ANNUAL%20REPORT%202015%20eng

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Notes to Consolidated Financial Statements 2 SIGNIFICANT ACCOUNTING POLICIES (Continued) (h) Property, plant and equipment Property, plant and equipment, which consist of buildings, plant and equipment, motor vehicles, office equipment, mining properties are stated at cost less accumulated depreciation and impairment losses (see Note 2(k)). The cost of an asset comprises its purchase price, any directly attributable costs of bringing the asset to its present working condition and location for its intended use, the cost of borrowed funds used during the period of construction and, when relevant, the costs of dismantling and removing the items and restoring the site on which they are located, and changes in the measurement of existing liabilities recognised for these costs resulting from changes in the timing or outflow of resources required to settle the obligation or from changes in the discount rate. The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. All other cost is recognised as an expense in profit or loss in the period in which it is incurred. In open pit mining operations, the removal of overburden and waste materials, referred to as stripping, is required to obtain access to the ore body. Stripping costs incurred during the development phase of a mine are capitalised as stripping activity asset forming part of the cost of constructing the mining properties. Stripping costs incurred during the production phase of a surface mine are variable production costs that are included in the costs of inventory produced during the period that the stripping costs are incurred (Note 2(l)), unless the stripping activity can be shown to give rise to probably future economic benefits from the mineral property by improving the access to the ore body, the component of the ore body for which assess has been improved is identifiable and the costs associated with that component can be reliably measured, in which case the stripping costs would be capitalised as stripping activity asset included in property, plant and equipment – mining properties. All other expenditures, including the cost of repairs and maintenance and major overhaul, are expensed as they are incurred. Construction in progress represents property, plant and equipment under construction and equipment pending installation, and is initially recognised at cost less impairment losses (Note 2(k)). Cost comprises cost of materials, direct labour and an appropriate proportion of production overheads and borrowing costs (Note 2(w)). Capitalisation of these costs ceases and the construction in progress is transferred to property, plant and equipment when the asset is substantially ready for its intended use. No depreciation is provided in respect of construction in progress until it is completed and substantially ready for its intended use. Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognised in profit or loss on the date of retirement or disposal. Depreciation is calculated to write off the cost of items of property, plant and equipment, other than mining properties, over their estimated useful lives using the straight-line method, after taking into account the estimated residual values. Annual Report 2015 123
Notes to Consolidated Financial Statements 2 SIGNIFICANT ACCOUNTING POLICIES (Continued) (h) Property, plant and equipment (Continued) The estimated useful lives of property, plant and equipment are as follows: Depreciable life – Buildings and plants 10 - 40 years – Machinery and equipment 10 years – Motor vehicles 5 - 10 years – Office equipment 3 - 10 years Mining properties, except for stripping activity assets related to capitalised stripping costs incurred during the production phase, are depreciated on the units-of-production method utilising only proven and probable coal reserves in the depletion base. Stripping activity assets related to stripping costs incurred during the production phase are depreciated using a units-of-production basis over the proven and probable coal reserves of the component to which they relate. No depreciation is provided in respect of construction in progress until it is substantially completed and ready for its intended use. Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is allocated on a reasonable basis between parts and each part is depreciated separately. Both the useful life of an asset and its residual value, if any, are reviewed annually. (i) Intangible assets Intangible assets (acquired mining rights and softwares) acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following the initial recognition, intangible assets are stated at cost less accumulated amortisation (where the estimated useful life is finite) and impairment losses (see Note 2(k)). Intangible assets (acquired mining rights) are depreciated on the units-of-production method utilising only proven and probable coal reserves in the depletion base. Amortisation of other intangible assets with finite useful lives is recognised in profit or loss on a straight-line basis over the expected useful lives. The softwares are amortised over 10 years from the date they are available for use. Both the period and method of amortisation are reviewed annually. 124 Annual Report 2015
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(Incorporated in the Cayman Islands
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Company Profile Mongolian Mining Co
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Corporate Information BOARD OF DIRE
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Directors and Senior Management BOA
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Directors and Senior Management Gan
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Directors and Senior Management Une
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Directors and Senior Management SEN
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Group Structure 14 Annual Report 20
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Chairman’s Statement I believe th
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Management Discussion and Analysis
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Sustainability Report OUR APPROACH
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Sustainability Report Fair operatin
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Sustainability Report Figure 3. HR
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Sustainability Report The Company
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Sustainability Report In September
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Sustainability Report Figure 5. LTI
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Sustainability Report Biodiversity
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Sustainability Report In 2015, appr
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Sustainability Report There are num
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Sustainability Report OUR COMMUNITY
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Financial Summary SUMMARY DATA OF C
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Glossary and Technical Terms “FOT
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Glossary and Technical Terms “Ore
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Appendix I Technical details of the
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Appendix I Criteria Commentary •
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Appendix I Criteria Commentary Infr
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