ANNUAL%20REPORT%202015%20eng

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Notes to Consolidated Financial Statements 3 ACCOUNTING JUDGEMENTS AND ESTIMATES (Continued) (a) Critical accounting judgements in applying the Group’s accounting policies (Continued) (i) Reserves (Continued) Responsibility for demonstrating the required transparency and materiality in the estimation of Coal Resources and/or Coal Reserves required by the JORC Code lies with the “Competent Person”. A Competent Person is a minerals industry professional who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy (“the AusIMM”), or of the Australian Institute of Geoscientists (“the AIG”), or of a Recognised Professional Organisation, as included in a list available on the JORC website. These organisations have enforceable codes of ethics, including disciplinary processes with powers to suspend or expel a member. A Competent Person must have a minimum of five years relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking. A “Coal Reserve” is the economically mineable part of a Measured and/or Indicated Coal Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. A “Probable Coal Reserve” is the economically mineable part of an Indicated, and in some circumstances, a Measured Coal Resource. The confidence in the Modifying Factors applying to a Probable Coal Reserve is lower than that applying to a Proved Coal Reserve. A “Proved Coal Reserve” is the economically mineable part of a Measured Mineral Resource. A Proved Coal Reserve implies a high degree of confidence in the Modifying Factors. “Modifying Factors” are considerations used to convert Coal Resources to Coal Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors. Modifying Factors may change from one estimation to the next, where the materiality of such changes are demonstrable. Such changes may be as result of variation to any of the mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, governmental or other factors. Annual Report 2015 137
Notes to Consolidated Financial Statements 3 ACCOUNTING JUDGEMENTS AND ESTIMATES (Continued) (a) Critical accounting judgements in applying the Group’s accounting policies (Continued) (i) Reserves (Continued) Because the Modifying Factors used to estimate Coal Reserves may change from one estimate to the next, estimates of Coal Reserves may change from one period to another. Changes in reported Coal Reserves thus may affect the Group’s financial results and financial position in a number of ways, including the following: • Asset recoverable amounts may be affected due to changes in estimated future cash flows. • Depreciation, depletion and amortisation charged in the income statement may change where such charges are determined on the units of production basis, or where the useful economic lives of assets change. • Overburden removal costs recorded on the balance sheet or charged to the income statement may change due to changes in stripping ratios or the units of production basis of depreciation. • Reclamation and mine closure provisions may change where changes in estimated reserves affect expectations about the timing or cost of these activities. • The carrying amount of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits. (ii) Useful lives of property, plants and equipment Management determines the estimated useful lives of and related depreciation charges for its property, plant and equipment. This estimate is based on the actual useful lives of assets of similar nature and functions. It could change significantly as a result of significant technical innovations and competitor actions in response to industry cycles. Management will increase the depreciation charges where useful lives are less than previously estimated lives, or will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold. (iii) Impairment of assets The Group reviews the carrying amounts of the assets at each balance sheet date to determine whether there is objective evidence of impairment. When indication of impairment is identified, management prepares discounted future cashflow to assess the differences between the carrying amount and value in use and provided for impairment loss. Any change in the assumptions adopted in the cash flow forecasts would increase or decrease in the provision of the impairment loss and affect the Group’s net asset value. In relation to trade and other receivables (including the value-added tax (“VAT”) receivables), a provision for impairment is made and an impairment loss is recognised in profit or loss when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the Group will not be able to collect all of the amounts due under the original terms of the invoice. Management uses judgment in determining the probability of insolvency or significant financial difficulties of the debtor. 138 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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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 OUR COMMUNITY
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Sustainability Report Procurement W
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Corporate Governance Report BOARD O
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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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