PJSC ALROSA IFRS CONSOLIDATED FINANCIAL STATEMENTS · PDF file 2017. 3. 16. · IFRS...

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Transcript of PJSC ALROSA IFRS CONSOLIDATED FINANCIAL STATEMENTS · PDF file 2017. 3. 16. · IFRS...

  • PJSC ALROSA

    IFRS CONSOLIDATED FINANCIAL STATEMENTS

    FOR THE YEAR ENDED 31 DECEMBER 2016 AND

    INDEPENDENT AUDITOR’S REPORT

  • PJSC ALROSA

    IFRS consolidated financial statements for the year ended 31 December 2016 (in millions of Russian roubles, unless otherwise stated)

    CONTENTS

    Page

    Independent Auditor’s Report

    Consolidated Statement of Financial Position .............................................................................................................. 1

    Consolidated Statement of Profit or Loss and Other Comprehensive Income .............................................................. 2

    Consolidated Statement of Cash Flows ........................................................................................................................ 3

    Consolidated Statement of Changes in Equity ............................................................................................................. 4

    Notes to the Consolidated Financial Statements ..................................................................................................... 5-56

    1. ACTIVITIES ..................................................................................................................................................... 5 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ESTIMATES ..................... 5 3. FINANCIAL RISK MANAGEMENT ............................................................................................................ 20 4. FINANCIAL INSTRUMENTS BY CATEGORY .......................................................................................... 23 5. GROUP STRUCTURE AND INVESTMENTS ............................................................................................. 24 6. BANK DEPOSITS .......................................................................................................................................... 26 7. CASH AND CASH EQUIVALENTS ............................................................................................................. 26 8. PROPERTY, PLANT AND EQUIPMENT .................................................................................................... 28 9. INVENTORIES ............................................................................................................................................... 29 10. TRADE AND OTHER RECEIVABLES ........................................................................................................ 29 11. SHAREHOLDERS’ EQUITY ......................................................................................................................... 32 12. LONG-TERM DEBT ...................................................................................................................................... 33 13. SHORT-TERM LOANS AND CURRENT PORTION OF LONG-TERM DEBT ........................................ 35 14. OTHER PROVISIONS ................................................................................................................................... 35 15. PROVISION FOR PENSION OBLIGATIONS .............................................................................................. 36 16. TRADE AND OTHER PAYABLES............................................................................................................... 40 17. INCOME TAX AND OTHER TAX ASSETS AND LIABILITIES ............................................................... 40 18. REVENUE....................................................................................................................................................... 43 19. COST OF SALES ............................................................................................................................................ 43 20. GENERAL AND ADMINISTRATIVE EXPENSES ..................................................................................... 44 21. SELLING AND MARKETING EXPENSES.................................................................................................. 44 22. OTHER OPERATING INCOME .................................................................................................................... 44 23. OTHER OPERATING EXPENSES ................................................................................................................ 44 24. FINANCE INCOME AND COSTS ................................................................................................................ 45 25. CASH GENERATED FROM OPERATING ACTIVITIES ........................................................................... 46 26. CONTINGENCIES AND COMMITMENTS ................................................................................................. 46 27. RELATED PARTY TRANSACTIONS .......................................................................................................... 48 28. NON-CONTROLLING INTEREST ............................................................................................................... 50 29. SEGMENT INFORMATION.......................................................................................................................... 51 30. FAIR VALUE OF FINANCIAL INSTRUMENTS ........................................................................................ 54 31. EVENTS AFTER THE REPORTING PERIOD ............................................................................................. 56

  • AO PricewaterhouseCoopers Audit White Square Office Center 10 Butyrsky Val Moscow, Russia, 125047 T: +7 (495) 967-6000, F:+7 (495) 967-6001, www.pwc.ru

    Independent Auditor’s Report

    To the Shareholders and Supervisory Council of Public Joint Stock Company ALROSA:

    Report on the audit of the consolidated financial statements

    Our opinion

    In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Public Joint Stock Company ALROSA (the “Company”) and its subsidiaries (together – the “Group”) as at 31 December 2016, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).

    What we have audited

    The Group’s consolidated financial statements comprise:

     the consolidated statement of financial position as at 31 December 2016;

     the consolidated statement of profit or loss and other comprehensive income for the year then ended;

     the consolidated statement of changes in equity for the year ended;

     the consolidated statement of cash flows for the year then ended; and

     the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

    Basis for opinion

    We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report.

    We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

    Independence

    We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements of the Auditor’s Professional Ethics Code and Auditor’s Independence Rules that are relevant to our audit of the consolidated financial statements in the Russian Federation. We have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.

  • (ii)

    Our audit approach

    Overview

     Overall, group materiality: Russian Roubles (“RUB”) 8,000 million, which represents 5% of profit before tax.

     We conducted audit work at the parent company – PJSC ALROSA. In respect of other Group companies, we performed procedures over significant financial statements lines and analytical procedures.

     The group engagement team visited the divisions of PJSC ALROSA, located in Udachny and Mirny.

     Our audit scope addressed 93% of the Group’s revenues and 83% of the Group’s absolute value of underlying profit before tax and before adjustments to eliminate intercompany balances.

    Key audit matters:

     Evaluation of property, plant and equipment’s impairment of

    Urengoy Gas Company Ltd.;

     Evaluation of the provision for pension obligations.

    We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved [ii][ii]making assumptions and considering future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

    Materiality

    The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could