group’s investment property is based on valuations prepared annually by external evaluators in accordance with guidance issued by the International Valuation Standard Committee and reviewed by the Group, or these valuations are updated by management when there are no significant changes in the inputs to the valuation prepared by external evaluators in the preceding year, in accordance with guidance on fair value in IFRS 13.

Property, Plant and Equipment

(xi) Property, Plant and Equipment

Property, plant and equipment are carried at cost, net of accumulated depreciation and, if any, accumulated impairment losses. The initial cost of an item of property, plant and equipment comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of any decommissioning obligation, if any, and, for qualifying assets, borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Where an item of property, plant and equipment or part of the item that was separately depreciated is replaced and it is probable that future economic benefits associated with the replacement item will flow to the Group, the cost of the replacement item is capitalized and the carrying amount of the replaced asset is derecognized. All other replacement expenditures are recognized in profit or loss when incurred.

Inspection costs associated with major maintenance programs are capitalized and amortized over the period to the next inspection. All other maintenance costs are expensed as incurred.

When a right-of-use asset is acquired under a lease contract, the asset is measured at cost at the commencement date. The cost of the right-of-use asset comprises: (a) the amount of the initial measurement of the lease liability; (b) any lease payments made at or before the commencement date, less any lease incentives received; (c) any initial direct costs incurred by the Group; and (d) an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. After the commencement date, the Group measures the right-of-use asset applying a cost model whereby the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses and adjusts it for any remeasurement of the lease liabilities reflecting any reassessment, lease modifications or revised in-substance fixed lease payments. See Significant Accounting Policy (xiv) below.

The Group elected to apply IFRS 16 retrospectively, with the cumulative effect of the initial application of the new standard recognized at the date of initial application, being January 1, 2019. For further discussion, see Note 2B(xiv) below. The difference between the carrying amount of property, plant and equipment applying IAS 17 at the end of 2018 immediately preceding the date of initial application and the carrying amount in the consolidated statement of financial position at the date of initial application is reconciled as follows:

 

 

 

 

 

 

 

 

 

Carrying amount of property, plant and equipment as at December 31, 2018

 

$

58,325

Adjustment for the lease liabilities under IFRS 16 on the date of initial application

 

 

2,911

Carrying amount of property, plant and equipment recognized on the initial adoption of IFRS 16 as at January 1, 2019

 

$

61,236

 

The depreciable amounts of the Group’s property, plant, and equipment (i.e. the costs of the assets less their residual values) are depreciated according to the following estimated useful lives and methods:

 

 

 

 

 

 

 

    

Lives

    

Method

Buildings

 

20 years

 

straight-line

Processing plant and equipment

 

5 to 20 years

 

straight-line

Refinery and power plants

 

20 to 30 years

 

straight-line

Office equipment and other

 

3 to 10 years

 

straight-line

Office premises

 

2 to 10 years

 

straight-line

 

Depreciation expense is included in costs of sales and services or selling, general and administrative expense, whichever is appropriate.

The residual value and the useful life of an asset are reviewed at least at each financial year-end and, if expectations differ from previous estimates, the changes, if any, are accounted for as a change in an accounting estimate in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The depreciation method applied to an asset is reviewed at least at each financial year-end and, if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset, the method is changed to reflect the changed pattern.

The carrying amount of an item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is derecognized.

Interests in Resource Properties

(xii) Interests in Resource Properties

The Group’s interests in resource properties are mainly comprised of an interest in the Scully iron ore mine, and to a lesser extent exploration and evaluation assets (comprising hydrocarbon probable reserves and hydrocarbon undeveloped lands), hydrocarbon development and production assets.

(a) Exploration and evaluation assets

Exploration and evaluation costs, including the costs of acquiring undeveloped land and drilling costs are initially capitalized until the drilling of the well is complete and the results have been evaluated in order to determine the technical feasibility and commercial viability of the asset. Technical feasibility and commercial viability are considered to be determinable when proved and/or probable reserves are determined to exist. When proved and/or probable reserves are found, the drilling costs and the costs of associated hydrocarbon undeveloped lands are reclassified to hydrocarbon development and production assets or from hydrocarbon undeveloped lands to hydrocarbon probable reserves. The cost of hydrocarbon undeveloped land that expires or any impairment recognized during a period is charged to profit or loss. Pre-licence costs are recognized in profit or loss as incurred.

(b) Hydrocarbon development and production assets and an interest in an iron ore mine

The Group’s interests in resource properties are mainly comprised of an interest in the Scully iron ore mine, and to a lesser extent, hydrocarbon development and production assets.

(1) Recognition and measurement

Interests in resource properties are initially measured at cost and subsequently carried at cost less accumulated depletion and, if any, accumulated impairment losses.

The cost of an interest in resource property includes the initial purchase price and directly attributable expenditures to find, develop, construct and complete the asset. This cost includes reclassifications from exploration and evaluation assets, installation or completion of infrastructure facilities such as platforms, pipelines and the drilling of development wells, including unsuccessful development or delineation wells. Any costs directly attributable to bringing the asset to the location and condition necessary to operate as intended by management and result in an identifiable future benefit are also capitalized. These costs include an estimate of decommissioning obligations and, for qualifying assets, capitalized borrowing costs.

(2) Subsequent costs

Costs incurred subsequent to the determination of technical feasibility and commercial viability and the costs of replacing parts of property are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. Such capitalized costs generally represent costs incurred in developing proved reserves and bringing in, or enhancing production from, such reserves and are accumulated on a field or geotechnical area basis. All other expenditures are recognized in profit or loss as incurred. The costs of periodic servicing of the properties are recognized in costs of sales and services as incurred.

The carrying amount of any replaced or sold component is derecognized.

(3) Depletion

The carrying amount of an interest in a resource property is depleted using the unit of production method by reference to the ratio of production in the period to the related reserves.

For interests in hydrocarbon development and production assets, depletion is calculated based on proved producing reserves, taking into account estimated future development costs necessary to bring those reserves into production and the estimated salvage values of the assets at the end of their estimated useful lives. Future development costs are estimated taking into account the level of development required to continue to produce the reserves. Reserves for hydrocarbon development and production assets are estimated annually by independent qualified reserve evaluators and represent the estimated quantities of natural gas, natural gas liquids and crude oil which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future years from known reservoirs and which are considered commercially producible. For depletion purposes, relative volumes of petroleum and natural gas production and reserves are converted at the energy equivalent conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil.

For the interest in an iron ore mine, depletion is calculated based on proved and probable reserves. The estimate of the reserves of iron ore is reviewed whenever significant new information about the reserve is available, or at least at each financial year-end.

Impairment of Non-financial Assets

(xiii) Impairment of Non-financial Assets

The Group reviews the carrying amounts of its non-financial assets at each reporting date to determine whether there is any indication of impairment. If any such indication exists, an asset’s recoverable amount is estimated.

The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. Where an individual asset does not generate separately identifiable cash flows, an impairment test is performed at the cash-generating unit (“CGU”) level. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Where the carrying amount of an asset (or CGU) exceeds its recoverable amount, the asset (or CGU) is considered impaired and written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, an appropriate valuation model is used. These calculations are corroborated by external valuation metrics or other available fair value indicators wherever possible.

An assessment is made at the end of each reporting period whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, an estimate of the asset’s (or CGU’s) recoverable amount is reviewed. A previously recognized impairment loss is reversed to the extent that the events or circumstances that triggered the original impairment have changed. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, depletion and amortization, had no impairment loss been recognized for the asset in prior periods. A reversal of an impairment loss for a CGU is allocated to the assets of the CGU pro-rata with the carrying amounts of those assets.

Hydrocarbon probable reserves are tested for impairment when they are reclassified to hydrocarbon development and production assets or when indicators exist that suggest the carrying amount may exceed the recoverable amount. For purposes of impairment testing, hydrocarbon probable reserves are grouped with related producing resource properties as a CGU with common geography and geological characteristics.

Undeveloped lands are evaluated for indicators separately from hydrocarbon development and production assets and hydrocarbon probable reserves. Impairment is assessed by comparing the carrying amount of undeveloped lands to values determined by an independent land evaluator based on recent market transactions. Management also takes into account future plans for those properties, the remaining terms of the leases and any other factors that may be indicators of potential impairment.

Leases

(xiv) Leases

The Group adopted IFRS 16 with a date of initial application of January 1, 2019.

At the commencement date of a lease contract under which the Group is the lessee, the Group recognizes a right-of-use asset and a lease liability which is measured at the present value of the lease payments that are not paid at that date, discounted using the interest rate implicit in the lease (or if the rate cannot be readily determined, the Group company's incremental borrowing rate). After the commencement date, the Group (a) measures the lease liability by (i) increasing the carrying amount to reflect interest on the lease liability; (ii) reducing the carrying amount to reflect the lease payments made; and (iii) remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments; and (b) recognizes in profit or loss, unless the costs are included in the carrying amount of another asset, both (i) interest on the lease liability and (ii) variable lease payments not included in the measurement of the lease liability in the period in which the event or condition that triggers those payment occurs.

The Group elects not to apply IFRS 16 to short-term leases and leases for which the underlying asset is of low value and, as such, recognizes the lease payments associated with those leases as an expense on a straight-line basis.

The right-of-use assets are included in property, plant and equipment (see Note 2B (xi)) and the lease liabilities are included in account payables and accrued expense under current liabilities and/or other long-term liabilities.

Initial Adoption of IFRS 16

The Group elected to apply IFRS 16 retrospectively, with the cumulative effect of the initial application of the new standard recognized at the date of initial application, subject to permitted and elected practical expedients. Pursuant to the transitional requirements, the Group chose to measure that right-of-use asset at an amount equal to the lease liability immediately before the date of initial application and elected not to recognize a lease liability or right-of-use asset for which the lease term ended within 12 months of the date of initial application. As a result, the Group recognized an adjustment of $2,911,  $843 and $2,068 to property, plant and equipment, account payables and accrued expenses and other long-term liabilities, respectively, on January 1, 2019. The Group's weighted average incremental borrowing rate applied to lease liabilities recognized in the consolidated statement of financial position was 4.01% at the date of initial application. The difference between operating lease commitments disclosed applying IAS 17 at the end of 2018 immediately preceding the date of initial application and lease liabilities recognized in the consolidated statement of financial position at the date of initial application is reconciled as follows.

 

 

 

 

Operating leases as at December 31, 2018*

    

$

4,786

Exemptions for short term leases for which the underlying assets are of low value

 

 

(1,505)

Discounting

 

 

(370)

Lease liabilities recognized on the initial adoption of IFRS 16 as at January 1, 2019

 

$

2,911


*  Represents undiscounted lease commitments

IAS 17 (Accounting Policies Applicable Prior to January 1, 2019)

Under IAS 17, a lease was classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of the leased asset. Operating lease payments were expensed in profit or loss over the term of the lease on a straight-line basis.

Common to Both IFRS 16 and IAS 17

Under both IFRS 16 and IAS 17, lease income from operating leases is recognized in income on a straight-line basis over the term of the lease.

Provision, Financial Guarantee Contracts and Contingencies

(xv) Provisions, Financial Guarantee Contracts and Contingencies

Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the reporting date. Where appropriate, the future cash flow estimates are adjusted to reflect risks specific to the liability. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recorded as accretion and included in finance costs.

A financial guarantee contract is initially recognized at fair value. If the guarantee is issued to an unrelated party on a commercial basis, the initial fair value is likely to equal the premium received. If no premium is received, the fair value must be determined using a method that quantifies the economic benefit of the guarantee to the holder. At the end of each subsequent reporting period, financial guarantees are measured at the higher of: (i) the amount of the loss allowance, and (ii) the amount initially recognized less cumulative amortization, where appropriate.

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Group. Contingent liabilities, other than those assumed in connection with business combinations which are measured at fair value at the acquisition date, are not recognized in the consolidated financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. Legal costs in connection with a loss contingency are recognized in profit or loss when incurred.

The Group does not recognize a contingent or reimbursement asset unless it is virtually certain that the contingent or reimbursement asset will be received.

Decommissioning Obligations

(xvi) Decommissioning Obligations

The Group provides for decommissioning, restoration and similar liabilities (collectively, decommissioning obligations) on its resource properties, facilities, production platforms, pipelines and other facilities based on estimates established by current legislation and industry practices. The decommissioning obligation is initially measured at fair value and capitalized to interests in resource properties or property, plant and equipment as an asset retirement cost. The liability is estimated by discounting expected future cash flows required to settle the liability using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The estimated future asset retirement costs are adjusted for risks such as project, physical, regulatory and timing. The estimates are reviewed periodically. Changes in the provision as a result of changes in the estimated future costs or discount rates are added to or deducted from the asset retirement cost in the period of the change. The liability accretes for the effect of time value of money until it is settled. The capitalized asset retirement cost is amortized through depreciation, depletion and amortization over the estimated useful life of the related asset. Actual asset retirement expenditures are recorded against the obligation when incurred. Any difference between the accrued liability and the actual expenditures incurred is recorded as a gain or loss in the settlement period.

Own Equity Instruments

(xvii) Own Equity Instruments

The Group’s holdings of its own equity instruments, including common stock and preferred stock, are presented as “treasury stock” and deducted from shareholders’ equity at cost and in the determination of the number of equity shares outstanding. No gain or loss is recognized in profit or loss on the purchase, sale, re-issue or cancellation of the Group’s own equity instruments.

Revenue Recognition

(xviii) Revenue Recognition

IFRS 15

Effective January 1, 2018, the Group adopted IFRS 15. Pursuant to IFRS 15, the Group recognizes revenue, excluding interest and dividend income and other such income from financial instruments recognized in accordance with IFRS 9, upon transfer of promised goods or services to customers in amounts that reflect the consideration to which the Group expects to be entitled in exchange for those goods or services based on the following five step approach:

Step 1: Identify the contracts with customers;

Step 2: Identify the performance obligations in the contract;

Step 3: Determine the transaction price;

Step 4: Allocate the transaction price to the performance obligations in the contract; and

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The Group typically satisfies its performance obligations upon shipment of the goods, or upon delivery as the services are rendered or upon completion of services depending on whether the performance obligations are satisfied over time or at a point in time. The Group primarily acts as principal in contracts with its customers. The Group does not have material obligations for returns, refunds and other similar obligations, nor warranties and related obligations.

For performance obligations that the Group satisfies over time, the Group typically uses time-based measures of progress because the Group is providing a series of distinct services that are substantially the same and have the same pattern of transfer.

For performance obligations that the Group satisfies at a point in time, the Group typically uses shipment or delivery of goods and/or services in evaluating when a customer obtains control of promised goods or services.

A significant financing component exists and is accounted for if the timing of payments agreed to by the parties to the contract provides the customer or the Group with a significant benefit of financing the transfer of goods and services to the customer. As a practical expedient, the Group does not adjust the promised amount of consideration for the effects of a significant financing component if the Group expects, at contract inception, that the period between when the Group transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

The incremental costs of obtaining contracts with customers and the costs incurred in fulfilling contracts with customers that are directly associated with the contract are recognized as an asset (hereinafter, “assets arising from contract costs”) if those costs are expected to be recoverable, which are included in other long-term assets in the consolidated statements of financial position. The incremental costs of obtaining contracts are those costs that the Group incurs to obtain a contract with a customer that they would not have incurred if the contract had not been obtained. As a practical expedient, the Group recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Assets arising from contract costs are amortized using the straight-line method over their estimated contract periods.

The Group exercises judgments in determining the amount of the costs incurred to obtain or fulfill a contract with a customer, which includes, but is not limited to (a) the likelihood of obtaining the contract, (b) the estimate of the profitability of the contract, and (c) the credit risk of the customer. An impairment loss will be recognized in profit or loss to the extent that the carrying amount of the asset exceeds (a) the remaining amount of consideration that the entity expects to receive in exchange for the goods or services to which the asset relates, less (b) the costs that relate directly to providing those goods or services and that have not been recognized as expenses.

Initial Adoption of IFRS 15

Pursuant to the transition arrangement permitted under IFRS 15, the Group applied IFRS 15 retrospectively with the cumulative effect of initially applying IFRS 15 recognized at the date of initial application. There were no revisions on the accounts in the consolidated statement of financial position on January 1, 2018 upon the adoption of IFRS 15.

Moreover, there were no financial statement line items affected in the year ended December 31, 2018 by the application of IFRS 15 as compared to the presentation under IAS 18, Revenue ("IAS 18")  and related interpretations.

IAS 18, Revenue (Accounting Policies Applicable Prior to January 1, 2018)

The Group accounted for revenues under IAS 18 and other related international accounting standards and interpretations for the recognition and measurement of revenue until December 31, 2017.

Revenue included proceeds from sales of merchant banking products and services, real estate properties, medical instruments and supplies, rental income on investment property, interest and dividend income and net gains on securities. In an agency relationship, revenue was the amount of commission earned.

Revenue from the sale of goods was recognized when: (a) the Group had transferred to the buyer the significant risks and rewards of ownership of the goods (which generally coincided with the time when the goods were delivered to the buyer and title had passed); (b) the Group retained neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of revenue could be measured reliably; (d) it was probable that the economic benefits associated with the transaction would flow to the Group; and (e) the costs incurred or to be incurred in respect of the transaction could be measured reliably.

Revenue from the rendering of services was recognized when: (a) the amount of revenue could be measured reliably; (b) it was probable that the economic benefits associated with the transaction would flow to the Group; (c) the stage of completion of the transaction at the reporting date could be measured reliably; and (d) the costs incurred for the transaction and the costs to complete the transaction could be measured reliably.

Revenue was measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, customs duties and sales taxes. When the Group charged shipping and handling fees to customers, such fees were included in sales revenue. Where the Group acted as an agent on behalf of a third party to procure or market goods, any associated fee income was recognized and no purchase or sale was recorded.

Interest, royalty and dividend income were recognized when it was probable that economic benefits will flow to the Group and the amount of income could be measured reliably.

Costs of Sales and Services

(xix) Costs of Sales and Services

Costs of sales and services include the costs of goods (merchant banking products and services, real estate properties, medical instruments and supplies) sold. The costs of goods sold include both the direct cost of materials and indirect costs, freight charges, purchasing and receiving costs, inspection costs, distribution costs and a provision for warranty when applicable.

Costs of sales and services also include write-downs of inventories, net loss on securities, credit losses on financial assets, gains or losses on dispositions of subsidiaries, and fair value gain and loss on investment property, commodity inventories and derivative contracts.

The reversal of write-downs of inventories and credit losses reduces the costs of sales and services.

Employee Benefits

(xx) Employee Benefits

Wages, salaries, bonuses, social security contributions, paid annual leave and sick leave are accrued in the period in which the associated services are rendered by employees of the Group. The employee benefits are included in costs of sales and services or selling, general and administrative expenses, as applicable.

Share-Based Compensation

Share-Based Compensation

The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments on the date at which the equity instruments are granted and is recognized as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award. Fair value is determined by using an appropriate valuation model. At each reporting date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions and the number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous reporting date is recognized in profit or loss, with a corresponding amount in equity.

When the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognized over the original vesting period. In addition, an expense is recognized over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognized if this difference is negative. When an equity-settled award is cancelled other than by forfeiture when the vesting conditions are not satisfied, it is treated as if it had vested on the date of cancellation and any cost not yet recognized in profit or loss for the award is expensed immediately.

Share-based compensation expenses are included in selling, general and administrative expenses. When stock options are exercised, the exercise price proceeds together with the amount initially recorded in contributed surplus are credited to capital stock.

Finance Costs

(xxii) Finance Costs

Finance costs comprise interest expense on borrowings, accretion of the discount on provisions, decommissioning obligations and other liabilities and charges and fees relating to factoring transactions.

Capital stock and debt are recorded at the amount of proceeds received, net of direct issue costs (transaction costs). The transaction costs attributable to debt issued are amortized over the debt term using the effective interest method.

Income Taxes

(xxiii) Income Taxes

Income tax expense (recovery) comprises current income tax expense (recovery) and deferred income tax expense (recovery) and includes all domestic and foreign taxes which are based on taxable profits. The current income tax provision is based on the taxable profits for the period. Taxable profit differs from income before income taxes as reported in the consolidated statements of operations because it excludes items of income or expense that are taxable or deductible in other periods and items that are never taxable or deductible. The Group’s liability for current income tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date. Deferred income tax is provided, using the liability method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the consolidated statement of financial position.

Deferred income tax liabilities are recognized for all taxable temporary differences:

-      except where the deferred income tax liability arises on goodwill that is not tax deductible or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

-      in respect of taxable temporary differences associated with investments in subsidiaries and branches, except where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized:

-      except where the deferred income tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

-      in respect of deductible temporary differences associated with investments in subsidiaries and branches, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future.

On the reporting date, management reviews the Group’s deferred income tax assets to determine whether it is probable that the benefits associated with these assets will be realized. The Group also reassesses unrecognized deferred income tax assets. The review and assessment involve evaluating both positive and negative evidence. The Group recognizes a previously unrecognized deferred income tax asset to the extent that it has become probable that future taxable profit will allow the deferred income tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Tax relating to items recognized in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assets against current income tax liabilities, and when they relate to income tax levied by the same taxation authority and the Group intends to settle its current income tax assets and liabilities on a net basis.

Withholding taxes (which include withholding taxes payable by a subsidiary on distributions to the Group) are treated as income taxes when they have the characteristics of an income tax. This is considered to be the case when they are imposed under government authority and the amount payable is calculated by reference to revenue derived.

The Group includes interest charges and penalties on current income tax liabilities as a component of interest expense.

Earnings Per Share

(xxiv) Earnings Per Share

Basic earnings per share is determined by dividing net income attributable to ordinary equity holders of Scully by the weighted average number of common shares outstanding during the period, net of treasury stock.

Diluted earnings per share is determined using the same method as basic earnings per share, except that the weighted average number of common shares outstanding includes the effect of dilutive potential ordinary shares. For the purpose of calculating diluted earnings per share, the Group assumes the exercise of its dilutive options with the assumed proceeds from these instruments regarded as having been received from the issue of common shares at the average market price of common shares during the period. The difference between the number of common shares issued and the number of common shares that would have been issued at the average market price of common shares during the period is treated as an issue of common shares for no consideration and added to the weighted average number of common shares outstanding. The amount of the dilution is the average market price of common shares during the period minus the issue price and the issue price includes the fair value of services to be supplied to the Group in the future under the share-based payment arrangement. Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations.

When share-based payments are granted during the period, the shares issuable are weighted to reflect the portion of the period during which the payments are outstanding. The shares issuable are also weighted to reflect forfeitures occurring during the period. When stock options are exercised during the period, shares issuable are weighted to reflect the portion of the period prior to the exercise date and actual shares issued are included in the weighted average number of shares outstanding from the exercise date.

Business Combinations

(xxv) Business Combinations

The Group accounts for each business combination by applying the acquisition method. Pursuant to the acquisition method, the Group, when a business combination occurs and it is identified as the acquirer, determines the acquisition date (on which the Group legally transfers the consideration, acquires the assets and assumes the liabilities of the acquiree), recognizes and measures the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree, and recognizes and measures goodwill or a gain from a bargain purchase (i.e. negative goodwill). The identifiable assets acquired and the liabilities assumed are measured at their acquisition-date fair values. A non-controlling interest is measured at either its fair value or its proportionate share in the recognized amounts of the subsidiary’s identifiable net assets, on a transaction-by-transaction basis.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, the liabilities incurred by the Group to former owners of the acquiree and the equity interests issued by the Group.

In a business combination achieved in stages, the Group remeasures its previously held equity interest in the acquiree at its acquisition-date fair value and recognizes the resulting gain or loss, if any, in profit or loss.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Group retrospectively adjusts the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, the Group also recognizes additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as the Group receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. However, the measurement period does not exceed one year from the acquisition date.

Acquisition-related costs are costs the Group incurs to effect a business combination. Those costs include finder’s fees; advisory, legal, accounting, valuation and other professional or consulting fees; general administrative costs, including the costs of maintaining an internal acquisitions department; and costs of registering and issuing debt and equity securities. The Group accounts for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, except for the costs to issue debt or equity securities (see Significant Accounting Policy Item (xxii) above).

Critical Judgments in Applying Accounting Policies

C. Critical Judgments in Applying Accounting Policies

In the process of applying the Group’s accounting policies, management makes various judgments, apart from those involving estimations under Note 2D below, that can significantly affect the amounts it recognizes in the consolidated financial statements. The following are the critical judgments that management has made in the process of applying the Group’s accounting policies and that have the most significant effects on the amounts recognized in the consolidated financial statements:

(i) Identification of Cash-generating Units

The Group’s assets are aggregated into CGUs, for the purpose of assessing and calculating impairment  of non-financial assets, based on their ability to generate largely independent cash flows. The determination of CGUs requires judgment in defining the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. CGUs have been determined based on similar geological structure, shared infrastructure, geographical proximity, product type and similar exposure to market risks. In the event facts and circumstances surrounding factors used to determine the Group’s CGUs change, the Group will re-determine the groupings of CGUs.

(ii) Impairment and Reversals of Impairment on Non-Financial Assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at the end of each reporting period to determine whether there is an indication of impairment or reversal of previously recorded impairment. If such indication exists, the recoverable amount is estimated.

Determining whether there are any indications of impairment or impairment reversals requires significant judgment of external factors, such as an extended change in prices or margins for hydrocarbon commodities or refined products, a significant change in an asset’s market value, a significant revision of estimated volumes, revision of future development costs, a change in the entity’s market capitalization or significant changes in the technological, market, economic or legal environment that would have an impact on the Company’s CGUs. Given that the calculations for recoverable amounts require the use of estimates and assumptions, including forecasts of commodity prices, marketing supply and demand, product margins and in the case of the Group's iron ore interest, power plant and hydrocarbon properties, expected production volumes, it is possible that the assumptions may change, which may impact the estimated life of the CGU and may require a material adjustment to the carrying value of goodwill and non-financial assets.

Impairment losses recognized in prior years are assessed at the end of each reporting period for indications that the impairment has decreased or no longer exists. An impairment loss is reversed only to the extent that the carrying amount of the asset or CGU does not exceed the carrying amount that would have been determined, net of depletion, depreciation and amortization, if no impairment loss had been recognized.

(iii) Valuation of Investment Property

Investment properties are included in the consolidated statement of financial position at their market value, unless their fair value cannot be reliably determined at that time. The market value of investment properties is assessed annually by an independent qualified valuer, who is an authorized expert for the valuation of developed and undeveloped land in Germany, after taking into consideration the net income with inputs on realized basic rents, operating costs and damages and defects. The assumptions adopted in the property valuations are based on the market conditions existing at the end of the reporting period, with reference to current market sales prices and the appropriate capitalization rate. Changes in any of these inputs or incorrect assumptions related to any of these items could materially impact these valuations.

(iv) Assets Held for Sale and Discontinued Operations

The Group applies judgment to determine whether an asset (or disposal group) is available for immediate sale in its present condition and that its sale is highly probable and therefore should be classified as held for sale at the balance sheet date. In order to assess whether it is highly probable that the sale can be completed within one year, or the extension period in certain circumstances, management reviews the business and economic factors, both macro and micro, which include the industry trends and capital markets, and the progress towards a sale transaction. It is also open to all forms of sales, including exchanges of non-current assets for other non-current assets when the exchange will have commercial substance in accordance with IAS 16, Property, Plant and Equipment.

A discontinued operation is a component of an entity (which comprises operations and cash flows that can be clearly distinguished, operationally and, for financial reporting purposes, from the rest of the entity) that either has been disposed of or is classified as held for sale. The discontinued operation must represent a separate major line of business or a separate major geographical area of operations of the Group and the Group applies judgment to determine whether the thresholds are met. Generally, management determines whether a component is a discontinued operation or not based on the contribution of the component to the Group's net income (loss), net assets, or gross assets. Management does not view revenue as a major factor in determining whether a component is a discontinued operation or not because the revenue factor does not contribute any real economic benefits to the Group. While a component of the entity has distinguished financial data, judgments must be exercised on the presentation of inter-company transactions between components that are presented as discontinued operations and those that are presented as continuing operations. Furthermore, the allocation of income tax expense (recovery) also involves the exercise of judgments as the tax position of continuing operations may have an impact on the tax position of discontinued operations, or vice versa.

In 2019, the Group disposed of its interests in two product lines in Europe which management considered not to be discontinued operations because (i) they did not form separate segments or cash generating units, (ii) they did not have financial results which could be clearly identified from the rest of the Group, (iii) each of them was not a separate major geographical area, and (iv) the dispositions were not part of a single coordinated plan to dispose of them. Management, when exercising its judgments in terms of their respective contribution to the Group's net loss, total assets and net assets, concluded that these disposed components were not separate major lines of business or geographical area of operations. Based on the Group's consolidated financial statements as of June 30, 2019 (the latest publicly available financial results prior to their dispositions), the net income or loss of these disposed units represented 2% and 7%,  of the combined reported loss of all entities that reported a loss and each of them represented 1% of consolidated total assets and less than 1% of consolidated net assets of the Group. The combined revenue (third parties only), loss before taxes, income tax expense and net loss, respectively, was $81,766,  ($63),  ($575) and ($638) during the year of 2019 to the dates of their dispositions, which were included in the Group's continuing operations for the year ended December 31, 2019. The net gain on dispositions of these entities was $207.

(v) Purchase Price Allocations

There was a business combination in 2017. For every business combination, the Group measured the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The determination of fair value required the Group to make assumptions, estimates and judgments regarding future events, including the profit forecast of the new subsidiary in the future. The allocation process is inherently subjective and impacts the amounts assigned to individual identifiable assets and liabilities, including the fair value of long-lived assets, the recognition and measurement of any unrecorded intangible assets and/or contingencies and the final determination of the amount of goodwill or bargain purchase. The inputs to the exercise of judgments include legal, contractual, business and economic factors. As a result, the purchase price allocation impacts the Group’s reported assets and liabilities and future net earnings due to the impact on future depreciation, depletion and amortization and impairment tests.

(vi) Credit Losses and Impairment of Receivables

On January 1, 2018, the Group adopted IFRS 9. As a result, the Group applies credit risk assessment and valuation methods to its trade and other receivables under IFRS 9 which establishes a single forward-looking expected loss impairment model to replace the incurred impairment model under IAS 39.

The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on the financial instrument has increased significantly since initial recognition. The objective of the impairment requirements is to recognize lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition — whether assessed on an individual or collective basis — considering all reasonable and supportable information, including that which is forward-looking.

At each reporting date, management assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, management uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, management compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.

Allowance for credit losses is maintained at an amount considered adequate to absorb the expected credit losses. Such allowance for credit losses reflects management’s best estimate of changes in the credit risk on the Group’s financial instruments and judgments about economic conditions. The assessment of allowance for credit losses is a complex process, particularly on a looking-forward basis; which involves a significant degree of judgment and a high level of estimation uncertainty. The input factors include the assessment of the credit risk of the Group’s financial instruments, legal rights and obligations under all the contracts and the expected future cash flows from the financial instruments, which include inventories, mortgages and other credit enhancement instruments. The major source of estimation uncertainty relates to the likelihood of the various scenarios under which different amounts are expected to be recovered through the security in place on the financial assets. The expected future cash flows are projected under different scenarios and weighted by probability, which involves the exercise of significant judgment. Estimates and judgments could change in the near-term and could result in a significant change to a recognized allowance.

Major Sources of Estimation Uncertainty

D. Major Sources of Estimation Uncertainty

The timely preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

The major assumptions about the future and other major sources of estimation uncertainty at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. These items require management’s most difficult, subjective or complex estimates. Actual results may differ materially from these estimates.

(i) Interests in Resource Properties and Reserve Estimates

The Group had interests in resource properties mainly comprised of an interest in the Scully iron ore mine, and to a lesser extent, hydrocarbon properties, with an aggregate carrying amount of $270,070 as at December 31, 2019.

Estimation of reported recoverable quantities of proved and probable reserves include judgmental assumptions regarding production profile, prices of products produced, exchange rates, remediation costs, timing and amount of future development costs and production, transportation and marketing costs for future cash flows. It also requires interpretation of geological and geophysical models and anticipated recoveries. The economical, geological and technical factors used to estimate reserves may change from period to period. Changes in reported reserves can impact the carrying amounts of the Group’s interests in resource properties and/or related property, plant and equipment, the recognition of impairment losses and reversal of impairment losses, the calculation of depletion and depreciation, the provision for decommissioning obligations and the recognition of deferred income tax assets or liabilities due to changes in expected future cash flows. The recoverable quantities of reserves and estimated cash flows from the Group’s hydrocarbon interests are independently evaluated by reserve engineers at least annually. During the year ended December 31, 2019, the Group did not recognize any impairment in respect of its interest in resource properties.

The Group’s hydrocarbon reserves represent the estimated quantities of petroleum, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be economically recoverable in future years from known reservoirs and which are considered commercially producible. Such reserves may be considered commercially producible if management has the intention of developing and producing them and such intention is based upon: (a) a reasonable assessment of the future economics of such production; (b) a reasonable expectation that there is a market for all or substantially all the expected hydrocarbon production; and (c) evidence that the necessary production, transmission and transportation facilities are available or can be made available. Reserves may only be considered proven and probable if producibility is supported by either production or conclusive formation tests.

Included in interests in resource properties as at December 31, 2019, were exploration and evaluation assets with an aggregate carrying amount of $17,007. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount and upon reclassification to hydrocarbon development and production assets. If such indicators exist, impairment, if any, is determined by comparing the carrying amounts to the recoverable amounts. The measurement of the recoverable amount involves a number of assumptions, including the timing, likelihood and amount of commercial production, further resource assessment plans and future revenue and costs expected from the asset, if any.

(ii) Impairment of Other Non-Financial Assets

The Group had property, plant and equipment aggregating $55,413 as at December 31, 2019, consisting mainly of a power plant and a natural gas processing facility. Impairment of the Group’s non-financial assets is evaluated at the CGU level. In testing for impairment, the recoverable amounts of the Company’s CGUs are determined as the higher of their values in use and fair values less costs of disposal. In the absence of quoted market prices, the recoverable amount is based on estimates of future production rates, future product selling prices and costs, discount rates and other relevant assumptions. Increases in future costs and/or decreases in estimates of future production rates and product selling prices may result in a write-down of the Group’s property, plant and equipment.

(iii) Taxation

The Group is subject to tax in a number of jurisdictions and judgment is required in determining the worldwide provision for income taxes. Deferred income taxes are recognized for temporary differences using the liability method, with deferred income tax liabilities generally being provided for in full (except for taxable temporary differences associated with investments in subsidiaries and branches where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future) and deferred income tax assets being recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

The Group recognized deferred income tax assets of $14,295 as at December 31, 2019. In assessing the realizability of deferred income tax assets, management considers whether it is probable that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income in Malta and Canada during the periods in which temporary differences become deductible or before tax loss and tax credit carry-forwards expire. Management considers the future reversals of existing taxable temporary differences, projected future taxable income, taxable income in prior years and tax planning strategies in making this assessment. Unrecognized deferred income tax assets are reassessed at the end of each reporting period.

The Group does not recognize the full deferred tax liability on taxable temporary differences associated with investments in subsidiaries and branches where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. The Group may change its investment decision in its normal course of business, thus resulting in additional income tax liabilities.

The operations and organization structures of the Group are complex, and related tax interpretations, regulations and legislation are continually changing. The Group companies’ income tax filings are subject to audit by taxation authorities in numerous jurisdictions. There are audits in progress and items under review, some of which may increase the Group’s income tax liabilities. In addition, the companies have filed appeals and have disputed certain issues. While the results of these items cannot be ascertained at this time, the Group believes that the Group has an adequate provision for income taxes based on available information.

(iv) Contingencies

Pursuant to IAS 37, Provisions, Contingent Liabilities and Contingent Assets, the Group does not recognize a contingent liability. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. If it becomes probable that an outflow of future economic benefits will be required for an item previously accounted for as a contingent liability, an accrual or a provision is recognized in the consolidated financial statements in the period in which the change in probability occurs. See Note 24 for further disclosures on contingencies.

(v) Pandemic COVID-19

The COVID-19 pandemic in 2020 leads the world into a new era of uncertainties. The pandemic is dynamic and expanding and its ultimate scope, duration and effects are currently uncertain.  The impact of the pandemic and the global response thereto has, among other things, significantly disrupted global economic activity, negatively impacted gross domestic product and caused significant volatility in financial markets; although, since May 2020, the pandemic seems to be under control in some regions of the world and some countries and jurisdictions are planning to ease up their lockdown measures.

 

While various countries have implemented stimulus packages and other fiscal measures to attempt to reduce the impact of the pandemic on their economies, the impact of the pandemic on global economic activity and markets both in the short and longer term is uncertain at this time. The magnitude and duration of the disruption and resulting decline in business activity resulting from the COVID-19 pandemic is currently uncertain. While the Group expects that there will likely be some negative impact on its results of operations, cash flows and financial position from the pandemic beyond the near-term, the extent to which the COVID-19 pandemic impacts the Group’s business, operations and financial results will depend on numerous evolving factors that management may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals' actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response thereto; the effect on the Group’s customers, including the borrowers and customers of the Bank (as defined herein); its impacts on suppliers; and the impact of the pandemic on counterparties and their ability to carry out their obligations to the Group.

 

The Group's results of operations, cash flows and financial position will likely be adversely affected by the pandemic beyond near-term. However management does not believe the pandemic will have significant impact on the going concern of the Group in the foreseeable future, which is considered to be 12 months from the date of approval of these financial statements, as the Group currently has sufficient cash, good working capital position and steady cash inflows from operations. Management has performed stress tests on their forecasts with various assumptions and the results showed that the Group would be able to withstand any significant impact on operations within the aforesaid timeframe.

 

Although disruption and effects of the COVID-19 pandemic may be temporary, given the dynamic nature of these circumstances and the worldwide nature of the Company’s business and operations, the duration of any business disruption and the related financial impact to us cannot be reasonably estimated at this time but could materially affect the Group’s business results of operations and financial condition. Ultimately, the severity of the impact of the pandemic on the Group's business and going concern basis will depend on a number of factors, including, the duration and severity of the pandemic and the impact and new developments concerning the global severity of, and actions to be taken to contain the outbreak.

 

Management took into consideration all of these various factors and risks when concluding on the Company’s ability to continue as a going concern and the appropriateness of this presentation when preparing these consolidated financial statements.

 

Accounting Changes

E. Accounting Changes

Future Accounting Changes

In October 2018, IASB issued amendments to its definition of material to make it easier for companies to make materiality judgements. The updated definition amends IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The amendments clarify the definition of material and how it should be applied and ensure that the definition of material is consistent across all IFRS Standards. The changes are effective from January 1, 2020, although earlier  application is permitted. Management is assessing its impacts on the Group’s financial statement presentation.

 

In October 2018, the IASB amended IFRS 3, Business Combinations, seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application is permitted. The amended standard has a narrower definition of a business, which could result in the recognition of fewer business combinations than under the current standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the current standard may now be recognized as allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity's results of operations that would differ from the effect of goodwill having been recognized). Management is currently assessing the impacts and transition provisions of the amended standard and will apply the standard prospectively from January 1, 2020.

v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Basis of Presentation and Summary of Significant Accounting Policies  
Schedule of reconciliation of historically restated amounts in statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2017

 

2017

 

 

 

Original

 

 

Reclassification

 

 

As Restated

Costs and expenses:

 

 

 

 

 

 

 

 

 

Costs of sales and services

 

 

239,663

 

 

(11,306)

 

 

228,357

Exchange differences on foreign currency transactions, net (gain) loss

 

 

1,038

 

 

11,306

 

 

12,344

 

Schedule of reconciliation of historically restated amounts in statement of cashflows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2017

 

2017

 

 

 

Original

 

 

Reclassification

 

 

As Restated

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Exchange differences on foreign currency transactions, net (gain) loss

 

 

1,038

 

 

(11,306)

 

 

12,344

(Gain) loss on dispositions of subsidiaries

 

 

10,219

 

 

11,306

 

 

(1087)

 

Schedule of sets out exchange rates for the translation of the Euro and U.S. dollar

 

 

 

 

 

 

    

EUR

    

US$

Closing rate at December 31, 2019

 

1.4583

 

1.2988

Average rate for the year 2019

 

1.4856

 

1.3269

Closing rate at December 31, 2018

 

1.5613

 

1.3642

Average rate for the year 2018

 

1.5302

 

1.2957

Closing rate at December 31, 2017

 

1.5052

 

1.2545

Average rate for the year 2017

 

1.4650

 

1.2986

 

Schedule of carrying amount of property, plant and equipment on adoption of IFRS 16

 

 

 

 

 

 

 

 

Carrying amount of property, plant and equipment as at December 31, 2018

 

$

58,325

Adjustment for the lease liabilities under IFRS 16 on the date of initial application

 

 

2,911

Carrying amount of property, plant and equipment recognized on the initial adoption of IFRS 16 as at January 1, 2019

 

$

61,236

 

Schedule of estimated useful lives and methods of property, plant and equipment

 

 

 

 

 

 

    

Lives

    

Method

Buildings

 

20 years

 

straight-line

Processing plant and equipment

 

5 to 20 years

 

straight-line

Refinery and power plants

 

20 to 30 years

 

straight-line

Office equipment and other

 

3 to 10 years

 

straight-line

Office premises

 

2 to 10 years

 

straight-line

 

Schedule of of initial application and lease liabilities recognized

 

 

 

 

 

Operating leases as at December 31, 2018*

    

$

4,786

Exemptions for short term leases for which the underlying assets are of low value

 

 

(1,505)

Discounting

 

 

(370)

Lease liabilities recognized on the initial adoption of IFRS 16 as at January 1, 2019

 

$

2,911


*  Represents undiscounted lease commitments

v3.20.1
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure (Tables)
12 Months Ended
Dec. 31, 2019
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure  
Schedule of debt or long term debt to adjusted capital or equity ratio

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Total debt

 

$

35,418

 

$

 —

Less: cash and cash equivalents

 

 

(78,274)

 

 

(67,760)

Net debt

 

 

Not applicable

 

 

Not applicable

Shareholders’ equity

 

 

353,612

 

 

386,376

Net debt-to-adjusted capital ratio

 

 

Not applicable

 

 

Not applicable

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Long-term debt

 

$

35,418

 

$

 —

Shareholders’ equity

 

 

353,612

 

 

386,376

Long-term debt-to-equity ratio

 

 

0.10

 

 

Not applicable

 

v3.20.1
Business Segment Information (Tables)
12 Months Ended
Dec. 31, 2019
Business Segment Information  
Schedule of segment operating

Segment Operating Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Revenue from external customers

 

$

5,496

 

$

100,184

 

$

7,565

 

$

22

 

$

113,267

Intersegment sale

 

 

 —

 

 

 6

 

 

3,455

 

 

948

 

 

4,409

Interest expense

 

 

 —

 

 

323

 

 

601

 

 

26

 

 

950

Income (loss) before income taxes

 

 

4,419

 

 

(15,840)

 

 

4,800

 

 

(10,163)

 

 

(16,784)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2018 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Revenue from external customers

 

$

1,732

 

$

131,614

 

$

6,405

 

$

 —

 

$

139,751

Intersegment sale

 

 

 —

 

 

25

 

 

3,546

 

 

2,760

 

 

6,331

Interest expense

 

 

 —

 

 

1,770

 

 

12

 

 

 —

 

 

1,782

Income (loss) before income taxes

 

 

185,780

 

 

(25,469)

 

 

1,199

 

 

6,319

 

 

167,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2017 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Revenue from external customers

 

$

8,868

 

$

259,682

 

$

5,484

 

$

 1

 

$

274,035

Intersegment sale

 

 

 —

 

 

361

 

 

5,244

 

 

1,843

 

 

7,448

Interest expense

 

 

 —

 

 

4,098

 

 

833

 

 

 —

 

 

4,931

Income (loss) before income taxes

 

 

7,435

 

 

(39,936)

 

 

2,647

 

 

(8,553)

 

 

(38,407)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Segment assets

 

$

222,385

 

$

162,772

 

$

117,790

 

$

402

 

$

503,349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2018 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Segment assets

 

$

224,043

 

$

195,642

 

$

86,369

 

$

859

 

$

506,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

 

All Other

    

Total

Segment liabilities

 

$

53,489

 

$

37,482

 

$

45,808

 

$

4,556

 

$

141,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2018 (Restated)

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

 

Equity

 

Holding

    

All Other

    

Total

Segment liabilities

 

$

55,369

 

$

48,784

 

$

7,168

 

$

1,186

 

$

112,507

 

Schedule of cash flow by operating segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Year ended December 31, 2019

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

    

Equity

    

Holding

    

All Other

    

Total

Cash (used in) provided by operating activities

 

$

(98)

 

$

1,678

 

$

(2,685)

 

$

(8,702)

 

$

(9,807)

Cash used in investing activities

 

 

 —

 

 

(7,262)

 

 

(1,174)

 

 

(1,766)

 

 

(10,202)

Cash (used in) provided by financing activities

 

 

 —

 

 

(532)

 

 

35,133

 

 

191

 

 

34,792

Exchange rate effect on cash and cash equivalents

 

 

 —

 

 

(2,710)

 

 

(1,771)

 

 

212

 

 

(4,269)

Change in cash and cash equivalents

 

$

(98)

 

$

(8,826)

 

$

29,503

 

$

(10,065)

 

$

10,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Year ended December 31, 2018

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

    

Equity

    

Holding

    

All Other

    

Total

Cash provided by (used in) operating activities

 

$

300

 

$

(3,345)

 

$

3,844

 

$

(7,990)

 

$

(7,191)

Cash provided by (used in) investing activities

 

 

 —

 

 

46

 

 

(286)

 

 

(1,041)

 

 

(1,281)

Cash (used in) provided by financing activities

 

 

 —

 

 

(858)

 

 

 1

 

 

 —

 

 

(857)

Exchange rate effect on cash and cash equivalents

 

 

 —

 

 

1,672

 

 

577

 

 

(30)

 

 

2,219

Change in cash and cash equivalents

 

$

300

 

$

(2,485)

 

$

4,136

 

$

(9,061)

 

$

(7,110)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Year ended December 31, 2017

 

 

Iron Ore

 

Industrial

 

Merkanti

 

 

 

 

 

 

 

    

Royalty

    

Equity

    

Holding

    

All Other

    

Total

Cash provided by (used in) operating activities

 

$

5,611

 

$

(26,936)

 

$

1,749

 

$

16,379

 

$

(3,197)

Cash provided by (used in) investing activities

 

 

 —

 

 

5,375

 

 

(440)

 

 

(8,429)

 

 

(3,494)

Cash used in financing activities

 

 

 —

 

 

(42,677)

 

 

 —

 

 

(43)

 

 

(42,720)

Exchange rate effect on cash and cash equivalents

 

 

 —

 

 

(11,140)

 

 

738

 

 

14,007

 

 

3,605

Change in cash and cash equivalents

 

$

5,611

 

$

(75,378)

 

$

2,047

 

$

21,914

 

$

(45,806)

 

Schedule of geographic information

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Canada

 

$

13,730

 

$

13,035

 

$

19,595

Africa

 

 

4,114

 

 

4,254

 

 

4,283

Americas

 

 

5,880

 

 

1,786

 

 

22,446

Asia

 

 

1,909

 

 

1,549

 

 

14,894

Europe

 

 

87,634

 

 

119,127

 

 

212,817

 

 

$

113,267

 

$

139,751

 

$

274,035

 


 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Africa

 

$

29,930

 

$

33,258

Canada

 

 

293,974

 

 

297,537

Asia

 

 

24

 

 

20

Europe

 

 

52,800

 

 

52,914

 

 

$

376,728

 

$

383,729

 

v3.20.1
Securities (Tables)
12 Months Ended
Dec. 31, 2019
Securities  
Schedule of securities

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Short-term securities

 

 

  

 

 

  

Equity securities at FVTPL, publicly traded

 

$

1,822

 

$

 4

Equity securities at FVTPL, unlisted

 

 

1,130

 

 

 —

Debt securities at FVTPL, publicly traded

 

 

2,403

 

 

1,068

Debt securities at FVOCI, publicly traded

 

 

8,819

 

 

6,328

 

 

$

14,174

 

$

7,400

Long-term securities

 

 

  

 

 

  

Equity securities at FVTPL, publicly traded

 

$

 —

 

$

701

Equity securities in an affiliate at FVTPL, unlisted

 

 

3,809

 

 

4,001

 

 

$

3,809

 

$

4,702

 

v3.20.1
Trade Receivables (Tables)
12 Months Ended
Dec. 31, 2019
Trade Receivables  
Schedule of trade receivable

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Trade receivables, gross amount

 

$

4,204

 

$

5,654

Less: Allowance for expected credit losses

 

 

(46)

 

 

(311)

Trade receivables, net amount

 

$

4,158

 

$

5,343

 

Schedule of movement in the loss allowance

The movement in the loss allowance during the year ended December 31, 2019 and 2018 was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Equal to lifetime expected credit losses

 

 

 

 

 

Financial assets that

 

 

 

 

 

 

 

 

are credit-impaired

 

Other trade

 

 

 

 

    

at year-end

    

Receivables

    

Total

Loss allowance: as at January 1, 2018

 

$

 —

 

$

 —

 

$

 —

Reclassification from IAS 39 upon initial adoption of IFRS 9

 

 

8,948

 

 

 —

 

 

8,948

Additions for the year

 

 

21,817

 

 

87

 

 

21,904

Written off

 

 

(30,935)

 

 

 —

 

 

(30,935)

Exchange effect

 

 

184

 

 

10

 

 

194

Other

 

 

 —

 

 

200

 

 

200

Loss allowance: as at December 31, 2018

 

 

14

 

 

297

 

 

311

Additions for the year

 

 

443

 

 

 —

 

 

443

Reversal

 

 

 —

 

 

(83)

 

 

(83)

Written off

 

 

(409)

 

 

(199)

 

 

(608)

Exchange effect

 

 

(2)

 

 

(15)

 

 

(17)

Loss allowance: as at December 31, 2019

 

$

46

 

$

 —

 

$

46

 

v3.20.1
Other Receivables (Tables)
12 Months Ended
Dec. 31, 2019
Other Receivables  
Schedule of other current receivables

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

 

Interest receivables

 

$

145

 

$

83

 

Contract assets under contracts with customers

 

 

 —

 

 

295

 

Loans (net of allowance of $16 and $nil as of December 31, 2019 and 2018, respectively)

 

 

828

*

 

6,087

**

Indemnification asset (see Note 26)

 

 

6,362

 

 

 —

 

Other

 

 

769

 

 

2,210

 

 

 

$

8,104

 

$

8,675

 


*   In 2019, the Group had various amounts owing from an affiliate owned by our Chairman equal to $828 (see Note 26).

**  The loan, which was due from a former subsidiary, was written off in 2019.

Schedule of movement of contract assets under contracts with customers

 

 

 

 

 

 

 

 

    

2019

 

2018

Balance, beginning of the year

 

$

295

 

$

876

A change in the time frame for a right to consideration to become unconditional

 

 

(295)

 

 

(581)

Balance, end of the year

 

$

 —

 

$

295

 

v3.20.1
Inventories (Tables)
12 Months Ended
Dec. 31, 2019
Inventories  
Schedule of inventories

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Raw materials

 

$

1,877

 

$

3,640

Work-in-progress

 

 

20

 

 

3,568

Finished goods

 

 

491

 

 

1,960

Commodity inventories

 

 

 —

 

 

2,238

 

 

$

2,388

 

$

11,406

Comprising:

 

 

  

 

 

  

Inventories contracted at fixed prices or hedged

 

$

 —

 

$

9,432

Inventories – other

 

 

2,388

 

 

1,974

 

 

$

2,388

 

$

11,406

 

v3.20.1
Investment Property (Tables)
12 Months Ended
Dec. 31, 2019
Investment Property  
Schedule of Changes in Investment Property

 

 

 

 

 

 

 

Changes in investment property included in non-current assets:

    

2019

    

2018

Balance, beginning of year

 

$

37,804

 

$

37,660

Change in fair value during the year

 

 

2,996

 

 

(274)

Disposals

 

 

 —

 

 

(976)

Currency translation adjustments

 

 

(2,595)

 

 

1,394

Balance, end of year

 

$

38,205

 

$

37,804

 

Schedule of rental Income investment property

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Rental income

 

$

1,652

 

$

1,611

 

$

1,510

Direct operating expenses (including repairs and maintenance) arising from investment property during the year

 

 

266

 

 

193

 

 

256

 

v3.20.1
Property, Plant and Equipment (Tables)
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment  
Schedule of changes in property, plant and equipment

The following changes in property, plant and equipment were recorded during the year  ended December 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Initial adoption

 

 

 

 

 

 

 

Dispositions

 

 

 

 

Currency

 

 

 

 

 

Opening

 

of

 

 

 

 

 

 

 

of

 

 

 

 

translation

 

Ending

Costs

    

balance

    

IFRS 16

    

Additions

    

Disposals

    

subsidiaries

    

Reclassification

    

adjustments

    

balance

Refinery and power plants

 

$

68,559

 

$

 —

 

$

219

 

$

 —

 

$

 —

 

$

 —

 

$

(2,077)

 

$

66,701

Processing plant and equipment

 

 

3,761

 

 

 —

 

 

443

 

 

(326)

 

 

(1,019)

 

 

406

 

 

42

 

 

3,307

Office equipment

 

 

1,450

 

 

 —

 

 

332

 

 

(291)

 

 

(95)

 

 

(406)

 

 

(70)

 

 

920

Office premises*

 

 

 —

 

 

2,911

 

 

1,583

 

 

(278)

 

 

(2,500)

 

 

 —

 

 

(162)

 

 

1,554

 

 

$

73,770

 

$

2,911

 

$

2,577

 

$

(895)

 

$

(3,614)

 

$

 —

 

$

(2,267)

 

$

72,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Initial adoption

 

 

 

 

 

 

 

Dispositions

 

 

 

 

Currency

 

 

 

 

 

Opening

 

of

 

 

 

 

 

 

 

of

 

 

 

 

translation

 

Ending

Accumulated depreciation

    

balance

    

IFRS 16

    

Additions

    

Disposals

    

subsidiaries

    

Reclassification

    

adjustments

    

balance

Refinery and power plants

 

$

12,763

 

$

 —

 

$

2,641

 

$

 —

 

$

 —

 

$

 —

 

$

(521)

 

$

14,883

Processing plant and equipment

 

 

1,873

 

 

 —

 

 

416

 

 

(326)

 

 

(842)

 

 

387

 

 

(54)

 

 

1,454

Office equipment

 

 

809

 

 

 —

 

 

145

 

 

(136)

 

 

(36)

 

 

(387)

 

 

(29)

 

 

366

Office premises*

 

 

 —

 

 

 —

 

 

738

 

 

 —

 

 

(367)

 

 

 —

 

 

(5)

 

 

366

 

 

 

15,445

 

$

 —

 

$

3,940

 

$

(462)

 

$

(1,245)

 

$

 —

 

$

(609)

 

 

17,069

Net book value

 

$

58,325

 

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

$

55,413


*    right-of-use assets.


The following changes in property, plant and equipment were recorded during the year ended December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions

 

 

 

 

Currency

 

 

 

 

 

Opening

 

 

 

 

 

 

 

of

 

 

 

 

translation

 

Ending

Costs

    

balance

    

Additions

    

Disposals

    

subsidiaries

    

Impairments

    

adjustments

    

balance

Refinery and power plants

 

$

92,434

 

$

 —

 

$

(148)

 

$

(27,214)

 

$

 —

 

$

3,487

 

$

68,559

Processing plant and equipment

 

 

3,703

 

 

88

 

 

(25)

 

 

 —

 

 

(42)

 

 

37

 

 

3,761

Office equipment

 

 

1,135

 

 

340

 

 

(56)

 

 

 —

 

 

(4)

 

 

35

 

 

1,450

 

 

$

97,272

 

$

428

 

$

(229)

 

$

(27,214)

 

$

(46)

 

$

3,559

 

$

73,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions

 

 

 

Currency

 

 

 

 

 

Opening

 

 

 

 

 

 

 

of

 

 

 

translation

 

Ending

Accumulated depreciation

    

balance

    

Additions

    

Disposals

    

subsidiaries

    

Impairments

    

adjustments

    

balance

Refinery and power plants

 

$

11,047

 

$

2,775

 

$

(148)

 

$

(1,668)

 

$

 —

 

$

757

 

$

12,763

Processing plant and equipment

 

 

1,626

 

 

255

 

 

(10)

 

 

 —

 

 

(27)

 

 

29

 

 

1,873

Office equipment

 

 

645

 

 

211

 

 

(60)

 

 

 —

 

 

(4)

 

 

17

 

 

809

 

 

 

13,318

 

$

3,241

 

$

(218)

 

$

(1,668)

 

$

(31)

 

$

803

 

 

15,445

Net book value

 

$

83,954

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

$

58,325

 

v3.20.1
Interests in Resource Properties (Tables)
12 Months Ended
Dec. 31, 2019
Interests in Resource Properties  
Schedule of components of interests in resource properties

 

 

 

 

 

 

 

 

    

2019

    

2018

Interest in an iron ore mine

 

$

216,575

 

$

218,203

Hydrocarbon development and production assets

 

 

36,488

 

 

38,040

Exploration and evaluation assets – hydrocarbon probable reserves

 

 

12,367

 

 

12,367

Exploration and evaluation assets – hydrocarbon undeveloped lands

 

 

4,640

 

 

4,640

 

 

$

270,070

 

$

273,250

 

Schedule of movements in interest in resource properties

The movements in the interest in an iron ore mine and hydrocarbon development and production assets included in non-current assets during the year ended December 31, 2019 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Opening

 

Decommissioning

 

Ending

Costs

 

balance

 

obligations

 

balance

Interest in an iron ore mine

    

$

218,203

    

$

 —

    

$

218,203

Hydrocarbon development and production assets

 

 

45,533

 

 

1,167

 

 

46,700

 

 

$

263,736

 

$

1,167

 

$

264,903

 

 

 

 

 

 

 

 

 

 

 

 

 

Opening

 

 

 

Ending

Accumulated depreciation

 

balance

 

Additions

 

balance

Interest in an iron ore mine

    

$

 —

    

$

1,628

    

$

1,628

Hydrocarbon development and production assets

 

 

7,493

 

 

2,719

 

 

10,212

 

 

 

7,493

 

$

4,347

 

 

11,840

Net book value

 

$

256,243

 

 

 

 

$

253,063

 

The movements in the interest in an iron ore mine and hydrocarbon development and production assets included in non-current assets during the year ended December 31, 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reversal of

 

 

 

 

 

Opening

 

Decommissioning

 

impairment

 

Ending

Costs

 

balance

 

obligations

 

losses

 

balance

Interest in an iron ore mine

    

$

30,000

    

$

 —

    

$

188,203

    

$

218,203

Hydrocarbon development and production assets

 

 

45,871

 

 

(338)

 

 

 —

 

 

45,533

 

 

$

75,871

 

$

(338)

 

$

188,203

 

$

263,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reversal of

 

 

 

 

 

Opening

 

 

 

impairment

 

Ending

Accumulated depreciation

 

balance

 

Additions

 

losses

 

balance

Interest in an iron ore mine

    

$

 —

    

$

 —

    

$

 —

    

$

 —

Hydrocarbon development and production assets

 

 

5,022

 

 

2,471

 

 

 —

 

 

7,493

 

 

 

5,022

 

$

2,471

 

$

 —

 

 

7,493

Net book value

 

$

70,849

 

 

 

 

 

 

 

$

256,243

 

Schedule of movements in exploration and evaluation assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

 

Probable

 

Undeveloped

 

Probable

 

Undeveloped

 

 

reserves

 

lands

 

reserves

 

lands

Balance, beginning of year

    

$

12,367

    

$

4,640

    

$

12,367

    

$

9,335

Additions

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Disposal

 

 

 —

 

 

 —

 

 

 —

 

 

(4,695)

Balance, end of year

 

$

12,367

 

$

4,640

 

$

12,367

 

$

4,640

 

v3.20.1
Deferred Income Tax Assets and Liabilities (Tables)
12 Months Ended
Dec. 31, 2019
Deferred Income Tax Assets and Liabilities  
Schedule of of temporary differences of deferred income tax assets and liabilities

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Non-capital tax loss carry-forwards

 

$

27,214

 

$

26,363

Interests in resource properties

 

 

(60,589)

 

 

(56,904)

Other assets

 

 

(7,181)

 

 

(8,800)

Other liabilities

 

 

(10,456)

 

 

(11,345)

 

 

$

(51,012)

 

$

(50,686)

Presented on the consolidated statements of financial position as follows:

 

 

 

 

 

 

Deferred income tax assets

 

$

14,295

 

$

15,735

Deferred income tax liabilities

 

 

(65,307)

 

 

(66,421)

Net

 

$

(51,012)

 

$

(50,686)

 

Schedule of estimated accumulated non capital losses

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Amount for which

    

 

 

 

 

 

 

no deferred

 

 

 

 

 

 

 

income tax asset

 

 

Country / Region

 

Gross amount

 

is recognized

 

Expiration dates

Canada

 

$

35,359

 

$

14

 

2035‑2039

Germany

 

 

41

 

 

 —

 

Indefinite

Malta

 

 

93,203

 

 

66,129

 

Indefinite

Africa

 

 

28,880

 

 

 —

 

Indefinite

 

v3.20.1
Account Payables and Accrued Expenses (Tables)
12 Months Ended
Dec. 31, 2019
Account Payables and Accrued Expenses  
Schedule of account payables and accrued expenses

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Trade and account payables

 

$

9,921

 

$

19,993

Interest payables

 

 

486

 

 

46

Value-added, goods and services and other taxes (other than income taxes)

 

 

477

 

 

831

Compensation

 

 

206

 

 

247

Contract liabilities under contracts with customers

 

 

4,637

 

 

5,198

Lease liabilities

 

 

364

 

 

 —

Losses on corporate guarantees (see Note 19)

 

 

3,070

 

 

 —

 

 

$

19,161

 

$

26,315

 

Schedule of movement of contract liabilities under contracts with customers

 

 

 

 

 

 

 

 

    

2019

    

2018

Balance, beginning of the year

 

$

6,446

 

$

797

Considerations received

 

 

4,949

 

 

5,649

Reclassification to profit or loss upon satisfaction of performance obligations

 

 

(6,758)

 

 

 —

Balance, end of the year

 

$

4,637

 

$

6,446

 

Schedule of contract liabilities expects to recognize as revenue

 

 

 

 

 

 

 

 

    

2019

    

2018

Year 1 after the year-end (included in current liabilities)

 

$

4,637

 

$

5,198

Year 2 after the year-end (included in long-term liabilities)

 

 

 —

 

 

1,248

 

 

$

4,637

 

$

6,446

 

Schedule of future lease payments included in the measurement and principal amounts of the lease liabilities

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

    

Principal

 

Interest

 

Total

2020

 

$

364

 

$

49

 

$

413

2021

 

 

229

 

 

34

 

 

263

2022

 

 

196

 

 

19

 

 

215

2023

 

 

204

 

 

11

 

 

215

2024

 

 

203

 

 

 3

 

 

206

 

 

$

1,196

 

$

116

 

$

1,312

 


 

 

 

 

Current liabilities

    

$

364

Long-term liabilities

 

 

832

 

 

$

1,196

 

Schedule of Lease liabilities

 

 

 

 

 

    

Amount

Interest expense

 

$

71

Expense relating to short-term leases with payments directly charged to profit or losses

 

 

881

Expense relating to leases of low-value assets with payments directly charged to profit or losses

 

 

 —

Expense relating to variable lease payments not included in the measurement of lease liabilities

 

 

 —

Total cash outflows for leases

 

 

1,824

Depreciation charge for right-of-use assets (see Note 12)

 

 

738

Carrying amount of right-of-use assets at the end of the reporting period (see Note 12)

 

 

1,188

 

v3.20.1
Bond Payables (Tables)
12 Months Ended
Dec. 31, 2019
Bond Payables  
Schedule of contractual maturities of bond payables

As at December 31, 2019, the contractual maturities of the bond payables are as follows:

 

 

 

 

 

 

 

 

 

 

 

Years ending December 31:

    

Principal

    

Interest

    

Total

2020

 

$

 —

 

$

1,458

 

$

1,458

2021

 

 

 —

 

 

1,458

 

 

1,458

2022

 

 

 —

 

 

1,458

 

 

1,458

2023

 

 

 —

 

 

1,458

 

 

1,458

2024

 

 

 —

 

 

1,458

 

 

1,458

Thereafter

 

 

36,458

 

 

2,916

 

 

39,374

 

 

$

36,458

 

$

10,206

 

$

46,664

 

v3.20.1
Decommissioning Obligations (Tables)
12 Months Ended
Dec. 31, 2019
Decommissioning Obligations  
Schedule of decommissioning obligations

 

 

 

 

 

 

 

 

    

2019

    

2018

Decommissioning obligations, beginning of year

 

$

13,641

 

$

13,699

Changes in estimates

 

 

1,167

 

 

(338)

Accretion

 

 

210

 

 

280

Decommissioning obligations, end of year

 

$

15,018

 

$

13,641

 

v3.20.1
Shareholders' Equity (Tables)
12 Months Ended
Dec. 31, 2019
Shareholders' Equity  
Schedule of treasury stock

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

Total number of common shares held as treasury stock

 

 

65,647

 

 

65,647

Total carrying amount of treasury stock

 

$

2,643

 

$

2,643

 

v3.20.1
Consolidated Statements of Operations (Tables)
12 Months Ended
Dec. 31, 2019
Consolidated Statements of Operations  
Schedule of gross revenue

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Merchant banking products and services

 

$

101,013

 

$

124,059

 

$

249,581

Interest

 

 

1,057

 

 

676

 

 

973

Dividends

 

 

 —

 

 

168

 

 

 —

Gain on securities, net

 

 

931

 

 

3,856

 

 

 —

Other, including medical and real estate sectors

 

 

10,266

 

 

10,992

 

 

23,481

Revenue

 

$

113,267

 

$

139,751

 

$

274,035

 

Schedule of group's costs of sales and services comprised

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31:

    

2019

    

2018

    

2017

 

Merchant banking products and services

 

$

95,189

 

$

119,552

 

$

223,049

 

Market value (increase) decrease on commodity inventories

 

 

(160)

 

 

109

 

 

(400)

 

Write-down of inventories

 

 

1,822

 

 

 —

 

 

 —

 

(Gain) loss on derivative contracts, net

 

 

(122)

 

 

794

 

 

(1,934)

 

Loss on securities, net

 

 

 —

 

 

 —

 

 

619

 

(Gain) loss on dispositions of subsidiaries, net

 

 

(485)

 

 

(25,771)

 

 

10,219

 

Gains on settlements and derecognition of liabilities

 

 

(1,168)

 

 

(9,502)

 

 

(3,779)

 

Change in fair value of loan payable at FVTPL

 

 

979

 

 

167

 

 

 —

 

Other, including medical and real estate sectors

 

 

2,264

 

 

9,188

 

 

11,889

 

Total costs of sales and services

 

$

98,319

 

$

94,537

 

$

239,663

 

 

Credit losses, which were included in costs of sales and services in the years ended December 31, 2018 and 2017, were reclassified and shown separately on the current year’s consolidated statements of operations.

 

The Group's net gain on dispositions of subsidiaries comprised:

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31:

 

 

2,019

 

 

 

2,018

 

 

 

2,017

Net (liabilities) assets in excess of considerations received

 

$

(485)

 

 

$

(25,771)

 

 

$

10,219

Reclassification adjustment for the exchange differences upon dispositions of subsidiaries

 

 

(1758)

 

 

 

672

 

 

 

(11306)

Gain on dispositions of subsidiaries, net (see Note 29)

 

$

(2,243)

 

 

$

(25,099)

 

 

$

(1,087)

 

 

Schedule of Group's credit lossees

 

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

 

2019

 

 

2018

 

 

2017

Credit losses on loans and receivables and guarantees, net of recoveries

 

$

13,398

 

 

$

34,985

 

 

$

23,923

 

Schedule of costs of sales and services

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Inventories as costs of goods sold (including depreciation, amortization and depletion expenses allocated to costs of goods sold)

 

$

72,414

 

$

92,138

 

$

206,644

 

Schedule of Gain on Disposition of subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31:

 

 

2,019

 

 

 

2,018

 

 

 

2,017

Net (liabilities) assets in excess of considerations received

 

$

(485)

 

 

$

(25,771)

 

 

$

10,219

Reclassification adjustment for the exchange differences upon dispositions of subsidiaries

 

 

(1758)

 

 

 

672

 

 

 

(11306)

Gain on dispositions of subsidiaries, net (see Note 29)

 

$

(2,243)

 

 

$

(25,099)

 

 

$

(1,087)

 

Schedule of selling, general and administrative expenses

 

 

 

 

 

 

 

 

 

 

As at December 31:

    

2019

    

2018

 

2017

Compensation (wages and salaries)

 

$

6,762

 

$

10,305

 

$

16,369

Legal and professional

 

 

5,050

 

 

4,469

 

 

8,860

Accounting

 

 

1,965

 

 

1,784

 

 

1,979

Consulting and fees

 

 

2,365

 

 

4,276

 

 

5,506

Depreciation and amortization

 

 

502

 

 

254

 

 

1,640

Office

 

 

874

 

 

1,026

 

 

1,797

Reimbursement of expenses (net of recovery)

 

 

749

 

 

(1,579)

 

 

(2,387)

Other

 

 

4,306

 

 

5,830

 

 

11,708

 

 

$

22,573

 

$

26,365

 

$

45,472

 

Schedule of nature of expenses incurred in continuing operations

 

 

 

 

 

 

 

 

 

 

Years Ended December 31:

    

2019

    

2018

    

2017

Depreciation, amortization and depletion

 

$

8,287

 

$

5,712

 

$

6,732

Employee benefits expenses*

 

 

13,727

 

 

18,403

 

 

21,016


*     Employee benefits expenses do not include the directors’ fees. For directors’ fees, see Note 26.

v3.20.1
Share-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2019
Share-Based Compensation  
Schedule of changes in stock options granted

 

 

 

 

 

 

 

 

 

 

 

2017 Plan

 

2008 Plan

 

 

 

 

Weighted

 

 

 

Weighted

 

 

 

 

average

 

 

 

average

 

 

 

 

exercise

 

 

 

exercise

 

 

Number

 

price

 

Number

 

price

 

 

of

 

per share

 

of

 

per share

 

    

options

    

(US$)

    

options

    

(US$)

Outstanding as at December 31, 2016

 

 —

 

 —

 

40,000

 

40.05

Exchanged under the plan of arrangement

 

40,000

 

40.05

 

(40,000)

 

40.05

Granted

 

535,000

 

8.76

 

 —

 

 —

Outstanding as at December 31, 2017

 

575,000

 

10.94

 

 —

 

 —

Forfeited

 

(125,000)

 

13.77

 

 —

 

 —

Cancelled

 

(20,000)

 

40.05

 

 —

 

 —

Granted

 

20,000

 

8.76

 

 —

 

 —

Outstanding as at December 31, 2018

 

450,000

 

8.76

 

 —

 

 —

Forfeited

 

(4,000)

 

8.76

 

 —

 

 —

Exercised

 

(20,000)

 

8.76

 

 —

 

 

Outstanding as at December 31, 2019

 

426,000

 

8.76

 

 —

 

 

As at December 31, 2019:

 

 

 

 

 

 

 

 

Options exercisable

 

426,000

 

8.76

 

 —

 

 

Options available for granting in future periods

 

129,403

 

 

 

 —

 

 

 

Schedule of information about stock options outstanding and exercisable

 

 

 

 

 

 

 

Options Outstanding and Exercisable

 

 

 

 

Weighted average remaining

Exercise Price per Share (US$)

 

Number outstanding

 

contractual life (in years)

$8.76

    

426,000

    

7.92

 

Schedule of share-based compensation expenses recognized

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Share-based compensation expenses arising from stock options granted by the Company

 

$

 —

 

$

69

 

$

2,876

 

Schedule of black-scholes-merton formula

 

 

 

 

 

 

    

2018

    

2017

Number of options granted

 

20,000

 

535,000

Vesting requirements

 

Immediately

 

Immediately

Contractual life

 

9.54 years

 

10 years

Method of settlement

 

In equity

 

In equity

Exercise price per share

 

US$8.76

 

US$8.76

Market price per share on grant date

 

US$6.30

 

US$8.40

Expected volatility

 

37.86%

 

37.74%

Expected option life

 

9.54 years

 

10 years

Expected dividends

 

0.00%

 

0.00%

Risk-free interest rate

 

2.93%

 

2.38%

Fair value of option granted (per option)

 

$3.44(US$2.69)

 

$5.38(US$4.22)

 

v3.20.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Taxes  
Schedule of (Loss) income before income taxes

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Canada

 

$

(1,691)

 

$

170,538

 

$

7,360

Outside Canada

 

 

(15,093)

 

 

(2,709)

 

 

(45,767)

 

 

$

(16,784)

 

$

167,829

 

$

(38,407)

 

Schedule of income tax expense

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Current taxes

 

$

(384)

 

$

(867)

 

$

(3,744)

Deferred taxes

 

 

(98)

 

 

(55,238)

 

 

(3,141)

Resource property (expense) recovery

 

 

(1,137)

 

 

487

 

 

(1,773)

 

 

$

(1,619)

 

$

(55,618)

 

$

(8,658)

 

Schedule of reconciliation of (loss) income before income taxes

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

(Loss) income before income taxes

 

$

(16,784)

 

$

167,829

 

$

(38,407)

Computed recovery (expense) of income taxes

 

$

4,743

 

$

(50,137)

 

$

9,792

Decrease (increase) in income taxes resulting from:

 

 

 

 

 

 

 

 

 

Effect of change in income tax rate

 

 

891

 

 

 —

 

 

 —

Other non-taxable income

 

 

24

 

 

45

 

 

 7

Revisions to prior years

 

 

88

 

 

(1,355)

 

 

4,650

Capital gains and losses on dispositions, net

 

 

(7,663)

 

 

(5,357)

 

 

(3,150)

Resource property revenue taxes

 

 

(830)

 

 

356

 

 

(1,311)

Unrecognized losses in current year

 

 

(228)

 

 

(1,411)

 

 

(20,916)

Previously unrecognized deferred income tax assets, net

 

 

1,229

 

 

3,041

 

 

2,877

Permanent differences

 

 

(178)

 

 

(306)

 

 

(363)

Other, net

 

 

305

 

 

(494)

 

 

(244)

Provision for income taxes

 

$

(1,619)

 

$

(55,618)

 

$

(8,658)

 

v3.20.1
(Loss) Earnings Per Share (Tables)
12 Months Ended
Dec. 31, 2019
(Loss) Earnings Per Share  
Schedule of (Loss) Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

    

2019

    

2018

    

2017

Basic loss (income) attributable to holders of common shares

 

$

(18,553)

 

$

112,276

 

$

(47,855)

Effect of dilutive securities:

 

 

 —

 

 

 —

 

 

 —

Diluted (loss) income

 

$

(18,553)

 

$

112,276

 

$

(47,855)

 

 

 

 

 

 

 

 

 

 

Number of Shares

 

    

2019

    

2018

    

2017

Weighted average number of common shares outstanding - basic

 

12,543,271

 

12,534,801

 

12,544,141

Effect of dilutive securities:

 

 

 

 

 

 

Options

 

 —

 

 —

 

 —

Weighted average number of common shares outstanding - diluted

 

12,543,271

 

12,534,801

 

12,544,141

 

 

 

 

 

 

 

 

 

 

 

 

    

2019

    

2018

    

2017

(Loss) earnings per share - basic and diluted

 

$

(1.48)

 

$

8.96

 

$

(3.81)

 

v3.20.1
Consolidated Statements of Cash Flows - Supplemental Disclosure (Tables)
12 Months Ended
Dec. 31, 2019
Consolidated Statements of Cash Flows - Supplemental Disclosure  
Schedule of reconciliation of liabilities arising from financing activities

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31:

    

2019

    

2018

    

2017

Bond payables, opening balance

 

$

 —

 

$

 —

 

$

 —

Cash flows

 

 

35,433

 

 

 —

 

 

 —

Non-cash changes:

 

 

  

 

 

  

 

 

  

Accretion

 

 

533

 

 

 —

 

 

 —

Cumulative translation adjustments

 

 

(548)

 

 

 —

 

 

 —

Bond payables, ending balance (see Note 16)

 

$

35,418

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31:

    

2019

    

2018

    

2017

Lease liabilities, opening balance

 

$

 —

 

$

 —

 

$

 —

Cash flows

 

 

(943)

 

 

 —

 

 

 —

Non-cash changes:

 

 

  

 

 

  

 

 

  

Initial adoption of IFRS 16

 

 

2,911

 

 

 —

 

 

 —

Additions

 

 

1,583

 

 

 —

 

 

 —

Dispositions of subsidiaries

 

 

(487)

 

 

 —

 

 

 —

Accretion

 

 

71

 

 

 —

 

 

 —

Termination

 

 

(1,809)

 

 

 —

 

 

 —

Cumulative transaction adjustments

 

 

(130)

 

 

 —

 

 

 —

Lease liabilities, ending balance (see Note 15)

 

$

1,196

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Bank debt, opening balance

 

$

 —

 

$

43,733

 

$

116,813

Cash flows

 

 

 —

 

 

 —

 

 

(42,253)

Non-cash changes:

 

 

 

 

 

 

 

 

 

Dispositions of subsidiaries

 

 

 —

 

 

(45,465)

 

 

(34,996)

Accretion

 

 

 —

 

 

94

 

 

187

Rollover of interest expenses into principal

 

 

 —

 

 

286

 

 

 —

Cumulative translation adjustments

 

 

 —

 

 

1,352

 

 

3,982

Bank debt, ending balance

 

$

 —

 

$

 —

 

$

43,733

 

v3.20.1
Related Party Transactions (Tables)
12 Months Ended
Dec. 31, 2019
Related Party Transactions  
Schedule of transactions with related party

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Fee income

 

$

10

 

$

 —

 

$

 —

Interest income

 

 

31

 

 

 —

 

 

 —

Dividends received

 

 

 —

 

 

168

 

 

 —

Royalty expenses

 

 

(210)

 

 

 —

 

 

 —

Credit losses on corporate guarantees

 

 

(3,134)

 

 

 —

 

 

 —

ECL allowance under IFRS 9

 

 

(16)

 

 

 —

 

 

 —

Reimbursements of expenses, primarily including employee benefits and lease and office expenses

 

 

(811)

 

 

 —

 

 

 —

 

Schedule of key management personnel

 

 

 

 

 

 

 

 

 

 

Years ended December 31:

    

2019

    

2018

    

2017

Short-term employee benefits

 

$

1,451

*

$

1,245

 

$

1,777

Directors' fees

 

 

531

 

 

594

 

 

576

Share-based compensation

 

 

 —

 

 

 —

 

 

713

Total

 

$

1,982

 

$

1,839

 

$

3,066

 

v3.20.1
Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2019
Financial Instruments  
Schedule of carrying amounts that approximate their fair values due to their short-term nature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

 

Carrying

 

Fair

 

Carrying

 

Fair

As at December 31:

    

Amount

    

Value

    

Amount

    

Value

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$

6,761

 

$

6,761

 

$

4,706

 

$

4,706

Derivative assets

 

 

 —

 

 

 —

 

 

209

 

 

209

Debt securities

 

 

2,403

 

 

2,403

 

 

1,068

 

 

1,068

Fair value through other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

8,819

 

 

8,819

 

 

6,328

 

 

6,328

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities measured at amortized cost:

 

 

 

 

 

 

 

 

 

 

 

 

Bond payables

 

$

35,418

 

$

36,603

 

$

 —

 

$

 —

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 —

 

 

 —

 

 

37

 

 

37

Loan payable

 

 

4,769

 

 

4,769

 

 

3,981

 

 

3,981

 

Schedule of statements of financial position classified by level of the fair value hierarchy

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

    

Level 1

    

Level 2

    

Level 3

    

Total

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$

1,822

 

$

3,809

 

$

1,130

 

$

6,761

Debt securities

 

 

2,403

 

 

 —

 

 

 —

 

 

2,403

Fair value through other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

8,819

 

 

 —

 

 

 —

 

 

8,819

Total

 

$

13,044

 

$

3,809

 

$

1,130

 

$

17,983

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Loan payable

 

$

 —

 

$

 —

 

$

4,769

 

$

4,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2018

    

Level 1

    

Level 2

    

Level 3

    

Total

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$

705

 

$

4,001

 

$

 —

 

$

4,706

Debt securities

 

 

1,068

 

 

 —

 

 

 —

 

 

1,068

Derivative assets

 

 

 —

 

 

209

 

 

 —

 

 

209

Fair value through other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

6,328

 

 

 —

 

 

 —

 

 

6,328

Total

 

$

8,101

 

$

4,210

 

$

 —

 

$

12,311

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value through profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

 —

 

$

37

 

$

 —

 

$

37

Loan payable

 

 

 —

 

 

 —

 

 

3,981

 

 

3,981

 

 

$

 —

 

$

37

 

$

3,981

 

$

4,018

 

Schedule of nature of the risks of financial instruments

The nature of the risks that the Group’s financial instruments are subject to as at December 31, 2019 is set out in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risks

 

 

 

 

 

 

Market risks

Financial instrument

    

Credit

    

Liquidity

    

Currency

    

Interest rate

    

Other price

Cash and cash equivalents and restricted cash

 

X

 

 

 

X

 

X

 

 

Equity securities

 

 

 

 

 

X

 

 

 

X

Debt securities

 

X

 

 

 

 

 

X

 

X

Derivative securities and financial liabilities

 

X

 

X

 

X

 

 

 

X

Receivables

 

X

 

 

 

X

 

 

 

 

Account payables and accrued expenses

 

 

 

X

 

X

 

 

 

 

Bond payables

 

 

 

X

 

 

 

X

 

X

Loan payable

 

 

 

 

 

 

 

X

 

 

 

Schedule of maximum credit risk exposure

 

 

 

 

Cash and cash equivalents and restricted cash

 

$

78,359

Receivables

 

 

12,262

Amounts recognized in the consolidated statement of financial position

 

 

90,621

Guarantees

 

 

 —

Maximum credit risk exposure

 

$

90,621

 

Schedule of profit or loss from continuing operations

 

 

 

 

 

 

 

 

 

 

 

    

2019

    

2018

    

2017

 

 

(Restated)*

Interest income on financial assets not at FVTPL

 

$

955

 

$

661*

 

$

434

Interest income on financial assets classified at FVTPL

 

 

102

 

 

15*

 

 

539

Total interest income

 

$

1,057

 

$

676*

 

$

973

Interest expense on financial liabilities not at FVTPL

 

$

710

 

$

513*

 

$

3,509

Interest expense on financial liabilities classified at FVTPL

 

 

30

 

 

989*

 

 

1,195

Total interest expense

 

$

740

 

$

1502*

 

$

4,704

Dividend income on financial assets at FVTPL

 

$

 —

 

$

168

 

$

 —

Dividend income on financial assets classified not at FVTPL

 

 

 —

 

 

 —

 

 

 —

Net gain on financial assets at FVTPL

 

 

1,142

 

 

3,785

 

 

6,825

Loss on loan payable at FVTPL

 

 

(979)

 

 

(167)

 

 

 —

Reversal of (impairment) on securities measured at FVTOCI

 

 

(3)

 

 

 3

 

 

 —


*    Correction of error

v3.20.1
Fair Value Disclosure for Non-financial Assets (Tables)
12 Months Ended
Dec. 31, 2019
Fair Value Disclosure for Non-financial Assets  
Schedule of non-financial assets measured at fair value in consolidated statements of financial position, classified by level

Assets measured at fair value on a recurring basis as at December 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

Investment property

 

$

 —

 

$

 —

 

$

38,205

 

Assets measured at fair value on a recurring basis as at December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

Inventories

 

$

2,238

 

$

 —

 

$

 —

Investment property

 

 

 —

 

 

 —

 

 

37,804

Total

 

$

2,238

 

$

 —

 

$

37,804

 

v3.20.1
Scully and its Significant Subsidiaries (Tables)
12 Months Ended
Dec. 31, 2019
Scully and its Significant Subsidiaries  
Schedule of country of incorporation and proportion of interest

 

 

 

 

 

 

 

    

Country of

    

Proportion of

 

Subsidiaries

 

Incorporation

 

 Interest *

 

 

 

 

 

 

 

Merkanti Holding plc

 

Malta

 

100

%

1178936 B.C. Ltd.

 

Canada

 

100

%

Merkanti (A) International Ltd.

 

Malta

 

100

%

Merkanti (D) International Ltd.

 

Malta

 

100

%


* The Group's proportional voting interests are identical to its proportional beneficial interests, except that it holds a 99.72% proportional beneficial interest in each of Merkanti (A) International Ltd. and Merkanti (D) International Ltd.

 

v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies - Restatement (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Restatement      
Costs of sales and services $ 96,561 $ 95,209 $ 228,357
Exchange differences on foreign currency transactions, net (gain) loss $ 3,724 4,228 12,344
Exchange differences on foreign currency transactions, net (gain) loss     12,344
(Gain) loss on dispositions of subsidiaries     (1,087)
Original      
Restatement      
Costs of sales and services     239,663
Exchange differences on foreign currency transactions, net (gain) loss     1,038
Exchange differences on foreign currency transactions, net (gain) loss     1,038
(Gain) loss on dispositions of subsidiaries     10,219
Reclassification      
Restatement      
Costs of sales and services     (11,306)
Exchange differences on foreign currency transactions, net (gain) loss     11,306
Exchange differences on foreign currency transactions, net (gain) loss     (11,306)
(Gain) loss on dispositions of subsidiaries     $ 11,306
Amounts Reclassified for Consistency with Comparitive Information   $ 672  
v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Translation (Details)
12 Months Ended
Dec. 31, 2019
USD ($)
EUR (€)
Dec. 31, 2018
USD ($)
EUR (€)
Dec. 31, 2017
USD ($)
EUR (€)
Euro Member Countries, Euro      
Foreign Currency Translation      
Closing rate | € 1.4583 1.5613 1.5052
Average rate | € 1.4856 1.5302 1.4650
United States of America, Dollars      
Foreign Currency Translation      
Closing rate | $ 1.2988 1.3642 1.2545
Average rate | $ 1.3269 1.2957 1.2986
v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies - Real Estate Held For Sale (Details)
€ in Thousands
Dec. 31, 2019
EUR (€)
Basis of Presentation and Summary of Significant Accounting Policies  
Real Estate Held for Sale Included in Principal Amount of Bonds € 25,000
v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies - Initial Applicationof IFRS 16 (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Jan. 01, 2019
Dec. 31, 2018
Dec. 31, 2017
Disclosure of initial application of standards or interpretations [line items]        
Property, plant and equipment $ 55,413   $ 58,325 $ 83,954
IFRS 16        
Disclosure of initial application of standards or interpretations [line items]        
Adjustment for the lease liabilities under IFRS 16 on the date of initial application $ 2,911 $ 2,911    
Property, plant and equipment   $ 61,236    
v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies - Property, Plant and Equipment (Details)
12 Months Ended
Dec. 31, 2019
Buildings  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 20 years
Depreciation, Method straight-line
Processing plant and equipment  
Property, Plant and Equipment  
Depreciation, Method straight-line
Refinery and power plants  
Property, Plant and Equipment  
Depreciation, Method straight-line
Office equipment and other  
Property, Plant and Equipment  
Depreciation, Method straight-line
Office premises  
Property, Plant and Equipment  
Depreciation, Method straight-line
Bottom of range | Processing plant and equipment  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 5 years
Bottom of range | Refinery and power plants  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 20 years
Bottom of range | Office equipment and other  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 3 years
Bottom of range | Office premises  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 2 years
Top of range | Processing plant and equipment  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 20 years
Top of range | Refinery and power plants  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 30 years
Top of range | Office equipment and other  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 10 years
Top of range | Office premises  
Property, Plant and Equipment  
Useful life measured as period of time, property, plant and equipment 10 years
v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies - Leases (Details)
$ in Thousands
Jan. 01, 2019
CAD ($)
Disclosure of initial application of standards or interpretations [line items]  
Operating leases $ 4,786
Exemptions for short term leases for which the underlying assets are of low value (1,505)
Discounting (370)
IFRS 16  
Disclosure of initial application of standards or interpretations [line items]  
Lease liabilities recognized on the initial adoption of IFRS 16 $ 2,911
v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Plant
Mcf
bbl
Dec. 31, 2018
CAD ($)
Dec. 31, 2017
CAD ($)
Jan. 01, 2019
CAD ($)
Jan. 01, 2018
CAD ($)
Basis of Presentation and Summary of Significant Accounting Policies          
Percentage of voting power in subsidiaries 50.00%        
Accumulated other comprehensive income on available-for-sale equity securities reclassified to deficit upon initial adoption IFRS 9         $ 524
Percentage of excess decline in quoted market 25.00%        
Volume of natural gas as numerator of energy equivalent conversion rate | Mcf 6,000        
Volume of crude oil as denominator of energy equivalent conversion rate | bbl 1        
Interests in resource properties, carrying amount $ 270,070        
Exploration and evaluation assets, aggregate carrying amount 17,007        
Carrying amount $ 55,413 $ 58,325 $ 83,954    
Number of power plants | Plant 1        
Combined revenue $ 113,267 139,751 274,035    
Loss before taxes (16,784) 167,829 (38,407)    
Income tax expense 1,619 55,618 8,658    
Net loss (18,403) 112,211 (47,065)    
Deferred income tax assets 14,295 15,735      
Reversal of impairment of hydrocarbon, resource properties and property, plant and equipment, net   $ (188,203) $ (8,945)    
Disposal groups          
Basis of Presentation and Summary of Significant Accounting Policies          
Combined revenue 81,766        
Loss before taxes (63)        
Income tax expense (575)        
Net loss (638)        
Net gain on dispositions $ 207        
Disposal of unit 1          
Basis of Presentation and Summary of Significant Accounting Policies          
Combined profit ( as a percent) 2.00%        
Disposal of unit 2          
Basis of Presentation and Summary of Significant Accounting Policies          
Combined loss ( as a percent) 7.00%        
IFRS 16          
Basis of Presentation and Summary of Significant Accounting Policies          
Carrying amount       $ 61,236  
Transitional adjustments to property plant equipment $ 2,911     $ 2,911  
Transitional adjustments to accounts payable 843        
Transitional adjustments to accrued expenses and other long term liabilities $ 2,068        
Weighted average incremental borrowing rate 4.01%        
v3.20.1
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Dec. 31, 2018
CAD ($)
Dec. 31, 2017
CAD ($)
Dec. 31, 2016
CAD ($)
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure        
Total debt $ 35,418 $ 0    
Less: cash and cash equivalents (78,274) (67,760) $ (74,870) $ (120,676)
Net debt    
Shareholders' equity $ 353,612 $ 386,376    
Net debt-to-adjusted capital ratio    
Long-term debt $ 35,418 $ 0    
Long-term debt-to-equity ratio 0.10    
v3.20.1
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Capital Disclosure on the Group's Objectives, Policies and Processes for Managing Its Capital Structure    
Non-interest bearing long-term loan payable $ 4,769 $ 3,981
Long-term liabilities $ 832  
v3.20.1
Acquisitions of Consolidated Entities (Details)
$ in Thousands
Oct. 01, 2017
CAD ($)
Metal processing company  
Acquisitions of Consolidated Entities  
Goodwill recognized $ 502
v3.20.1
Assets Classified as Held for Sale (Details)
$ in Thousands
Dec. 31, 2016
CAD ($)
Assets Classified as Held for Sale  
Net assets held for sale $ 15,770
v3.20.1
Business Segment Information - Segment Operating Results (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Business Segment Information      
Revenue from external customers $ 113,267 $ 139,751 $ 274,035
Interest expense 740 1,502 4,704
Income (loss) before income taxes (16,784) 167,829 (38,407)
Operating segments      
Business Segment Information      
Revenue from external customers 113,267 139,751 274,035
Interest expense 950 1,782 4,931
Income (loss) before income taxes (16,784) 167,829 (38,407)
Operating segments | Iron Ore Royalty      
Business Segment Information      
Revenue from external customers 5,496 1,732 8,868
Interest expense   0 0
Income (loss) before income taxes 4,419 185,780 7,435
Operating segments | Industrial Equity      
Business Segment Information      
Revenue from external customers 100,184 131,614 259,682
Interest expense 323 1,770 4,098
Income (loss) before income taxes (15,840) (25,469) (39,936)
Operating segments | Merkanti Holding plc      
Business Segment Information      
Revenue from external customers 7,565 6,405 5,484
Interest expense 601 12 833
Income (loss) before income taxes 4,800 1,199 2,647
Operating segments | All other segments      
Business Segment Information      
Revenue from external customers 22   1
Interest expense 26 0 0
Income (loss) before income taxes (10,163) 6,319 (8,553)
Elimination of intersegment amounts      
Business Segment Information      
Revenue from external customers (4,409) (6,331) (7,448)
Elimination of intersegment amounts | Industrial Equity      
Business Segment Information      
Revenue from external customers (6) (25) (361)
Elimination of intersegment amounts | Merkanti Holding plc      
Business Segment Information      
Revenue from external customers (3,455) (3,546) (5,244)
Elimination of intersegment amounts | All other segments      
Business Segment Information      
Revenue from external customers $ (948) $ (2,760) $ (1,843)
v3.20.1
Business Segment Information (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Business Segment Information    
Segment assets $ 503,349 $ 506,913
Segment liabilities 141,335 112,507
Operating segments    
Business Segment Information    
Segment assets 503,349 506,913
Segment liabilities 141,335 112,507
Operating segments | Iron Ore Royalty    
Business Segment Information    
Segment assets 222,385 224,043
Segment liabilities 53,489 55,369
Operating segments | Industrial Equity    
Business Segment Information    
Segment assets 162,772 195,642
Segment liabilities 37,482 48,784
Operating segments | Merkanti Holding plc    
Business Segment Information    
Segment assets 117,790 86,369
Segment liabilities 45,808 7,168
Operating segments | All other segments    
Business Segment Information    
Segment assets 402 859
Segment liabilities $ 4,556 $ 1,186
v3.20.1
Business Segment Information - Change In Cash And Cash Equivalents (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Disclosure of operating segments [line items]      
Cash (used in) provided by operating activities $ (9,807) $ (7,191) $ (3,197)
Cash used in investing activities (10,202) (1,281) (3,494)
Cash (used in) provided by financing activities 34,792 (857) (42,720)
Exchange rate effect on cash and cash equivalents (4,269) 2,219 3,605
Decrease in cash and cash equivalents 10,514 (7,110) (45,806)
Operating segments      
Disclosure of operating segments [line items]      
Cash (used in) provided by operating activities (9,807) (7,191) (3,197)
Cash used in investing activities (10,202) (1,281) (3,494)
Cash (used in) provided by financing activities 34,792 (857) (42,720)
Exchange rate effect on cash and cash equivalents (4,269) 2,219 3,605
Decrease in cash and cash equivalents 10,514 (7,110) (45,806)
Iron Ore Royalty | Operating segments      
Disclosure of operating segments [line items]      
Cash (used in) provided by operating activities (98) 300 5,611
Decrease in cash and cash equivalents (98) 300 5,611
Industrial Equity | Operating segments      
Disclosure of operating segments [line items]      
Cash (used in) provided by operating activities 1,678 (3,345) (26,936)
Cash used in investing activities (7,262) 46 5,375
Cash (used in) provided by financing activities (532) (858) (42,677)
Exchange rate effect on cash and cash equivalents (2,710) 1,672 (11,140)
Decrease in cash and cash equivalents (8,826) (2,485) (75,378)
Merkanti Holding plc | Operating segments      
Disclosure of operating segments [line items]      
Cash (used in) provided by operating activities (2,685) 3,844 1,749
Cash used in investing activities (1,174) (286) (440)
Cash (used in) provided by financing activities 35,133 1  
Exchange rate effect on cash and cash equivalents (1,771) 577 738
Decrease in cash and cash equivalents 29,503 4,136 2,047
All other segments | Operating segments      
Disclosure of operating segments [line items]      
Cash (used in) provided by operating activities (8,702) (7,990) 16,379
Cash used in investing activities (1,766) (1,041) (8,429)
Cash (used in) provided by financing activities 191   (43)
Exchange rate effect on cash and cash equivalents 212 (30) 14,007
Decrease in cash and cash equivalents $ (10,065) $ (9,061) $ 21,914
v3.20.1
Business Segment Information - external customers by geographic region (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Business Segment Information      
Gross revenues $ 113,267 $ 139,751 $ 274,035
Canada      
Business Segment Information      
Gross revenues 13,730 13,035 19,595
Africa      
Business Segment Information      
Gross revenues 4,114 4,254 4,283
Americas      
Business Segment Information      
Gross revenues 5,880 1,786 22,446
Asia      
Business Segment Information      
Gross revenues 1,909 1,549 14,894
Europe      
Business Segment Information      
Gross revenues $ 87,634 $ 119,127 $ 212,817
v3.20.1
Business Segment Information - other non-current assets (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Business Segment Information    
Non-current assets other than financial instruments, deferred income tax assets and other non-current assets $ 376,728 $ 383,729
Canada    
Business Segment Information    
Non-current assets other than financial instruments, deferred income tax assets and other non-current assets 293,974 297,537
Africa    
Business Segment Information    
Non-current assets other than financial instruments, deferred income tax assets and other non-current assets 29,930 33,258
Asia    
Business Segment Information    
Non-current assets other than financial instruments, deferred income tax assets and other non-current assets 24 20
Europe    
Business Segment Information    
Non-current assets other than financial instruments, deferred income tax assets and other non-current assets $ 52,800 $ 52,914
v3.20.1
Business Segment Information - Additional Information (Details)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Business Segment Information    
Percentage of merchant banking in total revenue 13.00% 16.00%
v3.20.1
Securities (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Short-term securities    
Current securities $ 14,174 $ 7,400
Long-term securities    
Long-term securities 3,809 4,702
Equity    
Short-term securities    
Equity securities at FVTPL, publicly traded 1,822 4
Equity securities at FVTPL, unlisted 1,130 0
Long-term securities    
Equity securities at FVTPL, publicly traded 0 701
Equity securities at FVTPL, privately held 3,809 4,001
Debt securities    
Short-term securities    
Equity securities at FVTPL, publicly traded 2,403 1,068
Debt securities at FVOCI, publicly traded $ 8,819 $ 6,328
v3.20.1
Trade Receivables - Carrying Amount (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Trade Receivables    
Trade receivables, gross amount $ 4,204 $ 5,654
Less: Allowance for expected credit losses under IFRS 9 or credit losses under IAS 39 (46) (311)
Trade receivables, net amount $ 4,158 $ 5,343
v3.20.1
Trade Receivables - Loss Allowance (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Trade Receivables    
Loss allowance: opening balance $ 311  
Loss allowance: ending balance 46 $ 311
Loss allowance measured at an amount equal to lifetime expected credit losses    
Trade Receivables    
Loss allowance: opening balance 311 0
Reclassification from IAS 39 upon initial adoption of IFRS 9   8,948
Additions for the year 443 21,904
Reversal (83)  
Written off (608) (30,935)
Exchange effect (17) 194
Other   200
Loss allowance: ending balance 46 311
Loss allowance measured at an amount equal to lifetime expected credit losses | Financial assets that are credit impaired at year end    
Trade Receivables    
Loss allowance: opening balance 14 0
Reclassification from IAS 39 upon initial adoption of IFRS 9   8,948
Additions for the year 443 21,817
Reversal 0  
Written off (409) (30,935)
Exchange effect (2) 184
Other   0
Loss allowance: ending balance 46 14
Loss allowance measured at an amount equal to lifetime expected credit losses | Other trade receivables    
Trade Receivables    
Loss allowance: opening balance 297 0
Reclassification from IAS 39 upon initial adoption of IFRS 9   0
Additions for the year 0 87
Reversal (83)  
Written off (199) 0
Exchange effect (15) 10
Other   200
Loss allowance: ending balance $ 0 $ 297
v3.20.1
Trade Receivables - Loss Allowance Additional Information (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Trade Receivables    
Less: Allowance for credit losses $ 46 $ 311
v3.20.1
Trade Receivables - Additional Information (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2019
Trade Receivables      
Cumulative allowance for credit losses $ 311   $ 46
Net trade receivables due from former customer group 5,343   $ 4,158
Net trade receivables due from customer and affiliates   $ 21,375  
Credit risk      
Trade Receivables      
Management recognized credit loss $ 21,812 1,317  
Large exposure customers | Credit risk      
Trade Receivables      
Reversals   1,541  
Increase in valuation allowance based on revision of expected future cash flows   $ 224  
v3.20.1
Other Receivables (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other Receivables      
Interest receivables (including $352 and $nil due from an affiliate as of December 31, 2019 and 2018, respectively) $ 145 $ 83  
Contract assets under contracts with customers 0 295 $ 876
Indemnification asset (see Note 26) 6,362 0  
Loans 828 6,087  
Other 769 2,210  
Total $ 8,104 $ 8,675  
v3.20.1
Other Receivables - contracts with customers (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Other Receivables    
Balance, beginning of the year $ 295 $ 876
A change in the time frame for a right to consideration to become unconditional (295) (581)
Balance, end of the year $ 0 $ 295
v3.20.1
Other Receivables - Additional Information (Details)
$ in Thousands
Dec. 31, 2019
CAD ($)
Other Receivables  
Allowance of loans and leases receivables $ 16
v3.20.1
Inventories (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Inventories    
Raw materials $ 1,877 $ 3,640
Work-in-progress 20 3,568
Finished goods 491 1,960
Commodity inventories   2,238
Inventories 2,388 11,406
Inventories contracted at fixed prices or hedged   9,432
Inventories - other 2,388 1,974
Current inventories $ 2,388 $ 11,406
v3.20.1
Investment Property (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Investment Property    
Balance, beginning of year $ 37,804 $ 37,660
Change in fair value during the year 2,996 (274)
Disposals   (976)
Currency translation adjustments (2,595) 1,394
Balance, end of year $ 38,205 $ 37,804
v3.20.1
Investment Property - profit or loss in relation to investment property (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Investment Property      
Rental income $ 1,652 $ 1,611 $ 1,510
Direct operating expenses (including repairs and maintenance) arising from investment property during the year $ 266 $ 193 $ 256
v3.20.1
Property, Plant and Equipment (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Property, Plant and Equipment    
Opening balance $ 58,325 $ 83,954
Ending balance 55,413 58,325
Net book value of right of use assets 1,188  
Costs    
Property, Plant and Equipment    
Opening balance 73,770 97,272
Initial adoption of IFRS 16 2,911  
Additions 2,577 428
Disposals 895 229
Dispositions of subsidiaries 3,614 27,214
Reclassification 0  
Impairments   (46)
Currency translation adjustments (2,267) 3,559
Ending balance 72,482 73,770
Costs | Refinery and power plants    
Property, Plant and Equipment    
Opening balance 68,559 92,434
Additions 219 0
Disposals   148
Dispositions of subsidiaries 0 27,214
Reclassification 0  
Impairments   0
Currency translation adjustments (2,077) 3,487
Ending balance 66,701 68,559
Costs | Processing plant and equipment    
Property, Plant and Equipment    
Opening balance 3,761 3,703
Additions 443 88
Disposals 326 25
Dispositions of subsidiaries 1,019 0
Reclassification 406  
Impairments   (42)
Currency translation adjustments 42 37
Ending balance 3,307 3,761
Costs | Office equipment    
Property, Plant and Equipment    
Opening balance 1,450 1,135
Additions 332 340
Disposals 291 56
Dispositions of subsidiaries 95  
Reclassification (406)  
Impairments   (4)
Currency translation adjustments (70) 35
Ending balance 920 1,450
Costs | Office premises    
Property, Plant and Equipment    
Initial adoption of IFRS 16 2,911  
Additions 1,583  
Disposals 278  
Dispositions of subsidiaries 2,500  
Reclassification 0  
Currency translation adjustments (162)  
Ending balance 1,554  
Accumulated depreciation    
Property, Plant and Equipment    
Opening balance 15,445 13,318
Additions 3,940 3,241
Disposals (462) (218)
Dispositions of subsidiaries (1,245) (1,668)
Impairments   (31)
Currency translation adjustments (609) 803
Ending balance (17,069) 15,445
Accumulated depreciation | Refinery and power plants    
Property, Plant and Equipment    
Opening balance 12,763 11,047
Initial adoption of IFRS 16 0  
Additions 2,641 2,775
Disposals 0 (148)
Dispositions of subsidiaries 0 (1,668)
Reclassification 0  
Currency translation adjustments (521) 757
Ending balance (14,883) 12,763
Accumulated depreciation | Processing plant and equipment    
Property, Plant and Equipment    
Opening balance 1,873 1,626
Initial adoption of IFRS 16 0  
Additions 416 255
Disposals (326) (10)
Dispositions of subsidiaries (842)  
Reclassification 387  
Impairments   (27)
Currency translation adjustments (54) 29
Ending balance (1,454) 1,873
Accumulated depreciation | Office equipment    
Property, Plant and Equipment    
Opening balance 809 645
Initial adoption of IFRS 16 0  
Additions 145 211
Disposals (136) (60)
Dispositions of subsidiaries (36)  
Reclassification (387)  
Impairments   (4)
Currency translation adjustments (29) 17
Ending balance (366) $ 809
Accumulated depreciation | Office premises    
Property, Plant and Equipment    
Additions 738  
Dispositions of subsidiaries (367)  
Currency translation adjustments (5)  
Ending balance $ (366)  
v3.20.1
Property, Plant and Equipment - Additional Information (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Property, Plant and Equipment      
Carrying amount $ 55,413 $ 58,325 $ 83,954
Costs      
Property, Plant and Equipment      
Carrying amount $ 72,482 73,770 $ 97,272
Impairments   $ 46  
A power plant      
Property, Plant and Equipment      
Discount rate (as a percent) 8.00%    
Impairments $ 0    
Reasonably possible increase in discount rate (as a percent) 1.00%    
Increase (decrease) in net loss due to reasonably possible increase in discount rate $ 0    
A power plant | Costs      
Property, Plant and Equipment      
Carrying amount $ 29,931    
v3.20.1
Interests in Resource Properties (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Interests in Resource Properties      
Tangible exploration and evaluation assets $ 270,070 $ 273,250  
Interest in an iron ore development project      
Interests in Resource Properties      
Tangible exploration and evaluation assets 216,575 218,203  
Hydrocarbon development and production assets      
Interests in Resource Properties      
Tangible exploration and evaluation assets 36,488 38,040  
Hydrocarbon Probable Reserves      
Interests in Resource Properties      
Tangible exploration and evaluation assets 12,367 12,367 $ 12,367
Hydrocarbon Undeveloped lands      
Interests in Resource Properties      
Tangible exploration and evaluation assets $ 4,640 $ 4,640 $ 9,335
v3.20.1
Interests in Resource Properties - assets included in non-current assets (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance $ 273,250  
Ending balance 270,070 $ 273,250
Costs    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 263,736 75,871
Decommissioning obligations 1,167 (338)
Reversal of impairment losses   188,203
Ending balance 264,903 263,736
Accumulated depreciation    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 7,493 5,022
Additions 4,347 2,471
Reversal of impairment losses   0
Ending balance 11,840 7,493
Interest in iron ore mine and hydrocarbon development and production assets    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 256,243 70,849
Additions 0 0
Ending balance 253,063 256,243
Interest in an iron ore development project    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 218,203  
Ending balance 216,575 218,203
Interest in an iron ore development project | Costs    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 218,203 30,000
Decommissioning obligations 0 0
Reversal of impairment losses   188,203
Ending balance 218,203 218,203
Interest in an iron ore development project | Accumulated depreciation    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 0 0
Additions 1,628 0
Reversal of impairment losses   0
Ending balance 1,628 0
Hydrocarbon development and production assets    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 38,040  
Ending balance 36,488 38,040
Hydrocarbon development and production assets | Costs    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 45,533 45,871
Decommissioning obligations 1,167 (338)
Ending balance 46,700 45,533
Hydrocarbon development and production assets | Accumulated depreciation    
Disclosure Of Interests In Resource Properties [Roll Forward]    
Opening balance 7,493 5,022
Additions 2,719 2,471
Reversal of impairment losses   0
Ending balance $ 10,212 $ 7,493
v3.20.1
Interests in Resource Properties - exploration and evaluation assets (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Of Movements In Exploration And Evaluation Assets [Roll Forward]    
Opening balance $ 273,250  
Ending balance 270,070 $ 273,250
Hydrocarbon Probable Reserves    
Disclosure Of Movements In Exploration And Evaluation Assets [Roll Forward]    
Opening balance 12,367 12,367
Additions 0 0
Disposal 0 0
Ending balance 12,367 12,367
Hydrocarbon Undeveloped lands    
Disclosure Of Movements In Exploration And Evaluation Assets [Roll Forward]    
Opening balance 4,640 9,335
Additions 0 0
Disposal 0 (4,695)
Ending balance $ 4,640 $ 4,640
v3.20.1
Interests in Resource Properties - Additional Information (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Interest in an iron ore development project      
Interests in Resource Properties      
Expected future minimum sublease payments receivable $ 3,250    
Percentage of pre tax discount rate used to determine expected future cash flows   8.30%  
Reversal of non cash impairment loss   $ 188,203  
Hydrocarbon properties      
Interests in Resource Properties      
Reversal of non cash impairment loss $ 0   $ 15,585
Percentage of post tax discount rate   9.25% 11.00%
Percentage of pre tax discount rate 10.00%    
Reasonably possible increase in discount rate (as a percent) 1.00%    
Increase in net loss due to reasonably possible increase in discount rate $ 388    
Hydrocarbon development and production assets      
Interests in Resource Properties      
Reversal of non cash impairment loss     $ 13,264
Hydrocarbon Probable Reserves      
Interests in Resource Properties      
Reversal of non cash impairment loss     2,951
Hydrocarbon Undeveloped lands      
Interests in Resource Properties      
Reversal of non cash impairment loss     $ 630
v3.20.1
Deferred Income Tax Assets and Liabilities (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Deferred Income Tax Assets and Liabilities    
Non-capital tax loss carry-forwards $ 27,214 $ 26,363
Interests in resource properties (60,589) (56,904)
Other assets (7,181) (8,800)
Other liabilities (10,456) (11,345)
Net (51,012) (50,686)
Presented on the consolidated statements of financial position as follows:    
Deferred income tax assets 14,295 15,735
Deferred income tax liabilities (65,307) (66,421)
Net $ (51,012) $ (50,686)
v3.20.1
Deferred Income Tax Assets and Liabilities - accumulated non-capital losses (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Canada  
Deferred Income Tax Assets and Liabilities  
Gross amount $ 35,359
Amount for which no deferred income tax asset is recognized $ 14
Canada | Bottom of range  
Deferred Income Tax Assets and Liabilities  
Expiration period for estimated accumulated non capital losses 2035
Canada | Top of range  
Deferred Income Tax Assets and Liabilities  
Expiration period for estimated accumulated non capital losses 2039
Germany  
Deferred Income Tax Assets and Liabilities  
Gross amount $ 41
Amount for which no deferred income tax asset is recognized $ 0
Expiration dates for estimated accumulated non capital losses Indefinite
Malta  
Deferred Income Tax Assets and Liabilities  
Gross amount $ 93,203
Amount for which no deferred income tax asset is recognized $ 66,129
Expiration dates for estimated accumulated non capital losses Indefinite
Africa  
Deferred Income Tax Assets and Liabilities  
Gross amount $ 28,880
Amount for which no deferred income tax asset is recognized $ 0
Expiration dates for estimated accumulated non capital losses Indefinite
v3.20.1
Account Payables and Accrued Expenses (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Jun. 30, 2019
Dec. 31, 2018
Dec. 31, 2017
Account Payables and Accrued Expenses        
Trade and account payables $ 9,921   $ 19,993  
Interest payables 486   46  
Value-added, goods and services and other taxes (other than income taxes) 477   831  
Compensation 206   247  
Contract liabilities under contracts with customers 4,637   5,198  
Lease liabilities 364      
Losses on corporate guarantees 3,070 $ 3,134 0 $ 1,502
Account payables and accrued expenses $ 19,161   $ 26,315  
v3.20.1
Account Payables and Accrued Expenses - Movement of contract liabilities (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Account Payables and Accrued Expenses    
Balance, beginning of the year $ 6,446 $ 797
Considerations received 4,949 5,649
Reclassification to profit or loss upon satisfaction of performance obligations (6,758) 0
Balance, end of the year $ 4,637 $ 6,446
v3.20.1
Account Payables and Accrued Expenses - recognize the contract liabilities (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Account Payables and Accrued Expenses      
Year 1 after the year-end (included in current liabilities) $ 4,637 $ 5,198  
Year 2 after the year-end (included in long-term liabilities) 0 1,248  
Contract liabilities, revenue $ 4,637 $ 6,446 $ 797
v3.20.1
Account Payables and Accrued Expenses - Future lease payments included in the measurement of the lease liabilities (Details)
$ in Thousands
Dec. 31, 2019
CAD ($)
Disclosure of maturity analysis of operating lease payments [line items]  
Principal $ 1,196
Interest 116
Total 1,312
2020  
Disclosure of maturity analysis of operating lease payments [line items]  
Principal 364
Interest 49
Total 413
2021  
Disclosure of maturity analysis of operating lease payments [line items]  
Principal 229
Interest 34
Total 263
2022  
Disclosure of maturity analysis of operating lease payments [line items]  
Principal 196
Interest 19
Total 215
2023  
Disclosure of maturity analysis of operating lease payments [line items]  
Principal 204
Interest 11
Total 215
2024  
Disclosure of maturity analysis of operating lease payments [line items]  
Principal 203
Interest 3
Total $ 206
v3.20.1
Account Payables and Accrued Expenses - Principal amounts lease Liablities (Details)
$ in Thousands
Dec. 31, 2019
CAD ($)
Account Payables and Accrued Expenses  
Current liabilities $ 364
Long-term liabilities 832
Total lease liabilities $ 1,196
v3.20.1
Account Payables and Accrued Expenses - Lease liabilities (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Account Payables and Accrued Expenses  
Interest expense $ 71
Expense relating to short-term leases with payments directly charged to profit or losses 881
Expense relating to leases of low-value assets with payments directly charged to profit or losses 0
Expense relating to variable lease payments not included in the measurement of lease liabilities 0
Total cash outflows for leases 1,824
Depreciation charge for right-of-use assets (see Note 12) 738
Carrying amount of right-of-use assets at the end of the reporting period (see Note 12) $ 1,188
v3.20.1
Account Payables and Accrued Expenses - Additional information (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2019
Jun. 30, 2019
Account Payables and Accrued Expenses        
Losses on corporate guarantees $ 0 $ 1,502 $ 3,070 $ 3,134
Guarantees recovered 833      
Minimum lease payments recognized as expenses 2,303 3,120    
Contingent rents $ 423 $ 115    
v3.20.1
Bond Payables - Maturities (Details)
€ in Thousands, $ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Dec. 31, 2019
EUR (€)
Dec. 31, 2019
CAD ($)
Aug. 31, 2019
USD ($)
Aug. 31, 2019
EUR (€)
Dec. 31, 2018
CAD ($)
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Total     $ 35,418     $ 0
Bonds payable            
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Principal   € 25,000 36,458 $ 36,511 € 25,000  
Interest $ 10,206          
Total     46,664      
2020 | Bonds payable            
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Principal     0      
Interest 1,458          
Total     1,458      
2021 | Bonds payable            
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Principal     0      
Interest 1,458          
Total     1,458      
2022 | Bonds payable            
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Principal     0      
Interest 1,458          
Total     1,458      
2023 | Bonds payable            
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Principal     0      
Interest 1,458          
Total     1,458      
2024 | Bonds payable            
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Principal     0      
Interest 1,458          
Total     1,458      
Thereafter | Bonds payable            
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items]            
Principal     36,458      
Interest $ 2,916          
Total     $ 39,374      
v3.20.1
Bond Payables (Details)
€ in Thousands, $ in Thousands, $ in Thousands
1 Months Ended 12 Months Ended
Aug. 31, 2019
USD ($)
Aug. 31, 2019
EUR (€)
Dec. 31, 2019
CAD ($)
Dec. 31, 2019
EUR (€)
Dec. 31, 2019
CAD ($)
Aug. 31, 2019
EUR (€)
Disclosure of detailed information about borrowings [line items]            
Commissions and issuance costs     $ 1,078      
Bond payables         $ 35,418  
Bonds payable            
Disclosure of detailed information about borrowings [line items]            
Notional amount $ 36,511     € 25,000 $ 36,458 € 25,000
Commissions and issuance costs $ 1,078 € 738        
Nominal interest rate       4.00% 4.00%  
Effective interest rate     4.41%      
Bond payables         $ 35,418  
v3.20.1
Decommissioning Obligations (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Decommissioning Obligations    
Decommissioning obligations, beginning of year $ 13,641 $ 13,699
Changes in estimates 1,167 (338)
Accretion 210 280
Decommissioning obligations, end of year $ 15,018 $ 13,641
v3.20.1
Decommissioning Obligations - Additional Information (Details))
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Decommissioning Obligations    
Decommissioning obligations using an average discount rate 1.61% 1.98%
v3.20.1
Shareholders' Equity (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Shareholders' Equity    
Total number of common shares held as treasury stock 65,647 65,647
Total carrying amount of treasury stock $ 2,643 $ 2,643
v3.20.1
Shareholders' Equity - Additional Information (Details)
12 Months Ended
Dec. 31, 2019
USD ($)
$ / shares
shares
Shareholders? Equity  
Value of shares authorized | $ $ 450,000
Description of voting rights one vote
Common Shares  
Shareholders? Equity  
Number of shares authorized | shares 300,000,000
Par value of shares authorized | $ / shares $ 0.001
Preferred Shares  
Shareholders? Equity  
Number of shares authorized | shares 150,000,000
Par value of shares authorized | $ / shares $ 0.001
v3.20.1
Consolidated Statements of Operations - Revenue (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Consolidated Statements of Operations      
Merchant banking products and services $ 101,013 $ 124,059 $ 249,581
Interest 1,057 676 973
Dividends   168 0
Gain on securities, net 931 3,856 0
Other, including medical and real estate sectors 10,266 10,992 23,481
Revenue $ 113,267 $ 139,751 $ 274,035
v3.20.1
Consolidated Statements of Operations - costs of sales and services (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Consolidated Statements of Operations      
Merchant banking products and services $ 95,189 $ 119,552 $ 223,049
Market value (increase) decrease on commodity inventories (160) 109 (400)
Write-downs of inventories 1,822    
(Gain) loss on derivative contracts, net (122) 794 (1,934)
Loss on securities, net 0   619
(Gain) loss dispositions of subsidiaries, net (485) (25,771) 10,219
Gains on settlements and derecognition of liabilities (1,168) (9,502) (3,779)
Gains on settlements and derecognition of liabilities (1,168) (9,502) (3,779)
Change in fair value of loan payable at FVTPL 979 167  
Other, including medical and real estate sectors 2,264 9,188 11,889
Total cost of sales and services $ 98,319 $ 94,537 $ 239,663
v3.20.1
Consolidated Statements of Operations - Inventories as costs of goods sold (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Consolidated Statements of Operations        
Net (liabilities) assets in excess of considerations received $ (485) $ (25,771) $ 10,219  
Reclassification adjustment for the exchange differences upon dispositions of subsidiaries (1,758) 672 (11,306)  
Gain on dispositions of subsidiaries, net (see Note 29) $ (2,243) (25,099) (1,087)  
Inventories as costs of goods sold (including depreciation, amortization and depletion expenses allocated to costs of goods sold)   $ 72,414 $ 92,138 $ 206,644
v3.20.1
Consolidated Statements of Operations - Credit losses (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Disclosure of financial assets [line items]      
Credit losses on loans and receivables and guarantees, net of recoveries $ 13,398 $ 34,985 $ 23,923
Credit losses on corporate guarantees 3,134    
Credit losses from write off of royalty income receivables   3,875 1,425
Former consolidated entity      
Disclosure of financial assets [line items]      
Credit losses on loans and receivables and guarantees, net of recoveries 6,087 $ 9,957 $ 8,585
Credit losses relating to the consideration on sale of subsidiary $ 3,200    
v3.20.1
Consolidated Statements of Operations - selling, general and administrative expenses (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Consolidated Statements of Operations      
Compensation (wages and salaries) $ 6,762 $ 10,305 $ 16,369
Legal and professional 5,050 4,469 8,860
Accounting 1,965 1,784 1,979
Consulting and fees 2,365 4,276 5,506
Depreciation and amortization 502 254 1,640
Office 874 1,026 1,797
Reimbursement of expenses (net of recovery) 749 (1,579) (2,387)
Other 4,306 5,830 11,708
Selling, general and administrative expense $ 22,573 $ 26,365 $ 45,472
v3.20.1
Consolidated Statements of Operations - Additional information on the nature of expenses incurred in continuing operations (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Consolidated Statements of Operations      
Depreciation, amortization and depletion $ 8,287 $ 5,712 $ 6,732
Employee benefits expenses $ 13,727 $ 18,403 $ 21,016
v3.20.1
Consolidated Statements of Operations - Additional Information (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Consolidated Statements of Operations      
Revenue from merchant banking products and services $ 101,013 $ 124,059 $ 249,581
Metals 77,527 107,540 143,572
Food products 2,465    
Plastics     98
Steel products     23,898
Minerals, chemicals and alloys     57,768
Natural gas 7,712 10,371 8,931
Royalty revenue 5,687 2,437 8,868
Power and electricity 4,075 4,254 4,215
Fees $ 3,547 4,331 2,231
Interest to contract liabilities   2,437  
Underpayment of resource property royalties from prior years     $ 5,619
Loss on settlement   $ 5,600  
v3.20.1
Share-Based Compensation - changes in stock options granted under the plans (Details)
12 Months Ended
Dec. 01, 2017
Option
Dec. 31, 2019
Option
$ / shares
Dec. 31, 2018
USD ($)
Option
CAD ($)
$ / shares
Dec. 31, 2017
USD ($)
Option
CAD ($)
$ / shares
Share-Based Compensation        
Number of options, Outstanding     40,000  
Number of options, granted 535,000   20,000 535,000
Number of options, Outstanding       40,000
2017 Plan        
Share-Based Compensation        
Number of options, Outstanding   450,000 575,000 0
Number of options, Forfeited   (4,000) (125,000)  
Number of options, Cancelled     (20,000)  
Number of options, Exercised   (20,000)    
Number of options, Exchanged under the Arrangement       40,000
Number of options, granted     20,000 535,000
Number of options, Outstanding   426,000 450,000 575,000
Number of options, exercisable   426,000    
Options available for granting in future periods   129,403    
Weighted average exercise price per share, outstanding | $ / shares   $ 8.76 $ 10.94 $ 0.00
Weighted average exercise price of share options forfeited in share-based payment arrangement | $ / shares   8.76 $ 13.77  
Weighted average exercise price per share, Cancelled | $     $ 40.05  
Weighted average exercise price per share, Exchanged under the Arrangement | $       $ 40.05
Weighted average exercise price per share, Exercised | $ / shares   8.76    
Weighted average exercise price of share options granted in share-based payment arrangement | $ / shares     $ 8.76 $ 8.76
Weighted average exercise price per share, outstanding | $ / shares   8.76 $ 8.76 $ 10.94
Weighted average exercise price per share, options exercisable | $ / shares   $ 8.76    
2008 Plan        
Share-Based Compensation        
Number of options, Outstanding   0 0 40,000
Number of options, Forfeited   0 0  
Number of options, Cancelled     0  
Number of options, Exercised   0    
Number of options, Exchanged under the Arrangement       (40,000)
Number of options, granted     0 0
Number of options, Outstanding   0 0 0
Number of options, exercisable   0    
Options available for granting in future periods   0    
Weighted average exercise price per share, outstanding | $ / shares   $ 0.00 $ 0.00 $ 40.05
Weighted average exercise price of share options forfeited in share-based payment arrangement | $ / shares   $ 0.00 $ 0.00  
Weighted average exercise price per share, Cancelled | $     $ 0.00  
Weighted average exercise price per share, Exchanged under the Arrangement | $       $ 40.05
Weighted average exercise price of share options granted in share-based payment arrangement | $ / shares     $ 0.00 $ 0.00
Weighted average exercise price per share, outstanding | $ / shares     $ 0.00 $ 0.00
v3.20.1
Share-Based Compensation - stock options outstanding and exercisable (Details) - Eight Point Seven Six Exercise Price Per Share
Dec. 31, 2019
Option
Y
$ / shares
Share-Based Compensation  
Exercise price per share | $ / shares $ 8.76
Number of options, outstanding and exercisable | Option 426,000
Weighted average remaining contractual life | Y 7.92
v3.20.1
Share-Based Compensation - share-based compensation expenses (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-Based Compensation      
Share-based compensation expenses arising from stock options granted by the Company $ 0 $ 69 $ 2,876
v3.20.1
Share-Based Compensation - assumptions and inputs (Details)
12 Months Ended
Dec. 01, 2017
Option
Dec. 31, 2018
Y
CAD ($)
$ / shares
Dec. 31, 2018
Y
CAD ($)
$ / shares
$ / shares
Dec. 31, 2017
Y
CAD ($)
$ / shares
Dec. 31, 2017
Y
CAD ($)
$ / shares
$ / shares
Share-Based Compensation          
Number of options granted 535,000 20,000 20,000 535,000 535,000
Vesting requirements   Immediately Immediately Immediately Immediately
Contractual life   9 years 6 months 15 days 9 years 6 months 15 days 10 years 10 years
Method of settlement   In equity In equity In equity In equity
Exercise price, share options granted   $ 8.76   $ 8.76  
Market price per share on grant date   $ 6.30 $ 6.30 $ 8.40 $ 8.40
Expected volatility   37.86% 37.86% 37.74% 37.74%
Expected option life | Y   9.54 9.54 10 10
Expected dividends   0.00% 0.00% 0.00% 0.00%
Risk-free interest rate   2.93% 2.93% 2.38% 2.38%
Fair value of option granted (per option) | (per share)   $ 2.69 $ 3.44 $ 4.22 $ 5.38
v3.20.1
Share-Based Compensation - Additional Information (Details)
1 Months Ended 12 Months Ended
May 12, 2018
Option
$ / shares
Dec. 01, 2017
Option
$ / shares
Jul. 31, 2019
Options
$ / shares
Dec. 31, 2019
CAD ($)
Dec. 31, 2018
CAD ($)
Dec. 31, 2017
CAD ($)
Option
Share-Based Compensation            
Number of common shares subject to all awards | Option           575,403
Number of options issued in exchange for options issued and outstanding | Option           40,000
Number of options granted   535,000     20,000 535,000
Exercise price of outstanding share options | $ / shares   $ 8.76        
Aggregate fair value of options granted recognized as Share-based compensation expenses | $       $ 0 $ 69,000 $ 2,876,000
Common Shares            
Share-Based Compensation            
Number of options granted 20,000   20,000      
Weighted average exercise price of share options granted in share-based payment arrangement | $ / shares $ 8.76   $ 8.76      
Closing price of shares | $ / shares     $ 14.76      
Number of options, surrendered for cancellation | Option 20,000          
v3.20.1
Income Taxes - (Loss) income before income taxes (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Taxes      
Income (loss) before income taxes $ (16,784) $ 167,829 $ (38,407)
Canada      
Income Taxes      
Income (loss) before income taxes (1,691) 170,538 7,360
Outside Canada      
Income Taxes      
Income (loss) before income taxes $ (15,093) $ (2,709) $ (45,767)
v3.20.1
Income Taxes - components of income tax expense (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Taxes      
Current taxes $ (384) $ (867) $ (3,744)
Deferred taxes (98) (55,238) (3,141)
Resource property (expense) recovery (1,137) 487 (1,773)
Provision for income taxes $ (1,619) $ (55,618) $ (8,658)
v3.20.1
Income Taxes - reconciliation of (loss) income before income taxes (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Taxes      
(Loss) income before income taxes $ (16,784) $ 167,829 $ (38,407)
Computed recovery (expense) of income taxes 4,743 (50,137) 9,792
Decrease (increase) in income taxes resulting from:      
Effect of change in income tax rate 891 0 0
Other non-taxable income 24 45 7
Revisions to prior years 88 (1,355) 4,650
Capital gains and losses on dispositions, net (7,663) (5,357) (3,150)
Resource property revenue taxes (830) 356 (1,311)
Unrecognized losses in current year (228) (1,411) (20,916)
Previously unrecognized deferred income tax assets, net 1,229 3,041 2,877
Permanent differences (178) (306) (363)
Other, net 305 (494) (244)
Provision for income taxes $ (1,619) $ (55,618) $ (8,658)
v3.20.1
Income Taxes - Additional Information (Details) - New MFC - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Taxes      
Statutory tax rate 0.00%    
Current and deferred income tax relating to items charged directly to other comprehensive income or loss $ 0 $ 0 $ 0
v3.20.1
(Loss) Earnings Per Share (Details) - CAD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
(Loss) Earnings Per Share      
Basic income (loss) attributable to holders of common shares $ (18,553) $ 112,276 $ (47,855)
Effect of dilutive securities:      
Diluted (loss) income $ (18,553) $ 112,276 $ (47,855)
Weighted average number of common shares outstanding - basic 12,543,271 12,534,801 12,544,141
Effect of dilutive securities:      
Options 0 0 0
Weighted average number of common shares outstanding - diluted 12,543,271 12,534,801 12,544,141
(Loss) earnings per share - basic and diluted $ (1.48) $ 8.96 $ (3.81)
v3.20.1
(Loss) Earnings Per Share - Additional Information (Details) - shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
(Loss) Earnings Per Share      
Number of stock option not included in diluted earnings per share 426,000 450,000 575,000
v3.20.1
Commitments and Contingencies - Additional Information (Details)
€ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Dec. 31, 2017
CAD ($)
subsidiary
Dec. 31, 2019
EUR (€)
Dec. 31, 2019
CAD ($)
Jun. 30, 2019
CAD ($)
Dec. 31, 2018
CAD ($)
Commitments and Contingencies            
Amount of assessment $ 2,996          
Amount of assessment paid in dispute $ 899          
Litigation guarantee     € 43,800 $ 63,874    
Provision for guarantee   $ 1,502   $ 3,070 $ 3,134 $ 0
Number of subsidiaries | subsidiary   2        
Maximum percentage of share capital of subsidiaries   10.00%        
Period for expiration of rights   10 years        
v3.20.1
Consolidated Statements of Cash Flows Supplemental Disclosure - reconciliation of liabilities arising from financing activities (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Non-cash changes:      
Long-term liabilities $ 832    
Total lease liabilities 1,196    
Bonds payable      
Disclosure of reconciliation of liabilities arising from financing activities [line items]      
Cash flows 35,433    
Non-cash changes:      
Accretion 533    
Cumulative translation adjustments (548)    
Ending balance 35,418    
Lease liabilities      
Disclosure of reconciliation of liabilities arising from financing activities [line items]      
Cash flows (943)    
Non-cash changes:      
Initial adoption of IFRS 16 2,911    
Additions 1,583    
Dispositions of subsidiaries (487)    
Accretion 71    
Termination (1,809)    
Cumulative translation adjustments (130)    
Ending balance 1,196    
Long-term borrowings      
Disclosure of reconciliation of liabilities arising from financing activities [line items]      
Opening balance $ 0 $ 43,733 $ 116,813
Cash flows   0 (42,253)
Non-cash changes:      
Dispositions of subsidiaries   (45,465) (34,996)
Accretion   94 187
Rollover of interest expenses into principal   286 0
Cumulative translation adjustments   1,352 3,982
Ending balance   $ 0 $ 43,733
v3.20.1
Consolidated Statements of Cash Flows Supplemental Disclosure - Non-cash transactions (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Consolidated Statements of Cash Flows - Supplemental Disclosure      
Non-cash transaction liabilities $ 1,128    
Non controlling interest receivable $ 390    
Non-cash settlement loss   $ 5,600  
Offsetting of payable against receivable due from entity     $ 12,264
Redemption of preferred shares     52,299
Fair value of trade receivables     52,299
Offsetting of long-term deposit liabilities against finance lease receivables     $ 545
Deconsolidation of subsidiary recognition of long-term non-interest bearing loan payable   $ 3,645  
v3.20.1
Related Party Transactions (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Related Party Transaction [Line Items]    
Fee income $ 10  
Interest income 31  
Dividends received   $ 168
Royalty expenses (210)  
Credit losses on corporate guarantees (3,134)  
ECL allowance under IFRS 9 (46) $ (311)
Reimbursements of expenses, primarily including employee benefits and lease and office expenses (811)  
IFRS 9    
Related Party Transaction [Line Items]    
ECL allowance under IFRS 9 $ (16)  
v3.20.1
Related Party Transactions - Key management personnel (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Related Party Transactions      
Short-term employee benefits $ 1,451 $ 1,245 $ 1,777
Directors' fees 531 594 576
Share-based compensation 0 0 713
Total $ 1,982 $ 1,839 $ 3,066
v3.20.1
Related Party Transactions - Puttable instrument financial liability (Details)
$ in Thousands
1 Months Ended 12 Months Ended
Jan. 31, 2017
CAD ($)
shares
Dec. 31, 2019
EUR (€)
Dec. 31, 2019
CAD ($)
Dec. 31, 2017
CAD ($)
Dec. 31, 2019
CAD ($)
Related Party Transactions          
Minimum percentage of significant equity interest   10.00% 10.00%    
Indemnification asset         $ 6,362
Reimbursements of expenses, primarily including employee benefits and lease and office expenses     $ (811)    
Royalty expense     210    
Gain from disposition of subsidiary     229 $ 57  
Credit losses on corporate guarantees     $ (3,134)    
Put Holder          
Related Party Transactions          
Consideration received on sale of subsidiary $ 14,413        
Number of common stock shares issued | shares 90,000        
Company Controlled By Chairman          
Related Party Transactions          
Loans to corporate entities         828
Interest percentage on loans provided   6.30% 6.30%    
Reimbursements of expenses, primarily including employee benefits and lease and office expenses     $ 811    
Nominal consideration on sale of non-core metal processing business | €   € 1.00      
Gain from disposition of subsidiary     $ 906    
Merkanti Holding plc | Company Controlled By Chairman          
Related Party Transactions          
Bonds issued   € 316,000     $ 462
Total outstandaing percentage of offering and bonds issued   1.25% 1.25%    
v3.20.1
Related Party Transactions - Additional Information (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Related Party Transactions      
Share-based compensation $ 0 $ 0 $ 713
Directors      
Related Party Transactions      
Share-based compensation     323
Other key management personnel      
Related Party Transactions      
Share-based compensation     $ 390
v3.20.1
Financial Instruments -Fair values of the group's financial instruments (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Bonds payable | Financial liabilities measured at amortized cost    
Financial Instruments    
Financial Liabilities Carrying Amount $ 35,418 $ 0
Financial Liabilities Fair Value 36,603 0
Derivative liabilities | Financial liabilities fair value through profit or loss    
Financial Instruments    
Financial Liabilities Carrying Amount   37
Financial Liabilities Fair Value   37
Loan payable | Financial liabilities fair value through profit or loss    
Financial Instruments    
Financial Liabilities Carrying Amount 4,769 3,981
Financial Liabilities Fair Value 4,769 3,981
Financial assets fair value through profit or loss | Equity securities    
Financial Instruments    
Financial Assets Carrying Amount 6,761 4,706
Financial Assets Fair Value 6,761 4,706
Financial assets fair value through profit or loss | Derivative assets    
Financial Instruments    
Financial Assets Carrying Amount   209
Financial Assets Fair Value   209
Financial assets fair value through profit or loss | Debt securities    
Financial Instruments    
Financial Assets Carrying Amount 2,403 1,068
Financial Assets Fair Value 2,403 1,068
Fair value through other comprehensive income | Debt securities    
Financial Instruments    
Financial Assets Carrying Amount 8,819 6,328
Financial Assets Fair Value $ 8,819 $ 6,328
v3.20.1
Financial Instruments - Financial position classified by level of the fair value hierarchy (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Financial Instruments    
Financial assets fair value through profit or loss $ 17,983 $ 12,311
Financial liabilities fair value through profit or loss   4,018
Financial liabilities fair value through profit or loss | Level 1    
Financial Instruments    
Financial liabilities fair value through profit or loss   0
Financial liabilities fair value through profit or loss | Level 2    
Financial Instruments    
Financial liabilities fair value through profit or loss   37
Financial liabilities fair value through profit or loss | Level 3    
Financial Instruments    
Financial liabilities fair value through profit or loss   3,981
Derivative liabilities | Financial liabilities fair value through profit or loss    
Financial Instruments    
Financial liabilities fair value through profit or loss   37
Derivative liabilities | Financial liabilities fair value through profit or loss | Level 1    
Financial Instruments    
Financial liabilities fair value through profit or loss   0
Derivative liabilities | Financial liabilities fair value through profit or loss | Level 2    
Financial Instruments    
Financial liabilities fair value through profit or loss   37
Derivative liabilities | Financial liabilities fair value through profit or loss | Level 3    
Financial Instruments    
Financial liabilities fair value through profit or loss   0
Loan payable | Financial liabilities fair value through profit or loss    
Financial Instruments    
Financial liabilities fair value through profit or loss 4,769 3,981
Loan payable | Financial liabilities fair value through profit or loss | Level 1    
Financial Instruments    
Financial liabilities fair value through profit or loss 0 0
Loan payable | Financial liabilities fair value through profit or loss | Level 2    
Financial Instruments    
Financial liabilities fair value through profit or loss 0 0
Loan payable | Financial liabilities fair value through profit or loss | Level 3    
Financial Instruments    
Financial liabilities fair value through profit or loss 4,769 3,981
Fair value through other comprehensive income | Level 1    
Financial Instruments    
Financial assets fair value through profit or loss 13,044 8,101
Fair value through other comprehensive income | Level 2    
Financial Instruments    
Financial assets fair value through profit or loss 3,809 4,210
Fair value through other comprehensive income | Level 3    
Financial Instruments    
Financial assets fair value through profit or loss 1,130 0
Equity securities | Financial assets fair value through profit or loss    
Financial Instruments    
Financial assets fair value through profit or loss 6,761  
Equity securities | Financial assets fair value through profit or loss | Level 1    
Financial Instruments    
Financial assets fair value through profit or loss 1,822  
Equity securities | Financial assets fair value through profit or loss | Level 2    
Financial Instruments    
Financial assets fair value through profit or loss 3,809  
Equity securities | Financial assets fair value through profit or loss | Level 3    
Financial Instruments    
Financial assets fair value through profit or loss 1,130  
Debt securities | Financial assets available-for-sale instruments    
Financial Instruments    
Financial assets fair value through profit or loss   6,328
Debt securities | Financial assets available-for-sale instruments | Level 1    
Financial Instruments    
Financial assets fair value through profit or loss   6,328
Debt securities | Financial assets available-for-sale instruments | Level 2    
Financial Instruments    
Financial assets fair value through profit or loss   0
Debt securities | Financial assets available-for-sale instruments | Level 3    
Financial Instruments    
Financial assets fair value through profit or loss   0
Debt securities | Financial assets fair value through profit or loss    
Financial Instruments    
Financial assets fair value through profit or loss   1,068
Debt securities | Financial assets fair value through profit or loss | Level 1    
Financial Instruments    
Financial assets fair value through profit or loss   1,068
Debt securities | Financial assets fair value through profit or loss | Level 2    
Financial Instruments    
Financial assets fair value through profit or loss   0
Debt securities | Financial assets fair value through profit or loss | Level 3    
Financial Instruments    
Financial assets fair value through profit or loss   0
Debt securities | Fair value through other comprehensive income    
Financial Instruments    
Financial assets fair value through profit or loss 8,819  
Debt securities | Fair value through other comprehensive income | Level 1    
Financial Instruments    
Financial assets fair value through profit or loss 8,819  
Debt securities | Fair value through other comprehensive income | Level 2    
Financial Instruments    
Financial assets fair value through profit or loss 0  
Debt securities | Fair value through other comprehensive income | Level 3    
Financial Instruments    
Financial assets fair value through profit or loss 0  
Derivative assets | Financial assets fair value through profit or loss    
Financial Instruments    
Financial assets fair value through profit or loss 2,403 209
Derivative assets | Financial assets fair value through profit or loss | Level 1    
Financial Instruments    
Financial assets fair value through profit or loss 2,403 0
Derivative assets | Financial assets fair value through profit or loss | Level 2    
Financial Instruments    
Financial assets fair value through profit or loss 0 209
Derivative assets | Financial assets fair value through profit or loss | Level 3    
Financial Instruments    
Financial assets fair value through profit or loss $ 0 0
Short-term securities | Financial assets fair value through profit or loss    
Financial Instruments    
Financial assets fair value through profit or loss   4,706
Short-term securities | Financial assets fair value through profit or loss | Level 1    
Financial Instruments    
Financial assets fair value through profit or loss   705
Short-term securities | Financial assets fair value through profit or loss | Level 2    
Financial Instruments    
Financial assets fair value through profit or loss   4,001
Short-term securities | Financial assets fair value through profit or loss | Level 3    
Financial Instruments    
Financial assets fair value through profit or loss   $ 0
v3.20.1
Financial Instruments - Credit risk exposure (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Financial Instruments        
Cash and cash equivalents and restricted cash $ 78,274 $ 67,760 $ 74,870 $ 120,676
Credit risk        
Financial Instruments        
Cash and cash equivalents and restricted cash 78,359      
Receivables 12,262      
Amounts recognized in the consolidated statement of financial position 90,621      
Guarantees (see Note 26) 0      
Maximum credit risk exposure $ 90,621      
v3.20.1
Financial Instruments - Additional disclosure (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Financial Instruments      
Interest income on financial assets not at FVTPL $ 955 $ 661 $ 434
Interest income on financial assets classified at FVTPL 102 15 539
Total interest income 1,057 676 973
Interest expense on financial liabilities not at FVTPL 710 513 3,509
Interest expense on financial liabilities classified at FVTPL 30 989 1,195
Total interest expense 740 1,502 4,704
Dividend income on financial assets at FVTPL 0 168 0
Dividend income on financial assets classified not at FVTPL 0 0 0
Net gain on financial assets at fair value through profit or loss 1,142 3,785 6,825
Loss on loan payable at FVTPL (979) (167) 0
Reversal of impairment on securities measured at FVTOCI $ (3) $ 3 $ 0
v3.20.1
Financial Instruments (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Dec. 31, 2018
CAD ($)
Dec. 31, 2017
CAD ($)
Dec. 31, 2016
CAD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2019
CAD ($)
Financial Instruments            
Undiscounted contractual amount due out of surplus cash of subsidiary         $ 42,070 $ 54,641
Minimum expected repayment period of undiscounted contractual due 14 years          
Difference between the carrying amount of the loan payable and the amount the Group would be contractually required to pay at maturity           $ 49,872
Credit risk            
Financial Instruments            
Payments for provisions       $ 40,677    
Proceeds from risk mitigation assets related to guarantees       39,149    
Recovery of credit loss       $ 35,121    
Net reversal of credit loss   $ 21,812 $ 1,317      
Provision for credit losses on guarantees $ 3,134          
Credit risk | Provision for credit commitments            
Financial Instruments            
Provision for credit loss   $ 833 $ 1,502      
Bottom of range | Credit risk            
Financial Instruments            
Average contractual credit period for trade receivables 30 days          
Top of range | Credit risk            
Financial Instruments            
Average contractual credit period for trade receivables 60 days          
Average contractual credit period for sales 180 days          
v3.20.1
Financial Instruments - Currency risk sensitivity analysis (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Financial Instruments  
Increase in Loss from continuing operations if U.S. dollar currency weakened 10% against functional currencies $ 653
Decrease in Loss from continuing operations if U.S. dollar currency strengthened 10% against functional currencies (619)
Decrease in Loss from continuing operations if Euro weakened 10% against functional currencies 7,554
Increase in Loss from continuing operations if Euro strengthened 10% against functional currencies 7,554
Decrease in Loss from continuing operations if Canadian dollar weakened 10% against functional currencies 35
Increase in Loss from continuing operations if Canadian dollar strengthened 10% against functional currencies $ 35
v3.20.1
Financial Instruments - Interest rate risk sensitivity analysis (Details) - CAD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Derivative liabilities | Other price risk    
Financial Instruments    
Notional amount of derivative financial instruments   $ 9,720
Net unrealized fair value gain (loss) of derivative   $ 172
Bottom of range | Interest rate risk    
Financial Instruments    
Decrease in Loss from continuing operations 1% if benchmark interest rate is lower with all other variables held constant $ 551  
Increase in Loss from continuing operations if 1% benchmark interest rate is higher with all other variables held constant 469  
Bottom of range | Other price risk    
Financial Instruments    
Decrease in other comprehensive loss from continuing operations if equity prices strengthened 10% with all other variables held constant 466  
Top of range | Other price risk    
Financial Instruments    
Increase in other comprehensive loss from continuing operations if equity prices weakened 10% with all other variables held constant $ 466  
v3.20.1
Fair Value Disclosure for Non-financial Assets (Details) - CAD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Disclosure of fair value measurement of assets [line items]    
Assets $ 503,349 $ 506,913
Recurring fair value measurement | Level 1    
Disclosure of fair value measurement of assets [line items]    
Assets   2,238
Recurring fair value measurement | Level 2    
Disclosure of fair value measurement of assets [line items]    
Assets   0
Recurring fair value measurement | Level 3    
Disclosure of fair value measurement of assets [line items]    
Assets   37,804
Recurring fair value measurement | Inventories | Level 1    
Disclosure of fair value measurement of assets [line items]    
Assets   2,238
Recurring fair value measurement | Inventories | Level 2    
Disclosure of fair value measurement of assets [line items]    
Assets   0
Recurring fair value measurement | Inventories | Level 3    
Disclosure of fair value measurement of assets [line items]    
Assets   0
Recurring fair value measurement | Investment property | Level 1    
Disclosure of fair value measurement of assets [line items]    
Assets 0 0
Recurring fair value measurement | Investment property | Level 2    
Disclosure of fair value measurement of assets [line items]    
Assets 0 0
Recurring fair value measurement | Investment property | Level 3    
Disclosure of fair value measurement of assets [line items]    
Assets $ 38,205 $ 37,804
v3.20.1
Scully and its Significant Subsidiaries (Details)
12 Months Ended
Dec. 31, 2019
MFC Bancorp and its Significant Subsidiaries  
Proportion of Interest 99.72%
Merkanti Holding plc  
MFC Bancorp and its Significant Subsidiaries  
Subsidiaries Merkanti Holding plc
Country of Incorporation Malta
Proportion of Interest 100.00%
1178936 B.C. Ltd  
MFC Bancorp and its Significant Subsidiaries  
Subsidiaries 1178936 B.C. Ltd.
Country of Incorporation Canada
Proportion of Interest 100.00%
Merkanti (A) International Ltd.  
MFC Bancorp and its Significant Subsidiaries  
Subsidiaries Merkanti (A) International Ltd.
Country of Incorporation Malta
Proportion of Interest 100.00%
Merkanti (D) International Ltd.  
MFC Bancorp and its Significant Subsidiaries  
Subsidiaries Merkanti (D) International Ltd.
Country of Incorporation Malta
Proportion of Interest 100.00%
v3.20.1
Scully and its Significant Subsidiaries - Additional Information (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
CAD ($)
Dec. 31, 2018
CAD ($)
Dec. 31, 2017
CAD ($)
subsidiary
Scully and its Significant Subsidiaries      
Proportion of voting rights held in subsidiary 50.00%    
Proportion of ownership interest in subsidiary 99.72%    
Recognition of a pre-tax gain   $ 25,740  
Recognition of deferred tax expense   7,204  
Reclassification of cumulative currency translation adjustment loss (gain) $ (1,758) 672 $ (11,306)
Recognition of a long-term liability   3,645  
Recognition of non-controlling interests   6,441  
Adjustment to deficit under equity   $ 6,284  
Number of subsidiaries | subsidiary     2
Maximum percentage of ownership of each subsidiary to exercise rights of non controlling interest   0.50%  
Gain from disposition of subsidiary 229   $ 57
Loss on the dispositions of the subsidiaries     1,087
Gains on deconsolidation of subsidiaries   $ 25,099  
(Gain) loss on dispositions of subsidiaries $ 2,243 $ 25,099 $ 1,087