DJ Polymetal: Report on payments to governments for the year 2021
Polymetal International plc (POLY) Polymetal: Report on payments to governments for the year 2021 30-Jun-2022 / 09:00 MSK Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY Date 30 June 2022 Polymetal International plc
Report on payments to governments for the year 2021
Polymetal issues the report on payments to government for the year ended 31 December 2021.
INTRODUCTION
This Report provides an overview of the payments to governments made by Polymetal International plc and its subsidiary undertakings (hereinafter referred to as "Polymetal") for the year 2021 as required under the UK's Report on Payments to Governments Regulations 2014 (as amended in December 2015). These UK Regulations enact domestic rules in line with Directive 2013/34/EU (the EU Accounting Directive (2013)) and apply to large extractive companies, whose securities are publicly listed on a UK-regulated stock market, that are involved in the exploration, prospection, discovery, development and extraction of minerals, oil, natural gas deposits or other materials. This Report is also intended to satisfy the requirements of the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom.
BASIS OF PREPARATION
Legislation
This report is prepared in accordance with The Reports on Payments to Governments Regulations 2014 as enacted in the UK in December 2014 and as amended in December 2015.
Reporting entities
This Report includes payments to governments made by Polymetal. Payments made by entities over which Polymetal has joint control or significant influence are excluded from this Report.
Activities
Payments made by Polymetal to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals are disclosed in this Report. It excludes payments related to refining activities made to the refineries owned by the government agencies and any payments which are not directly attributable to the production and exploration activities.
Government
Government includes any national, regional or local authority of a country, and includes a department, agency or entity that is a subsidiary of a government.
Project
Payments are reported at project level except that payments that are not attributable to a specific project are reported at legal entity level. Project is defined as operational activities which are governed by a single contract, or licence agreement, and form the basis for payment liabilities with a government. If such agreements are substantially interconnected, those agreements are to be treated as a single project.
"Substantially interconnected" means forming a set of operationally and geographically integrated contracts, or licence agreements that are signed with a government giving rise to payment liabilities. Indicators of integration include, but are not limited to, geographic proximity, the use of shared infrastructure and common operational management.
License agreements are aggregated for the purposes of reporting as a single project only when those legal agreements have substantially similar terms and are both geographically and operationally integrated.
Payments
The information is reported under the following payment types:
Income taxes
These are taxes paid by Polymetal on its income and/or profits in accordance with legislation enacted in the applicable jurisdiction. Payments are reported net of refunds. Value added tax, personal income taxes, social taxes, property taxes are excluded.
The maximum income tax in Russia is set at a rate of 20% and is allocated between federal budget and the budgets of the relevant constituent regions. In 2021 and 2020 the following proportion was applied: 3% allocated to the federal budget, whereas 17% allocated to the regional budgets. From 1 January 2017 Omolon Gold Mining Company LLC and Magadan Silver JSC are entitled to the decreased statutory income tax rate of 17% for the operations held in the Special Economic Zone of the Russian Far East, as well as decreased mining tax rate (paying at 60% of the standard mining tax rates). In return for obtaining this tax relief the members of the regional Special Economic Zone are obliged to invest 50% of their tax savings each year in the Special Economic Zone Development Program. From 1 January 2016 Svetloye LLC was subject to tax relief as a participant in a Regional Investment Project and was entitled to decreased mining tax rates and the statutory income tax rate of 0% up to 2021.
In Kazakhstan income tax is set at a rate of 20% and there is no allocation for regional or local income taxes in this country.
Mining tax
Mining tax is a royalty payable in Russian Federation and Kazakhstan, which is calculated based on the value of the precious metals extracted in the period. In Russia this value is usually determined based on the realised selling price of precious metals or, in case if there were no sales during the period, cost of production of metals extracted. In Kazakhstan the value is determined based on the market price whether or not there were sales during the period.
Mining tax in Russia is levied at federal level, and then is reallocated between federal and respective regional budgets based on the following proportion: 40% of total tax collected is transferred to the federal budget, 60% to regional budgets. Mining tax and royalties in Kazakhstan are levied at republican level.
Licence fees
These are fees and other sums paid as consideration for acquiring a licence for gaining access to an area where extractive activities are performed. Administrative government fees that are not specifically related to the extractive sector, or to access to extractive resources, are excluded.
Rental fees
The land in the Russian Federation and Kazakhstan on which the Group's production facilities are located is owned by the state. The Group leases this land through operating lease agreements.
Other payments
Other payments include enviromental emission fees, and also payments made and social commitments in accordance with subsoil contracts attributable to the Kyzyl project and investment in the Special Economic Zone Development Program of Omolon Gold Mining Company LLC and Magadan Silver JSC.
Cash and in-kind payments
Payments are reported on cash basis. No in-kind payments were made during years ended 31 December 2021 and 31 December 2020.
Materiality Level
Any payment, whether made as a single payment or as a series of related payments, below GBP 86,000 within a financial year is excluded from this Report.
Payments made to governments by joint ventures or associates of the Group in proportion to the company's interest in the respective venture or associate are insignificant to this Report based on materiality level set.
Exchange Rate
Relevant payments are made by Polymetal in Russian Rubles and Kazakh Tenge and for the purpose of this Report are translated to the US Dollar based on the foreign exchange rate at the relevant monthly average rate.
PAYMENTS PER GOVERNMENT
FOR THE YEAR 2021
Government Mining Rental Licence
Income tax fees Other Total
000'USD tax fees
Kazakhstan 91,712 41,870 - - 10,8081 144,390
Russia 123,407 92,965 4,734 175 18,7552 240,036
Total 215,119 134,835 4,734 175 29,563 384,426
PAYMENTS PER
PROJECT
Entity Country/ Mining Rental Licence
Project Government Region Income tax fees Other Total
000'USD tax fees
Bakyrchik Mining Venture Kyzyl Kazakhstan n/a 73,975 27,325 - - 7,4081 108,708
LLC
Varvarinskoye JSC Varvara Kazakhstan n/a 10,919 1,540 - - 523 12,982
Komarovskoye Mining Komar Kazakhstan n/a 6,818 13,005 - - 2,877 22,700
Company LLC
Gold of Northern Urals Voro Russia Svedlovskaya 8,617 4,985 138 - - 13,740
CJSC oblast'
Saumskaya Mining Company Saum Russia Svedlovskaya 2,880 1,481 - - - 4,361
LLC oblast'
Svetloye LLC Svetloye Russia Khabarovskiy - 5,389 443 - - 5,832
Kray
Magadan Silver JSC Dukat Russia Magadanskaya 49,270 24,172 694 - 10,3602 84,496
oblast'
Mayskoye Gold Mining Chukotka
Company LLC Mayskoye Russia Autonomous 4,886 18,605 - - - 23,491
Okrug
Omolon Gold Mining Omolon Russia Magadanskaya 29,001 14,285 534 175 8,0082 52,003
Company LLC oblast'
Albazino Resources Ltd Albazino Russia Khabarovskiy 29,626 24,821 1,225 - 251 55,923
Kray
GRK Amikan LLC Veduga Russia Krasnoyarskiy (873)3 (773)3 294 - - (1,352)3
Kray
South-Verkhoyansk Mining Nezhda Russia Yakutia - - 305 - 136 441
Company JSC
Kutynskaya Mining Kutyn Russia Khabarovskiy - - 1,101 - - 1,101
Company LLC Kray
Total 215,119 134,835 4,734 175 29,563 384,426
______________________
1 In accordance with a memorandum with East-Kazakhstan Oblast Administration (local Kazakhstan government) Polymetal participates in financing of certain social and infrastructure development project of the region. During the year ended 31 December 2021 Polymetal paid USD4,598 thousand under this programme.
2 Includes payments under Special Economic Zone Development Program of USD7,930 thousand for Omolon Gold Mining Company LLC and USD10,325 thousand for Magadan Silver JSC.
3 During the year ended 31 December 2021 GRK Amikan LLC received reimbursement of income and mining taxes from tax authorities that were paid during previous periods.
PAYMENTS PER GOVERNMENT
FOR THE YEAR 2020
Government Mining Rental
Income tax Licence fees Other Total
000'USD tax fees
Kazakhstan 87,813 39,241 - 3,668 8,7711 139,493
Russia 158,843 86,066 2,588 1,220 12,6682 261,385
Total 246,656 125,307 2,588 4,888 21,439 400,878
PAYMENTS PER
PROJECT
Entity Country/ Mining Rental
Project Government Region Income tax Licence fees Other Total
000'USD tax fees
Bakyrchik Mining Venture Kazakhstan n/a 55,177 29,396 - 3,668 6,9971 95,238
LLC Kyzyl
Inter Gold Capital LLC Kazakhstan n/a 118 - - - - 118
Varvarinskoye JSC Varvara Kazakhstan n/a 28,707 - - - 605 29,312
Komarovskoye Mining Komar Kazakhstan n/a 3,811 9,845 - - 1,169 14,825
Company LLC
Gold of Northern Urals Voro Russia Svedlovskaya 27,298 10,016
CJSC oblast' - - 497 37,811
Svetloye LLC Svetloye Russia Khabarovskiy - 2,504 354 592 - 3,450
Kray
Magadan Silver JSC Dukat Russia Magadanskaya 38,962 16,995 628 7,1762
oblast' 665 64,426
Mayskoye Gold Mining Chukotka
Company LLC Mayskoye Russia Autonomous 13,975 17,288 - - - 31,263
Okrug
Omolon Gold Mining Omolon Russia Magadanskaya 41,148 13,427 4,7942
Company LLC oblast' 262 - 59,631
Albazino Resources Ltd Albazino Russia Khabarovskiy 36,239 23,980
Kray 703 - 201 61,123
GRK Amikan LLC Veduga Russia Krasnoyarskiy 1,221 1,856
Kray 285 - - 3,362
South-Verkhoyansk Mining Nezhda Russia Yakutia
Company JSC - - 319 - - 319
Total 246,656 125,307 2,588 4,888 21,439 400,878
______________________
1 In accordance with a memorandum with East-Kazakhstan Oblast Administration (local Kazakhstan government) Polymetal participates in financing of certain social and infrastructure development project of the region. During the year ended 31 December 2020 Polymetal paid USD4,576 thousand under this programme.
2 Includes payments under Special Economic Zone Development Program of USD4,492 thousand for Omolon Gold Mining Company LLC and USD6,465 thousand for Magadan Silver JSC.
Enquiries
Investor Relations Polymetal ir@polymetalinternational.com Evgeny Monakhov +44 20 7887 1475 (UK) Timofey Kulakov Kirill Kuznetsov +7 812 334 3666 (Russia)
Forward-looking statements
This release may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements speak only as at the date of this release. These forward-looking statements can be identified by the use of forward-looking terminology, including the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or "should" or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the company's control that could cause the actual results, performance or achievements of the company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the company's present and future business strategies and the environment in which the company will operate in the future. Forward-looking statements are not guarantees of future performance. There are many factors that could cause the company's actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
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ISIN: JE00B6T5S470 Category Code: PGR TIDM: POLY LEI Code: 213800JKJ5HJWYS4GR61 OAM Categories: 1.3. Payments to governments Sequence No.: 171563 EQS News ID: 1387069 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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