ANNUAL%20REPORT%202015%20eng

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Notes to Consolidated Financial Statements 6 LOSS BEFORE TAXATION (Continued) (b) Staff costs: (Continued) Pursuant to the relevant labor rules and regulations in Mongolia, the Group participates in defined contribution retirement benefit schemes (the “Schemes”) organised by the GoM whereby the Group is required to make contributions to the Schemes at a rate of 7% of the eligible employees’ salaries. Contributions to the Schemes vest immediately. The Group has no other material obligation for the payment of pension benefits beyond the annual contributions described above. (c) Other items: 2015 2014 USD’000 USD’000 Selling and distribution costs (Note(i)) 8,589 56,445 Depreciation and amortisation 39,179 46,145 Provision for impairment losses on trade and other receivables (Note 21(b)) 8,512 8,806 Provision for impairment loss on non-financial assets (Note (ii)) — 190,000 8,512 198,806 Operating lease charges: minimum lease payments – hire of plant and machinery 705 2,224 – hire of other assets (including property rentals) 962 2,006 1,667 4,230 Net gain on disposal of property, plant and equipment and assets held for sale (62) (36,881) Auditors’ remuneration – audit services 536 536 – tax and other services (Note(iii)) 9 272 545 808 Cost of inventories (Note(iv)) 165,604 335,510 Annual Report 2015 145
Notes to Consolidated Financial Statements 6 LOSS BEFORE TAXATION (Continued) (c) Other items: (Continued) Note: (i) Selling and distribution costs Selling and distribution costs represent fees and charges incurred for importing coal into the People’s Republic of China (“PRC”), logistics and transportation costs, governmental fees and charges and fixed agent fees associated with the new market penetration strategy to diversify and expand sales channels in inland PRC. (ii) Impairment of non-financial assets Given the fact that coking coal market experienced continuing price decline and the operating losses sustained by the Group during the year ended 31 December 2015, according to IAS 36, Impairment of assets, management has performed impairment assessment on the carrying amount of the Group’s property, plant and equipment, construction in progress, intangible assets and long-term prepayments related to the UHG Mine and BN Mine operations (collectively referred to as “UHG and BN Assets”). For the purpose of this, the UHG and BN Assets are treated as a cash generating unit (“CGU”). The recoverable amount of the CGU was based on value in use, determined by discounting the future cash flows to be generated from the continuing use of the UHG and BN Assets. The key assumptions used in the estimation of value in use were as follows: – Recoverable reserves and resources Economically recoverable reserves and resources represent management’s expectations at the time of completing the impairment testing, based on reserves and resource statements and exploration and evaluation work undertaken by appropriately qualified persons. Compared with the one used at the year end of 2014, economically recoverable reserves and resources applied in the estimation made for the year end of 2015 had incorporated the latest JORC (2012) Coal Reserve estimate for UHG issued at a post balance sheet date. – Growth rate Instead of using a steady growth rate over the estimation period longer than five years, the cash flow projection made at the year end of 2015 and the year end of 2014 followed the same mechanism as coal product price multiplied by sales quantity, which was consistent throughout the whole life-of-mine (“LOM”) time. 146 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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Corporate Governance Report Remuner
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Corporate Governance Report The Cor
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Corporate Governance Report SHAREHO
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Directors’ Report The Directors s
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Directors’ Report Risk Management
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Directors’ Report FINANCIAL STATE
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Notes to Consolidated Financial Sta
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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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