Download 2004 Annual Report - Polymetal

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Long−term VAT receivable at De−cember 31, 2004 and 2003 pri−marily represents VAT balancesresulting from capital expenditureswhich are not expected to be recov−ered within twelve months followingrespective balance sheet dates.Management believes that suchbalances are fully recoverable fromtax authorities at the time respec−tive capital assets qualify as put intooperation for VAT purposes.Short−term VAT receivable at De−cember 31, 2004 and 2003 re−lates to capital expenditures in fixedassets expected to be put into usewithin twelve months following re−spective balance sheet dates andVAT receivable from current op−erations.VAT claims are submitted to tax au−thorities on a monthly basis.The short term VAT receivable asat December 31, 2003 was mainlyrepaid by the tax authorities tothe Group in 2004. As at June 30,2005, of the amount of VAT receiv−able as at December 31, 2004 col−lected U.S. Dollar 7 373 and theCompany expects the balance to befully repaid during the second half ofthe year in due order.NOTE 13Accounts Payable and Accrued LiabilitiesDecember 312004December 312003Trade accounts payable 15 563 7 988Accrued interest payable to third parties 1 689 3 910Other accounts payable 3 165 3 499Total accounts payable and accrued liabilities 20 417 15 397NOTE 14Accounts Payable and Promissory Notes – related partiesDecember 312004Trade accounts payable to Geotekhservice 598Trade accounts payable to Press−Invest 1 653December 312003Other trade accounts payable 1 777 1 393Short−term promissory notes − 254Total accounts payable and promissory notes – related parties 4 028 1 647At December 31, 2004 Press−Invest was under control of ZAO ICT.NOTE 15Short−term Debt and Current Portion of Long−term DebtInterestrate %December 312004Interestrate %December 312003Khanti−Mansiiski Bank (U.S. Dollar) − 11% 7 500Khanti−Mansiiski Bank (RR) − 16% 7 639Alfa−Bank (U.S. Dollar) − 9,5% 40 000MDM−Bank (U.S. Dollar) − 11,5−12,5% 32 275NIKoil Bank (U.S. Dollar) 9% 30 000 −Current portion of long−term loans 21 318 27 207Total short−term debt and current portionof long−term debt51 318 114 62162 Polymetal annual report 2004
Loans from NIKoil Bank in total ofU.S.Dollar 30 000 are guaranteedby ZAO Inkas−Service and Severo−Zapadnaya Leasing Company LLCin amount of U.S. Dollar 6 984 (in−cluding pledged equipment in totalamount U.S. Dollar 1 164) and U.S.Dollar 18 054 (including pledgedequipment in total amount U.S. Dol−lar 3 009), respectively. Loans fromNIKoil Bank mature in November2005.Pledged to the loan agreement withNIKoil Bank property and equipmentof U.S. Dollar 5 535 at net book val−ue as at December 31, 2004.NOTE 16Short−term Debt – Related PartiesInterestrate %December 312004Interestrate %December 312003Nomos−Bank (RR) − 17−21% 19 471Nomos−Bank (U.S. Dollar) 9% 38 910 15% 20 000Linex (RR) 17,6% 3 246 −Total short−term debt– related parties 42 156 39 471NOTE 17Long−term DebtInterestrate %December 312004Interestrate %December 312003Standard Bank London (U.S. Dollar) LIBOR + 3,5−4,0% 105 000 −Magadan Region Administration (U.S. Dollar) 6% 5 856 6% 6 135MDM−Bank (U.S. Dollar) − 16% 26 525Bonds (RR) 17−19% 27 029 17−19% 25 463Less current portion of long−term loans (21 318) (27 207)Total long−term debt 116 567 30 916In March 2003 ISPA “Polymetal” issued 750 000 non−convertible bonds at par value of U.S. Dollar 27 029. The bondsmature in 2006. All bonds are issued and registered both as at December 31, 2003 and December 31, 2004. Inter−est on bonds amounting to 17−19% is paid semiannually.NOTE 17Long−term Debt (continued)Long−term debt is repayable as follows:December 31, 2004 December 31, 20031 to 2 years 52 667 −2 to 3 years 19 400 30 9163 to 4 years 19 500 −4 to 5 years 25 000 −116 567 30 916In December 2004 the Companyreceived the long−term loan totalingU.S. Dollar 105 000 from StandardBank London for the purpose of re−financing its debts and developmentof current operations. Loan shouldbe repaid in monthly installmentsstarting April 1, 2005 with the lastpayment being made in 2009. Ac−cording to the loan agreement withStandard Bank London the Groupshould meet certain financial andnon−financial covenants to avoidwithdrawal of loan facility.Appendix #1: Consolidated financial statements63
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Annual report2004St. Petrsburg1
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Annual Report2004St. Petersburg3
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FinancialhighlightIndicator Meas. u
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2004Key eventsFebruarynew managemen
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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 and 52: JSC “ISPA “POLYMETAL”STATEMEN
Page 53 and 54: JSC “ISPA “POLYMETAL”CONSOLID
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: Investments mainly represent or−d
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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