31  Borders & Southern Petroleum plc Annual Report & Accounts 2014 www.bordersandsouthern.com  STRATEGIC  REPORT DIRECTORS’  REPORT F INANCIAL  S T ATEMENTS 1 ACCOUNTING POLICIES  CONTINUED 2 LOSS FROM OPERATIONS 3 BASIC AND DILUTIVE LOSS PER SHARE  4 SEGMENT ANALYSIS 5 STAFF COSTS Management has made the following judgements which have the most significant effects on the amounts recognised in the  financial statements: RECOVERABILITY OF EXPLORATION AND EVALUATION COSTS Expenditure is capitalised as an intangible asset by reference to appropriate CGUs and is assessed for impairment when  circumstances suggest that the carrying amount may exceed its recoverable value. This assessment involves judgement as to: The Group’s share-based payments were recognised at fair value using a 60% volatility rate based on long-term average standard  deviation of the Company’s share price and a 1.5% risk free rate based on current UK Government bond yields. See note 7. SHARE OPTIONS The calculation of the basic and dilutive loss per share is based on the loss attributable to ordinary shareholders divided by the  weighted average number of shares in issue during the year. The loss for the financial year for the Group was $3,887,512 (2013 –  loss $2,955,526) and the weighted average number of shares in issue for the year was 484,098,484 (2013 – 484,098,484). During  the year the potential ordinary shares are anti-dilutive and therefore diluted loss per share has not been calculated. At the  statement of financial position date, there were 6,150,000 (2013 – 6,150,000) potentially dilutive ordinary shares being the share  options (see note 7 for further details). The Company operates in one operating segment (exploration for oil and gas) and in substantially one geographical market (the  Falkland Islands), therefore no additional segmental information is presented. Of the Group’s total non-current assets, the property, plant and equipment is based in the UK and all other non-current assets  are located in the Falkland Islands.  Staff costs (including Directors) comprise: COMPANY AND GROUP: 2014  $000 2013  $000 Staff costs (note 5) 1,321 1,185 Share-based payment – equity settled 245 427 Services provided by the auditors: Fees payable to the Company’s auditors for the audit of the Parent Company and consolidated  annual accounts 74 69 Fees payable to the Company’s auditor and its associates for other services: Tax services 9 2 Consultancy 27 61 Depreciation of office equipment 2 9 Operating lease expenses – property 329 294 Foreign exchange loss 910 207 2014  $ 2013  $ Wages and salaries 1,172 1,049 Employers national insurance contribution 149 137 1,321 1,186 Share-based payment – equity settled 201 427 1,522 1,613 (i) the timing of future development of the asset;  (ii) funding structures and financing costs of development;  (iii) commercial development opportunities for extracting value from the asset; and  (iv) modelling inputs such as the appropriateness of discount rates, reserve and resource estimates, oil and gas pricing  predictions, etc.