27 April 2012
Petropavlovsk PLC (the "Company")
Notice of Annual General Meeting
Notice of Posting of Annual Report
The Company confirms that its Annual General Meeting will be held on 31 May 2012 at 11 Grosvenor Place, Belgravia, London SW1X 7HH, commencing at midday. A notice convening that meeting has today been posted to shareholders together with the proxy card. In compliance with Listing Rule 9.6.1, a copy of these documents has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/nsm. The Notice of Annual General Meeting will shortly be available to view and download from the Company's website at www.petropavlovsk.net.
The Annual Report and Sustainability Report for the year ended 31 December 2011 have also been posted to shareholders today together with the above mentioned documents. A copy of these documents will shortly be available to view and download from the Company's website at www.petropavlovsk.net. A copy of these documents has also been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/nsm.
The information contained in the Appendix to this announcement, which is extracted from the Annual Report 2011, is included solely for the purposes of complying with DTR 6.3.5 and the requirements it imposes on how to make public, annual financial reports. The Appendix should be read in conjunction with the Company's Annual Results and Financial Statements issued on 28 March 2012. Together, these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material should be read in conjunction with, and is not a substitute for reading, the full Annual Report 2011.
The information contained in this announcement does not constitute the Company's statutory accounts as defined in section 434 of the Companies Act 2006 (the "Act") for 2011or 2010 but is derived from those accounts. The auditors have reported on those accounts and their report was unqualified, with no matters by way of emphasis, and did not contain statements under section 498(2) of the Act (regarding adequacy of accounting records and returns) or under section 498(3) (regarding provision of necessary information and explanations). The statutory accounts for the year ended 31 December 2011 have been approved by the Board and will be delivered to the Registrar of Companies. A copy of the statutory accounts for the year ended 31 December 2010 was delivered to the Registrar of Companies.
ENQUIRIES
Petropavlovsk PLC +44 (0) 20 7201 8900
Alya Samokhvalova - Group Head of External Communications
Rachel Tuft - Investor Relations
Merlin +44 (0) 20 7726 8400
David Simonson
Ian Middleton
Appendix
1. Statement of Directors' Responsibilities
The following responsibility statement is repeated here solely for the purpose of complying with DTR6.3.5. This statement relates to and is extracted from page 126 of the Annual Report 2011. Responsibility is for the full Annual Report 2011 not the extracted information presented in this announcement and the Annual Results and Financial Statements announcement.
Each of the Directors, whose names and functions are listed on pages 88 to 89 of the Annual Report 2011, confirm that, to the best of their knowledge:
? The financial statements prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
? The management report, which is incorporated into the Directors' report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
2. Principal risks relating to the Group
The most significant risks that may have an adverse impact on the Group's reputation, its ability to meet its strategic objectives and to deliver shareholder value are set out below. Summarised alongside each risk is a description of its potential impact on the Group. Measures in place to manage or mitigate against each specific risk, where this is within the Group's control, are also described. The 'additional information' column provides a cross-reference to further information that is available in the Annual Report and in the Sustainability Report, specifically regarding the processes and procedures that are undertaken to mitigate these risks in order that the Group can successfully deliver on its strategy.
The Group's principal risks are set out below. These should not be regarded as a complete or comprehensive list of all potential risks and uncertainties that the Group may face which could have an adverse impact on its performance. Additional risks may also exist that are currently unknown to the Group and certain risks which are currently believed to be immaterial could turn out to be material and significantly affect the Group's business and financial results.
OPERATIONAL RISKS |
|
Risk |
Description and potential impact |
Mitigation |
Additional information: |
|
Failure to complete various capital investment projects including the execution of the commissioning of the Pressure Oxidation (POX) Hub.
|
The Group's strategy relies on the successful completion of various capital investment projects including the successful commissioning of POX. Failure to deliver the Group's active capital investment programme including the successful execution of POX and the move to refractory ore and/or to adhere to agreed budgets or timeframes may have an adverse impact on the Group's growth plans and its future profitability. |
The progress in meeting capital investment timeframes and budgets is monitored regularly and a formal process exists by which the Executive Committee and the Board can monitor the progress of material capital projects against the original budgets and timeframes. The Technical and Strategic Committees both have the responsibility for formulating annual and long-term budgets and forecasts including capital investment budgets and monitoring and reporting on performance against these.
POX is being delivered together with an excellent team of specialists. The Company has dedicated significant time and resource to ensuring that the commissioning of POX will be successful and on schedule. Over the past five years, the Group has conducted extensive research into the POX technology and the processing parameters in its R&D centres and at the Giproruda research facility, in which IRC is the majority shareholder. This work has been supplemented by bulk sample testing at its pilot plant in Blagoveschensk. |
Strategic Priority page 11.
POX Hub pages 44 to 47. |
|
Delay in supply of, or failure of equipment / services. |
The Group relies on the supply and availability of various services and equipment in order to successfully run its operations. For example, timely delivery of mining equipment and jaw crushers and their availability are essential to the Group's ability to extract ore from the Group's assets to crush the mined ore prior to production.
Delay in the delivery or the failure of mining equipment could significantly delay production and impact the Group's profitability. |
Contingency plans are in place to address disruption to services. These were reviewed and strengthened in response to the challenges faced by failure of suppliers to deliver essential equipment on schedule during 2010.
The Group has high operational standards and maintenance of equipment is undertaken on a regular basis. . Equipment is inspected at the beginning and end of every shift and sufficient stocks of spare parts are available.
Equipment is ordered with adequate lead time in order to prevent delays in the delivery of equipment. |
|
|
Factors which impact output such as weather, equipment failures or lack of supplies |
The Group's assets are located in the Russian Far East which is an area that can be subject to severe climatic conditions. Severe weather conditions such as cold temperatures in winter could have an adverse impact on operations, including the delivery of supplies, equipment and fuel, and exploration and extraction levels may fall as a result of such climatic factors. |
Heating plants at operational bases are regularly maintained and operational equipment is fitted with cold weather options, which could assist in ensuring that equipment does not fail as a result of adverse weather conditions.
The Group aims to stock several months of essential supplies at each site. |
|
|
FINANICAL RISKS |
|
Risk |
Description and potential impact |
Mitigation |
Additional information: |
|
The Group's results of operations may be affected by changes in gold and/or iron ore prices
|
A sustained downward movement in the market price for gold or iron ore may negatively affect the Group's profitability and cash flow. The market price of gold is volatile and is affected by numerous factors which are beyond the Company's control. These factors include world production levels, global and regional economic and political events, international economic trends, inflation, currency exchange fluctuations and the political and economic conditions of major gold-producing countries. Additionally the purchase and sale of gold by central banks or other large holders or dealers may also have an impact on the market price.
|
The Group does not typically implement hedging or price management strategies, although the Executive Committee monitors the position on a regular basis and consults with the Board as appropriate. The Group aims to minimise overhead costs on an ongoing basis and to operate and maintain low-cost and efficient operations in order to optimise the Group's returns. The Group's business model is to actively maintain the lowest possible cash cost per gold ounce. During the year the Company appointed consultants to assist it in identifying operational efficiencies which have now been successfully implemented. |
Gold: Our Market Position and Competitive Environment on pages 24 to 27 |
|
Currency fluctuations may affect the Group.
|
The Company reports its results in US Dollars, which is the currency in which gold is principally traded and therefore in which most of the Group's revenue is generated. Significant costs are incurred in and/or influenced by the local currencies in which the Group operates principally Russian Roubles. In addition, a portion of the Group corporate overhead is denominated in sterling. The Company's financial condition and results of operations could be adversely affected by changes in the exchange rates between these currencies. In addition, if inflation in Russia were to increase without a corresponding devaluation of the Russian Rouble relative to the US dollar, the Group's business, results of operations and financial condition may be adversely affected. |
The Group has adopted a policy of holding a minimum of cash and monetary assets or liabilities in non US Dollar currencies and operates an internal funding structure which seeks to minimise foreign exchange exposure. |
Chief Financial Officer's Statement on pages 34 to 43. |
|
Lack of funding and liquidity to finance its strategy to grow through greenfield and brownfield exploration and through the employment of advanced technologies.
|
The Group's future production growth is dependent on its success in funding its existing operations and developing additional reserves. The Group requires funds to invest in and develop its exploration projects as well as to extend the life and capacity of its existing mining operations. If the Group is unable to obtain adequate funding, this may mean that the Group is unable to develop and/or meet its operational commitments. |
The Group's long-term strategic funding needs are detailed in the Group's five year strategic plan which was approved by the Board in November 2011. The five year strategic plan is periodically reviewed and monitored by the Executive Committee and the Board. A detailed annual budget is approved by the Board and monthly re-forecasts monitored.
During the year the Group took a number of actions to reduce the impact of this risk with increased access to funding through the execution of new banking facilities.
In addition, IRC has a loan facility with ICBC amounting to US$340 million for the development of the K&S iron ore concentrate project. |
Strategic Priority on page 11
Chief Financial Officer's Statement on pages 34 to 43. |
|
Risk that the Company breaches one or more of the restrictive covenants as set out in various loan agreements. |
In the event of a breach of one or more of the restrictive covenants in one of the Company's loan agreements with its debt providers loans may become payable immediately and the Company may not be able to access funds to repay the loans in such circumstances. |
A detailed annual budget and five year strategic plan have been developed and approved by the Board. These assist the executive management and the Board to closely monitor the position together with (i) monthly forecast updates including sensitivity analysis around covenants to assist careful management of cash flows, and (ii) development of a cost reduction plan to offset the effect of a decline in the gold price or adverse currency movements as appropriate. In addition, strong relationships are maintained between the Company and existing and potential equity and debt providers. |
Chief Executive Officer's Statement pages 34 to 43. |
|
Funding may be demanded from Petropavlovsk under a guarantee in favour of ICBC. |
Petropavlovsk has provided a guarantee against a US$340 million loan facility provided to IRC by ICBC. In the event that IRC were to default on their loan Petropavlovsk may be liable to repayment of the outstanding loan under the terms of the guarantee. |
The Group ensures constant monitoring of IRC's performance through [(1) Petropavlovsk representation on IRC Board, (2) IRC presentations to Petropavlovsk Board, (3) attendance of IRC Chairman and CEO at Petropavlovsk Executive meetings and (4) regular communication between the Group CFO and IRC CFO.
|
Chief Financial Officer's Statement pages 34 to 43.
IRC page 61. |
|
Exploration for reserves can be costly and uncertain |
Exploration activities are speculative and can be unproductive. These activities can require substantial expenditure to establish reserves through drilling and metallurgical and other testing, to determine appropriate recovery processes, to extract gold from the ore and to construct or expand mining and processing facilities. Once deposits are discovered it can take several years to determine whether reserves exist. During this time, the economic viability of a project may change. As a result of these uncertainties, the exploration programmes the Group is engaged in may not result in the expansion or replacement of the current production with new reserves or operations. |
The Group has a large, diverse portfolio of assets in highly prospective gold mining regions of Russia and carefully plans its exploration expenditure. The Group's exploration budget is determined for each asset at the start of each financial year depending on confidence in any previously received results. The Group is using modern geophysical and geochemical exploration and surveying techniques. The Group employs a team of qualified geologists with considerable regional expertise and experience. The Group's geological team is supported by a network of fully accredited laboratories capable of performing a range of assay work to high standards.
|
Our Strategy in Focus: Exploration on pages 12 to 15.
Exploration Report on pages 62 to 65. |
HEALTH, SAFETY AND ENVIRONMENTAL RISKS |
|
Risk |
Description and potential impact |
Mitigation |
Additional information |
|
Failures in the Group's health and safety processes and/or breach of Occupational Health and Safety legislation.
|
The Group's employees are one of its most valuable assets. The Group recognises that it has an obligation to protect the health of its employees and that they have the right to operate in a safe working environment. Some of the Group's operations are carried out under potentially hazardous conditions. Group employees may become exposed to health and safety risks which may lead to the occurrence of work-related accidents and harm to the Group's employees. These could also result in production delays, reputational damage and financial loss.
During 2011 amendments to the Russian Labour Code changed the previous 'principles' based operational health and safety measures approach for enterprises within the Russian Federation to a mandatory one - a breach of which could result in fines, penalties and reputational damage. |
Health and Safety management systems are in place across the Group to ensure that the operations are managed in accordance with the relevant health and safety regulations and requirements.
The Group has an established health and safety training programme under which its employees undergo initial training on commencement of employment and take part in refresher training on an annual basis.
The Group implemented a range of additional measures during the year as a result of three fatalities in 2010 in order to minimise the risk of accidents and improve accident response, including additional and enhanced technical measures at all sites and the provision of further occupational, health and safety training.
The Group operates a prompt incident reporting system to the Executive Committee and the Board.
Board level oversight of health and safety issues occurs through the work of the Health, Safety and Environmental Committee.
Internal policies have been updated to combine state legislation with the Group's internal policies to ensure compliance with the new legislation. |
Focus on health and safety on page 22.
Sustainability Report 2011. |
|
The Group's operations require the use of hazardous substances including cyanide and other reagents. |
Accidental spillages of cyanide and other chemicals may result in damage to the environment, personnel and individuals within the local community. |
Cyanide and other dangerous substances are kept in secure storages with limited access only to qualified personnel with access closely monitored by security staff.
|
Focus on the environment page 23.
Sustainability Report 2011. |
|
LEGAL AND REGULATORY RISKS |
|
Risk |
Description and potential impact |
Mitigation |
Additional information: |
|
The Group requires various licences and permits in order to operate.
|
The Group's principal activity is the mining of precious and non-precious metals which require it to hold licences which permit it to explore and mine in particular areas in Russia. These licences are regulated by Russian governmental agencies and if a material licence was challenged or terminated, this would have a material adverse impact on the Group. In addition, various government regulations require the Group to obtain permits to implement new projects or to renew existing permits. Non-renewal of a permit may cause the Group to discontinue the operations requiring the permit and the imposition of additional conditions may cause the Group to incur additional compliance costs. |
There are established processes in place to monitor the required and existing licences and permits on an on-going basis and processes are also in place to ensure compliance with the requirements of the licences and permits. Schedules are presented to the Executive Committee on a regular basis detailing compliance with the Group's licences and permits. |
Our Assets on pages 48 to 59.
Exploration Report on pages 62 to 65. |
|
The Group's mineral reserves and resources are estimates based on a range of assumptions.
. |
The Group's mineral reserves and resources are estimates based on a range of assumptions, including the results of exploratory drilling and an on-going sampling of the ore bodies; past experience with mining properties; and the experience of the expert engaged to carry out the reserve estimates. Other uncertainties inherent in estimating reserves include subjective judgements and determinations based on available geological, technical, contractual and economic information. Some assumptions may be valid at the time of estimation but may change significantly when new information becomes available.
Changes to any of these assumptions, on which the Group's reserve and resource estimates are based, could lead to the reported reserves being restated. Changes in the reserves and resources could adversely impact the economic life of deposits and the profitability of the Group's operations. |
The first stage of assurance of the accuracy of reserves and resources is by detailed analysis of geological samples in the Group's laboratories.
These laboratories are licensed by the Russian authorities and use multiple QA/QC procedures. The QA/QC procedures include the use of "standards", "blanks" and "duplicates" as well as cross checking a percentage of all samples analysed, in an independent laboratory in Ulan Ude, Republic of Buryatia, Russia.
The resource and reserve estimates are prepared in accordance with the guidelines of the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geosciences and Minerals Council of Australia ("JORC Code (2004)"). The Group engages the services of independent experts, Wardell Armstrong International, to review the Group's reserves and resources calculations for operating mines and development projects on a regular basis to provide additional external assurance.
In addition, the Company publishes its reserves and resources calculations based on gold prices which are lower than the current market price of gold. |
Strategic priority on page 1.
Our Strategy in Focus: Exploration on pages 12 to 15.
Gold Reserves and Resources on pages 66 to 75.
|
|
LEGAL AND REGULATORY RISKS |
|
Risk |
Description and potential impact |
Mitigation |
Additional Information: |
|
The Group is subject to risks associated with operating in Russia. |
Actions by governments or changes in economic, political, judicial, administrative, taxation or other regulatory factors or foreign policy in the countries in which the Group operates or holds its major assets could have an adverse impact on the Group's business or its future performance. Most of the Group's assets and operations are based in Russia.
Russian foreign investment legislation imposes restrictions on the acquisition by foreign investors of direct or indirect interests in strategic sectors of the Russian economy, including in respect of gold reserves in excess of a specified amount or any occurrences of platinum group metals.
None of the Group's assets are currently included on the list of subsoil blocks of federal significance, maintained by the Russian Government ("Strategic Assets"), and on the basis of the Russian foreign investment law and the related legislation now in force, it is not currently expected that any of the Group's assets will be classified as Strategic Assets.
However, if the legislative framework changes in the future, so that some assets of the Group become Strategic Assets, the Group entities holding licences in respect of such deposits may, themselves, become strategic. In this case, such Group entities' rights in relation to such assets may be limited or even terminated (with the compensation of incurred expenses in the course of the exploration of such deposits) under the procedure set out by the Russian Government. If the relevant Group entities are allowed to continue exploring such assets, direct or indirect acquisitions of interests in such entities may require clearance under the Russian foreign investments law.
Fluctuations in the global economy may adversely affect Russia's economy. Russia's economy has recently become increasingly dependent on global economic trends and is more vulnerable to market downturns and economic slowdowns elsewhere in the world, as well as to reductions and fluctuations in the prices of hydrocarbons and minerals. |
To mitigate the Russian economic and banking risk the Group strives to use the banking services of several financial institutions and not keep disproportionately large sums on deposit with a single bank.
The Group seeks to mitigate the political and legal risk by constant monitoring of the proposed and newly adopted legislation to adapt to the changing regulatory environment in the countries in which it operates and specifically in Russia. It also relies on the advice of external counsel in relation to the interpretation and implementation within the Group of new legislation.
The Group closely monitors its assets and the probability of their inclusion into the Strategic Assets lists published by the Russian Government. |
|
|
HUMAN RESOURCES RISK |
|
Risk |
Description and potential impact |
Mitigation |
Additional information: |
|
The Group depends on attracting and retaining key personnel. |
The Group's success and growth is closely aligned to the experience, abilities and contributions of certain of its key senior managers, and in particular the Group's Chairman and the Group's Chief Executive.
The Group's growth and profitability may be adversely impacted by the loss of the services of these key senior managers or its inability to attract additional highly-qualified and experienced people. |
Succession planning is an important item on the Board's agenda. The appointment of three new Executive Directors in January 2011 and further changes following the resignation of Dr Maslovskiy the Company's long-standing Chief Executive Officer on 20 December 2011 form part of the Company's ongoing long-term succession planning.
Regular reviews of reward structures and incentive plans are carried out in order to attract, retain and incentivise key employees. |
Directors' Remuneration Report on pages 108 to 120.
Corporate Governance Report on pages 99 to 107.
|
|
Lack of skilled labour |
The Group seeks its skilled labour within the geographies in which it operates, avoiding the need for higher expatriate labour costs. As the scale of the Group's operations increases, it may experience a shortage of skilled labour which may make it difficult to execute its business plans and/or lead to operational inefficiencies. |
The Group has a long standing programme of investing in education in the regions in which it operates to ensure a constant supply of highly qualified specialists for the Group's operations.
In response to the challenges of moving from a small scale mining operation to a more complex multi-mine operation, additional investment continues to be made in training (including expansion of the Pokrovskiy Mining College) and recruitment to improve operational efficiencies. |
Focus on community and workforce engagement on page 23.
Focus on education on page 22.
Sustainability Report 2011.
|
3. Related parties the Group entered into transactions with during the reporting period
OJSC Asian-Pacific Bank ('Asian-Pacific Bank'), V.H.M.Y. Holdings Limited, OJSC M2M Private Bank ('M2M Private Bank') and OJSC Kamchatprombank ('Kamchatprombank') are considered related parties as Mr Peter Hambro and Dr Pavel Maslovskiy have an interest in these companies.
The Petropavlovsk Foundation for Social Investment (the 'Petropavlovsk Foundation') is considered to be a related party due to the participation of the key management of the Group in the governing board of the Petropavlovsk Foundation and presence in its board of guardians.
OJSC Apatit ('Apatit'), a subsidiary of OJSC PhosAgro ('PhosAgro'), is considered to be a related party due to PhosAgro's minority interest and significant influence in the Group's subsidiary Giproruda.
OJSC Krasnoyarskaya GGK ('Krasnoyarskaya GGK') is considered to be a related party due to this entity's minority interest and significant influence in the Group's subsidiary Verhnetisskaya GRK.
Vanadium Joint Venture is a joint venture of the Group and hence is a related party.
Odolgo Joint Venture was a joint venture of the Group and hence was considered to be a related party until it was disposed of in May 2011.
Titanium Joint Venture was a joint venture of the Group and hence was considered to be a related party until it was acquired and became a subsidiary to the Group in April 2011 (note 16 to the Accounts).
Omchak Joint Venture was a joint venture of the Group and hence was considered to be a related party until it was acquired and became a subsidiary to the Group in July 2010.
Uralmining is an associate of the Group and hence is a related party.
Transactions with related parties the Group entered into during the years ended 31 December 2011 and 2010 are set out below.
Trading Transactions
Related party transactions the Group entered into that relate to the day-to-day operation of the business are set out below.
|
|
Sales to related parties |
Purchases from related parties |
|
|
|
2011
US$'000 |
2010
US$'000 |
2011
US$'000 |
2010
US$'000 |
|
Asian-Pacific Bank |
|
|
|
|
|
Sales of gold and silver |
168,578 |
25,617 |
- |
- |
|
Other |
281 |
723 |
1,064 |
546 |
|
|
168,859 |
26,340 |
1,064 |
546 |
|
Trading transactions with other related parties |
|
|
|
|
|
Engineering services provided to Apatit |
1,732 |
3,974 |
- |
- |
|
Exploration services provided by Krasnoyarskaya GGK |
- |
- |
13,825 |
7,216 |
|
Other transactions with Krasnoyarskaya GGK |
1,132 |
200 |
- |
- |
|
Rent, insurance and other transactions with other entities in which Mr Peter Hambro and/or Dr Pavel Maslovskiy have a controlling interest or exercise a significant influence |
229 |
1,214 |
6,093
|
5,866 |
|
Entities controlled by key management |
- |
- |
113 |
- |
|
Joint ventures and associates |
562 |
455 |
- |
26 |
|
Other |
465 |
- |
- |
- |
|
|
4,120 |
5,843 |
20,031 |
13,108 |
|
|
|
|
|
|
During the year ended 31 December 2011, the Group made US$3.4 million charitable donations to the Petropavlovsk Foundation (2010: US$2.5 million).
The outstanding balances with related parties at 31 December 2011 and 2010 are set out below.
|
|
Amounts owed by related parties
at 31 December |
Amounts owed to related parties
at 31 December |
|
|
|
2011
US$'000 |
2010
US$'000 |
2011
US$'000 |
2010
US$'000 |
|
Krasnoyarskaya GGK |
87 |
263 |
1,019 |
1,087 |
|
Other entities in which Mr Peter Hambro and/or Dr Pavel Maslovskiy have a controlling interest or exercise a significant influence |
60
|
330 |
1,713
|
1,840 |
|
Apatit |
1,480 |
925 |
- |
- |
|
Joint ventures and associates |
- |
75 |
- |
113 |
|
Asian-Pacific Bank |
7 |
- |
- |
- |
|
|
1,634 |
1,593 |
2,732 |
3,040 |
|
|
|
|
|
|
Banking arrangements
The Group has current and deposit bank accounts with Asian-Pacific Bank.
The bank balances at 31 December 2011 and 2010 are set out below:
|
|
|
2011
US$'000 |
2010
US$'000 |
|
Asian-Pacific Bank |
|
19,972 |
35,408 |
Financing transactions
During the year ended 31 December 2011, the Group received a US$15.1 million unsecured loan from Asian-Pacific Bank. The loan bears 10% interest and is repayable in October 2012.
During the year ended 31 December 2010, the Group received an interest-free unsecured loan from Krasnoyarskaya GGK totalling US$2.0 million. The loan principal was outstanding as at 31 December 2011 and 31 December 2010.
The Group also invested US$0.7 million in the associate through equity (2010: the Group invested US$1 million in the associate through loans advanced).
Key management compensation
Key management personnel are those having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any directors (whether executive or otherwise) of that entity.
|
|
2011 |
2010 |
|
|
US$'000 |
US$'000 |
|
Wages and salaries |
14,347 |
11,440 |
|
Pension costs |
325 |
164 |
|
Share-based compensation |
2,869 |
1,279 |
|
|
17,541 |
12,883 |
4. Subsequent events
On 7 February 2012, the Group disposed its interest in the wholly-owned subsidiary CJSC SeverChrome for the total cash consideration of US$7.8 million.
On 22 March 2012, the Group entered into a US$200 million loan facility agreement with Sberbank. The loan bears annual interest of 7.75% and is repayable between June 2016 and March 2018.
On 27 March 2012, the Board of Directors resolved to recommend a final dividend of ?0.07 per share which is expected to result in the aggregate payment of ?13.2 million. Subject to shareholder approval at the Annual General Meeting on 31 May 2012, the final dividend is proposed to be paid on 26 July 2012 to the shareholders on the register at the close of business on 29 June 2012.
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