ANNUAL%20REPORT%202015%20eng

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Notes to Consolidated Financial Statements 35 MAJOR NON-CASH TRANSACTIONS According to the relevant tax regulations in Mongolia, the income tax payable can be offset by the VAT receivables. During the year ended 31 December 2015, the Group offset the VAT receivables of USD244,000 (2014: USD3,729,000), USD1,271,000 (2014: USD2,452,000), USD4,162,000 (2014: USD7,195,000) and USD22,349,000 (2014: USD23,759,000) with income tax payable, air pollution fee, royalty tax payable and payables due to suppliers, respectively. During the year ended 31 December 2015, the Group offset no promissory notes payable (2014: USD45,174,000) with trade receivables due from QGX Holding Ltd. (see Note 24(iv)). During the year ended 31 December 2015, according to the agreement with Thiess Mongolia LLC (previous Leighton LLC), the Group offset prepayment of maintenance due from Thiess Mongolia LLC of USD10,000,000 (2014: USD12,408,000) with trade payables due to Thiess Mongolia LLC. 36 SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATE (a) On 11 March 2016, the Group entered into the Deed of Termination and Release (the “DTR”) with EBRD, FMO, and DEG (the “Parallel Lenders”) regarding the repayment of secured interest-bearing borrowings (see Note 23). Pursuant to the DTR, the Group shall endorse to the Parallel Lenders certain promissory notes issued by MOF (see Note 21(c) (iv)) with total amount of approximately MNT105.6 billion and in return the obligations under the borrowings will be discharged in their entirety and the relevant security thereunder will be released after 121 calendar days plus 2 business days from the signing of the DTR (the “Timing Condition”). Until the issuance of the consolidated financial statements, the Group had completed the endorsement of promissory notes as required by the DTR. (b) Pursuant to a temporary waiver letter granted by the Lenders of the BNP and ICBC Facility on 14 March 2016, the Group is due to repay principal installments of approximately USD36.8 million together with applicable interest payment on 22 March 2016. As of the issuance of the consolidated financial statements, the Group had neither made the payment to the Lenders nor been able to secure any waiver or forbearance from the Lenders in this regard. As such, an event of default under the BNP and ICBC Facility has taken place, which also constitutes an event of default under certain of the Group’s other indebtedness that contain cross-default provisions, including the Senior Notes issued by the Group with a principal amount of USD600 million due on 29 March 2017. The Group has proposed to enter forbearance agreements with both the Lenders and the steering committee of the holders of the Senior Notes (the “Steering Committee”). The Group is in discussion with and intends to continue dialogue with the Lenders and the Steering Committee and their respective advisers. Also, until the issuance of the consolidated financial statements, the Group had not obtained corresponding waivers from BNP Paribas Singapore Branch and Industrial and Commercial Bank of China Limited in respect of the financial covenants breach of the BNP and ICBC Facility. As such, an event of default under the BNP and ICBC Facility has taken place. The Group has initiated discussions with the Lenders for revised terms of the debt facility. Given the material amount of the BNP and ICBC Facility and also existing Intercreditor Agreement between Lenders and the holders of the Senior Notes in relation to the shared securities and guarantees, the discussions to revise the BNP and ICBC Facility are undertaken in connection with the debt restructuring in respect of the Senior Notes. The Group continues discussion with the Lenders regarding waivers on breach of certain security coverage ratio and financial covenants under the BNP and ICBC Facility. Annual Report 2015 195
Notes to Consolidated Financial Statements 36 SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATE (Continued) Until the issuance of the consolidated financial statements, the Group has not received any notice from any of the Lenders demanding immediate repayment of any outstanding amount under the BNP and ICBC Facility or any holder of the Senior Notes or any other creditors. 37 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE FOR THE YEAR ENDED 31 DECEMBER 2015 Up to the date of issue of these financial statements, the IASB has issued a number of amendments and new standards which are not yet effective for the year ended 31 December 2015 and which have not been adopted in these financial statements. These include the following which may be relevant to the Group. Effective for accounting periods beginning on or after Annual Improvements to IFRSs 2012-2014 Cycle 1 January 2016 Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between an investor and its associate or joint venture 1 January 2016 Amendments to IFRS 11, Accounting for acquisitions of interests in joint operations 1 January 2016 Amendments to IAS 1, Disclosure initiative 1 January 2016 Amendments to IAS 16 and IAS 38, Clarification of acceptable methods of depreciation and amortisation 1 January 2016 IFRS 15, Revenue from contracts with customers 1 January 2017 IFRS 9, Financial instruments 1 January 2018 The Group is in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a significant impact on the Group’s results of operations and financial position.` 196 Annual Report 2015
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Company Profile Mongolian Mining Co
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Corporate Information BOARD OF DIRE
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Sustainability Report OUR APPROACH
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Sustainability Report The Company
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Sustainability Report In September
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Sustainability Report Biodiversity
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