549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 549300FUXVT7TF6ZKV71 2020-12-31 549300FUXVT7TF6ZKV71 2020-01-01 549300FUXVT7TF6ZKV71 2019-12-31 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 549300FUXVT7TF6ZKV71 2019-01-01 549300FUXVT7TF6ZKV71 2020-01-01 PG2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2020-12-31 PG2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 PG2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2020-12-31 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2020-12-31 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2020-12-31 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2020-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2020-12-31 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2020-12-31 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-12-31 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2019-01-01 PG2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 PG2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2019-01-01 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2019-01-01 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2019-01-01 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2019-01-01 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2019-01-01 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2019-01-01 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2019-01-01 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2019-01-01 2019-12-31 ifrs-full:NoncontrollingInterestsMember iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 
PJSC “Polyus”
 
Consolidated financial statements
for the year ended 31 December 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2
PJSC “POLYUS”
 
CONSOLIDATED STATEMENT
 
OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
Year ended
31 December
Notes
2020
2019
Gold sales
 
5
4,956
3,965
Other sales
42
40
Total revenue
4,998
4,005
Cost of gold sales
 
6
(1,389)
(1,405)
Cost of other sales
(34)
(33)
Gross profit
3,575
2,567
Selling, general and administrative expenses
 
7
(336)
(295)
Other expenses, net
 
8
(173)
(55)
Operating profit
3,066
2,217
Finance costs, net
 
9
(232)
(254)
Interest income
22
48
(Loss) / gain on revaluation of derivative financial instruments, net
 
10
(544)
93
Foreign exchange (loss) / gain, net
(250)
273
Profit before income tax
2,062
2,377
Income tax expense
 
11
(416)
(433)
Profit for the year
1,646
1,944
Profit for the year attributable to:
Shareholders of the Company
1,598
1,931
Non-controlling interests
48
13
 
1,646
1,944
Weighted average number of ordinary shares ’000
-
 
for basic earnings per share
 
20
134,360
133,017
-
 
for dilutive earnings per share
 
20
134,894
133,317
Earnings per share (US Dollar per share)
-
 
basic
11.89
14.52
-
 
dilutive
11.85
14.48
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
PJSC “POLYUS”
 
CONSOLIDATED STATEMENT
 
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
Year ended
31 December
2020
2019
Profit for the year
1,646
1,944
Other comprehensive (loss) / income for the year
Items that may be subsequently reclassified to profit or loss:
Effect of translation to presentation currency
(321)
105
Other comprehensive (loss) / income for the year
(321)
105
Total comprehensive income for the year
1,325
2,049
Total comprehensive income for the year attributable to:
Shareholders of the Company
1,296
2,025
Non-controlling interests
29
24
1,325
2,049
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
PJSC “POLYUS”
 
CONSOLIDATED STATEMENT
 
OF FINANCIAL POSITION
AT 31 DECEMBER 2020
 
(in millions of US Dollars)
 
31 December
Notes
2020
2019
Assets
Non-current assets
Intangible assets
 
12
132
123
Property, plant and equipment
 
13
4,121
4,680
Inventories
 
15
519
431
Deferred tax assets
 
25
109
134
Derivative financial instruments
 
16
17
98
Other receivables
25
30
Other non-current assets
3
6
4,926
5,502
Current assets
Inventories
 
15
595
659
Deferred expenditure
17
17
Derivative financial instruments
 
16
-
1
Advances paid to suppliers and prepaid expenses
29
26
Trade and other receivables
 
17
133
197
Taxes receivable
 
18
120
111
Income tax prepaid
30
13
Cash and cash equivalents
 
19
1,445
1,801
2,369
2,825
Total assets
7,295
8,327
Equity and liabilities
Capital and reserves
Share capital
 
20
5
5
Additional paid-in capital
 
20
2,410
2,049
Treasury shares
 
20
(288)
(103)
Translation reserve
(3,044)
(2,727)
Retained earnings
3,272
2,586
Equity attributable to shareholders of the Company
2,355
1,810
Non-controlling interests
91
103
2,446
1,913
Non-current liabilities
Borrowings
 
21
3,329
4,382
Derivative financial instruments
 
16
330
130
Deferred tax liabilities
 
25
259
308
Site restoration, decommissioning and environmental obligations
63
64
Other non-current liabilities
57
32
Deferred revenue
 
22
-
126
Deferred consideration
 
23
-
119
4,038
5,161
Current liabilities
Borrowings
 
21
225
704
Derivative financial instruments
 
16
42
7
Trade and other payables
 
24
399
355
Taxes payable
 
26
101
81
Income tax payable
 
44
49
Deferred consideration
 
23
-
57
811
1,253
Total liabilities
4,849
6,414
Total equity and liabilities
7,295
8,327
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
PJSC “POLYUS”
 
CONSOLIDATED STATEMENT
 
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
Equity attributable
 
to shareholders
 
of the Company
Notes
Number of
outstanding
shares ’000
Share
capital
Additional
paid-in
capital
Treasury
shares
Translation
reserve
Retained
earnings
Total
Non-
controlling
interests
Total
Balance
 
at 31
 
December
 
2018
 
132,339
5
1,949
(67)
(2,824)
1,300
363
87
450
Profit
 
for the
 
year
 
-
-
-
-
-
1,931
1,931
13
1,944
Other
 
comprehensive
 
income
 
-
-
-
-
94
-
94
11
105
Total comprehensive
 
income
 
-
-
-
-
94
1,931
2,025
24
2,049
Equity-settled
 
share-based
 
compensation
 
(LTIP), net
 
of tax
 
-
-
29
-
-
-
29
-
29
Shares
 
awarded
 
under
 
LTIP
 
 
487
-
(18)
27
-
(12)
(3)
-
(3)
Issue
 
and buy-back
 
of treasury
 
shares
 
-
-
83
(83)
-
-
-
-
-
Purchase
 
of additional
 
ownership
 
in SL
 
Gold (payable
 
in treasury
shares)
 
370
-
6
20
3
-
29
-
29
Dividends
 
declared
 
to shareholders
 
of non-controlling
 
interests
 
 
-
-
-
-
-
-
-
(8)
(8)
Dividends
 
declared
 
to shareholders
 
of the
 
Company
 
 
-
-
-
-
-
(633)
(633)
-
(633)
Balance
 
at 31
 
December
 
2019
 
133,196
5
2,049
(103)
(2,727)
2,586
1,810
103
1,913
Profit
 
for the
 
year
 
-
-
-
-
-
1,598
1,598
48
1,646
Other
 
comprehensive
 
loss
 
-
-
-
-
(302)
-
(302)
(19)
(321)
Total comprehensive
 
income
 
/ (loss)
 
-
-
-
-
(302)
1,598
1,296
29
1,325
Equity-settled
 
share-based
 
compensation
 
(LTIP), net
 
of tax
 
20
-
-
45
-
-
-
45
-
45
Shares
 
awarded
 
under
 
LTIP
 
20
370
-
(13)
36
(5)
(24)
(6)
-
(6)
Execution
 
of conversion
 
option
 
by bondholders
 
21
449
-
317
43
(3)
-
357
-
357
Issue
 
of treasury
 
shares
 
to a subsidiary
 
20
-
-
436
(436)
-
-
-
-
-
Settlement
 
of share
 
loan
 
20
1,808
-
(429)
436
(7)
-
-
-
-
Purchase
 
of additional
 
ownership
 
in SL
 
Gold
 
23
246
-
5
24
-
6
35
(6)
29
Increase
 
of ownership
 
in subsidiaries
 
32
5
-
-
1
-
(13)
(12)
(24)
(36)
Share
 
buyback
 
20
(1,361)
-
-
(287)
-
(14)
(301)
-
(301)
Dividends
 
declared
 
to shareholders
 
of non-controlling
 
interests
 
-
-
-
-
-
-
-
(11)
(11)
Dividends
 
declared
 
to shareholders
 
of the
 
Company
 
20
-
-
-
-
-
(860)
(860)
-
(860)
Other
 
(8)
-
-
(2)
-
(7)
(9)
-
(9)
Balance
 
at 31
 
December
 
2020
134,705
5
2,410
(288)
(3,044)
3,272
2,355
91
2,446
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
PJSC “POLYUS”
 
##D<MD_ENG_CONSOLIDATED / CONDENSED CONSOLIDATED
 
INTERIM STATEMENT
 
>
STATEMENT
 
OF CASH FLOWS
 
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
Year ended
31 December
Notes
2020
2019
Operating activities
Profit before income tax
2,062
2,377
Adjustments for:
Finance costs, net
 
9
232
254
Interest income
(22)
(48)
Loss / (gain) on revaluation of derivative financial instruments, net
 
10
544
(93)
Depreciation and amortisation
349
367
Foreign exchange loss / (gain), net
250
(273)
Other
93
76
3,508
2,660
Movements in working capital
Inventories
(122)
(151)
Deferred expenditure
(4)
(1)
Trade and other receivables
7
(82)
Advances paid to suppliers and prepaid expenses
(11)
4
Taxes receivable
(29)
(9)
Trade and other payables and accrued expenses
43
1
Taxes payable
69
2
Cash flows from operations
3,461
2,424
Income tax paid
(415)
(250)
Net cash generated from operating activities
3,046
2,174
Investing activities
1
Purchase of property, plant and equipment (excluding purchase of additional ownership in LLC SL Gold
and construction of the Omchak high-voltage power grid)
(776)
(769)
Purchase of additional ownership in LLC SL Gold
 
23
(156)
(28)
Payments for the Omchak high voltage power grid
 
5
(24)
(26)
Refund of unutilised part of government grant
 
22
(14)
-
Interest received
23
48
Other
29
27
Net cash utilised in investing activities
(918)
(748)
Financing activities
1
Proceeds from borrowings
112
1,300
Repayment of borrowings
(1,144)
(405)
Interest paid
(237)
(272)
Commissions on borrowings paid
(4)
(6)
Payments on initial exchange of principal amounts under cross currency swaps
 
-
(28)
Payments on expiration of cross-currency swaps
 
-
(472)
Repayments of lease liability
 
(15)
(15)
Net proceeds on exchange of interest payments under cross currency swaps
 
9
30
42
Net proceeds on exchange of interest payments under interest rate swaps
 
9
(2)
2
Payments for close out of revenue stabilizer programme
 
16
(32)
(30)
Increase of ownership in subsidiaries
 
32
(12)
-
Payment for share buyback
 
20
(268)
-
Dividends paid to shareholders of the Company
 
20
(844)
(638)
Dividends paid to shareholders of non-controlling interests
(11)
(9)
Other
(9)
-
Net cash utilised in financing activities
(2,436)
(531)
Net (decrease) / increase in cash and cash equivalents
(308)
895
Cash and cash equivalents at the beginning of the year
 
19
1,801
896
Effect of foreign exchange rate changes on cash and cash equivalents
(48)
10
Cash and cash equivalents at the end of the year
 
19
1,445
1,801
 
1
 
Significant non-cash transactions relating to investing (right-of-use assets recognition, LTIP and deferred consideration payments in treasury shares)
and financing activities (lease
 
liabilities recognition) are disclosed in the notes 14, 20 and 23 to these ##D<MD_ENG_consolidated / condensed
consolidated interim statement> financial statements, respectively.
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
7
1.
 
GENERAL
Public Joint Stock Company Polyus (the “Company” or “Polyus”) was incorporated in Moscow,
Russian Federation, on 17 March 2006
.
The principal activities of the Company and its controlled entities (the “group”) are the
extraction,
refining and sale of gold
. The mining and processing facilities of the group are located in the
Krasnoyarsk, Irkutsk, Magadan regions and the Sakha Republic of the
Russian Federation
. The
group also performs research and exploration works. Further details regarding the nature of the
business of the significant subsidiaries of the group are presented in note 32.
The shares of the Company are “level one” listed on the Moscow Exchange. Global depository
shares (“GDSs”) each representing interest in ½ of ordinary share in the Company are traded on
the main market for listed securities of the London Stock Exchange plc (“LSE”). The controlling
shareholder of the Company is
Polyus Gold International Limited
 
(“PGIL”), a company registered in
Jersey. The most senior parent of the Company is Wandle
 
Holdings Limited, а company registered
in Cyprus. As of 31 December 2020 and 2019, the ultimate controlling party of the Company was
Mr.
Said Kerimov
.
 
 
2.
 
BASIS
 
OF PREPARATION AND
 
PRESENTATION
 
2.1. Going concern
In assessing the appropriateness of the going concern assumption, the Directors have taken account
of the group’s financial position, expected
 
future trading
 
performance,
 
its borrowings,
 
available
 
credit
facilities
 
and its capital expenditure commitments, expectations of the future gold price, currency
exchange rates and other risks facing the group. After making appropriate enquiries, the Directors
consider that the group has adequate resources to continue in operational existence for at least
 
the next 12 months from the date of signing these consolidated financial statements and that it is
appropriate to adopt the going concern basis in preparing these consolidated financial statements.
 
 
2.2. Compliance with the International Financial Reporting Standards
The consolidated financial statements have been prepared in accordance with IFRS as issued by
the International Accounting Standards Board (“IASB”). IFRS include the standards and
interpretations approved by the IASB including IFRS, International Accounting Standards (“IAS”) and
interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).
 
2.3. Basis of presentation
The entities of the group maintain their accounting records in accordance with the laws, accounting
and reporting
 
regulations
 
of the
 
jurisdiction
 
in which
 
they
 
are
 
incorporated
 
and registered.
 
The accounting
principles and financial reporting procedures in these jurisdictions may differ substantially from those
generally accepted under IFRS. Accordingly, such financial information has been adjusted to ensure
that the consolidated financial statements are presented in accordance with IFRS.
 
The consolidated
 
financial
 
statements
 
of the
 
group
 
are prepared
 
on the
 
historical
 
cost
 
basis,
 
except
 
for
derivative
 
financial
 
instruments
 
and certain
 
trade
 
receivables,
 
which are accounted for at fair value, as
explained in the accounting policies below.
 
 
2.4. IFRS standards first time applied in 2020
The following is a list of new or amended IFRS standards and interpretations that have been applied
by the group in these consolidated financial statements:
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
8
Title
Subject
Effective for annual
periods beginning
on or after
Effect
 
on the consolidated
 
financial statements
 
Amendment IFRS 3
Business combinations
1 January 2020
No effect
Amendments IAS 1 and IAS 8
Definition of material
1 January 2020
No effect
Amendments to References to
 
the Conceptual Framework in
 
IFRS Standards
Updates of references to or from
 
the Conceptual Frameworks to
 
the IFRS standards
1 January 2020
No effect
Interest Rate Benchmark Reform
phase 1 (Amendments to IFRS 9,
IAS 39 and IFRS 7)
Identification of interest rate in hedge
accounting
1 January 2020
No effect
Amendment to IFRS 16
Covid-19-related rent concessions
1 June 2020
No effect
 
2.5. IFRS standards to be applied after 2020
The following standards and interpretations, which have not been applied in these consolidated
financial statements, were in issue but not yet effective:
Title
Subject
Effective for annual
periods beginning
on or after
Expected effect
 
on the consolidated
 
financial statements
Interest Rate Benchmark Reform
phase 2 (Amendments to IFRS 9,
IAS 39 and IFRS 7)
Replacement of LIBOR with alternative
Risk-free Rates
1 January 2021
No effect
Amendment IFRS 3
 
Updates of references to or from
 
the Conceptual Frameworks to
 
the IFRS standards
 
 
1 January 2022
 
No effect
Amendment IAS 16
 
 
Proceeds before Intended Use
 
 
1 January 2022
 
Under review
Amendment IFRS 1
 
Subsidiary as a first-time adopter
 
 
1 January 2022
 
No effect
Amendment IAS 41
 
Taxation in fair value measurements
 
 
1 January 2022
 
No effect
Amendment IAS 37
 
 
Onerous Contracts—Cost of Fulfilling
a Contract
 
 
1 January 2022
 
No effect
Amendment IFRS 9
 
 
Fees in the ‘10 per cent’ test for
derecognition of financial liabilities
 
 
1 January 2022
 
No effect
IFRS 17
Insurance contracts
1 January 2023
No effect
Amendments to IFRS 17
Insurance contracts
1 January 2023
No effect
Amendment IAS 1
 
 
Classification of Liabilities as Current or
Non-Current
 
 
1 January 2023
 
No effect
 
 
3.
 
SIGNIFICANT ACCOUNTING POLICIES
 
 
3.1. Basis of consolidation
 
Subsidiaries
The consolidated financial statements of the group incorporate the financial statements of
the Company and all its subsidiaries, from the date that control effectively commenced until the date
that control effectively ceased. Control is achieved where the Company has the power over
the investee, exposure or rights to variable returns from its involvement with the investee and the
ability to use its power to affect its returns. The Company reassesses whether or not it controls
an investee if facts and circumstances indicate that there are changes to one or more of the three
elements of control defined above. Subsidiaries are included in the consolidated financial results of
the Company from the effective date of acquisition up to the effective date of loss of control.
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
9
For non-wholly owned, controlled subsidiaries, the net assets attributable to outside equity
shareholders are presented as non-controlling interests in the equity section of the consolidated
statement of financial position. The non-controlling interest may initially be measured either at fair
value or at the non-controlling interest’s proportionate share of the fair value of the subsidiary’s
identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition
basis.
 
All intra-group balances, transactions and any unrealised profits or losses arising from intra-group
transactions are eliminated on consolidation.
 
Functional currency
The functional currency of the Company and all the subsidiaries of the group is the Russian Rouble
(“RUB”).
3.2. Presentation currency
 
The group presents its consolidated financial statements in the US Dollar (“USD”), as management
believes it is a more convenient presentation currency for international users of the consolidated
financial statements of the group as it is a common presentation currency in the mining industry.
The translation of the financial statements of the group entities from their functional currencies to
the presentation currency is performed as follows:
 
All
 
assets
 
and
 
liabilities
 
are
 
translated
 
at
 
closing
 
exchange
 
rates
 
at
 
each
 
reporting
 
date;
 
 
All
 
income
 
and
 
expenses
 
are
 
translated
 
at
 
the
 
monthly
 
average
 
exchange
 
rates,
 
except
 
for
 
revenue and significant transactions that are translated at rates on the date of such
transactions;
 
Resulting
 
e
xchange
 
differences
 
are
 
included
 
in
 
the
 
Translation reserve
 
in equity (on disposal of
such entities this
Translation reserve
 
is reclassified into the consolidated
 
statement of profit or
loss); and
 
In
 
the
 
consolidated
 
statement
 
of
 
cash
 
flows,
 
cash
 
balances
 
at
 
the
 
beginning
 
and
 
end
 
of
 
each
 
reporting period presented are translated at exchange rates at the respective dates. All cash
flows are translated at the monthly average exchange rates, except for significant transactions
that are translated at rates on the date of such transactions.
 
As of 31 December 2020, year-end RUB/ US Dollar exchange rate used in the preparation of
the consolidated financial statements was 73.88 (31 December 2019: 61.91).
 
3.3. Foreign currencies
 
Transactions not denominated in RUB (functional currency of the Company and all the subsidiaries
of the group) are recorded at the exchange rate prevailing on the date of the transactions. All
monetary assets and liabilities not denominated in RUB are translated at the exchange rates
prevailing at the reporting date. Non-monetary items carried at historical cost are translated
at the exchange rate prevailing on the date of the transaction.
 
3.4. Revenue
 
The group entity recognises revenue when or as a performance obligation is satisfied, i.e. when
control of the goods or services underlying the particular performance obligation is transferred to the
customer.
Refined gold sales
The group recognises revenue from refined
 
gold sales upon physical shipment of gold from refinery
plant to customers, which are major Russian banks. Gold price is based on prevailing spot market
metal prices. Cash payments are received in advance or within several days after sale.
 
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10
Gold-antimony and gold flotation concentrates sales
The group has a number of sales contracts for gold flotation concentrates, which contain provisional
pricing terms depending on quantity and price. Revenue from sales of gold flotation concentrates is
recognised upon shipments from the railroad stations, seaports or group’s warehouses depending on
the date of passing the title as per contracts with customers.
 
Revenue from sales of gold within gold flotation concentrates is recognised in
Gold in flotation
concentrate
sales
 
within
Gold sales
. The net income from sale of antimony contained in the gold-
antimony flotation concentrate is treated as by-product sales and recognised as a decrease to
cost
of gold sales
.
 
Cash payments are received within several months after the shipment when customers have
processed the concentrates and extracted gold and antimony.
The adjustment to the quantity of gold in gold flotation concentrates delivered is treated as a variable
consideration, thus completely recognised in
Gold in flotation concentrate sales
within
Gold sales
.
 
The adjustment to the gold price depends on gold market prices, therefore represents a sales
contract with an embedded derivative. The embedded derivative relates to the trade receivables and
fails the “solely payments of principal and interest” test under IFRS 9, thus such trade receivables
are recognised and measured at fair value through profit or loss (FVTPL). The revaluation result is
presented within
(Loss) / gain on revaluation of derivative financial instruments, net
.
 
Other revenue
Other revenue comprises mainly sales of electricity and materials and supplies. Revenue from sales
is recognised when a contract exists, delivery has taken place, a quantifiable price has been
established or can be determined and the receivables are likely to be recovered. Delivery takes
place when the risks and benefits associated with ownership are transferred to the buyer.
3.5. Income tax
 
The income tax expense or benefit for the period consists of two components: current and deferred.
Income tax expense is recognised in the consolidated statement of profit or loss except to the extent
it relates to a business combination or items recognised directly in the consolidated statement of
changes in equity (the group does not have any significant amounts of income tax recognised
directly in the consolidated statement of changes in equity).
Current tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted at the reporting date in the countries where the group
operates and generates taxable income.
Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes provisions where
appropriate.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in
the financial statements of the separate legal entities and the corresponding tax bases used in
the computation of taxable profit and are accounted for using the balance sheet liability method.
 
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax
assets are generally recognised for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those deductible temporary differences
can be utilised.
 
 
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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the reporting date. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which
the group expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
 
Deferred tax assets and liabilities are not recognised for taxable temporary differences associated
with investments in subsidiaries because the group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
 
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.
3.6. Dividends
 
Dividends and related taxation thereon are recognised as a liability in the period in which they have
been declared and become legally payable.
Retained earnings legally distributable by the Company are based on the amounts available for
distribution in accordance with the applicable legislation and as reflected in the statutory financial
statements of the individual subsidiaries of the group. These amounts may differ significantly from
the amounts calculated on the basis of IFRS.
3.7. Intangible assets
 
Intangible assets are carried at cost less accumulated amortisation and impairment losses.
Intangible assets with a finite useful life are amortised on a straight-line basis over the estimated
economic useful life of the asset. The amortisation of such intangible assets is included in
Cost of
sales
 
or
Selling, general and administrative
 
expenses based on whether intangible asset is used in
operating activities or not. Intangible assets with an infinite useful life are not amortised.
The remaining useful lives of the group’s intangible assets are from 1 to 15 years.
The group applies IAS 36
Impairment of Assets
 
to determine whether an intangible asset is impaired
and accounts for any identified impairment loss when incurred.
 
 
3.8. Property, plant and equipment
 
Fixed assets
Fixed assets are recorded at cost less accumulated depreciation. Fixed assets include the cost of
acquiring and developing mining properties, pre-production expenditure and mine infrastructure,
processing plant, mineral rights and mining and exploration licences and the present value of future
mine closure, rehabilitation and decommissioning costs.
Fixed assets are amortised on a straight-line basis over the estimated economic useful life of
the asset, or the remaining life-of-mine in accordance with the mine operating plans (MOPs),
whichever is shorter.
 
Depreciation is charged from the date a new mine reaches commercial production quantities and is
included in the
Cost of sales
,
Selling, general and administrative expenses
or
 
Stripping activity
assets
accordingly. The estimated remaining useful lives of the group’s significant mines and
processing facilities based on the MOPs are as follows:
 
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(in millions of US Dollars)
 
12
 
Olimpiada
10 years
Blagodatnoye
15 years
Verninskoye
17 years
Kuranakh
17 years
Natalka
22 years
 
Stripping activity asset
The group incurs stripping costs during the production phases of its surface mining operations.
 
The group identifies separate components towards which the stripping costs are incurred for the ore
bodies in each of its mines. An identifiable component is a specific volume of the ore body that is
made more accessible by the stripping activity. For the purposes of identification of separate
components the group uses MOPs. Each discrete stage of mining identified in a MOP is considered
as a unit of account. If the MOP identifies several discrete stages which are scheduled to be mined
consecutively (one after the another) or located in the different parts of the mine, these stages are
identified as components.
The
 
group uses an allocation basis that compares volume of waste extracted with expected volume,
for a given volume of ore production in the period for the identified component of the ore body to
determine if stripping costs are to be allocated to stripping activity asset or the cost of inventory.
The stripping activity asset is initially measured at cost, which is the accumulation of costs directly
incurred to perform the stripping activity that improves access to the identified component of the ore
body, plus an allocation of directly attributable overhead costs.
After initial recognition the stripping activity asset is carried at cost less depreciation using unit-of
production method based on ore extracted and any impairment losses.
Capital construction in progress
Assets under construction at operating mines are accounted for as capital construction in progress.
When the capital construction in progress is completed and in a condition necessary to be capable of
operating in the manner intended by management, the objects are reclassified to fixed assets.
Capital construction in progress is not depreciated.
 
Exploration and evaluation assets
Exploration and evaluation expenditure is capitalised when the exploration and evaluation activities
have not reached a stage that permits a reasonable assessment of the existence of commercially
recoverable gold resources. When the technical feasibility and commercial viability of extracting
a gold resource are demonstrable and a decision has been made to develop the mine, capitalised
exploration and evaluation assets are reclassified to
Mine under development or Fixed assets
.
 
3.9. Impairment of long-lived tangible assets
 
Long-lived tangible assets are grouped at the lowest level for which identifiable cash flows are
largely independent of cash flows of other assets, which is generally at the individual mine level.
An impairment review of long-lived tangible assets is carried out when there is an indication that
those assets have suffered an impairment loss. There were no such indicators during 2020 and
2019.
 
Exploration and
 
evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable
amount. The following facts and circumstances, among others, indicate that exploration and
evaluation assets must be tested for impairment:
 
The
 
term
 
of
 
the
 
exploration
 
licence
 
in
 
the
 
specific
 
area
 
has
 
expired
 
during
 
the
 
reporting
 
period
 
or will expire in the near future, and is not expected to be renewed;
 
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(in millions of US Dollars)
 
13
 
Substantive
 
expenditure
 
on
 
further
 
exploration
 
for
 
and
 
evaluation
 
of
 
gold
 
resources
 
in
 
the specific area is neither budgeted nor planned;
 
Exploration
 
for
 
and
 
evaluation
 
of
 
gold
 
resources
 
in
 
the
 
specific
 
area
 
have
 
not
 
led
 
to
 
the discovery of commercially viable quantities of gold resources and the decision was made to
discontinue such activities in the specific area; and
 
Sufficient
 
data
 
exists
 
to
 
indicate
 
that,
 
although
 
a
 
development
 
in
 
the
 
specific
 
area
 
is
 
likely
 
to
 
occur, the carrying amount of the exploration and evaluation asset is unlikely to be recovered
 
in full from successful development or by sale.
3.10. Leases
 
The group assesses all contracts whether they contain leases and recognises a right-of-use asset
and a corresponding lease liability with respect to all lease arrangements in which it is the lessee
except for short-term leases and leases of low value assets.
 
The lease liability is initially measured at the present value of the lease payments discounted by
using the rate implicit in the lease or incremental borrowing rate.
The lease liability is subsequently measured at amortised cost using the effective interest method
and presented within
Borrowings
 
in the consolidated statement of financial position.
 
The group excludes the following lease agreements from the measurement of lease liabilities and
accounts lease payments associated with those leases as an expense:
 
With
 
variable
 
lease
 
payments
 
that
 
do
 
not
 
depend
 
on
 
index
 
or
 
a
 
rate;
 
and
 
 
Those
 
to
 
explore
 
for
 
or
 
use
 
minerals
 
and
 
similar
 
non
-
regenerative
 
resources.
 
The right-of-use assets comprise the initial measurement of the corresponding lease liability.
They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated on a straight-line basis over the shorter period of lease term and
useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented within
Property, Plant and Equipment
 
in the consolidated
statement of financial position.
The group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any
identified impairment loss when incurred.
 
 
3.11. Financial instruments
 
Financial assets and financial liabilities are initially recognised at fair value when the group becomes
a party to the contractual provisions of the instruments.
The group subsequently measures its financial instruments as follows:
 
Trade
 
receivables
 
for
 
gold
 
flotation
 
concentrates,
 
derivatives
 
 
at
 
FVTPL
 
with
 
effect
 
of
 
fair
 
value change presented within note 10;
 
 
Borrowings,
 
cash
 
and
 
cash
 
equivalents,
 
trade
 
and
 
receivables
 
(except
 
for
 
those
 
at
 
FVTPL),
 
deferred consideration, trade and other payables – at amortised cost using the effective
interest method.
 
The group neither applies hedge accounting nor has any financial instruments measured at fair value
through other comprehensive income.
Trade receivables for gold flotation concentrates
 
Accounting of trade receivables for gold flotation concentrates is disclosed in 3.4
Revenue
.
 
Derivatives
The group enters into a variety of derivative financial instruments to manage its exposure to interest
rate, foreign exchange rate risk and risk of volatility in the gold price.
 
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14
Derivatives are carried at fair value through profit or loss. Changes in the fair value of the derivative
financial instruments are recognised within
(Loss) / gain on revaluation of derivative financial
instruments, net
of the consolidated statement of profit or loss.
 
Gain or loss on the exchange of
interest payments under cross-currency and interest rate swaps are
 
recognised within
Finance cost,
net
.
 
Convertible bonds contained both a derivative (
conversion option on convertible bonds
) and a non-
derivative (
convertible bond
) component. As the economic characteristics and risks of the embedded
derivative were not closely related to those of the host contract, the hybrid contract itself was not
carried at FVTPL. The
Convertible bonds
were accounted
 
at amortised cost
 
using the effective
interest method, while the
Conversion option on convertible bonds
was accounted at FVTPL.
 
Borrowings
Borrowings (consisting of bonds issued, bank loans and lease liabilities) are initially recognised at
fair value adjusted for directly attributable transaction costs and are subsequently accounted at
amortised cost using the effective interest method.
 
Amortisation under the effective interest method (interest expense) and gains or losses on de-
recognition or debt modification are recognised as profit or loss in the consolidated statement of
income within
Finance costs, net
.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, cash deposits and highly liquid investments
which are:
 
Readily
 
convertible
 
to
 
known
 
amounts
 
of
 
cash
 
and
 
are
 
subject
 
to
 
an
 
insignificant
 
risk
 
of
 
changes in value; or
 
With
 
original
 
maturities
 
of
 
three
 
months
 
or
 
less.
 
Impairment of financial assets
Cash and cash equivalents and non-current receivables that are determined to have a low credit risk
at the reporting date and for which credit risk has not increased significantly since initial recognition,
are measured based on 12-month expected credit loss (ECL).
 
Lifetime ECL’s are recognised in respect of current receivables.
 
The expected credit losses on these financial assets are estimated at each reporting date based
on the group’s historical credit loss experience, adjusted for factors that are specific to the debtors,
general economic conditions and an assessment of both the current as well as the forecast direction
of conditions at the reporting date, including time value of money where appropriate.
 
Fair value
 
 
Accounting standards require that the fair value of financial instruments reflects their credit quality,
and also changes in credit quality where there is evidence that this has occurred. The credit risk
associated with the group’s derivative financial instruments is reflected in its derivative valuations.
This credit factor is adjusted over time to reflect the reducing tenor of the instrument and is updated
where the credit risk associated with the derivative has clearly changed based on market
transactions and prices.
 
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FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
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3.12. Inventories
 
Refined gold, ore stockpiles and gold-in-process
Stockpiles are valued at a lower of the average production costs per unit of ore mined and net
realisable value. Gold-in-process, refined gold and gold in flotation concentrate are valued at a lower
of the average production costs per recoverable gold and net realisable value. Costs are assigned to
individual items of inventory on a weighted average cost basis.
 
Net realisable value of long-term stockpiles is estimated in real terms by calculating the selling price
less all costs still to be incurred in converting the relevant inventory to saleable product, and
delivering it to the customer, subject to an applicable discount factor.
 
The selling price is estimated
on long-term consensus gold price forecasts, multiplied on long-term consensus exchange-rate
forecasts, gold content determined under group’s production reports and recovery coefficients
expected for a given ore type. Costs still to be incurred in converting the stockpile to refined gold are
determined based on historical processing costs. Timing for discounting is determined based on
management plans to process each type of ore or the life of the mine.
 
Materials and supplies
Materials and supplies consist of consumable materials and are stated at the lower of cost or net
realisable value. Costs of materials and supplies are determined on a weighted average cost basis.
 
Silver and antimony in gold-antimony flotation concentrate
Silver and a gold-antimony flotation concentrate are by-products of the group’s gold production,
which are valued at their net realisable value.
 
3.13. Deferred expenditure
 
Deferred expenditure relates to the preparation for the seasonal alluvial mining activities comprised
of excavation costs, general production and specific production overhead costs and releases in the
statement of profit or loss when the gold is extracted during the mining season.
3.14.
 
Government grants
 
Government grants are not recognised until there is reasonable assurance that the grants will be
received and the group will comply with the conditions attached to them.
Government grants whose primary condition is that the group should purchase, construct or
otherwise acquire property, plant and equipment are recognised as
 
deferred revenue in
the consolidated statement of financial position and amortised to profit or loss on a systematic and
rational basis over the useful lives of property, plant and equipment to which it relates. Amortisation
of deferred revenue starts at the moment when items of property, plant and equipment are put into
operation and is presented as a deduction of depreciation and amortisation charge in the statement
of profit or loss.
3.15.
 
Share-based payments
 
Equity-settled share-based payments to employees and others providing similar services are
measured at the fair value of the equity instruments at the grant date and subsequently expensed on
a straight-line basis over the vesting period, with a corresponding increase in equity. At the end of
each reporting period, the group revises its estimate of the number of equity instruments expected to
vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such
that the cumulative expense reflects the revised estimate, with a corresponding adjustment to
the equity.
 
 
 
 
 
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(in millions of US Dollars)
 
16
4.
 
CRITICAL
 
ACCOUNTING
 
JUDGEMENTS
 
AND KEY
 
SOURCES
 
OF ESTIMATION
 
UNCERTAINTY
 
Preparation of the consolidated financial statements in accordance with IFRS requires the group’s
management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting period. The determination
of estimates requires judgements which are based on historical experience, current and expected
economic conditions, and all other available information. Actual results could differ from those
estimates.
4.1. Critical judgements in applying accounting policies
 
The following
 
critical
 
judgements
 
have been
 
applied when
 
selecting
 
the appropriate
 
accounting
 
policies:
4.1.1. Determination of functional currency
The functional currency of each of the group’s consolidated entities is the currency of the primary
economic environment in which the entity operates. In accordance with IAS 21 the group has
analysed several factors that influence the choice of functional currency and, based on this analysis,
has determined that the functional currency for each consolidated entity of the group is Russian
Rouble.
4.2. Key sources of estimation uncertainty
 
The following are the key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year:
 
Mine
 
operating
 
plans;
 
 
Recoverability
 
of
 
the
 
exploration
 
and
 
evaluation
 
assets;
 
 
Impairment
 
of
 
long
-
lived
 
assets;
 
 
Net
 
realisable
 
value
 
of
 
long
-
term
 
stockpiles;
 
 
Derivative
 
financial
 
instruments
 
valuation;
 
and
 
 
Interpretation
 
of
 
tax
 
legislation
 
and
 
recoverability
 
of
 
deferred
 
tax
 
assets.
 
4.2.1. Mine operating plans
The group estimates ore, stripping volumes and grades for MOPs based on the data that accounts
for Joint Ore Reserves Committee Code (JORC) principles, where applicable, and considering
national regulations. The MOPs are prepared based on geological, technical and economic factors,
including quantities, grades, production techniques, recovery rates, production costs, transport costs,
commodity prices and exchange rates. This process requires complex and difficult geological
judgements and analysis to interpret the data. The MOPs are usually updated annually to account for
the newly obtained information including, but not limited to, resource definition drilling.
MOPs
 
are the best estimates of the group about the expected volume and timing of extraction and
processing of the reserves and resources from the group’s mines. MOPs are used for the planning
and actual extraction of ore from the mines and affect the
 
following amounts in the financial
statements:
 
 
Depreciation
 
and
 
amortisation
 
expense,
 
when
 
an
 
asset
 
is
 
amortised
 
based
 
on
 
the
 
units
-
of
-
production or straight-line basis (if
 
life-of-mine is shorter than the useful economic life of the
asset);
 
 
A
llocation
 
of
 
overburden
 
removal
 
(stripping)
 
costs
 
either
 
to
 
stripping
 
activity
 
asset
 
or
 
the
 
cost
 
of
 
inventory, depending on proportion of ore and waste as per MOPs and actual performance in
the reporting period;
 
Asset
 
retirement
 
obligations
 
due
 
to
 
expectations
 
ab
out
 
the
 
timing
 
or
 
cost
 
of
 
these
 
activities;
 
and
 
 
 
Carrying
 
value
 
of
 
deferred
 
tax
 
assets
 
which
 
depends
 
on
 
ability
 
of
 
the
 
group
 
to
 
realise
 
the
 
related tax benefits and is impacted by the expected results of mine operation and their timing.
 
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(in millions of US Dollars)
 
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4.2.2. Recoverability of exploration and evaluation assets
Management’s judgement is involved in the determination of whether the expenditures which are
capitalised as exploration and evaluation assets may be recouped by future exploitation or sale or
should be impaired. Determining this, management estimates the possibility of finding recoverable
ore reserves
 
related to
 
a particular
 
area of interest.
 
However, these
 
estimates are
 
subject to
 
significant
uncertainties. The group is involved in exploration and evaluation activities and some of its licensed
properties contain gold resources. Management assumes that all licences will be renewed. Many of
the factors, assumptions and variables involved in estimating resources are beyond the group’s
control and may prove to be incorrect over time. Subsequent changes in gold resources estimates
could impact the carrying value of exploration and evaluation assets.
4.2.3. Impairment of long-lived assets
The group reviews the carrying amounts of its long-lived assets to determine whether there is any
indication
 
that those
 
assets are
 
impaired. In
 
making the
 
assessment
 
for impairment
 
indicators,
 
assets
that do not generate independent cash flows are allocated to an appropriate cash-generating unit.
Management
 
necessarily
 
applies its
 
judgement
 
in allocating
 
assets that
 
do not generate
 
independent
cash flows to appropriate cash-generating units and also in estimating the timing and value of
underlying cash flows within the value-in-use calculation. The value-in-use calculations for operating
mines are based on the best available reserve estimates at the time of the analysis such as JORC.
Factors which could impact the underlying cash flows include:
 
Commodity
 
prices
 
and
 
exchange
 
rates;
 
 
Timelines
 
of
 
granting
 
of
 
licences
 
and
 
permits;
 
 
Capital
 
and
 
operating
 
expenditure;
 
and
 
 
Available
 
reserves
 
and
 
resources
 
and
 
future
 
production
 
profile.
 
Subsequent
 
changes to
 
the cash-generating
 
unit allocation
 
or to the
 
timing of cash
 
flows could
 
impact
the carrying
 
value of the
 
respective
 
assets.
4.2.4. Net realisable value of long-term stockpiles
 
The measurement of long-term stockpiles includes the determination of its net realisable value,
which involves significant estimates in future gold prices, Russian Rouble exchange rates, gold
recoveries, future energy, material and other processing
 
costs, timing of refined gold sales and
processing and determination of discount rates.
 
Judgment also exists in estimating the number of contained ounces in ore stockpiles. These
amounts are measured by estimating the number of gold ounces added (based on assay data) and
removed (based on processing data) from the stockpile. Although the quantities of recoverable gold
placed on the stockpiles are reconciled to the quantities of gold actually recovered (metallurgical
balancing), the nature of the process inherently limits the ability to precisely monitor recoverability
levels.
 
4.2.5. Derivative financial instruments valuation
Derivative instruments are carried at fair value and the group evaluates the quality and reliability of
the assumptions and data used to measure fair value.
 
Fair values of
Derivative financial instruments
 
are determined using valuation models based on inputs which are observable in the market (Level
2). The models incorporate various inputs including the credit
 
quality of
 
the group
 
and counterparties.
Changes in
 
inputs are not
 
controllable
 
by the group
 
and may change
 
in future.
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
18
4.2.6. Interpretation of tax legislation and recoverability of deferred tax assets
The group is subject to income taxes in a number of jurisdictions. Significant judgement is required in
determining the group’s provision for income taxes due to the complexity of legislation. There are
many transactions and calculations for which the ultimate tax determination is uncertain. The group
recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes
will be due. Where the final tax outcome of these matters is different from the amounts that were
initially recorded,
 
such differences
 
may impact
 
the income
 
tax and deferred
 
tax provisions
 
in the period
in which such
 
determination
 
is made.
Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer
probable
 
that sufficient
 
taxable profit
 
will be available
 
to allow all
 
or part of
 
the deferred
 
tax asset
 
to be
utilised.
 
The estimation
 
of that probability
 
includes judgements
 
based on expected
 
performance.
Various factors are
 
considered
 
to assess
 
the probability
 
of the future
 
utilisation
 
of deferred
 
tax assets,
including past operating results, operational plans, expiration of tax losses carried forward and tax
planning strategies. If actual results differ from the estimates or if these estimates must be adjusted
in future
 
periods, the
 
financial
 
position,
 
results of
 
operations
 
and cash flows
 
may be negatively
 
affected.
See note 11 for further
 
details.
 
5.
 
SEGMENT INFORMATION
For management purposes the group is organised by separate business segments identified
 
on a combination of operating activities and geographical area bases with separate financial
information available and reported regularly to the chief operating decision maker (“CODM”).
 
The following is a description of operations of the group’s identified reportable segments
 
and those that do not meet the quantitative reporting threshold:
 
Olimpiada
 
business unit
(Krasnoyarsk
 
region of
 
the Russian
 
Federation)
 
– mining (including
initial processing)
 
and sale of
 
gold from
 
the Olimpiada
 
mine, as well
 
as research,
 
exploration
 
and
development work at the Olimpiada deposit.
 
 
Blagodatnoye
 
business unit
(Krasnoyarsk
 
region of the
 
Russian Federation)
 
– mining
(including
 
initial processing)
 
and sale of
 
gold from the
 
Blagodatnoye
 
mine, as well
 
as research,
exploration
 
and development
 
work at the
 
Blagodatnoye
 
deposit.
 
Natalka business
 
unit
(Magadan region
 
of the Russian
 
Federation)
 
– mining (including
 
initial
processing)
 
and sale of
 
gold from the
 
Natalka mine,
 
as well as
 
research, exploration
 
and
development
 
work at the
 
Natalka deposit.
 
Construction
 
of the Omchak high-voltage power grid is
not included within this segment, as it was funded by a government grant (note 22).
 
Verninskoye business unit
(Irkutsk region of the Russian Federation) – mining (including
initial processing) and sale of gold from the Verninskoye mine, research, exploration and
development works at the Smezhny and Medvezhy Zapadny deposits.
 
Kuranakh
 
business unit
(Sakha Republic
 
of the Russian Federation) – mining (including initial
processing) and sale of gold from the Kuranakh mines.
 
Alluvials business unit
(Irkutsk region of the Russian Federation) – mining (including initial
processing) and sale of gold from several alluvial deposits.
 
Exploration business unit
 
(Krasnoyarsk, Irkutsk, Amur and other regions of the Russian
Federation) – exploration and evaluation works in several regions of the Russian Federation
other than those related to Sukhoi Log deposit.
 
Sukhoi Log business unit
(Irkutsk region of the
 
Russian Federation)
 
– exploration and
evaluation works at the Sukhoi Log deposit.
 
Unallocated
– the group does not allocate segment results of companies that perform
management, investing activities and certain other functions. Neither standalone results nor
 
the aggregated results of these companies are significant enough to be disclosed as operating
segments because quantitative thresholds are not met.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
 
19
The reportable gold production segments derive their revenue primarily from gold sales. The CODM
performs an analysis of the operating results based on these separate business units and evaluates
the reporting segment’s results, for purposes of resource allocation, based on the measurements of:
 
Gold
 
sales;
 
 
Ounces
 
of
 
gold
 
sold,
 
in
 
thousands;
 
 
Adjusted
 
earnings
 
before
 
interest,
 
tax,
 
depreciation
 
and
 
amortisation
 
and
 
other
 
items
 
 
(Adjusted EBITDA);
 
Total
 
cash
 
cost
 
(TCC);
 
 
Total
 
cash
 
cost
 
per
 
ounce
 
of
 
gold
 
sold
 
(TCC
 
per
 
ounce
);
 
and
 
 
Capital
 
expenditure.
 
 
Business segment assets and liabilities are not reviewed by the CODM and therefore are not
disclosed in these consolidated financial statements. The group’s non-current assets are located in
the Russian Federation.
 
Business units
 
Gold sales
Ounces of
gold sold in
thousands
2
Adjusted
EBITDA
TCC
2
TCC
 
per ounce
(US dollar)
2
Capital
expenditure
 
For the year ended 31 December 2020
Olimpiada
 
2,155
1,250
1,665
389
312
183
Blagodatnoye
 
810
456
620
158
347
71
Natalka
 
814
455
594
162
355
123
Verninskoye
 
484
274
370
89
327
76
Kuranakh
 
426
239
279
124
518
47
Alluvials
 
267
143
129
121
847
23
Exploration
 
-
-
-
-
-
12
Sukhoi Log
 
-
-
-
-
-
29
Unallocated
 
-
-
33
(23)
-
89
 
Total
 
4,956
2,817
3,690
1,020
362
653
 
For the year ended 31 December 2019
Olimpiada
 
1,906
1,416
1,381
415
293
165
Blagodatnoye
 
602
430
415
170
398
37
Natalka
 
571
405
361
160
396
155
Verninskoye
 
357
256
237
93
363
57
Kuranakh
 
317
225
174
117
523
39
Alluvials
 
212
146
74
119
821
21
Exploration
 
-
-
-
-
-
12
Sukhoi Log
 
-
-
-
-
-
28
Unallocated
 
-
-
38
(24)
-
116
 
Total
 
3,965
2,878
2,680
1,050
365
630
 
2
 
Unaudited and not reviewed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
 
20
Adjusted EBITDA reconciles to the IFRS reported figures on a consolidated basis as follows:
Year ended
31 December
2020
2019
Profit before income tax
2,062
2,377
Finance costs, net (note 9)
232
254
Interest income
 
(22)
(48)
Depreciation and amortisation
349
367
Foreign exchange loss / (gain), net
250
(273)
Loss / (gain) on revaluation of derivative financial instruments, net
 
(note 10)
544
(93)
Equity-settled share-based plans (LTIP) (note 20)
 
77
40
Expenses related to COVID-19
(note 29)
 
106
-
Special charitable contributions
35
43
Impairment of property, plant and equipment
10
9
Loss on transfer of Omchak high voltage power grid
(note 8, 22)
45
-
Loss on disposal of other property, plant and equipment and intangible assets
2
4
Adjusted EBITDA
3,690
2,680
The measurement of TCC per ounce of gold sold reconciles to the IFRS reported figures
on
 
a
 
consolidated basis as follows:
Year ended
31 December
2020
2019
Cost of gold sales before by-product
1,413
1,435
Antimony by-product sales
(24)
(30)
Cost of gold sales
(note 6)
1,389
1,405
Adjusted for:
Depreciation and amortisation (note 6)
(406)
(349)
Effect of depreciation, amortisation, accrual and provisions in inventory change
87
(6)
Expenses related to COVID-19 in cost of gold sales
(50)
-
TCC
3
1,020
1,050
Ounces of gold sold, in thousands
3
2,817
2,878
TCC per ounce of gold sold, USD per ounce
3
362
365
Gold sales
Year ended
31 December
2020
2019
Refined gold
4,586
3,575
Gold in flotation concentrate
370
390
Total
4,956
3,965
Gold sales reported above represent revenue generated from external customers. There were no
inter-segment gold sales during the years ended 31 December 2020 and 2019.
 
Geographical segments of gold sales
 
 
Year ended
31 December
 
 
2020
 
2019
 
 
 
 
 
Russian Federation
 
4,618
 
3,706
Outside of Russian Federation
 
338
 
259
 
 
 
 
 
Total
 
4,956
 
3,965
 
Reconciliation of capital expenditure to the property plant and equipment additions (note 13)
is presented below:
3
 
Unaudited and not reviewed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
21
Year ended
31 December
2020
2019
Capital expenditure
653
630
Construction of the Omchak high-voltage power grid
24
26
Stripping activity assets additions (note 13)
203
243
Less: intangible and other non-current assets additions
(43)
(51)
Property plant and equipment additions (note 13)
837
848
 
 
6.
 
COST OF GOLD SALES
 
Year ended
 
31 December
2020
2019
Depreciation and amortisation
406
349
Employee compensation
381
337
Consumables and spares
304
325
Tax on mining
238
192
Fuel
120
129
Power
61
59
Other
126
93
Total cost of production
1,636
1,484
Increase in stockpiles, gold-in-process and refined gold inventories
(247)
(79)
Total
1,389
1,405
 
 
7.
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
 
 
Year ended
 
31 December
2020
2019
Employee compensation
236
188
Depreciation and amortisation
23
21
Taxes other than mining and income taxes
19
20
Professional services
15
12
Distribution expenses related to gold flotation concentrate
18
25
Other
25
29
Total
336
295
 
 
 
8.
 
OTHER EXPENSES, NET
Year ended
 
31 December
2020
2019
Expenses related to COVID-19 (note 29)
56
-
Loss on transfer of Omchak high voltage power grid (note 22)
45
-
Special charitable contributions
35
43
Property, plant and equipment impairment
10
9
Other
27
3
Total
173
55
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
22
9.
 
FINANCE
 
COSTS,
 
NET
 
Year ended
 
31 December
2020
2019
Interest on borrowings
229
294
Interest on lease liabilities
4
5
Gain on exchange of interest payments under cross currency swaps
(30)
(42)
Loss / (gain) on exchange of interest payments under interest rate swaps
2
(2)
Unwinding of discounts
10
13
Bank commission and write-off of unamortised debt cost due to early extinguishment
12
3
Loss on early redemption of deferred consideration (note 23)
5
-
Gain on debt modification
-
(17)
Total
232
254
 
 
10.
 
(LOSS)
 
/ GAIN ON
 
REVALUATION OF DERIVATIVE FINANCIAL
 
INSTRUMENTS,
 
NET
 
Year ended
 
31 December
2020
2019
Revaluation (loss) / gain on cross currency swaps
(403)
169
Revaluation loss on revenue stabiliser (note 16)
(29)
(10)
Revaluation loss on interest rate swaps
(7)
(8)
Revaluation loss on conversion option (note 21)
(105)
(58)
Total
(544)
93
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
 
23
11.
 
INCOME
 
TAX EXPENSE
 
Year ended 31 December
2020
2019
 
Current tax expense
 
417
 
360
Deferred tax (income) / expense
 
(1)
 
73
 
Total income tax expense
 
416
 
433
 
The corporate income tax rate in the Russian Federation is 20% (17% regional and 3% federal).
The taxpayers in Russia have a right to apply reduced rates on tax on mining and income tax if they
implement
 
a regional investment program in certain regions and meeting certain criteria (thereafter
"RInvP"). Amount of tax savings on tax on mining should not exceed the amount of investments in
RinvP.
The Tax
 
Code provides for a right of each specified region of the Russian Federation to reduce
the regional component of the income tax rate to as low as zero percent.
JSC Polyus Verninskoye RInvP (Verninskoye business unit)
JSC
 
Polyus
 
Verninskoye,
 
a 100%
 
subsidiary
 
of
 
JSC
 
Polyus
 
Krasnoyarsk
 
operating
 
in
 
the Irkutsk
region of the Russian Federation, currently has a right to apply the following RInvP rates:
 
Tax
 
on
 
mining:
 
0%
 
for
 
2017
-
2018,
 
1.2%
 
for
 
2019
-
2020,
 
2.4%
 
for
 
2021
4
;
 
Corporate
 
income
 
tax:
 
17%
 
f
or
 
2017
-
2021
4
.
 
JSC Polyus Magadan RInvP (Natalka business unit)
JSC Polyus Magadan,
 
a 100% subsidiary of JSC Polyus Krasnoyarsk operating in the Magadan
region of the Russian Federation, applies the following RInvP rates:
 
Tax
 
on
 
mining:
 
0%
 
for
 
2018
-
2020
 
increasing
 
by
 
1.2%
 
every
 
two
 
years
 
thereafter
 
to
 
6%
 
by
 
2029;
 
Corporate
 
income
 
tax:
 
0%
 
for
 
2019
-
2023;
 
10%
 
for
 
2024
-
2028;
 
and
 
the
 
standard
 
20%
 
rate
 
thereafter.
 
A reconciliation of Russian Federation statutory income tax, the location of the group’s major
production entities and operations, to the income tax expense recorded in the consolidated
statement of profit or loss is as follows:
Year ended 31 December
2020
2019
 
Profit before income tax
 
2,062
 
2,377
 
Income tax
 
at statutory
 
rate applicable
 
to principal
 
entities (20%)
 
414
 
475
Effect of the
 
RinvP due to
 
different tax
 
rates (JSC
 
Polyus Magadan
 
and JSC Polyus
 
Verninskoye)
 
(80)
 
(48)
Unrecognised deductible temporary differences on revaluation of derivative financial
instruments
 
38
 
(10)
Tax effect
 
of non-deductible expenses and other permanent differences
 
44
 
16
 
Income tax expense
 
416
 
433
 
4
 
The group expects that during 2021 the amount of mining tax savings is likely to exceed the amount of investments in RInvP,
 
in
which case JSC Polyus Verninskoye would no longer be able to benefit from the reduced mining tax and income tax rates.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
24
12.
 
INTANGIBLE ASSETS
 
 
 
Internally-
generated
software
 
Purchased
software
Internally-
generated
other
Total
 
 
Cost
 
47
 
16
19
82
Accumulated amortisation and impairment
 
(4)
 
(4)
(1)
(9)
Net book value at 31 December 2018
 
43
 
12
18
73
 
 
Additions
 
31
 
11
9
51
Disposals
 
-
 
-
(1)
(1)
Amortisation charge
 
(4)
 
(5)
(2)
(11)
Effect of translation to presentation currency
 
6
 
2
3
11
 
 
Cost
 
85
 
28
28
141
Accumulated amortisation and impairment
 
(9)
 
(8)
(1)
(18)
Net book value at 31 December 2019
 
76
 
20
27
123
 
 
 
 
 
 
 
 
 
Additions
 
 
25
 
 
8
 
8
 
41
Reclassification
 
 
-
 
 
1
 
-
 
1
Amortisation charge
 
 
(4)
 
 
(6)
 
(2)
 
(12)
Effect of translation to presentation currency
 
 
(14)
 
 
(3)
 
(4)
 
(21)
 
 
Cost
 
 
95
 
 
28
 
 
34
 
157
Accumulated amortisation and impairment
 
 
(12)
 
 
(8)
 
(5)
 
(25)
Net book value at 31 December 2020
 
 
83
 
 
20
 
29
 
132
 
 
13.
 
PROPERTY, PLANT
 
AND EQUIPMENT
 
Fixed
 
assets
 
Stripping
activity
assets
 
Capital
construction
 
in progress
 
Exploration
and
evaluation
assets
 
Total
 
 
 
 
 
 
 
 
 
 
Cost
 
3,531
 
 
 
611
 
 
 
600
 
 
 
532
 
 
 
5,274
 
Accumulated depreciation and impairment
 
(1,192)
 
 
(222)
 
 
(49)
 
 
(27)
 
 
(1,490)
Net book value at 1 January 2019
 
2,339
 
 
 
389
 
 
551
 
 
505
 
3,784
 
 
 
 
 
 
 
 
 
 
 
Additions
 
-
 
 
243
 
 
541
 
 
64
 
 
848
Transfers
 
 
507
 
 
-
 
 
(494)
 
 
(13)
 
 
-
Disposals
 
(5)
 
 
-
 
 
(5)
 
 
-
 
 
(10)
Depreciation charge
 
(371)
 
 
(71)
 
 
-
 
 
-
 
 
(442)
Impairment
 
-
 
 
-
 
 
(9)
 
 
-
 
 
(9)
Effect of translation to presentation currency
 
290
 
 
56
 
 
70
 
 
64
 
 
480
Other
 
38
 
 
-
 
 
-
 
 
(9)
 
 
29
 
 
 
 
 
 
 
 
 
 
Cost
 
4,484
 
 
918
 
 
717
 
 
641
 
 
6,760
Accumulated depreciation and impairment
 
(1,686)
 
 
(301)
 
 
(63)
 
 
(30)
 
 
(2,080)
Net book value at 31 December 2019
 
2,798
 
 
617
 
 
654
 
 
611
 
 
4,680
 
 
 
 
 
 
 
 
 
 
Additions
 
-
 
 
203
 
 
571
 
 
63
 
 
837
Transfers
 
 
539
 
 
-
 
 
(530)
 
 
(9)
 
 
-
Disposals
 
(5)
 
 
-
 
 
(4)
 
 
-
 
 
(9)
Omchak high-voltage power grid disposal (note 22)
(132)
 
-
 
(1)
 
-
 
(133)
Depreciation charge
 
(403)
 
 
(94)
 
 
-
 
 
-
 
 
(497)
Impairment
 
-
 
 
-
 
 
(8)
 
 
(2)
 
 
(10)
Effect of translation to presentation currency
 
(442)
 
 
(101)
 
 
(116)
 
 
(99)
 
 
(758)
Other
 
8
 
 
-
 
 
2
 
 
1
 
 
11
 
 
 
 
 
 
 
 
 
 
Cost
 
4,130
 
 
971
 
 
629
 
 
590
 
 
6,320
Accumulated depreciation and impairment
 
(1,767)
 
 
(346)
 
 
(61)
 
 
(25)
 
 
(2,199)
Net book value at 31 December 2020
 
2,363
 
 
625
 
 
568
 
 
565
 
 
4,121
 
Carrying value of rights-of-use assets included in fixed assets is disclosed in note 14.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
25
 
Mineral rights
The carrying values of mineral rights included in fixed assets and exploration and
evaluation assets were as follows:
31 December
2020
 
2019
Mineral rights presented within:
 
 
- fixed assets
57
 
72
 
- exploration and evaluation assets
346
 
413
 
Total
403
 
485
Exploration and evaluation assets
The carrying values of exploration and evaluation assets were as follows:
31 December
2020
 
2019
 
Sukhoi Log
409
 
452
Chertovo Koryto
31
 
34
Razdolinskoye
29
 
30
Olimpiada
27
 
23
Burgakhchan area
17
 
14
Panimba
17
 
19
Bamsky
15
 
18
Natalka
7
 
8
Blagodatnoye
6
 
9
Other
7
 
4
Total
565
 
611
 
 
Depreciation and amortisation charges are allocated as follows:
Year ended
31 December
2020
2019
Depreciation in change in inventory
 
91
9
Capitalised within property, plant and equipment
72
79
Less: amortisation of intangible and other non-current assets
(15)
(13)
Total depreciation capitalised as part of other assets
148
75
Depreciation and amortisation within cost of production (note 6)
406
349
Less: depreciation in change in inventory
 
(91)
(9)
Selling, general and administrative expenses (note 7)
23
21
Cost of other sales
11
6
Total depreciation in profit or loss
349
367
Total depreciation of property,
 
plant and equipment
497
442
 
14.
 
LEASES
 
The most significant leases of the group are office leases. Movements of the right-of-use assets
presented within
Property, Plant and Equipment
 
(note 13) were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
26
Year ended 31 December 2020
Year ended 31 December 2019
Related party
transactions
Non-related
party
transactions
Total
 
Related party
transactions
Non-related
party
transactions
Total
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value as of the
beginning of the year
58
 
22
 
80
 
59
 
9
 
68
Changes in right-of-use
assets due to lease
indexation and
modification
2
 
(2)
 
-
 
-
 
13
 
13
Depreciation charge
(4)
 
(6)
 
(10)
 
(4)
 
(6)
 
(10)
Effect of translation to
presentation currency
(10)
 
(3)
 
(13)
 
3
 
6
 
9
 
 
 
 
 
 
Carrying value as of the
end of the year
46
 
11
 
57
 
58
 
22
 
80
 
Movements of the lease liabilities presented within
Borrowings
 
(note 21) were as follows:
 
Year ended 31 December 2020
Year ended 31 December 2019
Related party
transactions
Non-related
party
transactions
Total
 
Related party
transactions
Non-related
party
transactions
Total
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value as of the
beginning of the year
53
 
27
 
80
 
58
 
15
 
73
Changes in lease liabilities
due to lease indexation
and modification
2
 
(2)
 
-
 
-
 
13
 
13
Foreign
 
exchange
 
loss
 
/
(gain),
 
net
10
 
5
 
15
 
(6)
 
-
 
(6)
Interest on lease liabilities
3
 
1
 
4
 
3
 
2
 
5
Repayments of lease
liability
(7)
 
(8)
 
(15)
 
(7)
 
(8)
 
(15)
Effect of translation to
presentation currency
(10)
 
(4)
 
(14)
 
5
 
5
 
10
 
 
 
 
 
 
Carrying value as of the
end of the year
51
 
19
 
70
 
53
 
27
 
80
 
 
15.
 
INVENTORIES
 
31 December
2020
2019
Stockpiles
505
416
Gold-in-process
14
15
Inventories expected to be used after 12 months
519
431
Stockpiles
150
119
Gold-in-process
101
82
Antimony in gold-antimony flotation concentrate and silver
4
11
Refined gold and gold in flotation concentrate
4
4
Materials and supplies
365
474
Less: obsolescence provision for materials and supplies
(29)
(31)
Inventories expected to be used in the next 12 months
595
659
Total
1,114
1,090
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
27
16.
 
DERIVATIVE FINANCIAL
 
INSTRUMENTS
 
 
31 December 2020
31 December 2019
 
Non-Current
Current
Total
 
Non-Current
Current
Total
 
 
 
 
 
 
 
Cross currency swaps
17
-
17
98
-
98
Interest rate swaps
-
-
-
-
1
1
 
 
 
 
 
 
 
Total derivative financial assets
17
-
17
98
1
99
 
 
 
 
 
 
 
Cross currency swaps
321
42
363
62
-
62
Revenue stabiliser
-
-
-
-
7
7
Conversion option on convertible
bonds (note 21)
-
-
-
63
-
63
Interest rate swaps
9
-
9
5
-
5
 
 
 
 
 
 
 
Total derivative financial liabilities
330
42
372
130
7
137
 
Revenue stabiliser
During the
 
year ended
 
31 December
 
2020, the group
 
effectively
 
closed out the
 
revenue stabiliser
programme,
 
with a total
 
premium of
 
USD 32 million
 
paid.
 
Cross currency swaps
The following terms were in place as of 31 December 2020:
 
 
Nominal
 
 
 
Interest payments
 
Expiration
 
date
 
Group pays
 
(USD million)
 
Group receives
(RUB million)
 
Frequency
 
Group pays
 
(in USD)
 
Group receives
 
(in RUB)
 
 
 
 
 
 
July 2021
 
173
 
 
10,000
 
semi-annually
 
LIBOR + 4.45%
 
12.1%
 
July 2021
 
82
 
 
5,300
 
 
semi-annually
 
5.9%
 
12.1%
 
March 2024
 
125
 
 
8,225
 
 
quarterly
 
5.09%
 
 
MosPrime 3m + 0.2%
April 2024
 
965
 
 
64,801
 
 
quarterly
 
5.00%
 
 
MosPrime 3m - 0.45%
October 2024
 
310
 
 
20,000
 
 
semi-annually
 
3.23%
 
 
7.4%
 
March 2025
 
125
 
 
8,169
 
 
quarterly
 
2.8%
 
 
MosPrime 3m + 0.27%
 
 
Interest rate swaps
The following
 
terms were
 
in place as
 
of 31 December 2020:
 
 
Nominal
 
 
Interest payments
 
Expiration date
 
(USD million)
 
Frequency
 
Group pays
 
Group receives
 
 
 
 
February 2024
 
150
 
 
monthly
 
2.425%-2.44%
 
 
LIBOR
 
 
17.
 
TRADE AND
 
OTHER RECEIVABLES
 
31 December
2020
2019
Trade receivables for gold-bearing products
115
140
Other receivables
32
67
Less: allowance for other receivables
(14)
(10)
Total
133
197
 
 
 
18.
 
TAXES RECEIVABLE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
28
31 December
2020
2019
Reimbursable value added tax
118
107
Other prepaid taxes
2
4
Total
120
111
 
 
 
19.
 
CASH AND
 
CASH EQUIVALENTS
 
31 December
2020
2019
Current USD bank accounts
1,115
192
Current RUB bank accounts
69
18
Bank deposits denominated in USD
178
1,467
Bank deposits denominated in RUB
83
97
Cash in the Federal Treasury
-
27
Total
1,445
1,801
 
Bank deposits
 
within cash
 
and cash equivalents
 
include deposits
 
with original
 
maturity
 
less than
three months
 
or repayable
 
on demand without
 
loss on principal
 
and accrued
 
interest denominated
 
in
RUB and USD
 
and accrue
 
interest at
 
the following
 
rates:
Interest rates:
- Bank deposits denominated in USD
0.5-0.9%
0.7-4.3%
- Bank deposits denominated in RUB
4.0-4.7%
3.4-6.1%
 
 
 
20.
 
SHARE CAPITAL
 
Authorised share capital of the Company as of 31 December 2020 comprised issued and fully paid
136,069 thousand ordinary shares at par value of RUB 1 each,
 
of which 1,364 thousand was
included within treasury shares.
Treasury shares
 
On 30 September 2020, the Company issued 1,808 thousand shares at RUR 18,353 (USD 241) per
share, all of which were acquired by JSC Polyus Krasnoyarsk, a wholly owned subsidiary, and were
recorded as treasury shares.
 
 
In
 
October
 
2020,
 
these new shares were transferred to PGIL in settlement of a share loan taken
earlier in 2020 for the redemption of convertible bonds (note 21).
 
In connection with the share loan, a payment of USD 8 million was accrued (included within
Other
 
in
the consolidated statement of changes in equity).
 
Equity-settled share-based compensation (long-term incentive plan)
 
PJSC Polyus grants long-term incentive awards according to which the members of management of
the group are entitled to a conditional award in the form of PJSC Polyus’ ordinary shares, which vest
upon achievement of financial and non-financial performance targets on expiry of performance
periods. Expenses arising from the LTIP are recognised in the consolidated statement of profit or
loss within
Employee compensation
 
included within
Selling, general and administrative expenses.
 
 
Dividends
On 18 August 2020, Shareholders of the Company declared dividends of 244.75 RUR per share,
equivalent to USD 450 million (at the CBR currency exchange rate as of 18 August 2020) in respect
of the second half of financial year 2019.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
29
On 30 September 2020, Shareholders of the Company declared dividends of 240.18 RUR per share,
equivalent to USD 405 million (at the CBR currency exchange rate as of 30 September 2020) in
respect of the first half of financial year 2020 (excluding dividends on treasury shares).
 
Following the transfer of the new 1,808 thousand treasury shares to PGIL in October 2020, dividends
for the first half of 2020 were accrued on those shares (being treasury shares as of September 2020)
at 240.18 RUR per share in the total amount of USD 5 million.
 
Thus,
 
during the year ended 31 December 2020 the total amount of dividends declared to the
shareholders was USD 860 million (USD 844 million paid in cash at the CBR currency exchange rate
ruling at the dates of payments).
Share buyback
In December 2020, the group made an offer to purchase up to an aggregate of 1,429 thousand of
ordinary shares of the Company from its shareholders. As of 31 December 2020, 1,361 thousand
shares were acquired and orders for the buyback of additional 68 thousand shares were submitted to
the group.
 
Buyback transactions as of 31 December 2020
 
USD million
 
Quantity of
shares
 
(‘000)
 
 
 
 
Shares
 
acquired
 
from PGIL
233
 
1,111
Shares
 
acquired
 
from shareholders
 
other
 
than PGIL
31
 
144
Advances
 
paid for
 
shares
 
to be
 
delivered
 
from shareholders
 
other
 
than PGIL
4
 
22
Total paid
268
 
1,277
Payables
 
to shareholders
 
other
 
than PGIL
 
for delivered
 
shares
22
 
106
Accrued
 
payables
 
to shareholders
 
other
 
than PGIL
 
for shares
 
to be
 
delivered
10
 
46
Expenses directly attributable to buyback
1
 
-
Total payables (note 24)
33
 
152
Total buyback transactions
301
 
1,429
 
Weighted average number of ordinary shares
 
The weighted
 
average number
 
of ordinary
 
shares used
 
in the calculation
 
of basic and
 
diluted earnings
per share
 
(“EPS”) is
 
as follows
 
(in thousands
 
of shares):
 
Year ended
 
31 December
2020
2019
Ordinary shares in issue at the beginning of the year
133,196
132,339
Conversion
 
of convertible
 
bond
449
-
Shares
 
awarded
 
under
 
LTIP
370
487
Purchase
 
of additional
 
ownership
 
in SL
 
Gold (payable
 
in treasury
 
shares)
246
370
Settlement
 
of share
 
loan
1,808
-
Increase
 
of ownership
 
in subsidiaries
5
-
Share
 
buyback
(1,361)
-
Other
(8)
-
Ordinary shares in issue at the end of the year
134,705
133,196
Weighted average number of ordinary shares – basic EPS
134,360
133,017
Dilutive effect of potentially issuable shares under LTIP
534
300
Weighted average number of ordinary shares – dilutive EPS
134,894
133,317
Profit after tax attributable to the shareholders of the Company (million USD)
1,600
1,931
Profit after tax attributable to the shareholders of the Company for diluted EPS
calculation (million USD)
1,600
1,931
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
30
 
21.
 
BORROWINGS
 
 
 
 
31 December
 
Nominal rate %
 
2020
 
2019
 
 
Eurobonds with fixed interest rate due in 2022
4.699%
 
481
 
480
Eurobonds with fixed interest rate due in 2023
5.250%
 
785
 
784
Eurobonds with fixed interest rate due in 2024
4.7%
 
468
 
467
Notes due
 
in 2029 (Rusbonds)
 
with noteholders’
 
early repayment
 
option in
2024
7.4%
 
270
 
322
Notes due
 
in 2025 (Rusbonds)
 
with noteholders’
 
early repayment
 
option in
2021
12.1%
 
203
 
244
Credit facilities
 
with financial
 
institutions
 
nominated in
 
RUR with variable
interest rates
Central bank rate +
2.3%
MosPrime + 0.2% /
 
- 0.45%
 
1,128
 
1,228
Credit facilities
 
with financial
 
institutions
 
nominated in
 
USD with variable
 
interest
rates
USD LIBOR +
 
1.65%
 
149
 
148
Lease liabilities
 
nominated in
 
USD and RUR
5.15%
 
70
 
80
Credit facilities
 
with financial
 
institutions
 
nominated in
 
USD with fixed
 
interest
rates
3.5%-5.0%
 
-
 
331
Eurobonds with fixed interest rate due in 2020
5.625%
 
-
 
677
Сonvertible
 
bonds with
 
fixed interest
 
rate due in
 
2021
1%
 
-
 
194
Credit facilities with financial institutions nominated in RUR with fixed interest
rates
9.35%
 
-
 
131
 
 
Sub-total
 
 
3,554
 
5,086
Less: current
 
portion of long-term
 
borrowings
 
due within
 
12 months
 
(225)
 
(704)
 
Long-term borrowings
 
 
3,329
 
4,382
 
Convertible bonds with fixed interest rate due in 2021
In May 2020, the group completed early redemption of all convertible bonds due 2021 together
 
with
accrued interest
 
exercising an
 
option, which
 
became available
 
to the group
 
earlier in the
 
year as the
value of the
 
GDSs deliverable
 
on conversion
 
exceeded 130%
 
of the principal
 
amount of
 
the bonds.
During the
 
year ended
 
31 December
 
2020, 4,514
 
thousand GDSs were transferred to the converting
bondholders, of which 3,616 thousand GDSs (in the form of shares) were borrowed from PGIL (note
20) and remaining balance was redeemed with
Treasury shares
, resulted in an increase of
Additional
paid-in capital
 
in the amount of USD 289 million and USD 28 million respectively.
Eurobonds with fixed interest rate due in 2020
In April 2020, the group redeemed Eurobonds in the amount of USD 677 million due to their maturity.
Credit facilities with financial institutions nominated in RUR with variable interest rate
In March 2020, the group entered into a credit facility agreement in the amount of RUR 8,169 million
(USD 112 million translated at the exchange rate at the date of transaction)
 
with a variable interest
rate (Mosprime3m + 0.27% per annum) due in 2025.
 
Proceeds from this credit agreement were used
to extinguish in advance of maturity an existing credit facility nominated in RUB with fixed interest
rate from another borrower.
Credit facilities with financial institutions nominated in USD with fixed interest rate
During the year ended 31 December 2020, the group repaid in advance of maturity credit facilities
nominated in USD with a fixed interest rate in the amount of USD 340 million.
Unused credit facilities
As of 31 December 2020, the group has unused credit facilities in the total amount of USD 1,243
million (31 December 2019: USD 1,433 million) and a facility to borrow any amount of unpledged
Company’s shares from PGIL.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
31
Pledge
 
As of 31 December 2020 and 2019, all shares of JSC TaigaEnergoStroy
 
belonging to the group were
pledged to secure a credit line. Additionally, the group pledged proceeds from certain gold sale
agreements as a security for another credit facility.
 
 
Other matters
There were a number of financial covenants under several loan agreements in effect as of 31
December 2020 according to which the respective subsidiaries of the Company and the Company
itself are limited in its level of leverage and other financial and non-financial parameters.
The group tests covenants quarterly and was in compliance with the covenants as of 31 December
2020.
 
Reconciliation of liabilities arising from financing activities
 
 
For the year ended 31 December 2020
For the year ended 31 December 2019
 
Borrowings
Lease
Derivatives
 
Borrowings
Lease
Derivatives
Carrying value as of the
beginning of the year
5,006
80
38
3,972
10
621
Net cash flows
(1,032)
(15)
(4)
895
(15)
(486)
Non-cash changes, including:
Redemption of convertible bonds
(200)
-
(163)
-
-
-
Recognition of lease liabilities
 
-
-
-
-
76
-
Foreign exchange (gain) / loss, net
492
15
-
(388)
(6)
-
Debt modification
-
-
-
(17)
-
-
Commissions on borrowings and
amortisation at effective interest
rate
21
4
-
9
5
-
Gain on exchange of interest
payments under cross currency
and interest rate swaps
-
-
(28)
-
-
(44)
Loss / (gain)
 
on revaluation
 
of
derivative
 
financial instruments,
 
net
-
-
544
-
-
(93)
Effect of currency translation
(803)
(14)
(32)
535
10
40
 
Carrying value as of the end of
the year
3,484
70
355
5,006
80
38
 
22.
 
DEFERRED
 
REVENUE
JSC
 
Polyus
 
Magadan,
 
was a party
 
to an agreement
 
with the
 
Ministry
 
for
 
the
 
Development
 
of the
 
Russian
Far
 
East
 
(“Minvostokrazvitiya”)
 
under
 
which
 
Minvostokrazvitiya
 
provided
 
to JSC
 
Polyus
 
Magadan
 
a
government
 
grant
 
in the
 
total
 
amount
 
RUB 8,797 million
 
(USD
 
137 million,
 
including
 
VAT).
 
Under
 
the
 
agreement,
 
the
 
grant
 
was
 
used
 
for
 
the
 
construction
 
of an
 
electricity
 
transmission
 
line,
 
a
distribution
 
point
 
and
 
an electric
 
power
 
substation
 
(Omchak
 
high-voltage
 
power
 
grid).
 
JSC
 
Polyus
Krasnoyarsk
 
was
 
a guarantor
 
under
 
the
 
agreement.
In
 
the
 
fourth
 
quarter
 
of 2020,
 
the
 
group
 
completed
 
construction
 
of the
 
Omchak
 
high-voltage
 
power
 
grid
 
and
transferred
 
it for
 
zero
 
consideration
 
to a
 
power-distribution
 
grid
 
company,
 
resulting
 
in a
 
loss
 
of USD
 
45
million
 
(note
 
8).
The movement in the carrying value of deferred revenue, associated with government grant was
 
as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
32
Year ended
31 December
2020
2019
Carrying value as of the beginning of the year
126
117
Received cash
-
 
 
3
VAT
 
attributable to construction of
power grid
(3)
(8)
Unused grant refunded to Minvostokrazvitiya
(14)
-
Effect of translation to presentation currency
(21)
14
Offset of the subsidy against the carrying value
of Omchak high-voltage power grid on disposal
(88)
-
Carrying value as of the end of the year
-
126
 
 
 
23.
 
DEFERRED
 
CONSIDERATION
In March 2020, the group exercised the scheduled tranche of options in LLC SL Gold and increased
its participation interest from 68.2% to 78.0%. The group paid approximately USD 28 million and
transferred 246 thousand PJSC Polyus treasury shares (note 20)
 
totalling
 
USD 29 million.
In September 2020, the group and LLC “RT Business Development” (“RT”) amended the terms of a
number of options relating to RT’s participation interest in LLC SL Gold that were entered into in July
2017, to allow the group to purchase an 11.3% interest in LLC
 
SL Gold from RT at the initially agreed
valuation of USD 65.7 million for cash consideration instead of Polyus’ shares and agreed to
accelerate the exercise of all outstanding call options relating to RT’s interest in LLC SL Gold.
Following the amendment of the agreement the group completed the acquisition of RT’s entire
remaining stake of 22% in LLC SL Gold for USD 128 million, all paid in cash.
The movement in the carrying value of share option liabilities was as follows:
Year ended
31 December
2020
2019
Carrying value as of the beginning of the year
176
225
Settled in shares
(29)
(29)
Settled in cash
(156)
(28)
Unwinding of interest on deferred consideration
4
8
Loss on early redemption of deferred consideration (note 9)
5
-
Foreign exchange loss / (gain), net
31
(24)
Effect of translation to presentation currency
(31)
24
Total carrying value as of the end of the year
-
176
Less: short-term part of the option liabilities
-
(57)
Long-term part of the option liabilities as of the end of the year
-
119
 
 
24.
 
TRADE AND
 
OTHER PAYABLES
 
31 December
2020
2019
Employee compensation payable
94
95
Interest payable
57
77
Trade payables
49
49
Accrued annual leave
33
27
Share buyback (note 20)
33
-
Payables for shares of PJSC Lenzoloto (note 32)
24
-
Dividends payable
2
2
Other accounts payable and accrued expenses
107
105
Total
399
355
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
33
25.
 
DEFERRED
 
TAX ASSETS AND
 
LIABILITIES
 
The movement in the group’s deferred taxation position was as follows (tax assets are presented as
negative amounts, tax liabilities – as positive):
Year ended 31 December
2020
2019
Net deferred tax liability at the beginning of the year
174
87
Recognised in the consolidated statement of profit or loss
(1)
73
Effect of translation to presentation currency
(23)
14
Net deferred tax liability at the end of the year
150
174
 
Deferred
 
taxation
 
is attributable
 
to tax losses
 
carried-forward
 
and the temporary
 
differences
 
that exist
between the
 
carrying amounts
 
of assets
 
and liabilities
 
for financial
 
reporting
 
purposes and
 
the amounts
used for
 
tax purposes
 
and was as
 
follows:
31 December
2019
 
Recognised in
profit or loss
 
Effect of
translation to
presentation
currency
 
31 December
2020
 
 
 
 
 
 
Property, plant and equipment
395
34
(64)
365
Inventory
90
34
(14)
110
Borrowings
(5)
(6)
2
(9)
Deferred expenditure
3
1
(1)
3
Tax losses carried-forward
(294)
(2)
48
(248)
Trade and other payables
(36)
6
7
(23)
Intangible assets
3
(1)
-
2
Derivatives
18
(66)
(2)
(50)
Other
-
(1)
1
-
Net deferred tax liability
174
(1)
(23)
150
 
Certain deferred
 
tax assets
 
and liabilities
 
have been
 
offset. The
 
following
 
is the analysis
 
of the deferred
tax balances
 
(after offset)
 
as they are
 
presented
 
in the consolidated
 
statement
 
of financial
 
position:
31 December
2020
2019
 
Deferred tax assets
(109)
(134)
Deferred tax liabilities
259
308
 
 
 
Net deferred tax liability
150
174
 
Unrecognised deferred tax asset
31 December
2020
2019
Unrecognised
 
deferred
 
tax assets
 
resulting
 
from losses
 
on derivative
 
financial
 
instruments
195
 
141
 
Unrecognised
 
deferred
 
tax assets
 
resulted
 
from impairments
5
 
6
 
Unrecognised
 
deferred
 
tax assets
 
in respect
 
of tax
 
losses
 
carried
 
forward
 
available
 
for offset
 
against
 
future
 
taxable
 
profit
6
 
8
 
Total
206
 
155
 
 
Unrecognised deferred tax liability
31 December
2020
2019
Taxable temporary difference
 
associated with investments in subsidiaries
173
 
178
 
Deferred tax liability for the taxable temporary difference associated with investments in subsidiaries
is not recognised because the group is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
34
The group
 
does not recognise
 
deferred tax
 
assets for
 
some of its
 
tax losses
 
if it is more
 
likely than
 
not
that the future
 
taxable profits
 
will not
 
be available
 
to offset them
 
in certain group
 
entities.
26.
 
TAXES PAYABLE
 
31 December
2020
2019
Value added tax
33
21
Tax on mining
24
18
Social taxes
24
20
Property tax
5
5
Other taxes
15
17
Total
101
81
 
 
 
27.
 
RELATED PARTIES
 
There were no transactions with related parties throughout year ended 31 December 2020,
 
except
for those presented within notes 14 and 20 and compensation of the key management personnel as
detailed below.
 
Key management personnel
Year ended
 
31 December
2020
2019
Short-term compensation to key management personnel accrued
23
23
Equity-settled share-based compensation (LTIP)
71
37
Total
94
60
 
 
28.
 
COMMITMENTS
 
Commitments for future lease payments due under non-cancellable lease agreements
excluded from the scope of IFRS 16
The Land in the Russian Federation on which the group’s production facilities are located is owned
by the state. The group leases this land through operating lease agreements, which expire in various
years through to 2065. Future lease payments due under non-cancellable operating lease
agreements excluded from IFRS 16 scope (note 14) were as follows:
 
31 December
2020
 
2019
 
 
 
 
Due within one year
8
 
7
From one to five years
24
 
24
Thereafter
49
 
54
 
 
Total
81
 
85
 
Capital commitments
The group’s contracted capital expenditure commitments are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
35
31 December
2020
2019
Projects in Krasnoyarsk
97
49
Project Natalka
73
65
Other capital commitments
26
3
Project Omchak high-voltage power grid
-
12
Total
196
129
 
 
 
29.
 
OPERATING ENVIRONMENT
 
- IMPACT OF COVID-19
 
PANDEMIC
 
On March 11, 2020, the World
 
Health Organization declared the novel strain of coronavirus
 
(COVID-19) a global pandemic and recommended containment and mitigation measures worldwide.
Since March 30, in Russia, as in many countries where an outbreak of the virus was detected,
a lockdown started; most businesses closed, but have been gradually reopening.
 
 
Responses
 
put in place
 
by many countries
 
to contain
 
the spread
 
of COVID-19
 
are resulting
 
in
significant
 
operational
 
disruption
 
for many companies
 
and have major
 
impacts on
 
global financial
markets. As
 
the situation
 
is rapidly
 
evolving it
 
may have
 
a significant
 
effect on business
 
of many
companies
 
across a wide
 
range of sectors,
 
including,
 
but not limited
 
to such impacts
 
as disruption
 
of
business
 
operations
 
as a result
 
of interruption
 
of production
 
or closure
 
of facilities,
 
supply chain
disruptions,
 
quarantines
 
of personnel,
 
reduced demand
 
and difficulties
 
in raising financing.
 
In addition,
the group
 
may face the
 
increasingly
 
broad effects
 
of COVID-19
 
because of
 
its negative
 
impact on the
global economy
 
and major
 
financial markets.
 
The significance
 
of the effect
 
of COVID-19
 
on the group’s
business
 
largely depends
 
on the duration
 
and the
 
incidence
 
of the pandemic
 
effects on the
 
world and
Russian economy.
 
The health and safety of employees remains the group’s utmost focus. Polyus conducts a broad-
based testing of its employees and contractors for COVID-19. The group continues to monitor
the COVID-19 threat level and assess the potential health risks for its employees, with all monitoring
systems in place. The group cannot reasonably estimate the length or severity of this pandemic and
its impact on economy, including the gold market, however,
 
at the date of approval of these
consolidated financial statements, the impact on the group’s operations was principally limited to
provision of temporary accommodation and treatment facilities at the group’s production sites for the
affected employees, implementation of additional sanitary measures, and charitable contributions to
hospitals and other institutions in group’s operating regions.
 
In order to provide adequate quarantine and medical treatment conditions for the group employees
affected by the COVID-19 outbreak at Olimpiada, temporary accommodation facilities and field
hospital were organised by the company with the help of the Ministry of Defence and Krasnoyarsk
regional administration. During the
 
year ended 31
 
December 2020,
 
operations at the group’s assets
have not been interrupted.
 
Costs directly attributable to dealing with the COVID-19 pandemic comprise additional compensation
paid to employees, donations to regional administrations, hospitals and other institutions as well as
additional health and safety expenses. The group’s direct and incremental costs related to COVID-19
were included in the following captions of the consolidated financial statements as follows:
Year ended
31 December
2020
2019
Cost of gold sales (Employee compensation)
50
-
Other expenses, net
56
-
Total expenses related to COVID-19 recognised in profit or loss
106
-
Increase in stockpiles, gold-in-process and refined gold inventories
 
23
-
Property plant and equipment additions (infrastructure facilities and stripping activity asset)
 
26
-
Total costs related to COVID-19
155
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
36
 
 
30.
 
FAIR VALUE OF FINANCIAL
 
INSTRUMENTS
The carrying
 
value of
 
cash and cash
 
equivalents,
 
current trade
 
and other
 
receivables
 
and accounts
payable approximate
 
their fair value
 
given the short-term
 
nature of
 
these instruments.
 
Non-current
other receivables
 
are discounted
 
at discount
 
rates derived
 
from observable
 
market input
 
data. Trade
receivables
 
for gold-bearing
 
products are
 
carried at
 
fair value through
 
profit or
 
loss (Level
 
2 of the fair
value hierarchy
 
in accordance
 
with IFRS
 
13).
Determination
 
of fair value
 
of derivative
 
financial instruments
Fair value inputs
Derivative financial
instrument
Valuation technique
Inputs to valuation techniques
used to measure fair value
Fair value hierarchy of
inputs in accordance
with IFRS 13
Revenue stabiliser
Monte Carlo
simulation model
Spot gold prices and gold price
volatility
Level 2
Cross-currency swaps
Discounted cash flow
valuation technique
Spot currency exchange rates, USD
LIBOR and RUB interest rates
Level 2
Interest rate swaps
Discounted cash flow
valuation technique
Forward USD LIBOR rates
Level 2
Conversion option on
convertible bonds
Discounted cash flow
valuation technique
Risk-free interest rate and share
price volatility
Level 2
 
The fair
 
value of derivative
 
financial
 
instruments
 
includes an
 
adjustment
 
for credit
 
risk in accordance
with IFRS
 
13. The adjustment
 
is calculated
 
based on the
 
expected exposure.
 
For positive
 
expected
exposures,
 
credit risk
 
is based on
 
the observed
 
credit default
 
swap spreads
 
for each particular
counterparty
 
or, if they are
 
unavailable,
 
for equivalent
 
peers of the
 
counterparty. For
 
negative expected
exposures,
 
the credit
 
risk is based
 
on the observed
 
credit default
 
swap spread
 
of the group’s
 
peer.
Borrowings
 
and deferred consideration are carried
 
at amortised
 
cost. The
 
fair value
 
of the group’s
borrowings
 
excluding
 
lease liabilities
 
is estimated
 
as follows:
31 December
 
2020
31 December
 
2019
Carrying
 
amount
Fair value
Carrying
 
amount
Fair value
Eurobonds (Level 1)
1,734
1,852
2,408
2,535
Borrowings (Level 2)
1,277
1,278
1,838
1,894
Rusbonds (Level 1)
473
497
566
592
Convertible bonds (Level 2)
-
-
194
258
Total
3,484
3,627
5,006
5,279
 
The fair
 
value of all
 
of the group’s
 
borrowings
 
except for
 
the Eurobonds
 
and Rusbonds
 
is within Level
 
2
of the fair
 
value hierarchy
 
in accordance
 
with IFRS
 
13. The fair
 
value of
 
the Eurobonds
 
and Rusbonds
is within
 
Level 1 of
 
the fair value
 
hierarchy
 
in accordance
 
with IFRS
 
13, because
 
the Eurobonds
 
and
Rusbonds are
 
publicly traded
 
in an active
 
market. The
 
fair value
 
of borrowings
 
and bonds
 
is
determined
 
using a discounted
 
cash flow valuation
 
technique with
 
reference to
 
observable
 
market
inputs: spot
 
currency exchange
 
rates, forward
 
USD LIBOR
 
and RUB interest
 
rates, the
 
company’s own
credit risk
 
and quoted
 
price of the
 
convertible
 
bonds.
The fair value of deferred consideration on the date of initial recognition is based on inputs (spot
currency exchange rates and discount rates), which are observable in the market and are classified
as Level 2 of the fair value hierarchy in accordance with IFRS 13. As of 31 December 2020, the fair
value of the deferred consideration equals nil due to its redemption (note 21) (31 December
2019:180 million).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
37
31.
 
FINANCIAL
 
INSTRUMENTS
 
RISK MANAGEMENT
 
ACTIVITIES
Capital risk management
The primary objective of managing the group’s
 
capital is to ensure that there is sufficient capital
available to support the funding requirements of the group, including capital
 
expenditure, in a way
that optimises the cost of capital, maximises shareholders’ returns and ensures that the group
remains in a sound financial position.
The group manages and makes adjustments to the capital structure as opportunities arise in the
market place, as and when borrowings mature, or as and when funding is required. This may take
the form of raising equity, market or bank debt or hybrids thereof. The level of dividends is monitored
by the Board of Directors of the group in accordance with the Dividend policy of the group.
In the capital management process the group utilizes various financial metrics including the ratio of
group Net Indebtedness to Adjusted EBITDA (“group Leverage Ratio”). The group takes into account
that group Leverage Ratio should not exceed 3.5 times as per the Terms and Conditions
 
of the
Notes (Eurobonds).
“Group Net Indebtedness” is defined in the Terms and Conditions
 
of the Notes (Eurobonds) as all
consolidated Indebtedness less cash and cash equivalents, as shown on the Consolidated Financial
Statements of the group. Indebtedness is defined as the sum of any moneys borrowed, any principal
amount raised by acceptance under any acceptance credit facility, any principal amount raised
pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock
 
or any
similar instrument, any principal amount raised under any other transaction having the economic or
commercial effect of a borrowing and the amount of any liability in respect of the guarantee or
indemnity.
There were no changes in the group’s approach to capital management during the year.
 
Major categories of financial instruments
The group’s principal financial liabilities comprise borrowings, derivative financial instruments,
deferred consideration and account payables. The main purpose of these financial instruments is
to finance the group’s operations. The group has various financial assets such as cash and cash
equivalents, trade and other receivables, derivative financial instruments and loans
 
receivable.
31 December
 
2020
2019
Financial assets measured at fair value through profit or loss (FVPL)
Derivative financial instruments (Level 2)
17
99
 
Trade receivables (Level 2)
115
140
Financial assets measured at measured at amortised cost
Trade and other receivables
43
87
Cash and cash equivalents
1,445
1,801
 
Total financial assets
1,620
2,127
 
Financial liabilities measured at fair value through profit or loss (FVPL)
Derivative financial instruments (Level 2)
372
137
Financial liabilities measured at measured at amortised cost
Borrowings
3,554
5,086
Accounts payable
378
345
Deferred consideration
-
176
Total financial liabilities
4,304
5,744
 
The fair value of the group’s financial instruments and levels of fair value hierarchy are disclosed in
note 30.
 
The main risks arising from the group’s financial instruments are gold price, interest rate,
foreign currency exchange rates, credit and liquidity risks.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
38
Gold price risk
The group
 
is exposed
 
to changes
 
in the gold
 
price due to
 
its significant
 
volatility. During
 
2014 and
2016, the group entered into a number of derivative transactions (revenue stabiliser and gold forward
agreements) under a Strategic Price Protection Programme to limit its exposure to future possible
fluctuations of gold price (as detailed further in note 16). Under the terms of the revenue stabiliser
the group ensured a minimum selling gold price in the case of declines in the gold price and
at the same time might benefit from increases in the gold price until certain barrier prices are
reached on the call options, at which point the sale price was capped. In March 2020 the group
effectively closed out the revenue stabiliser programme (note 16).
If the gold price was 10% higher / lower during the year ended
 
31 December
 
2020
 
gold sales for
the year would have increased / decreased by USD 460 million / USD 460 million, respectively
(2019:
 
USD 357 million / USD 355 million).
Interest rate risk
Interest expenses on borrowings issued at variable interest rates are in its majority effectively
converted into fixed-rate interest payments using cross-currency and interest rate swaps (note 16);
the group is not materially exposed to interest rate risk.
Foreign currency exchange rate risk
Currency risk is the risk that the financial results of the group will be adversely affected by changes
in exchange rates to which the group is exposed. The group undertakes certain transactions
denominated in foreign currencies. Prices for gold are quoted in USD based on international quoted
market prices. The majority of the group’s expenditure are denominated in RUB, accordingly,
operating profits are adversely impacted by appreciation of the RUB against the USD. In assessing
this risk, management takes into consideration changes in the gold price.
The carrying amounts of monetary assets and liabilities denominated in foreign currencies other than
the functional currencies of the individual group entities were as follows:
31 December
2020
2019
Assets
USD
1,421
1,821
EURO (presented in USD at closing exchange rate)
3
1
Total
1,424
1,822
Liabilities
USD
2,402
3,532
EURO (presented in USD at closing exchange rate)
4
8
Total
2,406
3,540
 
Currency risk is monitored regularly by performing a sensitivity analysis of foreign currency positions
in order to verify that potential effects are within planned parameters. The table below details
the group’s sensitivity to changes in exchange rates by 25% which is the sensitivity rate used by
the group for internal analysis. The analysis was applied to monetary items at the reporting dates
denominated in the respective currencies.
 
If the USD or EURO exchange rate had increased by 25% for the year ended
 
31 December 2020
and 2019 compared to RUB as of the end of respective year, the group would have incurred
the following losses:
Year ended 31 December
2020
2019
 
Loss (USD exchange rate increased by 25% compared to RUB)
604
793
Loss (EURO exchange rate increased by 25% compared to RUB)
 
-
 
 
2
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
39
Credit risk
Credit risk is the risk that a customer may default or not meet its obligations to the group on a timely
basis, leading to financial losses to the group. Credit risk arises from cash, cash equivalents and
deposits kept with banks, derivative agreements, loans issued,
 
advances paid and other receivables.
 
In order to mitigate credit risk, the group conducts its business with creditworthy and reliable
counterparties, and minimises advance payments, actively uses guarantees, letters of credit and
other instruments for trade finance to decrease risks of non-payment. The group employs
a methodology for in-house financial analysis of banks and non-banking counterparties, which is
used during new agreements
 
with
 
counterparties.
 
The group’s
 
credit risk
 
profile is
 
regularly monitored
 
by management
 
in order to
 
avoid undesirable
increases
 
in risk,
 
to limit concentration
 
of credit and
 
to ensure compliance
 
with the
 
above mentioned
policies
 
and procedures.
 
Deposits,
 
current bank
 
accounts and
 
derivative
 
financial instruments
 
are held
with major Russian and international banks, with reasonable and appropriate diversification, which
decreases concentration risk by spreading the credit risk exposure across several top rated banks.
 
Although
 
the group
 
sells more than
 
90% of the total
 
gold sales
 
to several major
 
customers,
 
the group
 
is
not economically dependent on these customers because of the high level of liquidity in the gold
commodity market. A substantial portion of gold sales are made to banks on advance payment or
immediate payment terms, therefore the credit risk related to trade receivables is minimal.
As of 31 December
 
2020, trade receivables for gold bearing products sales were USD 115 million (31
December
 
2019: USD 140 million).
Gold sales to the group’s major customers are presented as follows:
Year ended 31 December
2020
 
2019
 
Otkritie
 
Bank
2,889
 
1,994
Sovkombank
1,262
 
511
VTB Bank
283
 
721
Other
 
522
 
739
 
Total
4,956
 
 
3,965
 
 
Liquidity risk
Liquidity
 
risk is the
 
risk that the
 
group will
 
not be able
 
to settle all
 
liabilities
 
as they are
 
due. The group’s
liquidity
 
position
 
is carefully
 
monitored
 
and managed.
 
The group manages
 
liquidity risk
 
by maintaining
detailed budgeting and cash forecasting processes and matching the maturity profiles of financial
assets and liabilities to help ensure that it has adequate cash available to meet its payment
obligations.
For assessing
 
own credit risk,
 
a proxy credit
 
default swaps
 
for
 
the industry
 
is used since
 
Polyus does
not have quoted
 
credit default
 
swaps.
 
The group’s cash management procedures include medium-
term forecasting (a budget approved each financial year and updated on a quarterly basis) and
short-term forecasting (monthly cash-flow budgets are established for each business unit and
a review of each entity’s daily cash position is performed using a two-week rolling basis).
Presented below is the maturity profile of the group’s financial liabilities as of 31 December 2020
based on undiscounted contractual cash payments,
 
including interest payments and derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
 
40
Borrowings and derivatives
Accounts
 
Principal
Interest
payable
Leasing
Total
Due in the first year
265
176
378
12
831
Due in the second year
497
151
-
12
660
Due in the third year
911
116
-
9
1,036
Due in the fourth year
2,001
51
-
9
2,061
Due in the fifth year
31
-
-
8
39
Due in the period between sixth
to eight years
-
-
-
35
35
Total
3,705
494
378
85
4,662
 
Presented below is the maturity profile of the group’s financial liabilities as of 31 December 2019
based on undiscounted contractual payments, including interest payments and derivatives:
Borrowings
 
and derivatives
Accounts
payable and
deferred
Principal
Interest
consideration
Leasing
Total
Due in the first year
677
217
 
373
14
1,281
 
Due in the second year
467
196
28
14
705
Due in the third year
500
167
34
13
714
Due in the fourth year
1,241
128
-
10
1,379
Due in the fifth year
2,045
51
-
10
2,106
Due in the period between sixth
to eight years
-
-
-
45
45
Total
4,930
759
435
106
6,230
 
Maturity of the derivative financial instruments and deferred consideration is
 
presented within notes
16 and 23.
32.
 
INVESTMENTS
 
IN SIGNIFICANT
 
SUBSIDIARIES
The basis of distribution of accumulated retained earnings for companies operating in the Russian
Federation
 
is defined by
 
legislation
 
as the current
 
year net
 
profit of the
 
company, as calculated
 
in
accordance
 
with Russian
 
accounting
 
standards.
 
However, the legislation
 
and other statutory
 
laws and
regulations
 
dealing with
 
profit distribution
 
are open to
 
legal interpretation
 
and accordingly
 
management
believes
 
at present
 
it would not
 
be appropriate
 
to disclose
 
an amount for
 
distributable
 
profits and
reserves
 
in these consolidated
 
financial statements.
 
Information about significant subsidiaries of the group
 
Effective % held at
 
31 December
5
Subsidiaries
 
Nature of business
 
2020
 
2019
 
 
 
 
Incorporated in Russian Federation
 
 
 
 
 
 
JSC Polyus Krasnoyarsk
 
Mining (open pit)
 
100
 
100
JSC Polyus Aldan
 
 
Mining (open pit)
 
100
 
100
JSC Polyus Verninskoye
 
Mining (open pit)
 
100
 
100
PJSC Lenzoloto
 
Holding company of Alluvials business unit
until 22 September 2020
 
74
 
64
JSC GMC Lenzoloto
Holding company of Alluvials business unit
from 22 September 2020
100
66
JSC Polyus Magadan
 
Mining
 
100
 
100
LLC Polyus Stroy
 
Construction
 
100
 
100
LLC SL Gold (note 23)
 
Exploration and evaluation of
 
the Sukhoi Log deposit
 
100
 
68
 
Change of ownership in subsidiaries
In September 2020, following the approval by the extraordinary general shareholders’ meeting of
PJSC Lenzoloto, JSC Polyus Krasnoyarsk acquired 94.4% of shares in JSC GMC Lenzoloto and
5
 
Effective % held by the Company, including holdings by other subsidiaries of the group.
 
 
 
 
 
 
 
 
PJSC “POLYUS”
 
NOTES
 
TO
 
THE
 
##D<MD_ENG_CONSOLIDA
TED
 
/
 
CONDENSED
 
CONSOLIDATED
 
INTERIM
 
STATEMENT>
 
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
 
(in millions of US Dollars)
 
 
41
paid cash consideration of approximately RUR 19,900 million to PJSC Lenzoloto (equivalent
 
of USD
262 million at the CBR currency exchange rate as of 22 September 2020). JSC GMC Lenzoloto
holds all production assets and mining licenses of the Alluvial business unit of the group.
 
 
During 2020, the group acquired 126,345 of ordinary and 15,498 of preferred shares of PJSC
Lenzoloto from its shareholders for a total cash consideration of USD 33 million and 5 thousand
ordinary shares of PJSC Polyus.
 
 
Summarised financial information of each of the group’s subsidiaries that have a material
non-controlling interest
 
PJSC Lenzoloto
6
31 December
 
LLC SL Gold
7
31 December
Summarised statements of financial position
2020
2019
 
2020
2019
 
Current assets
315
258
 
67
101
Non-current assets
2
104
 
221
229
Current liabilities
-
25
 
270
258
Non-current liabilities
-
41
 
3
75
Equity attributable to the shareholders of the subsidiary
233
231
 
15
(2)
Non-controlling interests
84
65
 
-
(1)
 
 
Summarised statements of profit or loss
 
 
 
 
 
 
 
Revenue
187
216
 
-
-
Profit / (loss) for the year
334
23
 
20
(5)
Profit attributable to non-controlling interests
105
10
 
7
(2)
 
 
Summarised statements of cash flows
 
 
 
 
 
 
 
Net cash inflow from operating activities
70
46
 
-
-
Net cash outflow from investing activities
50
(15)
 
(34)
(26)
Net cash (outflow) / inflow from financing activities
(7)
(2)
 
(4)
87
 
Dividends paid to non-controlling interests
1
8
 
-
-
 
 
 
33.
 
EVENTS AFTER
 
THE REPORTING
 
DATE
 
There were no events subsequent to the reporting date that should adjust amounts of assets,
liabilities, income or expenses or that should be disclosed in these consolidated financial statements.
 
 
6
 
Includes results of PJSC Lenzoloto and its subsidiaries until 22 September 2020 and only standalone PJSC Lenzoloto result and balances after.
 
7
 
During 2020 the group increased effective ownership in LLC SL Gold to 100%.