Annual Report 2011  Notes to Consolidated Financial Statements  Monument Mining Limited 1. Organization and Nature of Operations Monument Mining Limited (the “Company”) is a natural resource company engaged in the acquisition, exploration,  development and operation of gold mineral property interests. Its primary activities include gold production on the open  pit mine at the 100% owned Selinsing Gold Project (“Selinsing”) and exploration on the 100% owned Selinsing, Damar  Buffalo Reef gold mineral properties and Famehub prospects (note 9). The Company’s head office is located in  Vancouver, BC, Canada. Its gold project operations, exploration and development activities are carried out in Malaysia  through its wholly owned integrated subsidiaries. Effective September 1, 2010, the Company completed commissioning of a gold treatment plant and achieved  commercial production at the Selinsing Gold Mine, and subsequently closed the acquisition of the Famehub properties  and initiated new exploration programs on all its Malaysian mineral properties. Upon the attainment of commercial production, the Company started to record proceeds from the sale of gold as  revenues and associated expenses as cost of goods sold against operations instead of charging them against mineral  properties and construction in progress. Further, given the Company achieved commercial production, the Company  reclassified construction in progress costs to their respective property, plant and equipment classes, reclassified  accumulated exploration and development costs on the Selinsing Gold Property from mineral properties to property,  plant a nd equipment and started to amortize the corresponding amounts in accordance with the Company’s  amortization policy.  These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting  principles (“Canadian GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned integrated Malaysian  subsidiaries: Polar Potential Sdn. Bhd., Able Return Sdn. Bhd., Selinsing Gold Mine Manager Sdn. Bhd., Damar  Consolidated Exploration Sdn. Bhd., Famehub Ventures Sdn. Bhd. and Monument Mengapur Sdn. Bhd. All material  intercompany balances and transactions have been eliminated on consolidation. Effective July 1, 2010, the Company changed its reporting currency and functional currency for its all operations to the  United States dollar (US) from Canadian Dollar (CAD). The adoption of the US dollar as the unit of measure of the  Company’s  operations reflects the transition from an exploration company to a mine operator and the resulting shift in  operational exposure to the US dollar as the Company’s sales are of products quoted in US dollars. Prior to July 1, 2010, the Company reported its annual and quarterly consolidated financial statements with notes in CAD  which also was used as the unit of measure of its all foreign and Canadian operations. In making the change in reporting  and functional currency, the Company follows the recommendations of the Emerging Issues Committee (EIC) of the  Canadian Institute of Chartered Accountants (CICA) set forth in EIC – 130  – “Translation Method when the Reporting  Currency Differs from the Measured Currency or there is a Change in the Reporting Currency.” In accordance with EIC  –  130, the Company is required to translate all amounts presented for comparative purposes into  US dollars using the current rate method whereby all revenues, expenses and cash flows are translated at average rates  that were in effect during these periods and all assets and liabilities are translated at the closing rate in effect at the end  of these periods. Equity transactions have been translated at historic rates. The exchange difference resulting from the  translation is included i n accumulated other comprehensive income (loss) presented in shareholders’ equity.  The change in functional and reporting currency resulted in the following impact on the July 1, 2010, opening  consolidated balance sheet with $1,326,894 foreign exchange loss on consolidation charged to accumulated other  comprehensive loss in equity:  44 |  P a g e Change in functional and reporting currency  $_{a.}$ Basis of presentation  2. Significant Accounting Policies 