Annual Report 2003 - Antofagasta plc

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Notes to the Financial Statements1 Accounting Policies (continued)m) Provision for severance indemnitiesProvision is made for severance indemnities which are payable on termination of employment or on the eventual closureof an operation with a finite life, based on the net present value of estimated future costs. The release of the discountapplied in establishing the net present value of future costs is charged to the profit and loss account in each accountingperiod and is disclosed as a financing cost.n) Provision for decommissioning and site rehabilitation costsProvision is made for decommissioning and site rehabilitation costs in the accounting period when the relatedenvironmental impact occurs, based on the net present value of estimated future costs to rectify the environmentalimpact. Where an obligation is incurred in the course of acquiring or constructing tangible fixed assets, the discountedamount of the provision is capitalised and depreciated over the life of that asset. The release of the discount applied inestablishing the net present value of future costs is charged to the profit and loss account in each accounting periodand is disclosed as a financing cost.o) Provision for termination of water concessionThe accounting policy for the provision for the termination of the water concession acquired during the year is set outin e(iv).p) Deferred taxDeferred tax is provided in full on timing differences that result in an obligation at the balance sheet date to pay moretax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on currentlegislation. Timing differences arise from the inclusion of items of income and expenditure in taxation computationsin periods different from those in which they are included in the financial statements.q) Cash and net liquid resourcesCash at bank and in hand includes amounts held in current accounts and demand deposits. For the purposes of the cashflow statement, liquid resources include cash on deposit maturing within twelve months.ANTOFAGASTA PLC Annual Report and Financial Statements 2003r) LeasesTangible fixed assets acquired under finance leases are included in the balance sheet at their equivalent capital value anddepreciated over their useful lives. The corresponding liabilities are recorded as a loan creditor and the interest elementof the finance lease rentals is charged to the profit and loss account in proportion to the amounts outstanding.Rentals under operating leases are charged on a straight-line basis over the lease terms.56
1 Accounting Policies (continued)s) Derivative financial instrumentsThe Group uses derivative instruments to reduce exposure to foreign exchange, interest rate and commodity pricemovements. Derivative instruments are entered into for hedging purposes only.(i)Commodity instruments: each hedging instrument is allocated against future production at the time ofentering into the hedging instrument. All gains and losses on hedging instruments are included in turnoverwhen designated production is sold. Premiums paid for individual options used to hedge future productionare recognised as a deduction from turnover when the designated production is sold. If the option lapses oris exercised and immediately settled, the premium paid is recognised as an expense on the option expiry date.(ii) Financial instruments: interest rate swap agreements are used to fix or limit variations in interest rates onborrowings. The differential payments made under such swaps are recognised by an adjustment to interestpayable. Forward exchange contracts are used to hedge transaction exposures. These instruments are revaluedat the balance sheet date with net unrealised losses and gains included in other debtors and other creditorsand allocated against the underlying transaction when the hedged transactions occurs. Gains and lossesarising from instruments in respect of construction projects have been capitalised.2 Segmental Informationa) Turnover by geographical destination2003 2002US$m US$mUK 10.5 14.0Rest of Europe 312.9 241.8Chile 149.4 120.7Rest of Latin America 53.9 61.2North America 59.4 50.8Asia Pacific/other 490.1 374.61,076.2 863.1b) Turnover by operation2003 2002US$m US$mLos Pelambres 737.2 576.7El Tesoro 167.2 132.8Michilla 95.6 83.2Mining 1,000.0 792.7Railway and other transport services 75.8 70.4Water concession (acquisition) 0.4 –1,076.2 863.1ANTOFAGASTA PLC Annual Report and Financial Statements 2003Operations are based wholly in Latin America.57
Page 1 and 2:
Copper 1 a malleable ductile reddis
Page 3 and 4:
Highlights 2003Total copper product
Page 5 and 6:
Selected Financial and Operating Da
Page 7 and 8: consumption and low interest rates
Page 9 and 10: y an amount equivalent to 16.3 cent
Page 11 and 12: Selected Data for Mining Operations
Page 13 and 14: Exploration Projects - 2004KEYMININ
Page 15 and 16: FCAB Rail NetworkKEY85-90 POUND RAI
Page 17 and 18: Demerger of Quiñenco S.A.Following
Page 19 and 20: Cash Costs and Realised Copper Pric
Page 21 and 22: In 2003, sales of copper concentrat
Page 23 and 24: The Group’s borrowings relate mai
Page 25 and 26: Acquisition of Water ConcessionIn N
Page 27 and 28: Balance SheetThe Group’s balance
Page 29 and 30: As explained in the Chairman’s Re
Page 31 and 32: The Group also commenced a process
Page 33 and 34: Mining Reserves and ResourcesAt 31
Page 35 and 36: DirectorsThe Directors who served d
Page 37 and 38: Special Business at the Annual Gene
Page 39 and 40: Corporate GovernanceThe Board of Di
Page 41 and 42: c) Relations with ShareholdersThe E
Page 43 and 44: Report on Remuneration and Related
Page 45 and 46: Between 8 March 2004 and 30 April 2
Page 47 and 48: In addition, the Group paid Jara de
Page 49 and 50: Basis of Audit OpinionWe conducted
Page 51 and 52: Consolidated Statement of Total Rec
Page 53 and 54: Parent Company Balance SheetAt 31 D
Page 55 and 56: Notes to the Financial Statements1
Page 57: 1 Accounting Policies (continued)De
Page 61 and 62: 2 Segmental Information (continued)
Page 63 and 64: 2 Segmental Information (continued)
Page 65 and 66: 5 Directors’ Remuneration2003 200
Page 67 and 68: 7 Dividends 2003 2003 2002 2002cent
Page 69 and 70: 11 Tangible Fixed AssetsLand Buildi
Page 71 and 72: 12 Investment in Subsidiaries (cont
Page 73 and 74: 14 StocksGroup Group2003 2002US$m U
Page 75 and 76: 17 Loans (continued)b) (continued)U
Page 77 and 78: 18 Financial Instruments and Risk M
Page 79 and 80: 18 Financial Instruments and Risk M
Page 81 and 82: 20 Called Up Share Capital (continu
Page 83 and 84: 22 Notes to the Consolidated Cash F
Page 85 and 86: 23 Acquisition (continued)The asset
Page 87 and 88: 24 Demerger of Andsberg Limited (co
Page 89 and 90: 28 Ultimate Parent CompanyAt 31 Dec
Page 91 and 92: 2003 2002 2001 2000 1999Consolidate
Page 93 and 94: a) will expire 15 months after the
Page 95 and 96: f) Article 83 be amended by inserti
Page 97 and 98: A notice given under this Article 1
Page 99 and 100: Produced by Royle Financial Print L
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Annual Report 2003 - Antofagasta plc

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