dependent upon the effective−ness of economic, financial andmonetary measures undertakenby the Government, together withtax, legal, regulatory, and politicaldevelopments.Environmental contingenciesThe enforcement of environ−mental regulation in the RussianFederation is evolving and theenforcement posture of govern−ment authorities is continually be−ing reconsidered. The Group pe−riodically evaluates its obligationsunder environmental regulations.As obligations are determined,they are recognised immediately.Potential liabilities, which mightarise as a result of changes in ex−isting regulations, civil litigation orlegislation, cannot be estimatedbut could be material. In the cur−rent enforcement climate underexisting legislation, managementbelieves that there are no signifi−cant liabilities for environmentaldamage.Legal contingenciesDuring the year, the Group wasinvolved in a number of court pro−ceedings (both as a plaintiff and adefendant) arising in the ordinarycourse of business. In the opinionof management, there are no cur−rent legal proceedings or otherclaims outstanding, which couldhave a material effect on the re−sult of operations or financial posi−tion of the Group and which havenot been accrued or disclosed inthese consolidated financial state−ments.Insurance policiesThe Group holds no insurancepolicies in relation to its assets,operations, or in respect of publicliability or other insurable risks, ex−cept for insurance for property intotal amount of U.S. Dollar 22 474(including insurance for assetsunder capital lease in amount U.S.Dollar 9 419)Sales commitments.In accordance with the loan agree−ment of ZAO Zoloto SevernogoUrala with Nomos−Bank, Nomos−Bank has a priority right to buygold produced in 2005 from Zo−loto Severnogo Urala. The price isnot specified in the agreement.Taxation.Russian tax, currency and cus−toms legislation is subject to vary−ing interpretations, and changes,which can occur frequently. Man−agement’s interpretation of suchlegislation as applied to the trans−actions and activity of the Groupmay be challenged by the relevantregional and federal authorities.Recent events within the RussianFederation suggest that the taxauthorities may be taking a moreassertive position in their inter−pretation of the legislation andassessments, and it is possiblethat transactions and activitiesthat have not been challenged inthe past may be challenged. As aresult, significant additional taxes,penalties and interest may be as−sessed. Fiscal periods remainopen to review by the authoritiesin respect of taxes for three cal−endar years preceding the yearof review. Under certain circum−stances reviews may cover lon−ger periods.As at 31 December <strong>2004</strong> man−agement believes that its inter−pretation of the relevant legisla−tion is appropriate and that it isprobable that the Group’s tax,currency and customs positionswill be sustained. Where manage−ment believes it is probable thata position cannot be sustained, anappropriate amount has been ac−crued for in these financial state−ments.Political environment.The operations and earnings ofthe Company are affected by po−litical, legislative, fiscal and regu−latory developments, includingthose related to environmentalprotection. Because of the capi−tal−intensive nature of the indus−try, the Company is also subjectto physical risks of various kinds.The nature and frequency ofthese developments and eventsassociated with these risks, whichgenerally are not covered by in−surance, as well as their effect onfuture operations and earnings,are not predictable.70 <strong>Polymetal</strong> annual report <strong>2004</strong>
NOTE 30Subsequent eventsBank loan repaymentIn April – June 2005, the Companyrepaid U.S. Dollar 6 700 of totalU.S. Dollar 105 000 long−termloan from Standard Bank London.Appendix #1: Consolidated financial statements71
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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
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MineralResourcesVladimir T. Ryabukh
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Igor V. Venatovsky,First Deputy CEO
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Sergey A. Cherkashin,CFOSalesFinanc
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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
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- 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: In accordance with FAS 141, thecont
- 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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