Download 2004 Annual Report - Polymetal

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JSC “ISPA “POLYMETAL”CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands of U.S. Dollars, except as indicated)Year endedDecember 312004Year endedDecember 312003Cash flows from operating activitiesNet income 83 583 13 468Adjustments to reconcile net income to cash provided by operations:Depreciation and depletion 12 341 6 662Amortization of intangible assets 168 224Accretion of reclamation and mine closure obligation 665 581Gain on disposal of subsidiaries (47 551) −Gain on partial disposal of interest in a consolidated subsidiary − (13 850)Deferred income tax expense (benefit) 7 863 (3 221)Loss on disposal of property, plant and equipment 1 338 475Exchange gains, net (8 873) (8 868)Minority interest 12 782 642Changes in operating working capital, excluding cash and debt:Prepayments to suppliers (2 551) 1 644Related party receivables and prepayments 10 971 (7 084)Inventories (16 812) (12 211)VAT receivable (9 687) (16 972)Other current assets (21 297) 1 239Accounts payable and accrued liabilities 7 401 2 414Tax payable 1 625 (120)Net cash provided by (used in) operating activities 31 966 (34 977)Cash flows from investing activitiesAdditions to property, plant and equipment (29 595) (46 660)Purchase of additional shares in subsidiary (21 226) (296)Proceeds from disposal of interest in consolidated subsidiaries 10 890 20 787Prepayments for acquisition of third party promissory notes − (12 277)Loans made to third parties (31 117) −Repayment of loans made to third parties 9 670 −Loans made to related parties (12 783) (3 593)Repayment of loans made to related parties 10 766 −Net cash used in investing activities (63 395) (42 039)Cash flows from financing activitiesOrdinary shares issuance − 27 160Proceeds from short−term loans and borrowings 138 713 38 518Repayment of short−term loans and borrowings (202 913) (12 317)Proceeds from long−term debt 105 000 135 001Repayment of long−term debt (21 893) (145 952)Proceeds from short−term loans and borrowings – related parties 141 454 50 520Repayment of short−term loans and borrowings – related parties (141 999) (14 841)Proceeds from long−term debt – related parties 203 040 62 978Repayment of long−term debt – related parties (176 807) (38 971)Purchase of bonds − (8 093)Sale of bonds 6 520 −Lease payments (20 406) (15 689)Net cash provided by financing activities 30 709 78 314Exchange effects on cash balances 148 46Net (decrease) increase in cash and equivalents (572) 1 344Cash and cash equivalents, beginning of the year 1 925 581Cash and cash equivalents, end of the year 1 353 1 925Supplementary cash flow informationInterest paid, except for interest capitalized 33 230 16 843Income taxes paid 3 300 54Accounts receivable for subsidiary disposal 1 401 −Noncash additions to property, plant and equipment – capital lease 17 715 24 756The accompanying notes are an integral part of these consolidated financial statements.52 Polymetal annual report 2004
JSC “ISPA “POLYMETAL”CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY(In thousands of U.S. Dollars, except as indicated)SharecapitalAdditionalpaid−incapitalAccumulatedothercomprehensiveincome (loss)Retainedearnings(accumulateddeficit)Totalshareholders’equityBalance atDecember 31, 20026 227 25 134 − (46 518) (15 157)Comprehensive income:Net income − − − 13 468 13 468Currency translation adjustment (includingincome tax expense of U.S. Dollar 2 296,charged to other comprehensive loss)− − (3 841) − (3 841)Total comprehensive income 9 627Share issue (50 000 shares with par valueRuble 100 per share)170 26 990 − − 27 160Balance atDecember 31, 20036 397 52 124 (3 841) (33 050) 21 630Comprehensive income:Net income − − − 83 583 83 583Currency translation adjustment − − 5 633 − 5 633Total comprehensive income 89 216Balance atDecember 31, 20046 397 52 124 1 792 50 533 110 846The accompanying notes are an integral part of these consolidated financial statements.Appendix #1: Consolidated financial statements53
Page 1 and 2: Annual report2004St. Petrsburg1
Page 3 and 4: Annual Report2004St. Petersburg3
Page 5 and 6: FinancialhighlightIndicator Meas. u
Page 7 and 8: 2004Key eventsFebruarynew managemen
Page 9 and 10: koye gold mine. This cost increasec
Page 11 and 12: MineralResourcesVladimir T. Ryabukh
Page 13 and 14: Igor V. Venatovsky,First Deputy CEO
Page 15 and 16: Sergey A. Cherkashin,CFOSalesFinanc
Page 17 and 18: Denis G. Pavlov,Head of TreasuryDep
Page 19 and 20: At the Dukat and Lunnoye depos−it
Page 21 and 22: ProductionfacilitiesoverviewProduct
Page 23 and 24: Victor R. Wulfert,Managing Director
Page 25 and 26: Victor R. Wulfert,Managing Director
Page 27 and 28: Andrey V. Novikov,Managing Director
Page 29 and 30: Sergey G. Antipin,Managing Director
Page 31 and 32: Vorontsovskoye(Northern Urals Gold,
Page 33 and 34: Alexander V. Bulavin,Head of Licens
Page 35 and 36: Dukat depositconducting a feasibili
Page 37 and 38: GlobalpositioningIn 2004, world sil
Page 39 and 40: CorporategovernancePolymetal follow
Page 41 and 42: Hazardous facilities at the deposit
Page 43 and 44: Personnel at mining facilitiesCompa
Page 45 and 46: Upgrading skillsIn 2004, the compan
Page 47 and 48: ManagementVitaly NESISCEOMr. Nesis
Page 49 and 50: ZAOPricewaterhouseCoopers AuditSred
Page 51: JSC “ISPA “POLYMETAL”STATEMEN
Page 55 and 56: The Group’s 100% interest in avar
Page 57 and 58: Deferred developmentexpendituresIn
Page 59 and 60: NOTE 3Variable Interest EntityStart
Page 61 and 62: Investments mainly represent or−d
Page 63 and 64: Loans from NIKoil Bank in total ofU
Page 65 and 66: Future payments under capital lease
Page 67 and 68: Note 24Income TaxThe income tax exp
Page 69 and 70: In accordance with FAS 141, thecont
Page 71 and 72: NOTE 30Subsequent eventsBank loan r
Page 73 and 74: Vorontsovskoye (Northern Urals Gold
Page 75 and 76: Dukat and Lunnoye (Magadan Silver,
Page 77 and 78: 1) Per ounce of gold produced or so

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