Annual Report 2010 - Magnitogorsk Iron & Steel Works

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Open Joint Stock CompanyMagnitogorsk Iron & Steel Works And SubsidiariesSTATEMENT OF MANAGEMENT’S RESPONSIBILITIES FOR THE PREPARATION ANDAPPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2010Management is responsible for the preparation of consolidated financial statements that present fairlythe financial position of Open Joint Stock Company Magnitogorsk Iron & Steel Works and its subsidiaries (the“Group”) at 31 December 2010, and the results of its operations, cash flows and changes in equity for the yearthen ended, in compliance with International Financial Reporting Standards (“IFRS”).In preparing the consolidated financial statements, management is responsible for:• properly selecting and applying accounting policies;• presenting information, including accounting policies, in a manner that provides relevant, reliable,comparable and understandable information;• providing additional disclosures when compliance with the specific requirements in IFRS is insufficient toenable users to understand the impact of particular transactions, other events and conditions on the Group’sfinancial position and financial performance;• making an assessment of the Group’s ability to continue as a going concern.Management is also responsible for:• designing, implementing and maintaining an effective and sound system of internal controls, throughout theGroup;• maintaining adequate accounting records that are sufficient to show and explain the Group’s transactions anddisclose with reasonable accuracy at any time the financial position of the Group, and which enable them toensure that the consolidated financial statements of the Group comply with IFRS;• maintaining statutory accounting records in compliance with statutory legislation and accounting standards;• taking such steps as are reasonably available to them to safeguard the assets of the Group;• preventing and detecting fraud and other irregularities.The consolidated financial statements for the year ended 31 December 2010 were approved on31 March 2011 by:O. V. Fedonin M. A. ZhemchuevaVice-President FinanceChief Accountant31 March 2011Magnitogorsk, Russia88
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2010 (In millions of U.S. Dollars, unless otherwise stated)NotesYears ended 31 December2010 2009REVENUE 7 7,719 5,081COST OF SALES 9 (5,952) (3,940)GROSS PROFIT 1,767 1,141General and administrative expenses 10 (495) (349)Selling and distribution expenses 11 (565) (429)Other operating expenses, net 12 (97) (51)OPERATING PROFIT 610 312Share of results of associates 18 11 (31)Gain on revaluation of investment in associate upon acquisition ofmajority ownership 5 - 175Finance income 8 20Finance costs (140) (96)Foreign exchange (loss)/gain, net (24) 9Excess of the Group’s share in the fair value of net assets acquired overthe cost of acquisition5 - 30Change in net assets attributable to minority participants (5) 6Other income 7 2Other expenses 13 (177) (170)PROFIT BEFORE INCOME TAX 290 257INCOME TAX 14 (58) (38)PROFIT FOR THE YEAR 232 219OTHER COMPREHENSIVE INCOME/(LOSSES)Increase in fair value of available-for-sale investments 424 397Income tax related to increase in fair value of available-for-saleinvestments(85) (79)Translation of foreign operations 24 2Effect of translation to presentation currency (80) (270)OTHER COMPREHENSIVE INCOME FOR THE YEAR,NET OF TAX283 50TOTAL COMPREHENSIVE INCOME FOR THE YEAR 515 269Profit attributable to:Shareholders of the Parent Company 254 232Non-controlling interests (22) (13)232 219Total comprehensive income attributable to:Shareholders of the Parent Company 529 290Non-controlling interests (14) (21)515 269BASIC AND DILUTED EARNINGS PER SHARE (U.S. Dollars) 0.02 0.02Weighted average number of ordinary shares outstanding (in thousands) 11,118,083 11,098,862Steel & Style , 10 MMK ANNUAL REPORT 89
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ContentsAnnual Report2010Editor-in-
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Products for the Automotive Sector6
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Statement of the Chairmanof the Boa
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Business Model ММК16
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18Diverse Product Mix and Sales Foo
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Significant Growth Potential20
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NEW TRACKSMMK’s Missionand Strate
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To localize their production, forei
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OJSC MMK Board of Directors' Report
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The Company's ProductionOperationsT
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The Company's Production Operations
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Page 37 and 38: Any colouror hue foryourproduct!Col
Page 39 and 40: 16 22 26 28 32 38 50 72MMK , sBusin
Page 49 and 50: The Head of the State also highly p
Page 67 and 68: Risk ManagementIn 2010, the followi
Page 76 and 77: MMK Industrial Waste108644,8Total s
Page 78 and 79: Stakeholder EngagementCorporate soc
Page 80 and 81: Demag, ThyssenKrupp, АМСОМ, AL
Page 82 and 83: Information forShareholders andInve
Page 84 and 85: OJSC MMK Share Quotes and Trading V
Page 86 and 87: conferences for investors with MMK
Page 90 and 91: CONSOLIDATED STATEMENT OF FINANCIAL
Page 92 and 93: CONSOLIDATED STATEMENT OF CHANGES I
Page 94 and 95: CONSOLIDATED STATEMENT OF CASH FLOW
Page 96 and 97: Information on Companies in Which O
Page 98 and 99: Part Description PagePart 2: Financ
Page 100 and 101: Use of the GRI Reporting Framework
Page 102: No. Description Pages CommentsEN2 P
Page 106 and 107: General Information on OJSC MMKFull
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Annual Report 2010 - Magnitogorsk Iron & Steel Works

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