ANNUAL%20REPORT%202015%20eng

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Notes to Consolidated Financial Statements 2 SIGNIFICANT ACCOUNTING POLICIES (Continued) (t) Obligations for reclamation The Group’s obligations for reclamation consist of spending estimates at its mines in accordance with the relevant rules and regulations in Mongolia. The Group estimates its liabilities for final reclamation and mine closure based upon detailed calculations of the amount and timing of the future cash spending to perform the required work. Spending estimates are escalated for inflation, then discounted at a discount rate that reflects current market assessments of the time value of money and the risks specific to the liability such that the amount of provision reflects the present value of the expenditures expected to be required to settle the obligation. The Group records a corresponding asset associated with the liability for final reclamation and mine closure, which is included in the mining properties. The obligation and corresponding asset are recognised in the period in which the liability is incurred. The asset is depreciated on the units-of-production method over its expected life and the liability is accreted to the projected spending date. As changes in estimates occur (such as mine plan revisions, changes in estimated costs, or changes in timing of the performance of reclamation activities), the revisions to the obligation and the corresponding asset are recognised at the appropriate discount rate. (u) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows: (i) Sale of goods Revenue associated with the sale of coal is recognised when the risks and rewards of ownership of the goods have been passed to the customer. Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts and volume rebates. (ii) Interest income Interest income is recognised as it accrues using the effective interest method. Annual Report 2015 133
Notes to Consolidated Financial Statements 2 SIGNIFICANT ACCOUNTING POLICIES (Continued) (v) Translation of foreign currencies The presentation currency of the Group is USD. The functional currency of the Company and the investment holding companies is USD and the functional currency of other group entities located in Mongolia is Mongolian Togrog (“MNT”). Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the balance sheet date. Exchange gains and losses are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates. The results of operations in Mongolia are translated into USD at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Balance sheet items are translated into USD at the foreign exchange rates ruling at the balance sheet date. The resulting exchange differences are recognised in other comprehensive income and accumulated separately in equity in the exchange reserve. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the profit or loss on disposal is recognised. (w) Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred. The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or complete. 134 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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Sustainability Report We receive gr
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Sustainability Report As part of th
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Sustainability Report Procurement W
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Corporate Governance Report BOARD O
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Corporate Governance Report Continu
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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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