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) (viii) Capitalised stripping costs (Continued) Production stripping can give rise to two benefits being the extraction of ore in the current period and improved access to the ore body or component of ore body in future periods. To the extent that the benefit is the extraction of ore, the stripping costs are recognised as an inventory cost. To the extent the benefit is improved access to the ore body or component of ore body in future periods, the stripping costs are capitalised as mine properties in property, plant and equipment, if the following criteria are met: • It is probable that the future economic benefit (improved access to ore) will flow to the Group; • The ore body or component of the ore body for which access has been improved can be identified; and • The costs relating to the stripping activity can be measured reliably. Production stripping costs are allocated between the inventory produced and the mine properties capitalised using a life-of-component waste to ore strip ratio. When the current strip ratio is greater than the life-of-component ratio, a portion of the stripping costs is capitalised to the existing mine properties. The development and production stripping assets are depreciated using the units of production method based on the proven and probable mineral reserves of the relevant ore body or component of ore body. (ix) Taxation The Group is subject to various taxes and levies in the jurisdictions where it has operations. The Group makes payments and determines the provision for tax and levy liabilities primarily based on the computations as prepared by the Group. Nevertheless, judgement is required in determining the provision for taxes and levies as there are many transactions and calculations for which the ultimate determination is uncertain during the ordinary course of business, there are possible cases of disagreements with the relevant authorities on treatment of certain items included in the computations and certain non-routine transactions. The Group uses its best judgement to determine the probability although it is typically very difficult to determine the timing and ultimate outcome of each case. If the Group considers it probable that these judgement will result in different positions, the most likely amounts of the outcome will be estimated and adjustments to the liabilities will be made in the period in which such determination is made. Due to the inherent uncertainties related to the eventual outcome of each case, it is probable that certain matters may be resolved for amounts materially different from any estimated provisions or previous disclosures. Annual Report 2015 141
Notes to Consolidated Financial Statements 3 ACCOUNTING JUDGEMENTS AND ESTIMATES (Continued) (b) Sources of estimation uncertainty Other than requiring critical accounting judgements, assumptions concerning the future and other major sources of estimation uncertainty at the end of the reporting period are required in relation to the Group’s accounting policies on “obligations for reclamation”, “recognition of deferred tax assets” and “derivative financial instruments”. Information about the assumptions and their risk factors are set out in Notes 3(a) (iv), (v) and (vi). 4 REVENUE The Group is principally engaged in the mining, processing, transportation and sale of coal products. Revenue represents the sales value of goods sold to customers exclusive of value added or sales taxes and after deduction of any trade discounts and volume rebates. The amount of each significant category of revenue recognised in revenue during the year is as follows: 2015 2014 USD’000 USD’000 Self-produced coal Washed hard-coking coal (“HCC”) 75,594 280,081 Washed semi-soft coking coal (“SSCC”) — 4,277 Washed thermal coal (“middlings”) 1 43,925 Raw coal (“ROM coal”) — 24 Trading of coal procured from Chinese third party sources 23,890 — 99,485 328,307 Revenue during the year ended 31 December 2015 include approximately USD37,997,000 (year ended 31 December 2014: USD130,602,000) which arose from sales of washed hard coking coal to customers through agent sales arrangements for diversifying and expanding the Group’s sales channels. During the year ended 31 December 2015, the Group had four customers that individually exceeded 10% of the Group’s revenue from sales of goods and referring of services, being USD26,119,000, USD15,097,000, USD11,564,000 and USD11,243,000, respectively. During the year ended 31 December 2014, the Group had two customers that individually exceeded 10% of the Group’s revenue from sales of goods and referring of services, being USD117,673,000 and USD34,427,000, respectively. Details of concentrations of credit risk arising from these customers are set out in Note 30(b). 142 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 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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Corporate Governance Report BOARD O
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Directors’ Report The Directors s
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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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