Polus — Interim / Quarterly Report 2021

May 27, 2021

Polyus 3m2021 MDA and FS (ESMA) 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 549300FUXVT7TF6ZKV71 2021-03-31 549300FUXVT7TF6ZKV71 2021-01-01 549300FUXVT7TF6ZKV71 2020-01-31 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 549300FUXVT7TF6ZKV71 2020-01-01 549300FUXVT7TF6ZKV71 2020-03-31 549300FUXVT7TF6ZKV71 2020-01-01 PG1Q2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 PG1Q2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2020-03-31 PG1Q2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2020-03-31 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2020-03-31 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2020-03-31 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2020-03-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2020-03-31 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2020-03-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2020-01-01 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2020-01-01 2020-03-31 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2020-03-31 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2021-01-01 PG1Q2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 PG1Q2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2021-03-31 PG1Q2020:NumberSharesOutstanding 549300FUXVT7TF6ZKV71 2021-01-01 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2021-03-31 ifrs-full:IssuedCapitalMember 549300FUXVT7TF6ZKV71 2021-01-01 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2021-03-31 ifrs-full:SharePremiumMember 549300FUXVT7TF6ZKV71 2021-01-01 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2021-03-31 ifrs-full:TreasurySharesMember 549300FUXVT7TF6ZKV71 2021-01-01 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2021-03-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 549300FUXVT7TF6ZKV71 2021-01-01 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2021-03-31 ifrs-full:RetainedEarningsMember 549300FUXVT7TF6ZKV71 2021-01-01 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2021-03-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300FUXVT7TF6ZKV71 2021-01-01 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2021-01-01 2021-03-31 ifrs-full:NoncontrollingInterestsMember 549300FUXVT7TF6ZKV71 2021-03-31 ifrs-full:NoncontrollingInterestsMember iso4217:USD xbrli:shares iso4217:USD xbrli:shares PJSC “Polyus” Condensed consolidated interim financial statements for the three months ended 31 March 2021 (unaudited) 2 PJSC “POLYUS” CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) Three months ended 31 March Notes 2021 2020 Gold sales 5 1,017 861 Other sales 11 11 Total revenue 1,028 872 Cost of gold sales 6 (301) (281) Cost of other sales (10) (10) Gross profit 717 581 Selling, general and administrative expenses 7 (73) (86) Other expenses, net 8 (32) (14) Operating profit 612 481 Finance costs, net 9 (51) (70) Interest income 3 11 Loss on revaluation of derivative financial instruments, net 10 (12) (534) Foreign exchange loss, net (15) (339) Profit / (loss) before income tax 537 (451) Income tax (expense) / benefit (87) 62 Profit / (loss) for the period 450 (389) Profit / (loss) for the period attributable to: Shareholders of the Company 449 (408) Non-controlling interests 1 19 450 (389) Weighted average number of ordinary shares ’000 - for basic earnings per share 19 134,690 133,308 - for diluted earnings per share 19 135,043 133,550 Earnings / (loss) per share (US Dollar per share) - basic 3.33 (3.06) - diluted 3.32 (3.06) 3 PJSC “POLYUS” CONDENSED CONSOLIDATED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) Three months ended 31 March 2021 2020 Profit / (loss) for the period 450 (389) Other comprehensive loss for the period Items that may be subsequently reclassified to profit or loss: Effect of translation to presentation currency (67) (361) Other comprehensive loss for the period (67) (361) Total comprehensive income / (loss) for the period 383 (750) Total comprehensive income / (loss) for the period attributable to: Shareholders of the Company 384 (746) Non-controlling interests (1) (4) 383 (750) 4 PJSC “POLYUS” CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) Notes 31 Mar. 2021 31 Dec. 2020 Assets Non-current assets Intangible assets 11 131 132 Property, plant and equipment 12 4,083 4,121 Inventories 14 541 519 Deferred tax assets 108 109 Derivative financial instruments 15 21 17 Other receivables and non-current assets 25 28 4,909 4,926 Current assets Inventories 14 590 595 Deferred expenditure 33 17 Advances paid to suppliers and prepaid expenses 44 29 Trade and other receivables 16 26 133 Taxes receivable 17 75 120 Income tax prepaid 23 30 Cash and cash equivalents 18 1,800 1,445 2,591 2,369 Total assets 7,500 7,295 Equity and liabilities Capital and reserves Share capital 19 5 5 Additional paid-in capital 19 2,380 2,410 Treasury shares 19 (226) (288) Translation reserve (3,109) (3,044) Retained earnings 3,696 3,272 Equity attributable to shareholders of the Company 2,746 2,355 Non-controlling interests 90 91 2,836 2,446 Non-current liabilities Borrowings 20 2,813 3,329 Derivative financial instruments 15 330 330 Deferred tax liabilities 264 259 Site restoration, decommissioning and environmental obligations 58 63 Other non-current liabilities 40 57 3,505 4,038 Current liabilities Borrowings 20 703 225 Derivative financial instruments 15 49 42 Trade and other payables 21 290 399 Taxes payable 22 98 101 Income tax payable 19 44 1,159 811 Total liabilities 4,664 4,849 Total equity and liabilities 7,500 7,295 5 PJSC “POLYUS” CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (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 2019 133,196 5 2,049 (103) (2,727) 2,586 1,810 103 1,913 Profit / (loss) for the period - - - - - (408) (408) 19 (389) Other comprehensive income / (loss) - - - - (338) - (338) (23) (361) Total comprehensive income / (loss) - - - - (338) (408) (746) (4) (750) Equity-settled share-based compensation (LTIP), net of tax - - 9 - - - 9 - 9 Execution of conversion option by bondholders 156 - 4 15 (3) - 16 - 16 Shares awarded under LTIP 370 - (13) 36 (5) (24) (6) - (6) Purchase of additional ownership in SL Gold 246 - 5 24 - 2 31 (2) 29 Balance at 31 March 2020 133,968 5 2,054 (28) (3,073) 2,156 1,114 97 1,211 Balance at 31 December 2020 134,705 5 2,410 (288) (3,044) 3,272 2,355 91 2,446 Profit for the period - - - - - 449 449 1 450 Other comprehensive loss - - - - (65) - (65) (2) (67) Total comprehensive income / (loss) - - - - (65) 449 384 (1) 383 Equity-settled share-based compensation (LTIP), net of tax 19 - - 4 - - - 4 - 4 Shares awarded under LTIP 19 351 - (34) 74 - (39) 1 - 1 Share buyback 19 (62) - - (14) - 14 - - - Other 11 - - 2 - - 2 - 2 Balance at 31 March 2021 135,005 5 2,380 (226) (3,109) 3,696 2,746 90 2,836 6 PJSC “POLYUS” CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) Three months ended 31 March Notes 2021 2020 Operating activities Profit / (loss) before income tax 537 (451) Adjustments for: Finance costs, net 9 51 70 Interest income (3) (11) Loss on revaluation of derivative financial instruments, net 10 12 534 Depreciation and amortisation 81 74 Foreign exchange loss, net 15 339 Other 5 13 698 568 Movements in working capital Inventories (21) (53) Deferred expenditure (17) (19) Trade and other receivables 107 78 Advances paid to suppliers and prepaid expenses (16) (15) Taxes receivable 37 9 Trade and other payables and accrued expenses 16 24 Taxes payable (22) 14 Cash flows from operations 782 606 Income tax paid (96) (62) Net cash generated from operating activities 686 544 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) and intangible assets (196) (177) Purchase of additional ownership in LLC SL Gold - (28) Payments for the Omchak high voltage power grid 5 - (8) Interest received 3 11 Net cash utilised in investing activities (193) (202) Financing activities 1 Proceeds from borrowings - 112 Repayment of borrowings (4) (230) Interest paid (68) (87) Commissions on borrowings paid - (4) Repayments of lease liability (5) (4) Net (payment) / proceeds on exchange of interest payments under cross currency swaps 9 (1) 10 Net payment on exchange of interest payments under interest rate swaps 9 (1) - Payments for close out of revenue stabilizer programme - (32) Increase of ownership in subsidiaries (24) - Payment for share buyback 19 (32) - Unpaid dividends for previous periods returned 1 - Other 2 - Net cash utilised in financing activities (132) (235) Net increase in cash and cash equivalents 361 107 Cash and cash equivalents at the beginning of the period 18 1,445 1,801 Effect of foreign exchange rate changes on cash and cash equivalents (6) (30) Cash and cash equivalents at the end of the period 18 1,800 1,878 1 Significant non-cash transactions relating to investing (right-of-use assets recognition and LTIP payments in treasury shares) and financing activities (lease liabilities recognition) are disclosed in the notes 13 and 19 to these condensed consolidated interim financial statements, respectively. PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (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 27. 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 March 2021 and 31 December 2020, 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, management has 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, management considers that the group has adequate resources to continue in operational existence for at least the next 12 months from the date of signing these condensed consolidated interim financial statements and that it is appropriate to adopt the going concern basis in preparing these condensed consolidated interim financial statements. 2.2. Compliance with the International Financial Reporting Standards (“IFRS”) These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”). Accordingly, the condensed consolidated interim financial statements do not include all information and disclosures required for a complete set of financial statements, and should be read in conjunction with the group’s consolidated financial statements for the year ended 31 December 2020. 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 condensed consolidated interim financial statements are presented in accordance with IFRS. The condensed consolidated interim 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. 2.4. IFRS standards first time applied in 2021 The following is a list of new or amended IFRS standards and interpretations that have been applied by the group in these condensed consolidated interim financial statements: PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 8 Title Subject Effective for annual periods beginning on or after Effect on the condensed consolidated interim financial statements Interest Rate Benchmark Reform phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) Replacement of LIBOR with alternative Risk-free Rates 1 January 2021 No effect 2.5. IFRS standards to be applied after 2021 The following standards and interpretations, which have not been applied in these condensed consolidated interim financial statements, were in issue but not yet effective: Title Subject Effective for annual periods beginning on or after Effect on the condensed consolidated interim financial statements 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 Amendment IAS 8 New definition of the accounting estimates 1 January 2023 No effect Amendment IAS 1 Disclosure of accounting policy 1 January 2023 No effect 3. SIGNIFICANT ACCOUNTING POLICIES The same accounting policies, presentation and methods of computation have been followed in these condensed consolidated interim financial statements as were applied in the group’s audited consolidated financial statements for the year ended 31 December 2020. IAS 34 requires calculation of income tax benefit/expense for interim reporting periods to be based on the expected annual effective income tax rate. Non-taxable / (non-deductible) gains / (losses) on revaluation of certain Derivative financial instruments as well as certain other items of less predictable nature are excluded from determining the expected annual effective income tax rate, which may result in significant variations of effective income tax rate between different interim periods. The group presents its condensed consolidated interim financial statements in the US Dollar (“USD”), as management believes it is a more convenient presentation currency for international users of the condensed consolidated interim financial statements of the group as it is a common presentation currency in the mining industry. As of 31 March 2021, quarterly-end RUB/ US Dollar exchange rate used in the preparation of the condensed consolidated interim financial statements was 75.70 (31 December 2020: 73.88). PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 9 4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The critical accounting judgements, estimates and assumptions made by management of the group and applied in the accompanying condensed consolidated interim financial statements for the three months ended 31 March 2021 are consistent with those applied in the preparation of the consolidated financial statements of the group for the year ended 31 December 2020. 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”), determined as the Budget Committee and the Investment Committee. 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. ● 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. 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 PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 10 ● Capital expenditure s . Business segment assets and liabilities are not reviewed by the CODM and therefore are not disclosed in these condensed consolidated interim 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 expenditures For the three months ended 31 March 2021 Olimpiada 434 243 310 95 395 28 Blagodatnoye 165 92 121 33 359 21 Natalka 205 115 144 43 377 20 Verninskoye 116 65 87 22 338 15 Kuranakh 97 54 59 29 539 12 Alluvials - - (5) - - 4 Exploration - - - - - 4 Sukhoi Log - - - - - 9 Unallocated - - 23 (4) - 14 Total 1,017 569 739 218 386 127 For the three months ended 31 March 2020 Olimpiada 357 226 252 85 377 25 Blagodatnoye 165 103 117 37 361 8 Natalka 151 95 94 39 414 38 Verninskoye 108 69 78 24 353 16 Kuranakh 80 51 44 29 568 6 Alluvials - - (4) - - 4 Exploration - - - - - 4 Sukhoi Log - - - - - 4 Unallocated - - 8 1 - 19 Total 861 544 589 215 394 124 Adjusted EBITDA reconciles to the IFRS reported figures on a consolidated basis as follows: Three months ended 31 March 2021 2020 Profit / (loss) before income tax 537 (451) Finance costs, net (note 9) 51 70 Interest income (3) (11) Depreciation and amortisation 81 74 Foreign exchange loss, net 15 339 Loss on revaluation of derivative financial instruments, net (note 10) 12 534 Equity-settled share-based plans (LTIP) (note 19) 10 26 Expenses related to COVID-19 (note 25) 24 - Special charitable contributions 7 5 Impairment of property, plant and equipment - 2 Loss on disposal of property, plant and equipment and intangible assets 5 1 Adjusted EBITDA 739 589 2 Unaudited and not reviewed PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 11 The measurement of TCC per ounce of gold sold reconciles to the IFRS reported figures on a consolidated basis as follows: Three months ended 31 March 2021 2020 Cost of gold sales (note 6) 301 281 Adjusted for: Depreciation and amortisation (note 6) (94) (96) Effect of depreciation, amortisation, accrual and provisions in inventory change 22 30 Expenses related to COVID-19 in cost of gold sales (11) - TCC 2 218 215 Ounces of gold sold, in thousands 2 569 544 TCC per ounce of gold sold, USD per ounce 2 386 394 Gold sales Three months ended 31 March 2021 2020 Refined gold 1,017 848 Gold in flotation concentrate - 13 Total 1,017 861 Gold sales reported above represent revenue generated from external customers. There were no inter-segment gold sales during the three months ended 31 March 2021 and 2020. Gold sales in the Alluvial business unit are more heavily weighted towards the second half of the calendar year, with all annual sales usually occurring from May until October. There were no gold sales outside of Russian Federation during the three months ended 31 March 2021 and 2020. Reconciliation of capital expenditures to the property plant and equipment additions (note 12) is presented below: Three months ended 31 March 2021 2020 Capital expenditures 127 124 Construction of the Omchak high-voltage power grid - 8 Stripping activity assets additions (note 12) 67 53 Less: intangible and other non-current assets additions (5) (9) Property plant and equipment additions (note 12) 189 176 6. COST OF GOLD SALES Three months ended 31 March 2021 2020 Depreciation and amortisation 94 96 Employee compensation 87 80 Consumables and spares 64 71 Mineral extraction tax 50 44 Fuel 25 35 Power 15 16 Other 24 32 Total cost of production 359 374 Increase in stockpiles, gold-in-process and refined gold inventories (58) (93) Total 301 281 PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 12 7. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Three months ended 31 March 2021 2020 Employee compensation 54 66 Depreciation and amortisation 6 6 Taxes other than mineral extraction tax and income taxes 4 5 Professional services 2 2 Distribution expenses related to gold flotation concentrate 1 1 Other 6 6 Total 73 86 8. OTHER EXPENSES, NET Three months ended 31 March 2021 2020 Expenses related to COVID-19 (note 25) 13 - Special charitable contributions 7 5 Loss on disposal of property, plant and equipment and intangible assets 5 1 Impairment of property, plant and equipment - 2 Other 7 6 Total 32 14 9. FINANCE COSTS, NET Three months ended 31 March 2021 2020 Interest on borrowings 47 71 Interest on lease liabilities 1 1 Loss / (gain) on exchange of interest payments under cross currency swaps 1 (10) Loss on exchange of interest payments under interest rate swaps 1 - Unwinding of discounts 1 4 Bank commission and write-off of unamortised debt cost due to early extinguishment - 4 Total 51 70 10. LOSS ON REVALUATION OF DERIVATIVE FINANCIAL INSTRUMENTS, NET Three months ended 31 March 2021 2020 Revaluation loss on cross currency swaps (13) (437) Revaluation loss on revenue stabiliser - (29) Revaluation gain / (loss) on interest rate swaps 1 (7) Revaluation loss on conversion option - (61) Total (12) (534) PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 13 11. INTANGIBLE ASSETS Internally- generated software Purchased software Internally- generated other Total Cost 85 28 30 143 Accumulated amortisation and impairment (9) (8) (3) (20) Net book value at 31 December 2019 76 20 27 123 Additions 5 1 2 8 Reclassification - 1 - 1 Amortisation charge (1) (2) (1) (4) Effect of translation to presentation currency (16) (4) (6) (26) Cost 72 24 26 122 Accumulated amortisation and impairment (8) (8) (4) (20) Net book value at 31 March 2020 64 16 22 102 Cost 95 28 34 157 Accumulated amortisation and impairment (12) (8) (5) (25) Net book value at 31 December 2020 83 20 29 132 Additions 3 1 1 5 Reclassification 2 (2) - - Amortisation charge (1) (2) - (3) Effect of translation to presentation currency - (1) (2) (3) Cost 99 26 33 158 Accumulated amortisation and impairment (12) (10) (5) (27) Net book value at 31 March 2021 87 16 28 131 PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 14 12. PROPERTY, PLANT AND EQUIPMENT Fixed assets Stripping activity assets Capital construction in progress Exploration and evaluation assets Total 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 - 53 112 11 176 Transfers 69 - (69) - - Disposals (1) - - - (1) Depreciation charge (108) (18) - - (126) Impairment - - - (2) (2) Effect of translation to presentation currency (566) (130) (139) (126) (961) Other (1) - - 1 - Cost 3,615 776 609 519 5,519 Accumulated depreciation and impairment (1,424) (254) (51) (24) (1,753) Net book value at 31 March 2020 2,191 522 558 495 3,766 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 Additions - 67 103 19 189 Transfers 148 - (148) - - Disposals - - (1) - (1) Depreciation charge (104) (22) - - (126) Effect of translation to presentation currency (56) (16) (13) (14) (99) Other 5 - (1) (5) (1) Cost 4,178 1,014 566 590 6,348 Accumulated depreciation and impairment (1,822) (360) (58) (25) (2,265) Net book value at 31 March 2021 2,356 654 508 565 4,083 The carrying value of rights-of-use assets included in fixed assets is disclosed in note 13. Mineral rights The carrying values of mineral rights included in fixed assets and exploration and evaluation assets were as follows: 31 Mar. 2021 31 Dec. 2020 Mineral rights presented within: - fixed assets 55 57 - exploration and evaluation assets 340 346 Total 395 403 Exploration and evaluation assets The carrying values of exploration and evaluation assets were as follows: PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 15 31 Mar. 2021 31 Dec. 2020 Sukhoi Log 404 409 Chertovo Koryto 31 31 Olimpiada 31 27 Razdolinskoye 28 29 Burgakhchan area 18 17 Panimba 16 17 Bamsky 15 15 Natalka 7 7 Blagodatnoye 6 6 Other 9 7 Total 565 565 Depreciation and amortisation charges are allocated as follows: Three months ended 31 March 2021 2020 Depreciation in change in inventory 22 29 Capitalised within property, plant and equipment 26 27 Less: amortisation of intangible and other non-current assets (3) (4) Total depreciation capitalised as part of other assets 45 52 Depreciation and amortisation within cost of production (note 6) 94 96 Less: depreciation in change in inventory (22) (29) Selling, general and administrative expenses (note 7) 6 6 Cost of other sales 3 1 Total depreciation in profit or loss 81 74 Total depreciation of property, plant and equipment 126 126 13. 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 12) were as follows: Three months ended 31 March 2021 Three months ended 31 March 2020 Related party transactions Non-related party transactions Total Related party transactions Non-related party transactions Total Carrying value as of the beginning of the period 46 11 57 58 22 80 Changes in right-of-use assets due to lease indexation, modification and recognition of new contracts - 5 5 1 - 1 Depreciation charge (1) (2) (3) (1) (1) (2) Effect of translation to presentation currency (1) - (1) (13) (6) (19) Carrying value as of the end of the period 44 14 58 45 15 60 Movements of the lease liabilities presented within Borrowings (note 20) were as follows: PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 16 Three months ended 31 March 2021 Three months ended 31 March 2020 Related party transactions Non-related party transactions Total Related party transactions Non-related party transactions Total Carrying value as of the beginning of the period 51 19 70 53 27 80 Changes in lease liabilities due to lease indexation, modification and recognition of new contracts - 5 5 1 - 1 Foreign exchange loss, net 1 1 2 12 2 14 Interest on lease liabilities 1 - 1 1 - 1 Repayments of lease liability (2) (2) (4) (2) (3) (5) Effect of translation to presentation currency (1) (1) (2) (12) (4) (16) Carrying value as of the end of the period 50 22 72 53 22 75 14. INVENTORIES 31 Mar. 2021 31 Dec. 2020 Stockpiles 526 505 Gold-in-process 15 14 Inventories expected to be used after 12 months 541 519 Stockpiles 152 150 Gold-in-process 108 101 Antimony in gold-antimony flotation concentrate and silver 10 4 Refined gold and gold in flotation concentrate 5 4 Materials and supplies 344 365 Less: obsolescence provision for materials and supplies (29) (29) Inventories expected to be used in the next 12 months 590 595 Total 1,131 1,114 15. DERIVATIVE FINANCIAL INSTRUMENTS 31 March 2021 31 December 2020 Non-Current Current Total Non-Current Current Total Cross currency swaps 21 - 21 17 - 17 Total derivative financial assets 21 - 21 17 - 17 Cross currency swaps 322 49 371 321 42 363 Interest rate swaps 8 - 8 9 - 9 Total derivative financial liabilities 330 49 379 330 42 372 Cross currency swaps The following terms were in place as of 31 March 2021: PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 17 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 March 2021: Nominal Interest payments Expiration date (USD million) Frequency Group pays Group receives February 2024 150 monthly 2.425%-2.44% LIBOR 16. TRADE AND OTHER RECEIVABLES 31 Mar. 2021 31 Dec. 2020 Trade receivables for gold-bearing products 6 115 Other receivables 33 32 Less: allowance for other receivables (13) (14) Total 26 133 17. TAXES RECEIVABLE 31 Mar. 2021 31 Dec. 2020 Reimbursable value added tax 74 118 Other prepaid taxes 1 2 Total 75 120 18. CASH AND CASH EQUIVALENTS 31 Mar. 2021 31 Dec. 2020 Current USD bank accounts 1,422 1,115 Current RUB bank accounts 20 69 Bank deposits denominated in USD 278 178 Bank deposits denominated in RUB 80 83 Total 1,800 1,445 PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 18 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% 0.5-0.9% - Bank deposits denominated in RUB 3.6-4.7% 4.0-4.7% 19. SHARE CAPITAL AND RESERVES Authorised share capital of the Company as of 31 March 2021 comprised issued and fully paid 136,069 thousand ordinary shares at par value of RUB 1 each, of which 1,064 thousand were included within treasury shares. 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 condensed consolidated interim statement of profit or loss within Employee compensation included within Selling, general and administrative expenses. Share buyback During the three months ended 31 March 2021, the group completed a share buyback started in December 2020 by acquiring 62 thousand of the Company’s ordinary shares from its shareholders. As of 31 December 2020 a liability in the amount of USD 14 million was recognised in respect of shares to be delivered. 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): Three months ended 31 March 2021 2020 Ordinary shares in issue at the beginning of the period 134,705 133,196 Conversion of convertible bond - 156 Shares awarded under LTIP 351 370 Purchase of additional ownership in SL Gold (payable in treasury shares) - 246 Share buyback (62) - Other 11 - Ordinary shares in issue at the end of the period 135,005 133,968 Weighted average number of ordinary shares – basic EPS 134,690 133,308 Dilutive effect of potentially issuable shares under LTIP 353 242 Weighted average number of ordinary shares – diluted EPS 135,043 133,550 Profit / (loss) after tax attributable to the shareholders of the Company (million USD) 449 (408) Profit / (loss) after tax attributable to the shareholders of the Company for diluted EPS calculation (million USD) 449 (408) PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 19 20. BORROWINGS Nominal rate % 31 Mar. 2021 31 Dec. 2020 Eurobonds with fixed interest rate due in 2022 4.699% 481 481 Eurobonds with fixed interest rate due in 2023 5.250% 785 785 Eurobonds with fixed interest rate due in 2024 4.7% 469 468 Notes due in 2029 (Rusbonds) with noteholders’ early repayment option in 2024 7.4% 264 270 Notes due in 2025 (Rusbonds) with noteholders’ early repayment option in 2021 12.1% 198 203 Credit facilities with financial institutions nominated in RUR with variable interest rates Central bank rate + 2.3% MosPrime + 0.2% / + 0.27% / - 0.45% 1,098 1,128 Credit facilities with financial institutions nominated in USD with variable interest rates USD LIBOR + 1.40% / + 1.65% 149 149 Lease liabilities nominated in USD and RUR 5.26% 72 70 Sub-total 3,516 3,554 Less: current portion of long-term borrowings due within 12 months (703) (225) Long-term borrowings 2,813 3,329 Unused credit facilities As of 31 March 2021, the group has unused credit facilities in the total amount of USD 1,213 million (31 December 2020: USD 1,243 million). Pledge As of 31 March 2021 and 31 December 2020, 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 March 2021 according to which the respective subsidiaries of the Company and the Company itself are limited in their 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 March 2021. 21. TRADE AND OTHER PAYABLES 31 Mar. 2021 31 Dec. 2020 Employee compensation payable 79 94 Interest payable 35 57 Trade payables 65 49 Accrued annual leave 39 33 Share buyback (note 19) - 33 Payables for shares of PJSC Lenzoloto - 24 Dividends payable 2 2 Other accounts payable and accrued expenses 70 107 Total 290 399 PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 20 22. TAXES PAYABLE 31 Mar. 2021 31 Dec. 2020 Value added tax 21 33 Social taxes 40 24 Mineral extraction tax 17 24 Property tax 4 5 Other taxes 16 15 Total 98 101 23. RELATED PARTIES There were no transactions with related parties throughout three months ended 31 March 2021, except for those presented within note 13 and compensation of the key management personnel as detailed below. Key management personnel 3 Three months ended 31 March 2021 2020 Short-term compensation to key management personnel accrued 6 5 Equity-settled share-based compensation (LTIP) 8 21 Total 14 26 24. 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 13) were as follows: 31 Mar. 2021 31 Dec. 2020 Due within one year 8 8 From one to five years 24 24 Thereafter 48 49 Total 80 81 Capital commitments The group’s contracted capital expenditure commitments are as follows: 31 Mar. 2021 31 Dec. 2020 Projects in Krasnoyarsk 103 97 Project Natalka 74 73 Project Sukhoi Log 28 - Other capital commitments 24 26 Total 229 196 3 During the three months ended 31 March 2021, following the analysis of involvement of each individual member of the key management personnel in the decision making process within the group, it was concluded that certain members were to be excluded from the list. Amounts for the three months ended 31 March 2020 were updated, respectively. PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 21 25. 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. The group may face increasingly broad effects of COVID-19 due to its negative impact on the global economy and major financial markets from production interruptions or closure of facilities, supply chain disruptions, quarantines of personnel, reduced demand and difficulties in raising financing. The significance 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. 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 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. 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 condensed consolidated interim financial statements as follows: Three months ended 31 March 2021 2020 Cost of gold sales (Employee compensation) 11 - Other expenses, net 13 - Total expenses related to COVID-19 recognised in profit or loss 24 - Increase in stockpiles, gold-in-process and refined gold inventories 4 - Property plant and equipment additions (infrastructure facilities and stripping activity asset) 7 - Total costs related to COVID-19 35 - 26. 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 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 USD LIBOR rates 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. PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 22 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 March 2021 31 December 2020 Carrying amount Fair value Carrying amount Fair value Eurobonds (Level 1) 1,735 1,830 1,734 1,852 Borrowings (Level 2) 1,247 1,248 1,277 1,278 Rusbonds (Level 1) 462 470 473 497 Total 3,444 3,548 3,484 3,627 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. 27. 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 condensed consolidated interim financial statements. Information about significant subsidiaries of the group Effective % held at 4 Subsidiaries Nature of business 31 Mar. 2021 31 Dec. 2020 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 JSC GMC Lenzoloto Holding company of Alluvials business unit 100 100 JSC Polyus Magadan Mining (open pit) 100 100 LLC Polyus Stroy Construction 100 100 LLC Polyus Sukhoi Log (renamed, previously LLC SL Gold) Exploration and evaluation of the Sukhoi Log deposit 100 100 JSC Polyus Krasnoyarsk regional investment program (Blagodatnoye business unit) JSC Polyus Krasnoyarsk is undertaking an investment project to increase mining and processing facilities of the Blagodatnoye mine (thereafter «Mill-5 project»). According to the Directive of the Government of the Krasnoyarsk region JSC Polyus Krasnoyarsk was included in the register of the participants of regional investment projects (thereafter «RInvP») starting from 2021. As a result, the subsidiary has been granted a right to apply reduced corporate income tax rates in relation to the Mill-5 project income and reducing MET coefficients in relation to minerals extracted under the Mill-5 project. Considering expected start of production under the Mill-5 project, JSC Polyus Krasnoyarsk expects to apply the following reduced tax rates: 4 Effective % held by the Company, including holdings by other subsidiaries of the group. PJSC “POLYUS” NOTES TO THE ##D FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2021 (UNAUDITED) (in millions of US Dollars) 23 ● Mineral extraction tax (MET): 0% for 2025 - 2026 increasing by 1.2% e very two years thereafter to 6%. Amount of tax savings should not exceed the amount of investments in Mill-5 project; ● Corporate income tax: 5% for 2025 - 2028. JSC Polyus Verninskoye regional investment program (Verninskoye business unit) The group expects that during 2021 the amount of mineral extraction tax savings is likely to exceed the amount of investments in regional investment program, in which case JSC Polyus Verninskoye would no longer be able to benefit from the reduced mineral extraction tax and income tax rates (as of 31 March 2021 savings have not exceeded investments). 28. EVENTS AFTER THE REPORTING DATE There were no events subsequent to the reporting date that would adjust amounts of assets, liabilities, income or expenses or that should be disclosed in these condensed consolidated interim financial statements.