Download 2004 Annual Report - Polymetal

NOTE 3Variable Interest EntityStarting 2004 the Group oper−ated an entity which qualified forconsolidation into the Group as avariable interest entity (VIE) forwhich the Group is the primarybeneficiary. The entity’s primaryactivity is marketing of metalsproduced by the Group’s min−ing and production subsidiaries.Included within revenues in theconsolidated statement of opera−tions for the year ended Decem−ber 31, 2004 was U.S. Dollar 36612 representing third−partysales of gold and silver by the en−tity. Included within net income inthe consolidated statement ofoperations for the year ended De−cember 31, 2004 was U.S. Dollar4 584 net income of VIE. During2004 the entity provided guar−antees for certain of the Group’sshort−term debt facilities. None ofthese guarantees were outstand−ing at December 31, 2004 as therelated debt had been repaid infull prior to that date. Includedwithin loans to third parties in theconsolidated balance sheet at De−cember 31, 2004 was U.S. Dollar21 450 representing third−partyshort−term loans receivable is−sued by the entity.NOTE 4Cash and Cash EquivalentsThe Company maintains both Russian Ruble and U.S. Dollar bank accounts.December 312004December 312003Denominated in U.S. Dollars 68 54Denominated in Russian Rubles 1 285 1 871Total cash and cash equivalents 1 353 1 925NOTE 5Related party receivables and prepaymentsDecember 312004December 312003Prepayments to Daniz − 20 370Trade receivables from Nomos−Bank 25 785 15 974Other related party receivables and prepayments 680 1 092Total related party receivables and prepayments 26 465 37 436Nomos−Bank is an associate ofZAO ICT, the Company’s parent,and Daniz is a subsidiary of ZAOICT. The prepayments to Daniz atDecember 31, 2003 included aprepayment of U.S. Dollar 12 397for third party promissory notesreceived in 2004 and included inother current assets in the con−solidated balance sheet at De−cember 31, 2004.Appendix #1: Consolidated financial statements59