polyus gold international annual report 2013
polyus gold international
annual report 2013  polyus gold international
annual report 2013 polyus gold international  annual report  2013
2
in this annual report the terms polyus gold international  
limited pgil polyus gold polyus and group refer to poly
us gold international limited together with its subsidiaries 
whose financial results are consolidated by pgil when pre
paring the consolidated financial statements in accordance 
with international financial reporting standards ifrs 
in this report percentage movements are based on the au
dited numbers disclosed in the consolidated financial state
ments for the year ended 31 december 2013 as well as on 
unrounded operational numbers and not on the highlevel 
rounded numbers ie billions or millions of usd or oz and 
therefore there may appear to be some inconsistencies due 
to the rounding of numbers
the comparative operational and financial information for 
the year ended 31 december 2012 reflects adjustments 
made in connection with the early adoption of ifric 20  
refer to note 2 to the consolidated financial statements 
in the consolidated financial statements of the group for the 
year ended 31 december 2012 and with the presentation of 
the effect of discontinued operations following the sale of 
operating subsidiaries in kazakhstan and kyrgyzstan
about this report
verninskoye mining operations polyus gold international  annual report  2013
3
contents
appendix glossary 213 
appendix abbreviations 215
contacts and advisors 216
1 overview 5
11 polyus gold at a glance 6
12 performance 8
13 track record 10
14 market review 11
2 strategic report 13
21 chairman’s statement 14
22 description of strategy  16
23 description of business model  17
24 future developments 18
25 principal risks and uncertainties  20
26 analysis using key performance indicators  23
27 chief executive officer’s review 24
28 financial review  26
29 operational review 42
210 jorc resources and reserves 49
211 corporate and social responsibility 52
212 going concern statement 53
3 sustainability report 55
31 sustainability approach 58
32 independent assurance statement 62
33 message from the chief operating officer 64
34 sustainability governance 65
35 health and safety 67
36 employees 70
37 environmental stewardship 78
38 communities 86
39 gri content index 89
4 remuneration 105
41 statement from the chairman of the 
remuneration committee 106
42 remuneration committee report 107
43 directors’ remuneration report 108
44 remuneration policy report 111
5 directors’ report 117
6 corporate governance report 123
61 chairman’s statement 124
62 the board  126
63 board of directors composition 128
64 diversity policy 134
65 human rights policy  135
66 dividend policy 136
67 anticorruption efforts 137
68 senior management 138
69 audit committee report 139
610 risk committee report 142
611 nomination committee report 144
612 hsec committee report 146
7 financial statements 149
71 directors’ responsibility statement 150
72 independent auditor’s report 152
73 consolidated financial statements in accordance 
with the ifrs for the year ended 31 december 
2013   158 krasnoyarsk region
the putorana plateau 1700 metres above sea level 
is a unesco world heritage site overview
1 polyus gold international  annual report  2013
6
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1 overview
11 polyus at a glance
1 
please refer to glossary on page 213 for definition
our principal operations are 
located in russia’s most prolific 
gold mining provinces in eastern 
siberia and the far east and 
include five operating mines 
alluvial operations and one mine 
under development
the group’s flagship mine 
is olimpiada our largest gold 
mine and one of the largest gold 
deposits in russia the olimpiada 
mine contributed 42 of the 
group’s total gold output in 2013 
and represents a 36 share of the 
group’s jorc proved and probable 
reserves and 37 of the group’s 
measured indicated and inferred 
resources
the natalka mine which 
is currently under development 
will become the largest mine 
in the group the natalka deposit 
has 32 m oz of jorc proved and 
probable reserves and 60 m oz 
of measured indicated and 
inferred resources
polyus gold international limited pgil is the largest gold 
producer in russia and one of the top 10 gold miners globally 
by ounces produced 165 m oz in 2013
the group holds the world’s thirdlargest gold reserves with 
almost 831 m oz of proved and probable jorc
1
 reserves
pgil has a premium listing 
on the london stock exchange 
ticker pgil and is the largest 
londonlisted gold producer 
by gold output and reserves 
the company is a constituent 
of the stoxx europe 600 index 
the ftse global equity index 
series and the ftse all world 
equity index series additionally 
pgil’s global depository receipts 
gdrs are traded over the 
counter in the us ticker plzly 
as of 31 december 2013 the 
group’s market capitalisation was 
approximately usd 93 billion polyus gold international  annual report  2013
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pgil’s shareholders structure  
as of 31 december 2013
shareholder holding 
wandle holdings limited 402
lizarazu limited 185
wamika trading limited 100
receza limited 93
free float 220
total 1000
information  
on pgil’s shares
number of shares issued 3032149962
highest share price 
during 2013 gbpshare 230 8 february 2013
lowest share price 
during 2013 gbpshare 188 4 december 2013
average daily traded 
volume adtv lse 
usd million 87
share price 
at 31 december 2013 
gbpshare 199
market capitalisation 
at 31 december 2013 
usd billion 93
sedol b5wlxh3
isin number je00b5wlxh36
blagodatnoye processing plant polyus gold international  annual report  2013
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financial highlights
• gold sales of usd 23 billion down 14 on 2012
• adjusted ebitda
1
 of usd 910 million
• tcc
2
 and aisc
3
 per oz sold of usd 707 up just 1 and 
usd 1002 down 1 respectively
• impairment of usd 472 million was recognised primary 
related to the nezhdaninskoye and degdekanskoye de
posits at the exploration stage and kuranakh mine
• adjusted profit for the year from continuing operations
4 
of usd 564 million and
• adjusted eps
5
 of 17 us cents fy 2012 32 us cents
operational highlights
• refined gold sales for the year of 1631 k oz a 4 in
crease on 2012
• refined gold production of 1649 k oz a 5 increase 
over 2012 production
• a twofold increase in gold production at verninskoye 
as it reached its ore throughput ore throughput design 
capacity
• a 6 increase in gold output at olimpiada due to im
provement in recovery rates
• automation of processing plants completed at blagodat
noye and verninskoye and
• capital expenditure increased 78 to usd 1440 mil
lion with major investments in the development of the 
natalka project
industry comparisons
largest global gold mining companies by market 
capitalisation as at 31122013 usd bln 
barrick
goldcorp
pgil
newmont
yamana
newcrest
randgold
anglogold
agnicoeagle
kinross
225
202
71
65 64
108
93
59 54
52
280
210
140
70
00
source bloomberg
top10 global gold producers in 2013 m oz produced
barrick
goldcorp
pgil
newmont
polymetal
newcrest
goldfields
sibanye
anglogold
kinross
717
507
263
236
202
411
267
165
143
128
800
700
600
500
400
300
200
100
000
 gold equivalent source companies websites 
12 performance
1 
adjusted ebitda – for a definition and calculation refer to section 2810
2 
tcc per oz sold – for a definition and the calculation used refer to section 2811
3 
allin sustaining costs per oz sold – for a definition and calculation refer to section 2812
4 
adjusted profit for the year from continuing operations represents profit from continuing operations before impairment charges
5  
adjusted earnings per share represents adjusted profit from continuing operations attributable to the shareholders of the company 
divided by the weighted average number of ordinary shares polyus gold international  annual report  2013
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lselisted gold producers in 2013 m oz produced
randgold
pgil
polymetal
african barrick
centamin
nord gold
petropavlovsk
165
128
091
064
074
092
036
180
160
140
120
100
080
060
040
020
000
 gold equivalent 
source companies websites
largest global gold mining companies by jorc 
proved and probable gold reserves m oz
barrick
goldcorp
pgil
newmont
goldfields
newcrest
randgold
eldorado
harmony
kinross
104
88
68
54
49
83
78
40
38
28
120
100
80
60
40
20
0
 latest available disclosure  
source companies websites
corporate update
on 22 february 2013 the onexim group sold its 378 hold
ing in the company lizarazu limited a company associated 
with zelimkhan mutsoev purchased 185 of the company’s 
shares and receza limited and wamika trading limited both 
companies associated with gavriil yushvaev purchased the 
remaining 193 of the issued share capital of the company 
on 28 february 2013 pgil disposed of its assets in kazakh
stan and kyrgyzstan to a consortium consisting of institute 
project bv financial services bv and folkstand consortium 
limited for a total consideration of usd 297 million
on 21 march 2013 igor gorin was nominated by receza 
limited and wamika trading limited to the board as a non
executive director
on 29 april 2013 the company issued usd 750 million notes 
due in 2020 with a coupon of 5625 per annum the notes 
are guaranteed by cjsc “polyus” an indirect subsidiary of the 
company
on 31 may 2013 robert buchan resigned as chairman and 
as a director of the company
on 23 august 2013 zelimkhan mutsoev sold his ownership 
interest of 185 of the ordinary shares of the company 
to amirkhan mori
on 4 october 2013 ilya yuzhanov and edward dowling were 
appointed to the board as independent nonexecutive direc
tors ilya yuzhanov was also elected chairman of the board
on 13 november 2013 lord clanwilliam resigned from 
the board and pavel grachev was nominated to the board 
by wandle holdings limited as a nonexecutive director
on 27 november 2013 german pikhoya resigned as ceo and 
a director of the company and pavel grachev took on the re
sponsibilities of interim chief executive officer of the com
pany until a new ceo is appointed
on 27 february 2014 the company received notice from its 
chief financial officer oleg ignatov that he wished to resign 
from his position as cfo in order to pursue other activities 
on 27 march 2014 mikhail stiskin formerly deputy ceo for 
strategy and corporate development was appointed chief fi 
nancial officer of polyus gold  polyus gold international  annual report  2013
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gold production k oz
1
gold sales revenue usd million
1
2009 2010 2012 2011 2013
1172
1597
2259
2180
2618
3000
2500
2000
1500
1000 
500
adjusted ebitda usd million
1
2009 2010 2012 2011 2013
557
694
910
1082
1303
1500
1000
500
0
jorc proved and probable reserves m oz
2009 2010 2011 2012 2013
741
782
831
905
875
110
90
70
50
tcc and cash margin per oz sold usdoz
1 2
2009 2010 2012 2011 2013
2000
1500
1000
500
0
387
582
543 645 697
707
700
933
969
678
cash margin tcc
total dividends paid during the year usd million
2009 2010 2012 2011 2013
400
300
200
100
0
24
98
130
124
320
2009 2010 2012 2011 2013
1231
1275
1649
1378
1569
1750
1500
1250
1000
1
 excluding mining assets in kazakhstan and kyrgyzstan
2
 cash margin is calculated as difference between average realised gold price and tcc per oz sold 
3 
for definition refer to section 3 “sustainability report”
13 track record
2009 2010 2012 2011 2013
027
017
011
025
018
03
02
01
0
ltifr
3
 per 200000 hours worked polyus gold international  annual report  2013
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in addition to its use in jewellery electronics and den
tistry gold provides a convenient means to store wealth 
for a variety of investors from individuals to state cen
tral banks in 2013 gold supply to the global market de
creased by 2 to 4340 tonnes total demand declined 
by 15 to 3756 tonnes this decrease can be attributed 
to a 32 drop in central bank net purchases which was 
almost offset by a 28 increase in bar and coin demand 
by physical individuals to 1654 tonnes the annual aver
age gold price declined 15 to usd 1411 per oz 
supply
according to the world gold council wgc global gold 
production increased by 5 in 2013 to 3019 tonnes 
demonstrating the inelastic nature of production in the 
industry in 2013 production was strong across most re
gions in particular asia latin america and the common
wealth of independent states cis africa was the outlier 
because of the continued drop in output in south africa 
the industry’s response to declining gold prices has been 
to focus on cost management action to control operating 
costs has been widespread and where possible capital 
expenditure is being scaled back or deferred although to
date mine closures have been limited
according to data from the united states geological sur
vey usgs in 2013 russia was the fourth largest pro
ducer with an output of 220 tonnes an increase of 1 
over 2012
another significant source of supply to the global market 
is recycled gold gold scrap however in 2013 supply 
of scrap again decreased to 1371 tonnes dropping to 
a fiveyear low as the gold price fell 29 over the year 
across the world lower prices reduced the incentive for 
consumers to liquidate gold assets scrap receipts from 
the us europe and southeast asia fell by 1020
largest goldproducing countries 2013 
source us geological survey
demand
the jewellery industry is the largest consumer of gold and 
the strongest demand comes from jewellery manufactur
ers in india and china in 2013 demand for gold in the 
jewellery market rose by 17 to 2210 tonnes in response 
to the declining gold price and increase in population much 
of this increased demand came from the chinese market 
with china excluded from the global total demand in the 
rest of the world grew by a relatively modest 12
demand for gold from other industry sectors electronics 
dentistry decorative industries etc decreased by 1 
to 405 tonnes in 2013 
according to data provided by the wgc the official sec
tor represented by the central banks and the international 
monetary fund purchased 369 tonnes of gold in 2013 
down 32 compared to the previous year 
investment demand for gold includes demand for gold 
bars coins medals and financial instruments linked to the 
gold price exchange traded funds – etfs – and similar in
struments in 2013 investment demand amounted to 773 
tonnes a 51 decrease on the previous year and the low
est level since 2009 as a number of major institutional 
players sold some of their positions in gold in the second 
quarter of 2013
according to the wgc investment in physical bars and 
coins increased by 28 to 1654 tonnes as a result of low 
price volatility at the same time retail investors in europe 
and north america also saw lower prices as an opportuni
ty to increase purchases of coins in the second half of the 
year purchases of bars and coins returned to lower levels 
gold price
please refer to section 282 “external market factors af
fecting the group’s financial results“
global gold consumption 2013 
source world gold council
14 market review
59
21
11
10
central bank net purchases
technology
jewellery
investment
china
australia
russia
united states
46
4
5
5
8
8
9
15
peru
south africa
canada
other magadan region
forming a solid buttress to the waves at low tide 
the ‘three brothers’ to the east of magadan 
become islands as the tide rolls in strategic  
report
2 polyus gold international  annual report  2013
14
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i am pleased to present to shareholders the results of polyus 
gold against a background of declining gold prices which fell 
30 between january and june 2013 to usd 1192 per oz polyus 
demonstrated strong performance which is underpinned not just 
by increasing volumes of processed ore but also by an increased 
focus on cost control throughout our operations
we have revised our plans for the natalka project both 
in the light of the tough economic conditions and to al
low for further testing of advanced processing techniques 
which are showing great promise in early testing we now 
expect to have the full flowsheet operating at this strategic 
deposit in 2015
there have been some major changes to the board over 
the course of the year following the resignation of dmi
tri razumov a representative of onexim and alexander 
mosionzhik a representative of wandle holdings limited 
igor gorin a representative of receza limited and wamika 
trading limited joined the board as a nonexecutive di
rector igor brings with him a wealth of experience from the 
investment and corporate banking sector chairman rob
ert buchan left to take up a new executive appointment 
in late may and i was honoured to be offered the opportu
nity to succeed him the board was further strengthened 
by the appointment of another nonexecutive director 
edward dowling edward’s deep knowledge of the min
ing industry is certain to be of great value to the business 
in the coming years on 13 november lord clanwilliam re
signed from the board and pavel grachev a representative 
of wandle holdings limited was nominated to the board 
pavel has much experience serving on the boards of public 
companies and as the ceo of a large fertilizer producer 
lastly german pikhoya ceo of the company decided 
to resign from his position in order to pursue other activi
ties i should like to take this opportunity to thank robert 
dmitri alexander lord clanwilliam and german for their 
contribution to the company’s success
the board and its committees have been active over the 
year meeting 22 times and 26 times respectively the 
board’s work has included visits to the olimpiada and bla
godatnoye mines and the chairman of the audit commit
tee has additionally visited natalka as well as being im
portant as part of the board’s oversight role these visits 
serve to guide our strategic decisionmaking and ensure 
that we are reminded of the challenges faced by our opera
tions teams who work in some of the most hostile condi
tions in the world
2 strategic 
report
21 chairman’s  
statement polyus gold international  annual report  2013
15
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mining operations have long been considered as inherently 
dangerous and therefore ensuring the health and safety 
of everyone who works for polyus gold is a high priority for 
the group we aim to maintain a safe and healthy working 
environment and we are confident that all injuries at group 
operations are preventable set against this background 
it is therefore deeply saddening to have to report the death 
of three of our employees in 2013 while working at the 
company’s most challenging alluvial sites the group con
siders any fatality as unacceptable and is focusing on the 
complete prevention and elimination of workplace hazards 
during the year edward dowling a longterm industry pro
fessional was appointed as chairman of the health safety 
environment and community committee and we are con
fident that edward will draw on his extensive experience 
to help further improve our safety procedures and manage
ment systems
we recognise that our operations impact on local communi
ties and the environment we aim to work with communities 
to mitigate potential impacts through the formal stakeholder 
engagement process environmental and social impact assess
ment studies and community development programmes dur
ing 2013 the board approved the company’s human rights 
and stakeholder engagement policies setting new standards 
for the company’s work with local communities
as a socially responsible employer every year we commit sig
nificant funding to community projects and charitable causes 
we are confident about the company’s prospects for 2014 
it would not be appropriate for us to offer a detailed for
ward prediction on gold prices for impairment purposes 
we have used a longterm price forecast of usd 1350 
per oz which at the date of the publication of the con
solidated financial statements was in line with the market 
price in order to be conservative we have used usd 1200 
per oz for our budget purposes for 2014 and at that price 
supported by external financing we expect to remain cash 
positive for the year even after taking into account planned 
capital expenditure of approximately usd 674 million
we face 2014 with continued vigour we have some of the 
world’s best reserves both in terms of size and quality and 
a team fully committed to delivering worldleading results 
and excellent shareholder value
ilya yuzhanov
chairman of the board
london 24 march 2014
olimpiada inpit road polyus gold international  annual report  2013
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22 description of strategy
maximising free cash flow generation  
from the production of gold
maintaining a stable financial position 
and acceptable leverage
optimising operating costs  
and achieving a level of efficiency  
in operational management comparable 
with the best global industry practice
securing longterm gold production 
growth through valuecreating  
brownfield expansion and the launch  
of gold production at new economically
attractive deposits
focusing on largescale low cost  
open pit mining projects with globally 
competitive allin sustaining costs
focusing on three key russian regions – 
krasnoyarsk irkutsk and magadan 
the company develops its business on the basis of the following premises
1
2
3
4
5
6 polyus gold international  annual report  2013
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23 description 
of business model 
1 
excluding chairman
we have highly competitive  
operations and a strong track 
record of production from existing  
operations
with 2013 production of 1649 thousand ounces 831 mil
lion ounces of proved and probable jorc reserves and 1501 
million ounces of measured indicated and inferred jorc re
sources polyus gold is one of the top three gold companies 
worldwide by proved and probable jorc reserves based 
on the most recent publicly available reports our current 
producing assets are well established with minimal reli
ance on thirdparty infrastructure and as they have been 
producing for many years provide the foundation for fur
ther gold production in the medium term as a result of our 
solid operational performance and longestablished position 
in russia we are well positioned to capitalise on existing 
and future opportunities in the region
we have an extensive resource base 
and defined development pipeline 
which provides a leading production 
growth profile from significant  
development assets
a significant part of our reserves is within assets that are 
currently not producing given polyus gold’s solid financial 
position and strong track record of commissioning new 
mines we are wellpositioned to convert the reserve base 
into gold production management expects growth to come 
from both expansion of production at existing mines and 
the exploitation of new deposits including the natalka 
deposit when launched the natalka deposit is expected 
to rank among the largest gold mines in the world based 
on publicly available reserve and resources reports of lead
ing gold producers
we have wideranging expertise 
in gold mining and project execution 
in an opportunityrich mining region
our operations are characterised by efficient use of modern 
equipment and lowcost largescale processes we have 
a proven track record of project execution with much of the 
group’s existing production the result of successful project 
management from initial exploration through to design and 
development and ultimately gold production the total ca
pacity of mills commissioned by us between 2006 and 2012 
is more than 14 million tonnes per annum consequently 
we believe that polyus is wellpositioned to bring its existing 
development projects into production and to take advan
tage of future opportunities in resourceendowed russia
we have a strong financial position 
which allows us to capitalise  
on opportunities
as of 31 december 2013 polyus had a net debt position 
of just usd 349 million cash reserves of usd 809 million 
and an asset base of usd 57 billion the company gen
erated adjusted ebitda of usd 910 million and adjusted 
profit for the year from continuing operations of usd 564 
million in 2013 our current financial position and strong 
cash flow generation provide us with the financial flexibility 
to execute our organic growth strategy or to make oppor
tunistic acquisitions
we have a strong management  
team and an experienced and  
majorityindependent board
the group’s management has an experience and track re
cord in early stage exploration development and producing 
assets necessary to maximise the value of existing opera
tions development projects and our resource base in ad
dition the company has an experienced board of directors 
of whom the majority
1
 4 out of 7 is independent in accord
ance with uk corporate governance code
1
2
3
4
5
we are the largest gold producer in russia and one of the largest 
in the world with an extensive reserve portfolio an excellent 
track record of fullcycle asset development and minimal reliance 
on thirdparty infrastructure we employ modern technologies 
and equipment to excel in largescale lowcost bulk open pit 
mining and advanced metallurgical processes  polyus gold international  annual report  2013
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tax
in order to stimulate investment projects in some far east
ern and siberian regions of russia on 30 september 2013 
president putin signed an act amending the federal tax 
code for the company the changes mean that subsidiar
ies of the group which own mines and deposits for a list 
of deposits refer to section 291 “mines and deposits” lo
cated in the regions covered by the act may be considered 
for membership of a regional investment project rip 
the current version of the act covers the following regions 
where the company is represented the amur irkutsk and 
magadan regions and the republic of sakha rips came into 
effect from 1 january 2014 and will remain in place until 
1 january 2029 one of the key requirements for members 
is to make capital investment of at least rub 500 million 
approximately usd 1415 million in the region 
the benefit of membership of a rip is entitlement to some 
exemptions from or reduced rates of mining and income 
tax the company believes that some of its subsidiaries 
could potentially become members of an rip the data 
below summarises the potential effect on tax rates for 
members
gold price
the group’s only products are refined gold and occasionally 
semifinished products containing gold therefore group 
sales are directly affected by the gold price the gold price 
fell 29 in 2013 and uncertainties about future price re
main we examined three differing business outcomes de
pending on the mediumterm gold price besides impacting 
upon the group’s revenue and profitability a declining gold 
price could potentially bring into a question the appropriate
ness of continuing operations at some of our mines please 
refer to section 28 “financial review” for calculations of to
tal cash costs and allin sustaining costs by mines con
versely an increase in gold price could potentially lead to 
a decision to commission new mines which at the current 
gold price would not be economically viable
weakening of the rouble
section 28 “financial review” discusses the rubusd ex
change rate in detail however in 2013 the rub depreci
ated by 76 against the us dollar usd and if this trend 
continues the group could significantly benefit as its sales 
are usddenominated and are costs mainly are rubde
nominated 
inflation effects
over the last fifteen years the annual inflation rate in russia 
has declined significantly refer to section 28 “financial 
review” for further discussion should this trend continue 
it may have a positive effect on the group’s profitability
current tax rate potential tax rate
income tax 20 
from 0 to 10 on pretax income arising as a result of capital investment 
for the first five years after the tax period in which the capital investment was 
recorded from 10 to 18 for the remainder of the rips life 
mining tax 6
0 for the first two years from the date that a reduced income  
tax rate is first applied
24 future developments
during 2013 there were a number of legislative economic 
and technological changes which could potentially affect the fu
ture development performance or position of the group these 
are outlined below polyus gold international  annual report  2013
19
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technical solutions
the company places great emphasis on research and de
velopment and operates a research centre in krasnoyarsk 
a research processing plant at the natalka deposit and 
a research laboratory at the olimpiada mine the company 
also cooperates with leading research and engineering com
panies this strong grounding in technologies and systems 
design allows the company to maintain costs at a com
petitive level and provides a platform for significant growth 
in production the company’s key research and develop
ment focus includes development of new technologies 
providing solutions to current production problems techno
logical support for new projects and exploration solutions 
the company regularly reviews the operational flow sheets 
at its mines with the aim of finding new technical solutions 
to boost the effectiveness and profitability of its mines and 
reduce their environmental impacts 
in 2013 the following projects were under review
photometric separation pms at the natalka project on 27 
december 2013 the company announced a resequencing 
in mining operations at the natalka project along with the 
challenge presented by significant capex requirements 
when set against the background of a depressed gold price 
the decision to resequence the programme allows for the 
potential implementation of pms as a way to preenrich the 
ore in order to improve efficiency the decision to imple
ment pms if made could lead to material improvements 
in the natalka processing plant’s efficiency primarily to the 
ore crushing and conveying complex a critical part of the 
plant the company has carried out two stages of pilot test
ing of pms the potential viability of this technology for 
processing ore at natalka has been confirmed in smallscale 
testing and in january – august 2014 the company will 
conduct tests on a continuous industrial scale using the ex
isting pilot plant if the testing programme proves success
ful the plan is to develop process procedures and a feasibil
ity study of investment in a pms facility
xrayabsorption separation xas at the verninskoye mine 
the results of xas technology aggregate testing on lowgrade 
ores mined in 2013 at verninskoye proved the feasibility of us
ing the technology to enrich the gold content of processed 
ore the company plans to continue development work in this 
area in 2014 refining the technical parameters of the xas pro
cess ultimately the use of xas should allow the processing 
of stockpiled lowgrade ores
pressure oxidation pox at the olimpiada mine pox pilot 
testing was carried out in 2013 the technology has proved 
successful in increasing recovery reducing the use of cya
nides and biooxidation in 2014 the company plans to fi
nalise pox technology development and produce technical 
parameters to guide further development of a feasibility 
study examining the investment necessary for its incorpora
tion into plant design and construction
wastewater treatment at the olimpiada mine the develop
ment of technology to treat wastewater to remove heavy 
metal ions rhodanides and cyanides is planned for 2014 
with a view to providing the plant with circulated water 
a significant reduction in fresh water consumption is ex
pected if the technology is implemented
factors affecting demand for gold
according to the world gold council in 2013 51 of the 
demand for gold was for jewellery for more details please 
refer to section 14 “market review” total consumer de
mand hinges on the demand for jewellery by individual 
consumers together with the demand for pure gold bars 
and coins the strength of that demand depends to a large 
extent on the gold price the affluence of consumers and 
population size 
global consumer demand increased in 2013 by 21 and 
mainly reflects changes in the gold price alongside price 
consumer demand also reflects trends in population china 
and india have been the largest jewellery and pure gold 
markets for many years consumer demand in india has 
been driven largely by population growth with a lesser ele
ment attributable to growing affluence in china however 
growing affluence has been the main driver of demand for 
gold demand is also strong in most islamic countries pri
marily turkey the uae saudi arabia indonesia and egypt 
where similar factors came into play continued population 
growth and growing affluence in these countries should en
sure stable demand for the group’s main product polyus gold international  annual report  2013
20
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our activities are associated with a variety of risks that 
may have financial operational and reputational impact 
and which may affect the group’s operations and financial 
results and consequently shareholder returns the group 
seeks to mitigate these risks wherever possible although 
some risks such as those caused by a decline in the price 
of gold are to a large extent outside of our control
successful risk management requires amongst other things 
identification and assessment of potential threats and the 
development of measures aimed at mitigating them the 
company’s risk management process is overseen by the 
risk committee composed of three independent nonex
ecutive directors and two nonindependent directors ap
pointed by the board of directors the risk committee en
sures that there is a robust framework for identifying and 
assessing key risks to the business those principal risks 
and uncertainties are identified below along with the meas
ures put in place by management at the request of the 
committee to mitigate against them 
25 principal risks 
and uncertainties 
mineral resources and ore reserves
the group’s activities are reliant on the quantity 
and quality of the mineral resources and ore re
serves available to it 
background 
mineral resources and ore reserves are difficult to quan
tify and estimates of viable reserves may be inaccurate 
and subject to significant correction evaluation of mineral 
resources and ore reserves depends to a certain extent 
on statistical conclusions made on the basis of the results 
of limited drilling and other analyses that may prove to be 
incorrect the viability of reserves is heavily reliant on the 
prevailing world price of gold 
potential impact 
if the quantity and quality of the mineral resources and ore 
reserves are not as expected reserves may in the worst 
case scenario become unviable a significant decline in the 
price of gold could seriously erode margins and affect the 
viability of operations
risk treatment 
the group invests considerable sums every year in geo
logical surveys which are undertaken using cuttingedge 
technologies the group engages independent interna
tional experts to conduct audits on prospective and ex
isting deposits and the group’s activity is guided by their 
conclusions
mining and production activity
the group is exposed to a number of risk factors 
directly related to its production activities in
cluding flooding pit slope and rim slide accidents 
caused by the use of mining equipment and explo
sives work preparation and performance damage 
of power supply facilities or machinery breakdown 
background 
the group’s activities are carried out in remote regions 
of russia from krasnoyarsk to magadan often in sites 
which have complex geology and which are additionally 
subject to extreme weather in such conditions the risk 
of equipment failure and accidents is enhanced plant and 
equipment is subject to additional servicing and repair costs
potential impact 
these risks could result in the suspension of ore production 
and recovery increase the costs of operation and have ad
verse social health and safety and environmental impacts
risk treatment 
the group aims to mitigate the risk of unplanned inter
ruption to production through various processes including 
strict enforcement of maintenance regimes holding stock 
of critical spares probability analysis and effective risk 
management such risk management includes the iden
tification of potential threats modelling of risk scenarios 
and detailed analysis of potential negative events see 
also subsection 311 “materiality and risk management” 
of section 3 “sustainability report”
counterparty and supply chain risks
there are risks of late delivery and noncompliance 
with contracts due to failure of contractors manu
facturers or suppliers 
potential impact 
the inability to obtain consumables materials and equip
ment in time could adversely affect the introduction of both 
new production capacity and existing production plans  polyus gold international  annual report  2013
21
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background 
the group’s principal operations are located in remote ar
eas with harsh climates and poor road infrastructure in the 
krasnoyarsk region the main transshipment terminal at le
sosibirsk designed to handle transship store and deliver 
all supplies to the sites is connected by a 320 km road with 
a ferry crossing over the yenisei river or in winter months 
an ice crossing of the frozen river the route is impassable 
for between two and three months each year 
the natalka deposit located some 410 km to the north
west of magadan it is connected to magadan by an un
paved road which is subject to flooding and landslip the 
seaport of magadan has limited freight capacity
the delivery of supplies may be disrupted or transportation 
costs may increase failure by suppliers to meet schedules 
for production and delivery of the necessary supplies could 
affect the group’s ability to conduct its operations and con
tinue development of mines
risk treatment 
to mitigate these risks the group regularly monitors the 
financial performance of its counterparties and actively 
seeks to increase the number of counterparties to lower 
its dependence on external energy suppliers the company 
mines its own coal deposit and delivers it to its own power 
stations at the olimpiada and blagodatnoye mines there 
is stringent quality control over deliveries of new equip
ment prior to acceptance a special division llc polyus lo
gistics has been established to oversee logistics functions 
the group also keeps adequate stock of spare parts and 
other inventory to avoid production interruptions at times 
when the roads are impassable see also subsection 313 
“supply chain management” of section 3 “sustainability 
report” 
macroeconomic risks
background and potential impact 
macroeconomic risks applicable to the company include 
fluctuations of gold price strengthening of rub inflation 
decrease in demand for gold and some other for more 
information please refer to sections 24 “future develop
ments” and 28 “financial review”
risk treatment 
in the current economic climate gold is being used 
by many investors to hedge against potential losses in cur
rency and capital markets currently demand for gold re
mains stable and although the price has fallen by 29 over 
the year it remains at an historically high level the group 
constantly monitors gold markets in order to reduce the 
impact of increasing energy prices the group is develop
ing and modernising its own energygenerating facilities 
and has entered into longterm fixedprice contracts with 
energy suppliers the group forecasts inflationary changes 
as part of the budget planning process
regulatory risk
the activities of the group may be adversely affected 
by the failure to obtain the termination or the non 
renewal of licences from government or regulatory 
authorities
background 
the group holds a significant number of mining and exploration 
licences for gold and other minerals the terms of these licences 
require the group to comply with a range of industrial standards 
employ qualified personnel ensure that appropriate plant and 
machinery are used develop and enforce quality control systems 
maintain relevant documentation and provide information to the 
licensing authorities when requested renewal of existing licences 
and granting of new licences at least in part depends on the 
group’s performance in this area the group intends to exploit the 
deep horizons at the olimpiada deposit which may require special 
permission to carry out underground mining works 
potential impact 
failure to comply with the terms of mining and exploration li
cences may result in the termination of licences critical to op
erations alternatively the group might incur financial or le
gal sanctions failure to secure new licences or the renewal 
of existing licences could lead to cessation of mining at the 
group’s sites or an inability to expand operations
risk treatment 
the group is focused on strengthening control over its com
pliance with licence agreements and industrial standards 
on a continuous basis these control activities include the 
analysis of and immediate response to comments or re
ports made by state regulatory and supervisory authorities 
in connection with their inspections of the group’s business 
activities  polyus gold international  annual report  2013
22
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environmental risk
the group’s activities have a significant impact on the 
local environment mining operations create physi
cal damage to the soil subsoil and underlying strata 
damage flora and fauna and result in loss of habitat 
spoil from mining operations and the waste products 
of processing may be toxic requiring careful handling 
and disposal reputational and financial costs for en
vironmental failure can be significant 
background potential impact and treatment 
please refer to section 3 “sustainability report” for more 
information
project risks
implementation of the group’s investment projects 
is subject to geological market operational and 
compliance risks 
background
during the development phase of a mine or other major 
project there are significant risks caused by fluctuations 
in the prevailing price of gold changes in exchange rates 
and the effects of inflation operational risks include de
lays in commissioning the project and failures due to er
rors in project design which may lead to cost overrun 
and loss of forecast revenue there is a shortage of skilled 
technicians and significant competition in the recruitment 
of workers willing to work in the remote and hostile ar
eas where the group operates and this may lead to delays 
in implementation 
potential impact
should the identified risks occur they may result in late 
commissioning increased cost of projects reduced profit
ability and efficiency of projects and revocation of licences 
for the exploitation of mineral resources 
risk treatment
to reduce these project risks the group has developed proce
dures for careful and comprehensive study selection and analysis 
of proposed investment projects each project is subject to ap
proval by the group’s board which is constituted from mem
bers with expertise in economics production and law control 
is exercised over investment projects at all stages of their im
plementation professional and reliable consultants are engaged 
to provide audit and assistance in risk identification and ongoing 
control over the execution of large investment projects including 
design development subcontracting procurement construction 
commissioning and reporting to stakeholders
political risks
potential changes in russian legislation aimed 
at ‘deoffshorisation’ of the russian economy may 
negatively affect pgil’s operations and financial 
position the ministry of finance of the russian fed
eration mof has developed a draft law aimed at in
troducing significant amendments to russian tax 
legislation as part of the ‘deoffshorisation’ process 
and further measures of both a tax and nontax na
ture may be implemented in the future to support 
the ‘deoffshorisation’ initiatives 
background
russian governmental authorities and representatives have 
increasingly made statements encouraging the deoffshorisa
tion of businesses with predominantly russian assets that are 
held through ownership structures outside of russia in par
ticular plans have been announced to remove tax advantages 
associated with such structures and disallow their access 
to state support as a result companies registered in a foreign 
jurisdiction but which carry activities in russia may find that 
the russian government’s deoffshorisation policies could lead 
to restrictions on contracts with state bodies and limits being 
placed on state support and tax relief 
potential impact
changes in russian laws aimed at implementing the ‘de
offshorisation’ initiatives could increase pgils taxes or oth
erwise have a negative effect on our business financial 
condition or trading price of the shares in particular pgil 
is incorporated in jersey and may face 
• difficulties in obtaining relief on mining and income tax 
for instance membership of regional investment pro
jects see section 24 “future developments” if re
strictions are placed on such relief measures
• absence of state support or cofunding of infrastructure 
and power projects considered to be of local or federal 
importance see section 293 “development” for a de
scription of the group’s projects and
• increased tax burden on the group due to the imple
mentation of new tax residency rules for corporations 
which depending on the final text of the law could 
lead to the increase in taxes payable by pgil and off
shore subsidiaries of the group 
risk treatment
the company recognises the potential impact of these 
possible changes to russian legislation the company 
is monitoring developments in this area  polyus gold international  annual report  2013
23
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26 analysis using  
key performance indicators
the board believe that of the kpis on the corporate list 
the following are key in assessing progress production 
total cash costs per oz sold tcc the implementation 
of the health and safety management system and lost 
time injury frequency rate ltifr it is the board’s view 
that an appropriate balance should be struck between pro
duction and tcc which it believes is a key measure of the 
effectiveness of group operations we aim to achieve maxi
mum profitability at our operations our strategy envisages 
the development and commencing of new facilities each 
more efficient than current mines the natalka mine and 
expanded operations at blagodatnoye and verninskoye will 
be the main drivers of production growth for the company 
the continued development of these mines is our top prior
ity in the short and mediumterm
health and safety is a clear priority for the group and 
we strive to minimise injuries and fatalities it is our belief 
that zero fatalities is a realistic and achievable aim in that 
regard health and safety related indicators are very im
portant when measuring operational performance the 
company has implemented a health and safety manage
ment system and has made a range of health and safety 
commitments available at httpwwwpolyusgoldcom 
sustainabilityhealthandsafety
individual kpis compare average results for the senior 
management team against those agreed with each indi
vidual from the senior management team
the table below presents key bonus measures used in the 
kpi lists in 2013
measures
1
year ended  
31 december 2013
description target actual
production
2
 k oz 1639 1605
for the the purposes of remuneration the 
actual production volume for 2013 does not 
include production of 47 k oz in excess of the 
target production at alluvials which manage
ment are not remunerated on
tcc usdoz 778 773 based on management accounting calculations
implementation of the health and safety 
management systems
to be  
implemented implemented
health and safety management system in full 
compliance with ohsas 18001 and iso 14001 
standards and policy
ltifr per 200000 hours worked 018 011 refer to section 3 “sustainability report”
average individual kpi for 14 officers
3
  100 88
refer to section 43 “directors’ remuneration 
report” for an example of the individual list of 
kpis of the ceo
1 
all excluding kazakhgold
2
 unrefined gold doré
3  
applicable to the senior managers employed during 2013 and at the date of this report note that the makeup of the senior man
agement as of the date of the annual report differs from that in 2013 please refer to section 68 ”senior management” for a list 
of senior managers
the group uses a range of key performance indicators kpis 
to assess its progress these operational targets are distinct from 
but contribute to the group’s overall budgeted financial targets 
the company’s remuneration committee produced a list of cor
porate kpis and another of individual kpis for senior managers 
of the company for 2013  polyus gold international  annual report  2013
24
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operational and financial review
historically high production was offset by a weaker gold 
price and we recorded revenues of approximately usd 23 
billion versus 27 billion in 2012 during the year we pro
duced usd 422 million of operational cash flow raised usd 
1093 million of new debt and invested usd 1340 million 
in capital construction at the yearend we had usd 349 
million of net debt
dividends
on 31 may 2013 the shareholders approved a final dividend 
in respect of the financial year ended 31 december 2012 
of usd 00824 per ordinary share and a special dividend in re
spect of the financial year ended 31 december 2012 of usd 
00232 per ordinary share in recognition of the successful 
sale of our gold mining assets in kazakhstan kyrgyzstan and 
romania the special dividend and final dividend combined 
represent an aggregate dividend payment of usd 01056 per 
ordinary share for 2012 this resulted in a total payment of ap
proximately usd 320 million which is around 33 of the ad
justed profit from continuing operations for 2012
during april 2014 the board will decide whether to propose 
a dividend for the financial year 2013 taking into account 
the company’s dividend policy the current market situation 
and financial condition
cost control
in the year 2013 the gold price fell 29 most companies 
in the sector including pgil undertook cost control measures 
to align their operations with the new market conditions pol 
yus’ cost control initiatives were focused in three main areas
• the group’s 2013 budget was reviewed and we were 
able to cut selling general and administrative expenses 
sga operational and capital expenditures we also 
decreased exploration expenditures in the krasnoyarsk 
and irkutsk regions
• in january 2013 we committed to commence mining 
activities at the natalka project by the yearend with 
full commissioning of the mine in summer 2014 pro
gress reviews on the natalka development suggested 
that whilst this objective might be have been achiev
able it also carried the possibility of significant addi
1 
yearonyear yoy hereinafter means comparing fy2013 with fy2012
in january 2013 in the trading update for the 2012 we commit
ted to produce 15901684 k oz in 2013 we met the production 
target thanks to the increased output at the verninskoye mine 
yoy
1
 increase by 43 k oz and improved grade and recovery 
at the olimpiada mine 38 k oz yoy increase 
27 chief executive 
officer’s review  polyus gold international  annual report  2013
25
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tional expenditure and greater risks against a backdrop 
of an unfavourable gold price environment our strategy 
is not to produce gold at any price and in any condi
tions accordingly we decided to resequence the de
velopment plan for the natalka project and postpone 
commissioning of the plant from summer 2014 to sum
mer 2015 and continue working on optimising capital 
expenditures and operating technology 
• we developed contingency plans for lower gold price 
scenarios the plans include a detailed action list start
ing with improvements in operational efficiency reduc
tions in discretionary capital expenditures and decrease 
in the level of inventories through to measures like clo
sure of nonefficient enterprises the contingency plans 
also consider the possibility of hedging at certain gold 
price levels
impairments
following the fall in the gold price in h1 2013 the company 
in line with the industry has reassessed the future prospects 
of its exploration and evaluation ee asset portfolio and has 
also reconsidered the economic recoverability of its mining as
sets as a result based on a longterm gold price assump
tion of approximately usd 1350 per oz the company has 
recognised noncash impairment charges of usd 472 million 
in 2013 where usd 49 million is related to the impairment 
of longterm stockpiles and goldinprocess 
these impairments are indeed disappointing but thanks 
to the company’s conservative policy in evaluating reserves 
and projects the level of impairments was moderate com
pared to our global peers
our good operational results came out of the hard work of the 
group’s employees over the last few years on behalf of the 
management i would like to thank our employees for their 
efforts in delivering this successful performance in 2013
pavel grachev
interim ceo
london 24 march 2014
olimpiada an open pit polyus gold international  annual report  2013
26
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adjusted ebitda
3
 of usd 
910 million 2012 usd 1303 
million and adjusted ebitda 
margin of 39 2012 49
adjusted operating profit
2
 
of usd 694 million compared 
to usd 1211 million in 2012
following the significant fall in the gold price in 2013  
an impairment of usd 472 million was recognised primary related 
to the nezhdaninskoye usd 248 million and degdekanskoye  
usd 48 million deposits at the exploration stage and the kuranakh 
mine usd 138 million
gold sales down by 14 to usd 
23 billion reflecting a 17 
fall in the gold price but partly 
offset by a 4 increase in gold 
sold fy 2012 usd 26 billion
total cash costs tcc per 
oz sold
1
 rose by just 1 to usd 
707 per oz following improved 
cost control throughout the 
operations and the appreciation 
of the us dollar against the 
russian rouble by 2 which 
helped to offset cost inflation
281 financial highlights
28 financial review
adjusted profit for the year 
from continuing operations
4
 
decreased 42 to usd 564 
million fy 2012 usd 978 
million
adjusted earnings per share
5
 
of 17 us cents fy 2012 32 
us cents
profit for the year from 
continuing operations decreased 
to usd 143 million compared 
to usd 965 million in 2012
net debt position of usd 349 
million compared with a net 
cash position of usd 680 
million at the end of 2012
1 
tcc per oz sold – for a definition and the calculation used refer to section 2811 “total cash costs per oz sold”
2 
adjusted operating profit represents operating profit before impairment charges
3 
adjusted ebitda – for a definition and calculation refer to section 2810 “adjusted ebitda”
4 
adjusted profit for the year from continuing operations represents profit from continuing operations before impairment charges
5  
adjusted earnings per share represents adjusted profit from continuing operations attributable to the shareholders of the company 
divided by the weighted average number of ordinary shares polyus gold international  annual report  2013
27
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financial results
usd ‘000 unless specified otherwise
year ended 31 december
 change
yoy 2013 2012
gold production k oz 1649 1569 5
gold sold k oz 1631 1571 4
average realised gold price usd per oz 1385 1666 17
total revenue 2328915 2679913 13
profit for the year from continuing operations 143001 965104 85
weighted average number of ordinary shares ‘000s
1
3032150 2950916 3
earnings per share – basic and diluted us cents 4 31 87
adjusted operating profit 693528 1210527 43
adjusted operating profit margin  30 45 –
adjusted profit for the year from continuing operations 563791 977966 42
adjusted earnings per share – basic and diluted us cents 17 32 47
net cash flow from operations 422339 991769 57
capital expenditures 1439691 808886 78
adjusted ebitda 910076 1303131 30
adjusted ebitda margin  39 49 –
total cash cost per oz sold usd per oz 707 697 1
allin sustaining costs per oz sold usd per oz
2
1002 1007 1
net debtcash 349096 679871 –
1  
the weighted average number of shares changed following the sale of treasury shares on 10 may 2012 which resulted in an in
crease in the number of shares outstanding and therefore the average number for the year
2 
allin sustaining costs per oz sold – for a definition and calculation refer to section 2812 “allin sustaining costs per oz sold” polyus gold international  annual report  2013
28
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adjustments for impairment charges for the years ended 31 december 2013 and 2012 
see note 11 to the consolidated financial statements
usd ‘000
year ended 31 december 2013 year ended 31 december 2012
reported impairment adjusted reported impairment adjusted
operating profitloss  
for the year from 
continuing operations 221871 471657 693528 1195103 15424 1210527
addless
finance costs 13878 – 13878 31573 – 31573
income from investments 
net 21348 – 21348 35960 – 35960
foreign exchange gain 4348 – 4348 12026 – 12026
current income tax 
expense 131964 – 131964 246193 – 246193
deferred income tax gain 
expense 41276 50867 9591 219 2562 2781
profitloss for the 
year from continuing 
operations 143001 420790 563791 965104 12862 977966
attributable 
to shareholders of the 
company 133860 394275 528135 922066 12237 934303
weighted average 
number of ordinary 
shares ‘000s 3032150 – 3032150 2950916 – 2950916
earnings per share 
from continuing 
operations basic and 
diluted us cents 4 – 17 31 – 32 polyus gold international  annual report  2013
29
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282 external market factors affecting 
the group’s financial results
the group’s results are affected significantly by movements 
in the price of gold currency exchange rates principally 
the russian roubleus dollar rate and the prevailing infla
tion rates 
gold price
the market price of gold is the most significant factor in
fluencing profitability and operating cash flow in 2013 the 
gold price was volatile and traded in the range usd 1694 
per oz to usd 1192 per oz gold opened the year at usd 
1694 per oz and closed at usd 1205 per oz a fall of 29 
average afternoon gold price fixing in the year 
ended 31 december 2013 usd per oz
exchange rate
the group’s revenue from gold sales is denominated in us 
dollars but the majority of the group’s operating expenses 
are denominated in russian roubles rub accordingly 
an appreciation of the russian rouble against the us dollar 
may negatively affect the group’s margins increasing the 
us dollar value of its russian rouble denominated costs 
conversely an appreciation of the us dollar against the 
russian rouble should positively affect the group’s margins 
by decreasing the us dollar value of its roubledenominated 
costs in 2013 the usd appreciated by 76 against the 
rub and by a further 104 in january – february 2014
 rubusd exchange rate in 2013
inflation
the group’s principal operations are located in russia the 
increase in russia’s cpi consumer price index in 2013 
was 65 2012 66 and the increase in the ppi pro
ducer price index was 81 2012 7 the last fifteen 
years have seen both indices trending downwards 
1700
1600
1500
1400
1300
1200
1100
jan2013
feb2013
mar2013
apr2013
may2013
jun2013
aug2013
sep2013
oct2013
nov2013
jan2014
dec2013
jul2013
3400
3300
3200
3100
3000
2900
jan2013
feb2013
mar2013
apr2013
may2013
jun2013
aug2013
sep2013
oct2013
nov2013
jan2014
dec2013
jul2013 polyus gold international  annual report  2013
30
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in 2013 the group’s gold sales amounted to usd 2258599 
thousand 14 less than in 2012 the decrease in the value 
of gold sales is largely attributable to the fall in the gold 
price on the world market at the end of 2013 the group 
held approximately 34 k oz of refined gold which were sold 
in january 2014 thus in the reporting period the group 
produced 1649 k oz and sold 1616 k oz produced in 2013 
and 15 k oz produced in 2012
total sales volume in 2013 was 1631 k oz against 1571 
k oz in 2012
revenue bridge for the years ended 31 december 
2013 and 2012 usd million
in 2013 the weightedaverage realised gold price was usd 
1385 per oz a 17 decrease on 2012 this was usd 26 
per oz lower than the aagpf on the london market be
cause of the seasonality of production from our alluvial de
posits which do not produce and sell gold during the first 
quarter of the year the aagpf for the first quarter of 2013 
was higher than the full year aagpf 
gold sales volumes by mine for the years ended 31 
december 2013 and 2012 k oz
283 gold sales note 7 to the consolidated financial statements
the following table shows the breakdown of the group’s gold sales for the years ended 31 december 2013 and 2012
year ended 31 december
 change
yoy 2013 2012
gold sales usd thousands 2258599 2618024 14
gold sales k oz 1631 1571 4 
average realised gold price usd per oz 1385 1666 17
average afternoon gold price fixing aagpf usd per oz
1
1411 1669 15
deficit of average realised price compared to average  
afternoon gold price fixing usd per oz for the year 26 3 865
3000
2500
2000
1500
1000
500
0
2012
revenue
2 618
2013
revenue
2 259
gold price 
growth 
decrease
458
gold 
bullion sales 
growth 
decrease
99
2013
kuranakh
138 138
olimpiada
800
700
600
500
400
300
200
100
0
2012
680
654
titimukhta
129
117
blagodatnoye
389
402
verninskoye
46
89
alluvials
205
214
1
 source london bullion market association polyus gold international  annual report  2013
31
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the following table shows sales breakdown by type and by mine in 2013
usd ‘000 
unless 
specified 
otherwise
 krasnoyarsk bu
olim
piada
blago 
datnoye
titimu
khta
1
alluvials kuranakh
vernin
skoye other total
gold produced 
koz 691 395 131 205 138 89 – 1649
gold sold koz
2
680 389 129 205 138 89 – 1631
gold sales 947487 542495 178513 277351 190751 122002 – 2258599
other sales – – – 10172 4311 849 54984 70316
total sales 947487 542495 178513 287523 195062 122851 54984 2328915
1 
includes sales of gold produced from ore purchased from the third partyowned veduga mine
2  
unrefined gold doré for all mines in the krasnoyarsk business unit is stored in a single unit therefore gold sales volumes are bro
ken down in proportion to refined gold production
• in 2013 42 of the group’s gold sales came from 
the olimpiada mine
• in 2013 the krasnoyarsk business unit sold 1198 k oz 
yearend stocks at the refinery in krasnoyarsk amount
ed to 34 k oz which were sold in 2014
•  the olimpiada mine produced 691 k oz of gold and sold 
680 k oz expansion of the biooxidation facility resulted 
in a higher recovery rate 745 vs 737 in 2012 
and therefore higher production up 6
• production at the titimukhta mine increased by 12 
yoy following a plant upgrade and ore deliveries from 
the third party owned veduga deposit
• there was a slight decrease in ore grade at the blago
datnoye mine but this was fully offset by an increase 
in the recovery rate 883 vs 864 in 2012 follow
ing automation of the plant
• production at the verninskoye mine met its design pa
rameters by the yearend following automation the re
covery rate increased by 10 sales increased by 93 
compared to 2012
• output from the kuranakh mine was stable  
at 138 k oz
• following the depletion of gold grade in sand washed 
the alluvials delivered lower volumes of gold
284 cost of gold sales note 8 to the consolidated financial statements
the following table shows the group’s cost of gold sales for the years ended 31 december 2013 and 2012
usd ‘000
years ended 31 december
 change
yoy 2013 2012
cash operating costs 1267931 1127740 12
amortisation and depreciation of operating assets 209152 169923 23
total cost of production 1477083 1297663 14
increase in goldinprocess 
and refined gold inventories 130560 32357 303
cost of gold sales 1346523 1265306 6 polyus gold international  annual report  2013
32
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cash operating costs
breakdown of сash operating costs for the years 
ended 31 december 2013 and 2012
cash operating costs increased from usd 1127740 thou
sand in 2012 to usd 1267931 thousand in 2013 this 12 
increase resulted mainly from increasing costs for consum
ables and spares fuel and labour cost inflation
consumables and spares
a change of mining plan at the olimpiada mine resulted in an 
increase of 28 in ore mined and coupled with the continu
ing rampup in production over the year at the verninskoye 
mine resulted in an increased consumption of tyres explo
sives and spare parts an increase in gold production at olim
piada 6 titimukhta 12 and verninskoye 95 
resulted in higher consumption of cyanide lubricants other 
chemicals grinding balls and spare parts market prices for 
some consumables and spares also increased for example 
the average purchase price for cyanides increased by 10
fuel
fuel costs grew by 43 to usd 184226 thousand this 
increase was as a result of various factors
• a 5 increase in inhouse power generation at the ol
impiada diesel power station to ensure stable power 
supply for the biox process
• the increasing depth of mining at the olimpiada pit 
which resulted in fuel and vehicle maintenance costs 
rising as distances lengthened
• a fuel price increase of approximately 9 
• increases in consumption of diesel fuel petrol oil prod
ucts and lubricants following an early start to the sea
son at the alluvials operation
labour
in 2013 labour costs made up the largest component 
of cash operating costs these costs increased by 13 
to usd 385781 thousand the krasnoyarsk and irkutsk ore 
business units were the major contributors to this increase
•  staffing numbers increased and salary increases of be
tween 10 and 14 were introduced at the krasno
yarsk operation to meet the needs of the competitive 
market for labour in the region
• an 18 increase in the number of personnel at the vernin
skoye mine as a result of the continuing rampup
• an increase in the number of personnel at the com
pany’s service business units due to the construction 
at natalka
tax on mining
the mining tax charge decreased by 14 to usd 165573 
thousand the group increased production by 5 however 
this was offset by a 17 fall in the average realised gold price
power
power expenses increased by 15 to usd 57844 thousand 
at the krasnoyarsk business unit external power consumption 
increased 9 as a result of an increase in ore processed the 
irkutsk ore business unit increased external power consump
tion by 39 and the irkutsk alluvial business unit by 10 
as a result of connection to the federal grid 
120
100
80
60
40
20
0
others
refining costs
outsourced 
mining services
power
tax on mining
labour
fuel
consumables 
and spares
2012
11
7
4
3
17
30
27
2013
7
2
5
13
30
15
29 polyus gold international  annual report  2013
33
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amortisation and depreciation 
of operating assets
amortisation and depreciation of operating assets increased 
by 23 in 2013 to usd 209152 thousand the increase 
primarily relates to increases in depreciation charges for 
fixed assets at
• verninskoye where the plant was put into operation 
in the second half of 2012 and the rampup in produc
tion continued through 2013
• olimpiada titimukhta and kuranakh where the depre
ciation of stripping activity asset has increased over the 
period due to higher carried forward balances
increase in goldinprocess  
and refined gold
in 2013 the total metal inventories balance increased 
by 61 mainly related to
• an increase in ore stockpiles at the krasnoyarsk busi
ness unit in the second quarter of 2013 the group 
changed the mine plan at the olimpiada deposit to en
sure the optimisation of equipment use and enhance
ments to inpit safety which resulted in ore stockpiling
• continued stockpiling of lowgrade ore at the irkutsk ore 
business unit for future processing
• mining operations started at natalka in 2013 the stock
piled ore will be used in production following the com
mencement of the processing plant
• a significant amount of refined gold accumulated at the 
krasnoyarsk refinery plant which was sold in january 
2014
various types of inventories are valued using different ap
proaches refined gold is valued at the average cost of pro
duction per saleable unit of metal workinprocess stock
piles and doré are valued at the average production costs 
at the relevant stage of production for more details please 
refer to section 288 “review of the statement of financial 
position”
285 selling general and administrative 
expenses sga note 9 to the 
consolidated financial statements
in 2013 the group’s sga expenses decreased by 12 
to usd 225795 thousand mainly because taxes other than 
mining and income taxes declined by 59
salaries
in 2013 the group’s administrative labour costs increased 
by 13 to usd 151027 thousand 
the increase is mainly related to oneoff severance re
lated payments to former senior managers of the group 
and an increase in the number of administrative personnel 
at verninskoye 
286 finance costs note 12 to the 
consolidated financial statements
the total cost of debt increased from 28 as at 31 december 
2012 to 44 as at 31 december 2013 and relates mainly 
to the 5625 usd 750 million notes issued during 2013 
however interest expenses accrued on the notes and let
ters of credit were capitalised within the mine under devel
opment balance recognising the use of the proceeds for 
the natalka project development therefore the group’s 
finance costs decreased by 56 in 2013 to usd 13878 
thousand and cost of debt net of interest capitalised de
creased from 28 to 27
debt outstanding and weightedaverage interest 
rate as at 31 december 2013 and 2012
1400000
1200000
1000000
800000
600000
400000
200000
0
31122013 31122012
348347
1205586
275
273
debt 
outstanding 
usd thousand
weighted avarage cost 
of debt net of interest 
capitalized at date  polyus gold international  annual report  2013
34
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287 dividends note 25 to the 
consolidated financial statements
on 31 may 2013 shareholders of the company unanimous
ly voted for final and special dividend payments for the year 
2012 in the total amount of 1056 us cents per ordinary 
share a record dividend payment for the company
dividends per ordinary share in 20082013 
us cents
1
 
 
 
payout ratio
2
 in 20082013 
288 review of the statement 
of financial position
this section presents an analysis of critical balance sheet 
items and should be read in conjunction with the descrip
tions presented in notes 1530 to the consolidated financial 
statements for the year ended 31 december 2013
property plant and equipment  
note 15 to the consolidated financial 
statements
the table below sets forth the components of the group’s 
net book value of property plant and equipment
3
 at 31 de
cember 2013 and 2012
usd ‘000
31 december  
change
yoy 2013 2012
mining assets 1314396 1576431 17 
nonmining  
assets 37945 50136 24 
stripping  
activity assets 153308 175213 13 
net book value 
of property 
plant and  
equipment 1505649 1801780 16
mining assets represent 87 of total property plant and 
equipment the value of these assets declined by 17 
as a result of the disposal of the mining assets in kazakh
stan and kyrgyzstan with a net book value of usd 261150 
thousand the decrease in net book value on account of the 
sale was offset by transfers from capital constructionin
progress due to 
• completion of construction of the full flowsheet at the 
verninskoye mine and associated infrastructure valued 
at usd 140410 thousand
• completion of various projects at the krasnoyarsk busi
ness valued at usd 109748 thousand including au
tomation of the processing plant at blagodatnoye and 
mill throughput expansion at titimukhta in addition 
housing for 570 staff was commissioned at olimpiada 
replacing old facilities 
120
100
80
60
40
20
00
2008 2009 2010 2011 2012 2013
30
nil nil
700
600
500
400
300
200
100
00
2008 2009 2010 2013 2011 2012
601
331
256
341
nil
nil
40
41
23
1
 dividends paid by ojsc polyus gold for 20082010 and pgil for 2011–2013
2
 dividends per share divided by earnings per share expressed as a percentage
3
 adjusted to accumulated amortisation depreciation and impairment
82
special dividends final and interim dividends polyus gold international  annual report  2013
35
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changes to the gross book value of mining assets during the year ended 31 december 2013 usd million
capital constructioninprogress cip 
note 16 to the consolidated financial 
statements
cip represents assets under construction valued at the cost 
of purchase plus the costs required to bring these assets 
into working order 
the following table shows the group’s cip additions for the 
years ended 31 december 2013 and 2012
usd ‘000
year ended  
31 december  
change
yoy 2013 2012 
krasnoyarsk bu 209813 100733 108
capital  
construction bu 68229 133917 49
irkutsk ore bu 53253 111504 52
irkutsk  
alluvial bu 18386 23501 22
yakutia  
kuranakh bu 15673 26684 41
other 17867 66780 73
subtotal  
continuing  
operations 383211 463119 17
discontinued 
operations – 36831 100
total 383211 499950 23
in 2013 additions to cip were mainly driven by the following
• a number of projects at the krasnoyarsk business unit 
including automation of two processing plants at olim
piada and one at titimukhta valued at usd 209813 
thousand
• development of infrastructure at verninskoye valued 
at usd 53253 thousand
• increase of activities of the capital construction bu at 
natalka usd 37280 thousand and
• the start of construction of the peleduy – mamakan pow
er line usd 30949 thousand
mine under development note 17 to the 
consolidated financial statements
mine under development includes only the natalka mine magadan 
business unit for details see section 293 “development” 
exploration and evaluation assets 
note 18 to the consolidated financial 
statements
in 2013 the group invested usd 32652 thousand into 
exploration and reserves evaluation activities some 28 
less than in 2012 this decrease relates to a slowdown and 
termination of exploration activity
• at nezhdaninskoye degdekanskoye and some other 
unpromising deposits which are not expected to be 
economically viable at current gold prices and which 
were therefore impaired at 30 june 2013 for details 
see note 11 to the consolidated financial statements 
• at panimba medvezhy zapadny and other deposits 
where exploration work has ceased because the depos
its are in the final stage of reserve evaluation
mining assets  
at 31122012
verninskoye 
mine
krasnoyarsk 
business unit
other transfers 
from cip
disposals forex 
effect
other mining assests 
at 31122013
2580
110
121
140
395
167
16
2405
3500
3000
2500
2000
1500
1000
500
0 polyus gold international  annual report  2013
36
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most exploration expenses in 2013 related to drilling sampling 
evaluation and costs for audits of reserves and resources 
the table below shows total capitalised exploration expen
ditures for the years ended 31 december 2013 and 2012
usd ‘000
years ended 
31 december
 
change 
yoy 2013 2012
nezhdaninskoye 6678
1
19108 65
razdolinskoye  
inc poputnenskoye
5765
3559
62
smezhny 4817 4039 19
blagodatnoye 4853 – 100
chertovo koryto 4178 3139 33
olimpiada 2161 1057 104
others 4200 14342 71
total investment 
in exploration  
and evaluation assets 32652 45244 28
exploration and evaluation expenditures are capitalised 
when the exploration and evaluation activities have not 
reached a stage that permits a reasonable assessment 
of the existence of commercially recoverable gold resourc
es when the technical feasibility and commercial viability 
of extracting a gold resource are demonstrable and a deci
sion has been made to develop a mine capitalised explora
tion and evaluation assets are reclassified to mines under 
development 
at the end of the year exploration and evaluation assets 
decreased by 66 expenditures of usd 32652 thou
sand were offset by impairment of usd 316468 thousand 
see note 11 to the consolidated financial statements and 
by disposal of subsidiaries see notes 52 and 18 to the 
consolidated financial statements 
inventories note 20 to the consolidated financial statements
the table below shows the balance of metal contained in inventories by type for the group’s subsidiaries for the years 
ended 31 december 2013 and 2012
usd ‘000
years ended 31 december  change 
yoy 2013 2012
krasnoyarsk bu 371840 305112 22
stockpiles 277928 213580 30
goldinprocess 65697 80090 18
refined gold 28215 11442 147
yakutia kuranakh bu 24676 55357 55
stockpiles 12170 45394 73
goldinprocess 12506 9963 26
irkutsk ore bu 78040 68039 15
stockpiles 66873 45795 46
goldinprocess 11167 22244 50
irkutsk alluvial bu 450 526 14
goldinprocess 450 526 14
magadan bu 45655 – 100
stockpiles 45655 – 100
discontinued operations kazakhaltyn – 22684 100
stockpiles – 3085 100
goldinprocess – 6648 100
refined gold – 12951 100
total 520661 451718 15
1 
capitalised expenditures before 30 june 2013 when impairment was recognised polyus gold international  annual report  2013
37
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this increase is represented by 
• the rise in ore stockpiles at the krasnoyarsk business 
unit in q2 2013 the group reviewed the mine plan 
at the olimpiada deposit in an effort to optimise equip
ment utilisation and enhance inpit safety these chang
es have resulted in an increase in stockpiled ore which 
will be processed during 2014 and thereafter
• mining of lowgrade ore at the irkutsk ore business unit 
which is stockpiled for future processing
• in 2013 41 million tonnes of ore were mined for stock
piling at natalka including 947 thousand tonnes at 20 
gt 1498 thousand tonnes of ore at 10 gt and 1668 
thousand tonnes at 06 gt
• a significant amount of refined gold was accumulated 
at the krasnoyarsk refinery plant totalling 34 k oz 2012 
15 k oz which the group sold in january 2014 
the value of stores and materials increased by 6 from 
usd 449767 thousand at the beginning of the year to usd 
476366 thousand as at 31 december 2013 mainly due to
• an increase in consumption at the verninskoye mine
• the krasnoyarsk business unit which increased con
sumption of fuel because of increased haulage costs 
following the change of the mining plan at olimpiada 
and the works to enlarge the pit
capital and reserves note 25 to the 
consolidated financial statements 
the translation reserve has moved by usd 318634 thou
sand in 2013 which reflected the weakening of the russian 
rouble 
during the reporting period the group’s retained earnings 
decreased by 9 to usd 1922264 thousand due to a de
crease in net profit attributable to shareholders of the par
ent company of usd 140274 thousand and usd 320195 
thousand in dividends declared and paid in respect of 2012 
borrowings note 27 to the consolidated 
financial statements 
during the year the company raised usd 1092617 thou
sand in new debt and repaid usd 236233 thousand please 
refer to section 289 “cash flow analysis” for details
as at 31 december 2013 the group’s consolidated debt 
was usd 1205586 thousand the structure of the debt 
at yearend was as follows
debt breakdown by maturity
debt breakdown by type
due within 12 months
due within 24 months
due thereafter
10
68
22
18
2
62
18
bank loans
eca financing
deferred payments under letters of credit
eurobonds polyus gold international  annual report  2013
38
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debt breakdown by currency
debt breakdown by interest rate type
the company expects to repay usd 268693 thousand in 2014 
for more details of the 2014 repayment schedule please refer 
to note 33 to the consolidated financial statements
net cashdebt is defined as shortterm and longterm 
debt less cash and cash equivalents and shortterm bank 
deposits shortterm bank deposits with an original matu
rity of more than 3 months can be withdrawn on demand 
and therefore have the same liquidity as cash and cash 
equivalents net debt should not be considered as an alter
native to current and noncurrent loans and borrowings and 
should not necessarily be construed as a comprehensive 
indicator of the group’s measure of liquidity
the following table sets forth the group’s net debt as at 
31 december 2013 and 2012
 
 
usd ‘000
31 december  
change 
yoy 2013 2012
noncurrent  
borrowings 936893 160792 483 
 current  
   borrowings 268693  187555 43 
  cash and cash 
equivalents 808675 959932 16 
 bank deposits 47815 68286 30 
net debtcash 349096 679871 151
usd eur
90
10
float
62
38
fixed
289 cash flow analysis
operating activities
the decrease in cash inflow from operating activities resulted from a combination of factors mainly the declining gold 
price and the increased working capital requirements due to growth in inventory balances at verninskoye and olimpiada
net ocf in 2012 gold price
decrease
growth in
cos and sga
working 
capital needs
effect from
disposal of
kazakhgold 
assets
sales 
volume 
increase
other net ocf 
in 2013
459
180
99
84
99
153
1200
1000
800
600
400
200
0
992
422
operating cash flow in 2013 usd million polyus gold international  annual report  2013
39
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investing activities
the group spent usd 1023381 thousand 2012 usd 
763789 thousand in investing activities 
in 2013 purchases of capital constructioninprogress ex
ploration and evaluation assets and assets for mine under 
development totalled usd 1347217 thousand 2012 usd 
713089 thousand the group raised usd 291199 thou
sand from the disposal of its subsidiaries in kazakhstan
financing activities 
the group raised usd 744241 thousand from the issue 
of notes due in 2020 usd 750 million net of up front com
mission and usd 348375 thousand from issued letters 
of credit and credit facilities from vtb bank rosbank and 
deutsche bank the group paid out usd 363162 thousand 
in dividends and usd 236233 thousand to repay borrow
ings this resulted in a net cash inflow from financing activi
ties of usd 493222 thousand
2810 adjusted ebitda
adjusted ebitda is defined by the group as profit before fi
nance costs income tax incomelosses from investments 
depreciation amortisation and interest and is further adjust
ed for certain items included in the table below the group 
has made these adjustments in calculating adjusted ebitda 
to provide a clearer view of the performance of its underly
ing business operations and to generate a metric that it be
lieves will give greater comparability over time with peers 
in its industry the group believes that adjusted ebitda  
is a meaningful indicator of its profitability and performance 
this measure should not be considered as an alterna
tive to profit for the year and operating cash flows based 
on ifrs and should not necessarily be construed as a com
prehensive indicator of the group’s measure of profitability
the following table sets forth the group’s adjusted ebitda 
for the years ended 31 december 2013 and 2012
usd ‘000
year ended 31 december
 
change 
yoy 2013 2012
profit for the year 143001 965104 85
net finance  
income
1
13032 4184 211
income tax charged 90688 246412 63
depreciation  
and amortisation for 
the year 213834 174797 22
impairments  
note 11 to the con
solidated financial 
statements 471657 15424 2958
other adjustments
2
3928 15338 702
gain on loan for
giveness and share 
purchase agreement  
termination – 79084 100
adjusted ebitda 910076 1303131 30
the group’s adjusted ebitda decreased by 30 mainly 
due to lower gold prices and increases in costs which were 
partly offset by increased sales volumes 
ebitda 2012 realised price
decrease
tcc growth sales volume 
growth
other ebitda 2013
459
58
99
25
1400
1200
1000
800
600
400
200
0
1303
910
adjusted ebitda growth structure in 2013 usd million
1
 net finance income represents net amount of income from investments and finance costs
2
  other adjustments include gain on disposal of investments gain from investments in listed companies held for trading foreign 
exchange gain loss from disposal of property plant and equipment and workinprogress and gain on disposal of subsidiaries polyus gold international  annual report  2013
40
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the following table shows the breakdown of adjusted ebitda for the year ended 31 december 2013 for the principal 
revenue generating business units
usd ‘000
business unit
krasnoyarsk yakutia irkutsk ore
irkutsk  
alluvial
profitloss for the year 475985 112276    9993    54738
net finance incomeexpense 414           413     2999    6838
income tax chargedrecovered 126542 16179    2215    16832
depreciation and amortisation for the year 144050 18431    22471    15173
impairments 14850 137847    15205 –
other adjustments 11381 503     8133        294
adjusted ebitda 772394      28739    36600    80199
the following table shows the group’s tcc for the years ended 31 december 2013 and 2012
usd ‘000
years ended 31 december
 change
yoy 2013 2012
cost of gold sales 1346523 1265306  6 
 property plant and equipment depreciation 209152 169923 23 
 provision for annual vacation payment 18 3702 100 
 employee benefit obligations cost 5215 2369 120 
 change in allowance for obsolescence of inventory 2605 1562  67 
 nonmonetary changes in inventories
1
18487 4180  342 
total cash costs 1153266 1095054    5
gold sales k oz 1631 1571 4
tcc usd per oz sold 707 697 1
in 2013 the tcc per oz sold increased by 1 the key driver was an increase in the cost of gold sales by 6 for more details 
please refer to section 284 “cost of gold sales” partly offset by the appreciation of the us dollar against the russian rouble 
the aggregate adjusted ebitda of the group’s principal rev
enue generating business units is usd 917932 thousand and 
including the results of the other companies of the group 
gives a group adjusted ebitda of usd 910076 thousand
2811 total cash costs per oz sold
the group believes that the metrics total cash costs tcc 
and total cash costs per oz sold although nonifrs meas
ures provide a useful comparison with other industry players  
its use is common industry practice although the method 
of its calculation may differ as these items are nonifrs meas
ures an investor should not consider these items in isolation 
or as alternatives to the cost of sales profit for the year at
tributable to shareholders of the parent company net cash 
generated from operating activities or any other measure of fi
nancial performance presented in accordance with ifrs
total cash costs per oz sold is total cash costs divided 
by ounces of gold sold during the period
1  
nonmonetary changes in inventories is a calculation to estimate the noncash portion of costs included in the change in the amount 
of inventory primarily representing depreciation and amortisation polyus gold international  annual report  2013
41
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tcc per oz sold by mine in the years ended 31 december 2013 and 2012 usd per oz
•  olimpiada mine a 3 yoy decrease in tcc per ounce 
of gold sold as a result of an improvement in average 
grade and recovery
• blagodatnoye mine a slight increase in tcc of 3 yoy 
from a lower grade of ore processed offset by the im
proved recovery rate
• titimukhta mine an improvement of the recovery rate 
following installation of a new thickener and the expan
sion of the hydrometallurgical section offset by a 12 
decrease in gold grade
• verninskoye a 10 increase in tcc as a result 
of a combination of an increase in consumption of vari
ous mining and processing materials ore mining vol
umes increased growth in the number of personnel 
and increased prices for goods purchased
• alluvials a 5 decrease in tcc due to ongoing optimisa
tion of the mining plan and a 6 decrease in personnel
• kuranakh an increased zinc content in the ore fed to the 
plant significantly reduced the recovery rate this metal
lurgical issue together with an increase in cash operat
ing costs resulted in a 9 increase in tcc
2812 allin sustaining cash  
costs per oz sold
in june 2013 the world gold council wgc published 
a guidance note on the allin sustaining cash costs aisc 
metric for gold mining companies it is expected that the 
adoption of aisc by precious metal producers may help 
to provide investors governments local communities and 
other stakeholders with better visibility into the true cost 
of producing gold
aisc measures costs related to sustaining production
1
 
we calculate it in accordance with the recommendation 
of the wgc including tcc sga expenses sustaining capex 
and other cash costs attributable to current sales 
in 2013 aisc for the company was usd 1002 per oz sold 
which is 1 lower than in 2012 usd 1007 per oz sold the 
main reasons for the decrease are explained by a 2 fall 
of the russian rouble against the us dollar 61 lower strip
ping activity asset additions and a 12 reduction in sga 
expenses partly offset by overall inflation in the cost of sales 
and a 31 increase in sustaining capex
usd ‘000
year ended  
31 december
 
change
yoy 2013 2012
total cash costs 1153266 1095054  5 
sga less sga  
depreciation 221309  214157  3 
research expenses  2499  2079  20 
stripping activity  
asset additions  37692  96623  61 
sustaining capital ex
penditures  210236  159950  31 
unwinding of  
discounts on decommis
sioning liabilities  5442  9003  40 
adding back expenses 
excluded from tcc 2592 4509 43
allin sustaining costs 1633036 1 581 375    3
gold sales k oz 1631 1571 4
allin sustaining costs 
usd per oz sold 1002 1007 1
olimpiada titimukhta blagodatnoye verninskoye alluvials kuranakh
685
869
789
463
925 993
2013 2012
1200
1000
800
600
400
200
0
1  
nonsustaining costs are those costs incurred at new operations and costs related to ‘major projects’ at existing operations where 
these projects will materially increase production companies need to publicly disclose those operations and ‘major projects’ which 
are considered nonsustaining all other costs related to existing operations are considered sustaining
666
920
869
479
880
1085 polyus gold international  annual report  2013
42
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291 mines and deposits 
1 
please refer to glossary on page 215 for definition
2 
please refer to glossary on page 213 for definitions
3  
licenses for alluvial deposits are held by various entities that are not directly owned by polyus gold international limited the holdings 
range from 384 to 629 the group has the power to govern the financial and operating policies of theses entities and therefore 
the group consolidates the financial results of all of these entities and accounts for all of their reserves in the group’s reserves
region krasnoyarsk irkutsk yakutia magadan
mine olimpiada titimukhta blagodatnoye verninskoye alluvials kuranakh natalka
type of ore
sulphide 
refractory
oxidised 
and 
sulphide 
non
refractory
sulphide 
nonrefractory
sulphide 
non
refractory sands
quartz–
pyrite
sulphide non
refractory
jorc proved 
and probable 
reserves m oz 
31 dec 2013 300 16 92 44 13 27 316
mining method open pit open pit open pit open pit
quarrying 
and 
dredging open pit open pit
power source
federal grid 
diesel and 
coal power 
stations
federal 
grid diesel 
and coal 
power 
stations
federal grid 
andcoal 
power station
hydro and 
diesel power 
stations
hydro 
and diesel 
power 
stations federal grid
federal grid 
and diesel 
power station
ore processing 
capacity mtpa
1
80 24 60 22 na 36 10 ex
processing 
technology
2
gravity
flotation
biocarbon
inleach
gravity
resinin
leach
gravity
flotation
carbonin
leach
gravity
flotation
carbonin
leach gravity resininpulp
gravity
flotation
carboninleach
2013 production 
k oz 691 131 395 89 205 138 –
number 
of employees 
31122013 3022 789 1777 1688 2815 1787 1497
2013 tcc usd
oz 666 920 479 869 880 1085 –
owner cjsc polyus cjsc polyus cjsc polyus
ojsc 
pervenets
ojsc 
lenzoloto
ojsc 
aldanzoloto 
grk
ojsc matrosov 
mine
 of effective 
ownership 
by the company 951 951 951 951 384629
3
951 951
29 operational review polyus gold international  annual report  2013
43
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292 production
in 2013 the company produced 165 million ounces of refined 
gold from continuing operations a 5 increase on the 157 
million produced in 2012 and moved a total of 66 million cubic 
metres of rock in 2013 compared to 67 million 2012
the group mined 30 million tonnes
1
 of ore up 28 on the 
235 million mined in 2012 the increase was primarily due 
to increased volumes at the olimpiada and verninskoye mines 
in 2013 the company processed 22 million tonnes of ore 
3 more than last year with all mines other than olimpiada 
increasing their throughput
at the olimpiada and verninskoye mines the group mined a to
tal of 7 million tonnes more than it processed in order to im
prove safety of open mining operations the group reviewed the 
mining plan at olimpiada the new plan envisages a gradual 
transition from mining to stripping activities at the pit surface 
and as a result the stripping ratio decreased to 18 m³t from 
the 27 m³t achieved in 2012 mining will continue until july 
2014 after this date the feed for processing will come from the 
accumulated stockpiles once stripping works are complete 
mining will recommence at verninskoye we maintain a high 
level of mining operations but stockpile lowgrade material 
this ore will be processed once power shortages are resolved 
see section 293 “development” and new technological solu
tions introduced see section 24 “future developments”
olimpiada krasnoyarsk region
the olimpiada mine is located in the krasnoyarsk region 
of russia approximately 500 kilometres north of krasno
yarsk two mills with a total capacity of 80 mtpa process 
sulphide ores these sulphide ores contain refractory sul
phide minerals at concentrations of between 3 and 10 
the average gold grade of these sulphide ores is 35 gt
olimpiada is an open pit mine with surface stockpiling rock 
is removed by excavation and hauling after blasting the ore 
is processed using the gravity and flotation concentration meth
od with subsequent biooxidation of the flotation concentrate 
and sorption leaching of bioleach product using the cil process 
improved recovery rates and an increase in the average 
gold grade in the ore processed meant that total produc
tion of refined gold was 691273 ounces up from 653090 
in 2012 despite slightly lower processing volumes recovery 
rates continued to increase up 08 to 745 and further 
improvements are anticipated following completion of the 
automation of the biooxidation facility in q2 2014
refined gold production
k oz 2013 2012
 
change yoy
olimpiada 691 653
2
6
blagodatnoye 395 401 2
titimukhta 131
3
117 12
verninskoye 89 46 95
alluvials 205 214 4
kuranakh 138 138 
total refined gold production 1649 1569 5
olimpiada 2013 2012
 
change yoy
total rock moved ‘000 m
3
 25052 24368 3
including stripping 20757 21384 3
stripping ratio m³t 18 27 33
ore mined ‘000 tonnes 11597 8056 44
average grade in ore mined gt 36 34 8
ore processed ‘000 tonnes 7822 8068 3
average grade gt 36 34 5
recovery  745 737 1
refined gold production k oz 691 653
2
6
1 
excluding ore mined at natalka
2 
including 22953 ounces of gold produced in the form of flotation concentrate sold to a third party
3 
including 9356 ounces of refined gold production from ore purchased from the third partyowned veduga mine polyus gold international  annual report  2013
44
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blagodatnoye krasnoyarsk region
the blagodatnoye mine is in the krasnoyarsk region some 
25 km from the olimpiada mine the ores of the blago
datnoye deposit are quartzmicaceous schists with impreg
nated and vein impregnated sulphide mineralisation
the mine is an open pit with surface stockpiling the mill 
was commissioned in 2010 and is based on gravity con
centration flotation and cil the plant has a processing 
capacity of 60 mtpa
in 2013 blagodatnoye produced 395261 ounces full auto
mation of the blagodatnoye plant has resulted in processing 
volumes and recovery rates significantly exceeding design 
parameters offsetting a decrease in the gold grade of the 
ore processed 
titimukhta krasnoyarsk region
the titimukhta deposit is located 9 km northwest of the 
olimpiada deposit the deposit contains quartz vein and 
veinlet stockwork due to the close proximity of the deposit 
to the olimpiada mine the ores from titimukhta are pro
cessed through an older mill on the olimpiada site
gold production at titimukhta increased by 12 yoy 
to 130789 ounces in 2013 including 9356 ounces of re
fined gold produced from ore purchased from the third 
partyowned veduga mine in accordance with an offtake 
agreement the increase was mainly due to the higher vol
ume of ore processed and improved recovery rates follow
ing an upgrade of the processing plant
blagodatnoye 2013 2012
 
change yoy
total rock moved in ‘000 m
3
 13321 15355 13
including stripping 10851 13040 17
stripping ratio m³t 16 20 21
ore mined in ‘000 tonnes 6840 6463 6
average grade in ore mined gt 21 21 2
ore processed in ‘000 tonnes 6755 6499 4
average grade in ore gt 20 21 4
recovery  883 864 2
refined gold production k oz 395 401 2
titimukhta 2013 2012
 
change yoy
total rock moved in ‘000 m
3
 10195 10211 –
including stripping 9280 9328 1
stripping ratio m³t 37 39 4
ore mined ‘000 tonnes 2514 2422 4
average grade in ore mined gt 20 21 2
ore processed in ‘000 tonnes
1
2391 2131 12
average grade in ore gt
1
18 21 12
recovery 
1
850 822 3
refined gold production k oz 131 117 12
 
1 
excluding ore purchased from veduga polyus gold international  annual report  2013
45
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verninskoye irkutsk region
in december 2011 the group commenced production at the 
verninskoye mine located in the irkutsk region of russia 
the mill is based on gravity concentration flotation and cil 
and has a processing capacity of 22 mtpa 
verninskoye produced 89100 ounces of gold in 2013 nearly 
double last year’s 45586 ounces as a result of higher process
ing volumes increased gold grade in the ore and improved 
recovery rates following the completion of full automation 
in q4 2013 the verninskoye plant is currently being finetuned 
to reach its design performance parameters
alluvials irkutsk region
our alluvial deposits are located in the irkutsk region 
the  group mines gold using quarrying and dredging tech
niques followed by gravity separation stripping is per
formed by walking excavators and bulldozers
in the reporting period the company’s alluvial operations pro
duced 205417 ounces of gold compared to 213981 in 2012 
verninskoye 2013 2012
 
change yoy
total rock moved in ‘000 m
3
 4539 2408 88
including stripping 2712 1439 88
stripping ratio m³t 05 06 –
ore mined ‘000 tonnes 4934 2616 89
average grade in ore mined gt 20 18 8
ore processed ‘000 tonnes 1626 1324 23
average grade in ore gt 25 22 13
recovery  708 642 10
refined gold production k oz 89 46 95
alluvials 2013 2012
 
change yoy
sand washed million m
3
 10107 9962 1
average grade gm³ 063 07 5
refined gold production k oz 205 214 4 polyus gold international  annual report  2013
46
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293 development
natalka magadan region
once fully completed the natalka mine in the magadan re
gion will be the largest gold mine in russia 10 mtpa of ore 
processing capacity in 2015 with a potential increase up to 
40 mtpa over the course of 2013 the onsite construction 
team grew to 2700 and much of the key infrastructure was 
constructed 
the majority of the necessary engineering surveys have 
been carried out and planning of the site is complete
development of the facilities at the main mill are underway 
the sag mill and ball mill have been installed foundations for 
the crushed ore storage facility are complete and the tem
porary tailings dam is complete work continues on electric
ity pylons to bring 110kv power lines to the facility and the 
majority of the necessary temporary roads have been con
structed thirteen buildings providing canteens recreation and 
accommodation facilities for the more than 2400 construc 
tion workers and engineers have been built key technologi
cal equipment has been delivered the mining fleet and other 
equipment is on site refer to note 17 “mine under develop
ment” to the consolidated financial statements
the company has decided to resequence the development 
plan for the natalka mine and postpone commissioning 
of the plant from summer 2014 to summer 2015 while 
it is operationally possible to commence production at na
talka as previously planned the company deems it prudent 
to postpone final commissioning given the recent substan
tial decline in gold prices and the possibility of further weak
ness polyus gold expects to finalise detailed project revi
sions by the middle of 2014 following a thorough project 
assessment scheduled for completion during the first half 
of the year in the meantime development works onsite 
will continue albeit at a slower pace mining works which 
commenced in 2013 will also continue in accordance with 
the licence terms
we believe that the resequencing of the project devel
opment will allow the company to identify additional cost 
savings and operational efficiencies and the optimisation 
of capital and operating expenditures improvements to the 
project design are also being investigated including the po
tential implementation of photometric separation technol
ogy optical sorting as a way to preenrich the ore for 
further information please refer to section 24 “future de
velopments”
kuranakh republic of sakha
the kuranakh mine is located in the republic of sakha 
yakutia of russia ore is mined from numerous depos
its in the kuranakh ore field the area has a long history 
of mining and the deposits in the kuranakh ore field have 
been significantly depleted and the central parts of the de
posit which formerly had the most uniform ore bodies and 
the highest gold grade have been mined out
mining at kuranakh uses open cut drilling and blasting op
erations the processing plant is based on sorption technol
ogy with subsequent electrolysis and smelting
in 2013 kuranakh produced 137635 ounces of gold which 
was in line with 2012 
kuranakh 2013 2012
 
change yoy
total rock moved in ‘000 m
3
 13244 14361 8
including stripping 10952 12064 9
stripping ratio m³t 26 30 13
ore mined ‘000 tonnes 4146 3984 4
average grade in ore mined gt 14 13 2
ore processed ‘000 tonnes 3811 3735 2
average grade in ore gt 14 13 2
recovery  840 866 3
refined gold production k oz 138 138  polyus gold international  annual report  2013
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blagodatnoye mine expansion 
krasnoyarsk region
the company has been putting together detailed construc
tion documentation for a project to expand the capacity 
of the blagodatnoye mine to 8 mpta we expect the docu
mentation to be ready in the first half of 2014
an automatic process control system was installed at the 
existing mill as a result in 2013 recovery increased by 2  
refer to note 16 “capital constructioninprogress” to the 
consolidated financial statements
verninskoye processing plant automation 
irkutsk region
we completed the construction and commissioning of an 
automatic process control system and put in place a set 
of measures to optimise the operation of the mill and open 
pit in particular partial replacement of pumps and the re
placement of mixers and gravity and hydrometallurgical 
equipment this set of measures has helped to increase 
recovery rates we expect that once this work is fully com
pleted in 2014 recovery rates will meet planned levels re
fer to note 16 “capital constructioninprogress” to the con
solidated financial statements
peleduy – mamakan power line 
irkutsk region and republic of sakha
in order to guarantee supply to our strategic projects in the 
irkutsk region the company is building a 110 kv power line 
from peleduy in the republic of sakha to mamakan in the 
irkutsk region in the fourth quarter of 2013 we completed 
detailed construction documentation contracted all materi
als and started the construction of foundations and pylons 
completion is expected by the end of 2014 refer to note 16 
“capital constructioninprogress” to the consolidated finan
cial statements
razdolinskaya – taiga power line 
krasnoyarsk region
pgil’s assets in the krasnoyarsk region have a deficit of ex
ternal grid power supply in 2013 the company started the 
development of project documentation to connect the taiga 
substation near blagodatnoye to the razdolinskoye substa
tion this new power line would allow all our operating mines 
in the krasnoyarsk region to obtain an access to the prospec
tive power supply from the recently commissioned boguchan
skaya hydro power station it is expected that commissioning 
of this new power transmission line will lead to a decrease 
in power costs for the krasnoyarsk business unit polyus gold international  annual report  2013
48
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294 exploration refer to note 18 
“exploration and evaluation assets” 
to the financial statements
in 2013 the company carried out exploration work at 10 hard 
rock and a number of small alluvial deposits and prospective 
areas the volume of drilling was 79 thousand metres 
olimpiada krasnoyarsk region
the company explored the western flank of the deposit 
in order to convert resources into reserves this was suc
cessfully achieved a feasibility study to russian stand
ards and an estimate of reserves is underway and will 
be completed in 2014
blagodatnoye krasnoyarsk region
exploration of the deep levels of the blagodatnoye deposit 
to estimate reserves and resources is ongoing and is ex
pected to be completed in q4 2015 almost 11 thousand 
metres have been drilled and a further 10 thousand metres 
of drilling is planned for 2014 metallurgical and mineralogi
cal testing will be undertaken in parallel with the drilling
verninskoye irkutsk region
exploration was completed around the flanks and at deep 
levels of the verninskoye deposit 26 thousand metres were 
drilled a feasibility study meeting russian standards com
menced in 2013 and will estimate the new reserves and re
sources at the verninskoye deposit and the associated per
venets and perevalnoye deposits should these reserves and 
resources be proved viable it would support an increased 
throughput at the processing plant at the verninskoye mine
alluvial deposits irkutsk region
38 thousand metres were drilled at 20 potential sites 
kuranakh republic of sakha
in 2013 a feasibility study meeting russian standards and 
an estimate of reserves was undertaken and submitted for 
state approval the results of the advanced and operational 
exploration are in hand and a block model of the 11 depos
its in the kuranakh ore field was created the outlines of the 
open pits were optimised and an estimate of reserves was 
produced for each deposit in the ore field 
in addition a feasibility study to russian standards and 
an estimate of reserves contained in the low grade stock
piles at kuranakh was produced and submitted for state 
approval in 2013 the stockpiles also underwent an envi
ronmental risk assessment the lom lifeofmine plan as
sumes 16 years of mining with further processing at the 
kuranakh processing plant 
the total increase in jorc proved and probable reserves 
at kuranakh in 2013 was 11 m oz
chertovo koryto deposit irkutsk region
a drilling programme was undertaken at potential sites 
within the exploration area and a report has been issued 
llc polyus project the group’s design unit initiated the 
development of the detailed design works for construction 
of a mine at the deposit 
any decision to proceed with implementation of the project 
requires completion of the construction of the power line 
from peleduy to our operating facilities in the irkutsk region 
as described in section 293 “development”  polyus gold international  annual report  2013
49
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210 jorc resources and reserves
in 20122013 a jorc compliant resources and reserves audit was undertaken at olimpiada blagodatnoye titimukhta 
verninskoye the alluvial deposits kuranakh and the medvezhy zapadny deposits in russia according to the audit results the 
group’s total measured indicated and inferred resources are 1501 m oz and proved and probable reserves are 831 m oz
measured indicated and inferred resources 
resources are inclusive of reserves
1  
audited in september 2012 by wardell armstrong international competent person phil newal arsm bsc mcsm phd ceng fimmm
2  
audited in january 2013 by micon international co limited competent person stanley c bartlett pgeo 
3  
audited in july 2012 by micon international co limited ore in thousand cubic metres m
3
 gold grade in grams per cubic metre gm
3
 
conversion of sands was based on a ratio of two metric tonnes per one cubic metre competent person stanley c bartlett pgeo 
4  
audited in december 2012 by micon international co limited compitent person stanley c bartlett pgeo
5  
audited in october 2011 by micon international co limited competent person stanley c bartlett pgeo
6  
audited in october 2011 by kazakhstan mineral company – russia kmcru competent persons oleg kim phd gsl and vladimir danilov aig gsl
panimba area krasnoyarsk region
exploration has been undertaken at 3 remote locations pan
imba mikhailovsky and zolotoy as a result of this exploration 
panimba has been identified as a gold bearing deposit 
the panimba deposit is a quartz schist with a low sulphide 
concentration in the ore and free gold a feasibility study to 
russian standards has been developed and was submitted 
to gkz the federal reserves committee in 2013 approval 
is expected in 2014 
razdolinskaya area krasnoyarsk region
a prefeasibility study to russian standards to estimate 
reserves and resources has been developed and reviewed 
by state experts in 2013 the jorc compliant resources 
of the deposit are estimated at 32 m oz of gold currently 
the project is awaiting a mining permit from the regional 
government
measured indicated
total mea
sured and 
indicated
deposit ore grade gold ore grade gold gold
million 
tonnes
gt ‘000 ounces million 
tonnes
gt ‘000  
ounces ‘000 ounces
operating mines
olimpiada
1
230 399 2960 2812 332 30060 33020
blagodatnoye
1
1443 230 10670 10670
titimukhta
1
22 298 210 153 322 1580 1800
verninskoye
2
17 311 170 734 247 5820 5990
alluvials
3
632 074 1500 1500
kuranakh
4
   853 171 4700 4700
total operating mines 270 385 3340 6627 255 54330 57680
mine under development 
natalka
5
4642 170 25370 3091 174 17260 42630
total mine under development 4642 170 25370 3091 174 17260 42630
exploration projects
chertovo koryto
2
41 185 250 463 184 2740 2990
panimba
6
48 232 360 112 232 830 1190
razdolinskoye
6
   98 394 1240 1240
total exploration projects 89 212 610 673 182 4810 5420
total 5001 182 29320 10391 229 76400 105730 polyus gold international  annual report  2013
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deposit
inferred
ore 
million tonnes
grade  
gt
gold  
‘000 ounces
operating mines
olimpiada
1
1603 278 14350
blagodatnoye
1
116 194 720
titimukhta
1
16 172 90
verninskoye
2
1101 195 6890
alluvials
3
33 090 90
kuranakh
4
78 135 340
total operating mines 2946 237 22480
mine under development 
natalka
5
3055 174 17050
total mine under development 3055 174 17050
exploration projects
chertovo koryto
2
21 164 110
panimba
6
244 179 1410
razdolinskoye
6
176 350 1980
medvezhy zapadny
7
235 183 1380
total exploration projects 675 225 4880
total 6677 207 44410
1  
audited in september 2012 by wardell armstrong international competent person phil newal arsm bsc mcsm phd ceng fimmm
2 
audited in january 2013 by micon international co limited competent person stanley c bartlett pgeo 
3  
audited in july 2012 by micon international co limited ore in thousand cubic metres m
3
 gold grade in grams per cubic metre gm
3
 
conversion of sands was based on a ratio of two metric tonnes per one cubic metre competent person stanley c bartlett pgeo 
4 
audited in january 2013 by micon international co limited compitent person stanley c bartlett pgeo
5 
audited in october 2011 by micon international co limited competent person stanley c bartlett pgeo
6  
audited in october 2011 by kazakhstan mineral company – russia kmcru competent persons oleg kim phd gsl and vladimir 
danilov aig gsl
7 
audited in january 2013 by csa global competent person dmitry pertel msc aig aie gaa polyus gold international  annual report  2013
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proved and probable reserves
proved probable
total proved 
and probable
deposit ore grade gold ore grade gold gold
 
million 
tonnes
gt ‘000 
ounces
million 
tonnes
gt ‘000 
ounces
‘000 
ounces
operating mines
olimpiada
1
225 387 2790 2607 325 27220 30010
blagodatnoye
1
– – – 1273 224 9180 9180
titimukhta
1
21 292 200 132 328 1390 1590
verninskoye
2
18 289 170 532 247 4220 4390
alluvials
3
– – – 607 066 1290 1290
kuranakh
4
– – – 604 139 2700 2700
total operating mines 264 373 3160 5755 249 46000 49160
mine under development 
natalka
5
4545 156 22800 1594 172 8800 31600
total mine under development 4545 156 22800 1594 172 8800 31600
exploration projects
chertovo koryto
6
29 212 200 316 212 2160 2360
total exploration projects 29 212 200 316 212 2160 2360
total 4838 168 26160 7665 231 56960 83120
1  
audited in september 2012 by wardell armstrong international competent person phil newal arsm bsc mcsm phd ceng fimmm
2  
audited in january 2013 by micon international co limited competent person stanley c bartlett pgeo 
3  
audited in july 2012 by micon international co limited ore in thousand cubic metres m
3
 gold grade in grams per cubic metre gm
3
 
conversion of sands was based on a ratio of two metric tonnes per one cubic metre competent person stanley c bartlett pgeo 
4  
audited in december 2012 by micon international co limited compitent person stanley c bartlett pgeo
5  
audited in october 2011 by micon international co limited competent person stanley c bartlett pgeo
6  
audited in october 2011 by kazakhstan mineral company – russia kmcru competent persons oleg kim phd gsl and vladimir danilov aig gsl polyus gold international  annual report  2013
52
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211 corporate social responsibility
the group is committed to the principles of sustainable 
development and the objective of the removal of environ
mental health and safety and social risks these risks may 
adversely affect the group’s interaction with stakeholders 
and the group’s overall efficiency
in 2013 the company continued implementation of meas
ures aimed at improving and developing its policies in these 
crucial areas
environment
the group’s activities like those of all other miners can 
have a severe environmental impact damaging flora and 
fauna and their habitats soil and subsoil are stripped in ad
vance of mining activities ore processing involves the use 
of dangerous chemicals including cyanide which could 
pose a significant environmental threat to watercourses 
and the ecosystems that depend on them our operations 
are major consumers of energy produced from fossil fuels 
and therefore our ghg green house gases emissions are 
significant  
the сompany keeps its environmental policy under continu
al review seeks to minimise its use of dangerous chemicals 
and has put water management systems in place at pre
sent there are no legal requirements with regard to ghg 
emissions however while replacement and upgrading 
of gaspurifying and ventilation systems would entail signifi
cant investment the company feels that as well as being 
environmentally responsible such investment would offer 
a competitive advantage in the long term 
as a responsible mining company polyus gold conducts as
set retirement assessments and has developed life of mine 
plans in order to mitigate longterm risks for all its stake
holders planning the allocation of the necessary funds and 
land rehabilitation measures in advance 
securing mining licences is crucial for the group’s long
term survival and hence strict compliance with legislation 
is essential the company monitors legal developments 
closely and participates in discussions on relevant legisla
tive proposals for information on the environmental risks 
posed by the company’s operations and the measures put 
in place by the company to mitigate against them see sec
tion 25 “principal risks and uncertainties” and section 3 
“sustainability report”
employees
the company regrettably has to report three work related 
fatalities in 2013 and considers this totally unacceptable 
safety remains а core value and is of paramount importance 
to the group in all its endeavours the company’s current 
focus is on ensuring immediate response medical aid and 
evacuation in case of emergency the company strives 
to prevent any accidents and injuries at its operations and 
constant vigilance and preparedness are prerequisites for 
fostering a culture of safety for information on the safety 
challenges at our mines and the company’s plans to miti
gate against them refer to section 3 “sustainability report”
polyus gold is one of the largest employers in the are
as where it operates attracting and developing talented 
and motivated employees who share the corporate values 
of polyus gold is crucial to ensuring continued success de
terioration in the quality of professional training standards 
in russian educational institutions and the consequent 
shortage of qualified specialists could pose a serious long 
term threat to the company expansions in the group’s 
current operations and potential development projects will 
require a growing demand for highlyqualified profession
als growth opportunities therefore might be limited by the 
inability to recruit appropriate staff for information on the 
challenges faced by the company in this area and its ef
forts to mitigate against them refer to section 3 “sustain
ability report”
social community and human rights
polyus gold strives to establish positive relationships with 
individuals and legal entities to become more effective 
in achieving the combined social and economic goals of the 
company and local communities 
the group recognises the necessity to assess the needs 
of communities in the regions where it operates and to work 
to ensure that its operations are beneficial to those commu
nities the company aims to be honest in its dealings with 
local people about the company’s true impacts on the envi
ronment and the social and economic situation 
polyus gold operates in strict compliance with russian legis
lation which incorporates much international human rights 
legislation the сompany’s human rights policy was ap
proved by the board on 13 december 2013 and the stake
holder engagement policy was signedoff by the committee 
chairman these policies set new standards and parameters  polyus gold international  annual report  2013
53
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1 
for current composition refer to section 68 “senior management”
2 
see section 281 “financial highlights”
for the company’s work with the local communities where 
the group operates no issues regarding human rights were 
identified during 2013 for information on the company’s 
work in this area and the measures taken to mitigate any 
challenges see section 3 “sustainability report”
diversity
the group’s recently introduced diversity policy see sec
tion 64 “diversity policy” commits the board to open and 
transparent recruitment policies and the appointment of the 
most suitable candidate for every role
since its shares were admitted to the premium segment 
of the london stock exchange the company has always 
had female representation on its board and in its senior 
management team
1

position at yearend 2013
directors
senior  
manage
ment employees
male 875 933 849
female 125 67 151
212 going concern statement
the group has a moderate financial position solid opera
tions and significant ore reserves we start 2014 with usd 
808675 thousand in cash and cash equivalents and usd 
1205586 thousand in debt the 2013 financial results 
showed that with an average realised gold price of usd 
1385 per oz and a rubusd exchange rate of 3185 for 
more information please refer to 282 “external market fac
tors affecting the group’s financial results” the group gen
erated adjusted profit from continuing operations
2
 of usd 
563791 thousand from its existing mining operations 
excluding growth capital expenditure requirements our 
operating cash flows are sufficient to finance our working 
capital requirements usd 283148 thousand in 2013 the 
directors are confident of financing the remaining capital 
expenditure required to complete the natalka development
in assessing the group’s going concern status the direc
tors have taken account of the group’s financial position 
expected future trading performance its borrowings and 
available credit facilities and its capital expenditure com
mitments together with other risks facing the group after 
making appropriate enquiries the directors consider that 
the group has adequate resources to continue in opera
tional existence for at least the next 12 months from the 
date of these consolidated financial statements with some 
uncertainties related to external market factors the direc
tors believe that it is appropriate to adopt the going concern 
basis in preparing these consolidated financial statements
the strategic report was approved by the board of direc
tors on 24 march 2014 and signed on its behalf by
kobus moolman
chairman audit committee
london 24 march 2014 magadan region
standing atop a rocky promontory which forces its way 
hundreds of metres out into the wild waters of the 
sea of okhotsk is the lighthouse at cape ram sustainability  
report
3 polyus gold international  annual report  2013
56
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the mission of polyus gold international limited stated in its 
code of corporate ethics is to develop natural resources and hu­ man potential for the benefit of shareholders employees and the 
local community 
pgil firmly believes that the success of its business is inex­ tricably intertwined with its sustainability performance the 
group constantly strives to enhance its management of sus­ tainability and its data collection procedures so as to obtain 
timely reliable and complete information on its performance 
in 2013 the group continued to develop its sustainability 
framework creating new policies and procedures and modi­ fying its governance structure for managing sustainability
the group first began publishing information on safety 
environmental protection and social responsibility in 2006 
initially the company followed a biennial reporting cycle 
before switching to reporting on an annual basis in 2012 
the company’s previous sustainability report was pub­ lished in 2013 and covered the year 2012 
the group’s reports along with additional information on its 
sustainability performance are available on the company’s 
website at httppolyusgoldcominvestorsreportsannu­ alreports and httpwwwpolyusgoldcomsustainability 
this the group’s fifth sustainability report – sustainability 
report for the year 2013 the report reflects its sustain­ ability performance for the period from 1 january 2013 
to 31 december 2013
guidelines and standards
the report was prepared in accordance with gri g4 guide­ lines and the requirements of the mining and metals sec­ tor supplement the report is prepared in accordance with 
comprehensive gri g4 requirements 
the report has been prepared with regard to the g4 princi­ ples for defining report quality these are balance compara­ bility accuracy timeliness clarity and enabling comparison 
with the group’s previous reports and the reports of leading 
international mining companies references to information 
sources covering the standard disclosures are presented 
in the gri content index
the company adheres to the aa1000 accountability prin­
cip les standard – a framework based on the three following 
principles for managing and reporting sustainability per­ formance
• inclusivity identifying and engaging with stakeholders 
to gain a full understanding of issues
• materiality determining which issues are important 
to the company and its stakeholders and
• responsiveness responding to material issues and be­ ing transparent about the group’s performance 
the recommendations of the greenhouse gas protocol cor­ porate accounting and reporting standard are used to col­ lect data on and calculate greenhouse gas emissions
report boundaries
gri guidelines were applied when defining the boundaries 
of the report as a whole as well as for individual perfor­ mance indicators according to these guidelines the report 
should cover the subsidiaries over which the group has op­ erational and financial control as well as subsidiaries that 
impact upon the group’s operational financial social and 
environmental performance results
the report covers the performance of all wholly­owned 
subsidiaries and joint ventures of the group namely 
• cjsc polyus krasnoyarsk bu 
• ojsc lenzoloto irkutsk alluvial bu 
• ojsc pervenets irkutsk ore bu 
• ojsc aldanzoloto grk yakutia kuranakh bu 
• ojsc svmc exploration bu and
•  ojsc matrosov mine magadan bu 
as well as the group’s professional services
• llc polyus stroy construction service 
• psf polyus shield llc security service 
• cjsc polyus logistics logistics service 
• llc polyus project engineering service and
• polyus energy energy service and its subsidiaries 
cjsc vitimenergo cjsc vitimenergosbyt cjsc mama­ kanskaya hydroelectric power plant 
for the first time in this report data on environmental 
performance indicators relating to the above professional 
services is presented broken down by professional services 
the terms ‘the group’ and ‘the company’ as used in this 
report refer to the above group of bus and professional 
services
3 sustainability 
report
about this report polyus gold international  annual report  2013
57
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data measurement techniques
the primary source of data and information for the sus­ tainability report is the group’s own corporate sustainability 
data collection system site­level reports are consolidated 
and verified at corporate level annually with the aim of col­ lecting information on material sustainability indicators
information on health and safety employees and social is­ sues is acquired through the internal reporting system la­ bour performance indicators are calculated based on head­ count as at the end of 2013 and include if applicable 
information on the managing company for the russian as­ sets ojsc polyus gold located in moscow environmen­ tal data is mainly collected through federal state statisti­ cal monitoring forms which are complemented by internal 
reporting forms the forms are aggregated regularly on an 
ad hoc daily monthly quarterly or yearly basis depending 
on the requirements of the company 
the gri indicators are calculated as specified in the gri 
g4 guidelines or in accordance with the company’s internal 
requirements 
all pgil financial performance indicators are denominated 
in usd which is also the currency used in the group’s au­ dited ifrs consolidated financial statements for the year 
ended 31 december 2013
report content
in defining the report content the group was guided by the 
principle for defining report content stipulated by gri 
guidelines
• stakeholder inclusiveness
• sustainability context
• materiality and
• completeness
the reported information is comparable with that of previ­ ous reports and serves as a basis for a comprehensive as­ sessment of sustainability performance in seeking to fully 
and objectively reflect its performance the group discloses 
transparently in the report both its achievements and the 
challenges that arose during the reporting period
in 2013 the group applied a more formalised approach 
to materiality assessment see “sustainability approach” 
the report focuses on the following issues identified 
as material in terms of their impact on the group’s activities 
and on stakeholder interests and expectations
• the potential impact on the group’s business develop­ ment strategy
• the economic social and environmental impacts 
on communities affected by the group’s operations and
• stakeholders’ interests and expectations
the material issues may have an impact both within and 
outside of the company affecting the group’s performance 
as well as the communities it operates in particular empha­ sis was put on managing these issues during the reporting 
year as is reflected in this report
restatements and significant changes
comparison with the 2012 sustainability report shows that 
there have been no material changes in applicable methods 
for measuring and presenting data or to reporting bounda­ ries in relation to the group as a whole
in 2013 the group sold its assets in kazakhstan
assurance
the group is well aware that independent sustainability re­ port assurance enables the company to improve the qual­ ity of reported information including compliance with the 
principles of balance accuracy and reliability as they relate 
to the presented performance data satisfy stakeholders’ 
requirements and determine the effectiveness of internal 
processes with this in mind the group engaged a pro­ fessional firm to provide sustainability reporting assurance 
services
in 2013 a decision was made to take a further step in en­ suring report credibility this report features reasonable as­ surance of a number of gri standard disclosures in order 
to increase the transparency and quality of the reporting 
information the standard disclosures for which reasonable 
assurance has been given are indicated in the gri content 
index 
more detailed information on the boundaries and the sub­ ject of assurance can be found in the “independent assur­ ance statement” section of the report
contact information
feedback from stakeholders on the completeness objectiv­ ity and materiality of information disclosed in sustainability 
reports plays a key role in helping the company to improve 
its management of sustainability and its nonfinancial re­ porting processes your questions comments or sugges­ tions regarding this report are therefore very welcome and 
can be sent to
alexey fortygin
hsec director
address 151 tverskoy boulevard moscow
e­mail fortyginavpolyusgoldcom
tel 7 495 641­33­77 polyus gold international  annual report  2013
58
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the company strives to achieve production growth while 
adhering to the principles of sustainable development 
being aware of its responsibility to investors employees 
and communities in the regions where it operates pgil 
aspires to be a forward­thinking and innovative compa­ ny acting proactively to meet all the challenges posed 
by the demanding and versatile environment in which the 
group works
having adopted the gri g4 guidelines the company em­ barked on a path of gradual but substantial internal change 
the broad spectrum of gri g4 requirements for materiality 
assessment calls for a significant shift in existing internal pro­ cesses and procedures and is not yet fully incorporated in the 
company’s day­to­day activities pgil realises that there 
is still a long way to go but the company is keen to tackle all 
the challenges involved and meet and exceed its goals 
31 sustainability approach
comprehensive improvement of all aspects of the group’s activities 
for the benefit of stakeholders is pgil’s strategic priority 
pgil strives for constant improvement in all aspects of its activities 
taking into account the interests of a wide range of stakeholders 
311 materiality and risk management
at present the materiality assessment process is based on an 
extensive analysis of the risks that the group faces until 2012 
the group’s focus with regards to identifying material issues 
was focused on identifying production risk extensive consulta­ tions were held with business unit specialists various mitiga­ tion actions were brainstormed and analysed and an assess­ ment methodology was developed laying the foundation for 
risk prioritisation through risk matrix compilation risks were 
reassessed on a half­ yearly and annual basis after bus had 
filed reports on the risks to their business 
in late 2012 the company moved towards incorporating 
strategic risks which include a wide range of sustainability 
aspects the overall approach to consolidation of material 
issues resembles that of production risks in previous report­ ing periods however the risks are also defined at a much 
more senior level within the group as well the corporate 
centre and bu top management the sustainability risks 
evaluated as significant are included in an action plan that 
specifies responsible risk managers in each bu and dead­ lines and allocated funds for the management of the identi­ fied risk the results of the risk management activities are 
reviewed by the board of directors on a half­ yearly basis 
the hr hs environmental and community development 
risks thus identified are the most pressing faced by the 
company although stakeholder consultation is not yet part 
of the materiality assessment process the company does 
not intend to stand still and plans to further enhance its 
procedures in this field our first step in this direction was 
adoption of a stakeholder engagement policy in the report­ ing period
the main material issues were defined with a view to iden­ tifying the following
• the potential impact on the group’s business develop­ ment strategy
• the economic social and environmental impacts 
on communities affected by the group’s operations 
and
• stakeholders’ interests and expectations  polyus gold international  annual report  2013
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aspects
risks and identified 
material issues
for more detailed information please see section 25 our response
employees
• a shortage of qualified specialists
• deterioration in the quality of professional 
training for the mining industry
• attracting and developing talented and quali­ fied specialists
• strengthening the hr brand
• building strategic relationships with education­ al institutions
• youth development programmes
health and 
safety
• fatalities
• insufficient medical emergency response and 
medical emergency evacuation plan
• a monitoring and reporting system is in place 
with immediate in­depth incident root cause 
analysis
• health and safety management system in com­ pliance with ohsas 18001
• implementation of minimum occupational 
health requirements and medical emergency 
response
• third party health and safety audits with follow 
up action plans
• a comprehensive risk assessment plan is be­ ing developed and implemented field level risk 
assessment workplace hazard identification 
and risk assessment together with a business 
continuity management system
environment
• cyanide management
• a requirement to mitigate the effect of the 
greenhouse gases release
• changes in  environmental controls and regu­ lations
• inadequate water balance
• inaccurate estimates of closure costs insuf­ ficient resources
• comprehensive review of the company cya­ nide management operation
• developing and incorporating of a greenhouse 
gas policy
• ongoing awareness on regulation updates
• assessing the water balance water manage­ ment plans and designing water treatment fa­ cilities
• developing mine site closure plans asset re­ tirement obligation aro and life of mine 
lom closure cost estimates
communities
• negative health and environmental outcomes 
in the event of environmental accidents
• lack of awareness about the company’s ac­ tivities among local communities
• building strategic relationships with local au­ thorities including supporting youth develop­ ment programmes
• roll out of comprehensive environmental 
monitoring programme implement mitigation 
measures based on environmental impact as­ sessment eia and monitoring results
• stakeholder engagement policy roll out across bus
supply chain
• poor quality of products and services
• supply chain delays
• streamlining transparent procurement pro­ cesses
• thorough supplier assessment polyus gold international  annual report  2013
60
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312 stakeholder engagement
the company strives to engage openly and proactively with 
all its stakeholders in its relationships with individuals le­ gal entities and the authorities pgil is guided by its corpo­ rate code of ethics in fulfilling its commitments to constant 
development and improvement the company developed 
two crucial documents in 2013
• a stakeholder engagement policy and
• a human rights policy
the stakeholder engagement policy which was approved 
in december 2013 aims to formalise the company’s inter­ action with stakeholders pgil is committed to identifying 
and engaging project stakeholders and to develop strate­ gies that are socially and culturally sensitive and tailored 
to the needs of each stakeholder group these strategies 
aim to inform stakeholders about polyus gold activities ad­ dress their concerns and expectations provide appropriate 
feedback and enable collaboration 
in its human rights policy the company pledges to de­ termine and assess the impact of its operations on human 
rights to establish a confidential grievance mechanism and 
to monitor and report on the implementation of the policy 
these documents are designed to radically overhaul the 
company’s processes and interactions 
2013 also saw the appointment of a sustainability and com­ munity manager at the natalka project paving the way for 
the introduction of such a position at all operations pgil 
is gradually embracing international best practice making 
stakeholder engagement an inherent part of its processes 
and fostering a culture of diversity and mutual respect 
313 supply chain management
pgil does not currently conduct rigorous assessment of its 
supply chain against sustainability criteria the key assess­ ment factors in the bidding process are the credibility of the 
potential suppliers and the quality of the products and ser­ vices all supplier contracts are scrutinized by legal depart­ ment specialists to ensure compliance with russian law the 
majority of the company’s suppliers are located in russia 
and comply with russian legal requirements including the 
labour code which guarantees labour rights other suppli­ ers comply with the requirements of the national legislation 
of the countries where they are registered when transpor­ tation of hazardous substances is required the company 
engages only licensed providers in 2013 about 3 of all 
the company’s suppliers were engaged in the transporta­ tion of hazardous substances potential counterparties have 
to fill out a questionnaire and to provide charter and other 
documents which are also required for anti­money launder ­ ing purposes
the group’s suppliers include local businesses in areas where 
the group has operations as well as large international sup­ pliers the group endeavours as much as possible to engage 
and support local suppliers with a view to enhancing commu­ nity development opportunities in its procurement activities 
the company at bu level also takes into account the interests 
of small­ and medium­sized businesses
distribution of suppliers by region 
 2013
moscow
krasnoyarsk territory
irkutsk region
sverdlovsk region
novosibirsk region
magadan region
other
26
23
11
6
6
5
23 polyus gold international  annual report  2013
61
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a priority in 2013 was increasing procurement transparency 
and attracting new suppliers so as to achieve lower purchase 
prices and improved delivery times in addition there was 
a shift in focus towards direct contracts with manufacturers
regulations on the tender committee were developed and 
implemented stipulating cross­ functional collective deci­ sion­making on major purchases
pgil is working actively on developing and implementing 
procurement risk management measures
the company is considering expanding its supplier assess­ ment procedures to cover environmental performance la­ bour practices human rights and social impact including 
the introduction of potential supplier auditing
 
314 corruption
the group complies fully with international and russian anti­ money laundering and counterterrorism financing legislation 
and applies anti­corruption procedures and programmes the 
group has approved and complies with its policy on ‘internal 
regulations for counteracting the legalisation laundering 
of proceeds from crime and terrorist financing’ and an anti­ corruption policy based on the uk bribery act and has ap­ pointed officers responsible for implementing its anticorrup­ tion procedures and programmes
the anti­corruption measures require all employees 
to remain vigilant in order to identify potential incidents 
of corruption and corruption risks in the reporting pe­ riod an e­learning program on the anti­corruption policy 
was developed and widely implemented the programme 
is mandatory for all hq employees and over 90 of them 
passed it successfully during the reporting period feedback 
on its content and quality has been positive an educational 
programme on counteracting the legalisation of illegally ac­ quired proceeds is under development for more informa­ tion please see section 63 and 31 of this report
 
315 commitments to external initiatives
the group is actively involved in various external initiatives 
and supports a number of activities in collaboration with 
organisations such as
• the russian union of gold producers a nonprofit or­ ganisation
• the partnership of russian mining operators a non­ profit organisation
• the russian union of gold prospectors a nonprofit or­ gansation
• the russian union of mining surveyors a public body
• mining work a nonprofit partnership that promotes 
the mining industry
• the eurasian business council a non­commercial part ­ nership promoting trade and economic ties
• the international council on mining and metals icmm 
the group is not yet a member but is in the process 
of achieving full compliance with icmm requirements
local suppliers number of companies and 
percentage of total spend 2013
40
30
20
10
0
krasnoyarsk 
territory
irkutsk 
region
yakutia magadan 
region
number 
of local suppliers
spending 
with local suppliers
99
35
2
9 polyus gold international  annual report  2013
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our opinion and conclusions
based on the scope of our work and the assurance procedures we performed we conclude that
reasonable assurance opinion
• the selected sustainability performance data listed under ‘reasonable assurance’ below and compiled as described 
in pgil’s basis of reporting and presented on pages 67–69 79–85 are fairly stated
• the pgil sustainability reporting at a gri g4 comprehensive level is in all material respects fairly stated
limited assurance conclusion
• nothing has come to our attention that causes us to believe that the selected sustainability performance data listed 
under ‘limited assurance’ below and compiled as described in pgil’s basis of reporting and presented on pages 71–77 
are materially misstated
scope of our work and the assurance standards we used
we have been engaged by the board of directors of pgil to perform assurance procedures on
reasonable assurance
• total energy consumption mwh
• total air emissions tonnes
• total waste generated thousand tonnes
• total water consumption m
3

• lti frequency rate per 200000 hours worked
• number of fatalities
• number of new cases of occupational disease
limited assurance
• composition of governance bodies and breakdown of employees per employee category according to gender age 
group minority group membership and other indicators of diversity
• average hours of training per year by employee gender and employee category
• benefits provided to full time employees
• percentage of operations with implemented local community engagement impact assessments and development 
programs
• monetary value of significant fines and total number of nonmonetary sanctions for noncompliance with laws and 
regulations
gri assurance 
using global reporting initiative g4 reporting principles and standard disclosures ‘the gri guidelines’ in preparing the 
report – pgil’s has applied the gri guidelines at a comprehensive level in preparing the report
we carried out assurance on the selected key performance indicators in accordance with the international standard on as­ surance engagements 3000 isae3000 
to achieve limited assurance the isae3000 requires that we review the processes systems and competencies used 
to compile the areas on which we provide assurance it does not include detailed testing of source data or the operating 
effectiveness of processes and internal controls 
32 independent 
assurance statement
independent assurance report by deloitte  touche cis zao ‘deloitte’ to the board of directors of polyus gold interna­ tional limited ‘pgil’ on the 2013 sustainability report ‘the report’ for the year ended 31 december 2013 polyus gold international  annual report  2013
63
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to achieve reasonable assurance the isae3000 requires that we review the processes systems and competencies used 
to compile the areas on which we provide assurance 
considering the risk of material error we planned and performed our work to obtain all of the information and explanations 
we considered necessary to provide sufficient evidence to support our assurance conclusion 
our key assurance procedures
to form our conclusions we undertook the following procedures
• interviewing pgil personnel including the sustainability reporting team
• analysed and reviewed on a non­statistical sample basis the key structures systems processes procedures and con­ trols relating to the collation aggregation validation and reporting processes of the selected sustainability performance 
indicators 
• checking the report against the requirements of gri g4 comprehensive level
• reviewing information and reasoning about the reports’ assertions regarding sustainability performance in 2013 and
• reviewing the content of the report against the findings of the aforementioned procedures and as necessary provided 
recommendations for improvement
where data relating to prior reporting years has been restated by pgil no additional work has been undertaken by deloitte 
to review the accuracy and completeness of the restated data no assurance is provided over restated data
our independence and competencies in providing assurance to pgil
• we complied with deloitte’s independence policies which address and in certain cases exceed the requirements 
of the international ethics standards board for accountants code of ethics for professional accountants in their role 
as independent auditors and in particular preclude us from taking financial commercial governance and ownership 
positions which might affect or be perceived to affect our independence and impartiality and from any involvement 
in the preparation of the report we have confirmed to pgil that we have maintained our independence and objectivity 
throughout the year and in particular that there were no events or prohibited services provided which could impair our 
independence and objectivity
• our team consisted of a combination of chartered accountants with professional assurance qualifications and profes­ sionals with a combination of environmental sustainability and stakeholder engagement experience including many 
years experience in providing sustainability report assurance
roles and responsibilities
• the directors are responsible for the preparation of the sustainability report and for the information and statements con­ tained within it they are responsible for determining the sustainability goals performance and for establishing and main­ taining appropriate performance management and internal control systems from which the reported information is derived
• our responsibility is to express independently an opinion on the sustainability report as defined within the scope of work 
above 7 indicators for reasonable assurance and 5 indicators for limited assurance to pgil in accordance with our engage­ ment letter our work has been undertaken so that we might state to pgil those matters we are required to state to them 
in this statement and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility 
to anyone other than pgil for our work for this statement or for the conclusions we have formed
deloitte  touche cis zao 
moscow 
24 march 2014 polyus gold international  annual report  2013
64
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this report details our performance in several key areas 
affecting the company’s business and stakeholders health 
and safety sustainability governance environmental stew­ ardship community development employee engagement 
and stakeholder engagement
health and safety is the most critical part of polyus gold’s 
business and sustainability strategy we continue to work 
towards achieving zero fatalities we have identified and 
analysed all the incidents for 2009–2012 and implemented 
‘golden safety rules’ which are designed to prevent the 
most common operational incidents these rules are now 
used in each of our operating business units moreover our 
‘courageous safety leadership’ training was further incor­ porated with the aim of promoting interdependent health 
and safety awareness we believe that with a large number 
of newly trained employees behaviors are changing to the 
benefit of safety and health 
our environmental management system is another priority 
for polyus gold’s sustainability strategy this year we fo­ cused on introducing an integrated management system 
addressing both environmental and safety aspects 
our success is driven by our employees’ diverse back­ grounds skills experience and talents at polyus gold we 
believe that a culture of mutual respect transparency and 
inclusion improves employee retention and engagement 
and enables the company to deliver high performance and 
maintain a competitive advantage we are committed to 
the further improvement of our labour practices accommo­ dating international best practices and pursuing an align­ ment of corporate and individual goals 
we continue our work with local communities this year 
we have established a new stakeholder engagement policy 
which we will put into practice in 2014
our sustainability governance model is a key part of our 
success in adhering to our ethical and sustainable values 
this year we have managed to further integrate this model 
at different levels of our company at the board of directors 
level the audit committee took an active role in improving 
our ethical and sustainable performance the committee 
provided greater accuracy in analysing data and develop­ ing corrective and future action plans 
transparency is one of our fundamental business principles 
we strive to increase the level of transparency in our report­ ing each year and this year we prepared our integrated report 
in compliance with gri g4 guidelines we continue working 
with deloitte as our independent auditor and for the first time 
this year we claim ‘reasonable assurance’ for several indicators
our goal is to maintain our successful business performance 
and in doing so to be among the industry leaders in sustain­ ability we realise that this is a difficult path to take yet even 
though it sounds ambitious we are taking small steps and are 
coming closer and closer towards this goal every year 
this report is an opportunity for us to present our achieve­ ments and to share our plans for the future of polyus gold 
and the environment we operate in i look forward to your 
feedback which will help us to improve our performance 
with kind regards
anthony j nieuwenhuys
chief operating officer
33 message from the chief 
operating officer
dear friends
when i reflect on our performance in 2013 i am proud of our 
progress as an organisation in terms of sustainability 
at pgil we believe that our employees are our most valua­ ble asset we aim to make sure that when children of our em­ ployees grow up and come to work for us they will see pol­ yus gold as a safe caring and trustful company to work for  
this approach helps us to achieve the highest targets and satisfy 
the most demanding shareholder expectations polyus gold international  annual report  2013
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34 sustainability  
governance
polyus gold has robust sustainability governance procedures 
to oversee its sustainability agenda and ensure its long­term val ­ ue the group continues to implement its sustainability principles 
at every stage of its operations 
the group believes that changes made in 2013 will result in im­ proved sustainability management in 2014 and beyond the dia­ gram below reflects these changes and shows the group’s sus­ tainability governance structure
board of directors
illya yuzhanov
hsec committee
edward dowling
audit committee
kobus moolman
interim chief executive officer
pavel grachev
general director of ojsc polyus gold
fyodor kirsanov
hsec director
alexey fortygin
stakeholder
engagement
hr director
elena romanova
health
safety
environment
employees
social planes
charity
chief operating officer
james nieuwenhuys
 in the second half of 2013 the responsibility for charitable activities was handed over to the governmental relation department polyus gold international  annual report  2013
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the health safety environment and community hsec 
board committee has been assisting the board of direc­ tors since 2011 and plays a key role in integrating sustain­ ability values into the group’s decision­making process and 
mitigating risks related to health and safety environment 
and community among other responsibilities the hsec 
committee evaluates the effectiveness of the group’s poli­ cies and procedures ensures that all employees regard­ less of their position comply with internal practices and 
national legislation related to hse issues encourages the 
development of best practice and examines management 
responses to incidents and accidents the committee meets 
at least four times a year the committee has well­estab ­ lished communication channels with the board of directors 
the board discusses the sustainability report and provides 
its input prior to publication 
in 2013 the group restructured its sustainability govern­ ance and redefined the processes carried out by the hse 
and hr departments two regional managers were appoint­ ed to act under the hse department while the hr depart­ ment delegated its responsibilities for interacting with its 
business units to one division and for personnel administra­ tion and organisational development to another
one of the main positive changes in the company’s sus­ tainability governance structure in 2013 is the active role 
of the audit committee in developing and incorporating the 
best sustainability practices at all company levels through­ out the last year the polyus gold management team have 
been working closely with the audit committee exchanging 
ideas on sustainability issues have sought feedback on the 
company’s sustainability report and developed new best 
practice policies for the company in addition the audit 
committee took an active part in preparing the group’s sus­ tainability report in compliance with gri g4 in 2013 the 
polyus gold international limited sustainability report has 
been audited by deloitte and some indicators have been 
verified with “reasonable assurance” the group is commit­ ted to complying with the highest standards of the icmm 
sustainability programme
 
olimpiada exploration at deephorizons polyus gold international  annual report  2013
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35 health and safety
safety management and investment in health and wellbeing 
programmes remain at the core of the group’s zero harm strategy
target status plans
zero fatalities
not achieved in 2013 but fatality rate was 
down there were three work­related fatalities 
at the group’s sites the company considers 
any fatality as totally unacceptable and aims 
to achieve zero fatality rate in 2014 zero fatalities – permanently
development and implementation 
of an accurate and timely health and 
safety reporting system
in progress
the company continued to upgrade its internal 
reporting system with the aim of comprehen­ sive disclosure of sustainability performance 
indicators under gri guidelines g4 to be continued in 2014
health and safety management sys­ tem hsms roll­out
hsms in operations that have already imple­ mented iso 14001 conform to this standard
further development of hsms 
for all group’s operating bus
dupont safety leadership pro­ gramme on zero lost time injury rate 
roll­out 
a programme for the olimpiada mine site  
was discussed and agreed with the mine 
management to be continued in 2014–2015
compliance with icmm health and 
safety principles including policies 
procedures and performance indica­ tors 
gap analysis has been performed  
report to be issued in 2014 to be continued in 2014
compliance with the cyanide code
detox facilities at the verninskoye and olim­ piada mines are to be commissioned to be continued in 2014 polyus gold international  annual report  2013
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351 approach
safety remains a core value of the company and is the 
first priority in all its endeavors the group truly believes 
that everyone who works with polyus gold has the right 
to return home safely and it makes every effort to achieve 
this the company believes that all injuries are preventable 
and is committed to integrating safety management into all 
aspects of the polyus gold business 
in the reporting period the group continued its committed 
approach to health and safety by identifying all potential 
risks learning from previous incidents and implementing 
risk mitigation processes technologies and behaviors
the group’s approach to safety is outlined in its health and 
safety policy a comprehensive framework written in accord­ ance with ohsas 18001 and supported by a set of safety 
principles and mandatory safety standards this underpins 
the delivery of the company’s safety vision which outlines 
a risk­ based approach to safety to achieve its high safety 
target – zero fatalities – the group is implementing a health 
and safety management system hsms at all its operat­ ing mines and development project sites the group’s key 
health and safety commitments which are fundamen­ tal to the hsms are highlighted on the group’s corpo­ rate web page httpwwwpolyusgoldcomsustainability 
healthandsafety
the group’s health and safety activities are led by the 
health safety environment and community committee 
the function and responsibilities of which are described 
in details in section 34 of this report
352 highlights of 2013
the group continues to place the highest importance 
on upholding its values and ensuring that safety is para­ mount in every activity regrettably although the compa­ ny achieved safety improvements in the reporting period 
three people lost their lives due to safety incidents while 
working at the company’s most challenging alluvial sites 
the group considers any fatality as unacceptable and is ex­ tremely saddened by these fatalities 
an incident and accident monitoring and reporting sys­ tem is in place and immediate in­depth investigations take 
place the accidents were thoroughly analysed with the 
involvement of an independent consulting company spe­ cialising in health and safety audits with relevant follow­up 
action being taken
the company constantly strives to improve safety and 
to reinforce its strong safety culture and health and safety 
management structure in the reporting period the com­ pany placed extra emphasis on health issues as planned 
a regional occupational health manager reporting to the 
hsec director was taken on to concentrate specifically 
on improving employee health
another major initiative to improve occupational health 
standards at the group was the implementation of an inter­ nal standard on medical emergency response and minimum 
occupational health requirements in each polyus group bu 
in line with this standard medical services in each bu are 
being formed and equipped a minimum standard for 
personal protective equipment ppe and work uniforms 
was completed and is expected to be approved in 2014 
in 2014 the group will continue to monitor the implemen­ tation of the standards and update them if necessary
as part of its continuous improvement work the group be­ gan registering all medical treatment injuries so as to mon­ itor and reduce atrisk behavior at the group bus the next 
step will be to monitor and control a wider range of em­ ployee health indicators so as to identify at risk groups and 
provide timely treatment
the group continued to conduct health and safety audits 
inviting leading consulting companies with vast experience 
in health and safety and compliance assessment with their 
assistance the company strives to conduct integrated au­ dits covering both ohsas 18001 and iso 14001 manage­ ment system requirements the company will extend this 
integrated approach to all operating bu’s leading to the 
development and implementation of an integrated hse 
management system in 2013 the company put in place 
emergency response procedures at almost all the group’s 
operational sites in addition as planned the group fo­ cused on increasing the efficiency of the system of medi­ cal checks for drivers and other employees including pre­ journey pre­shift check ­ups this system is being tested 
at several of the group’s sites and in future will be operated 
automatically 
as part of its work to eliminate fatalities the company con­ ducted an analysis and prepared classification of the fatali­ ties and lti’s from 2010 to 2013 among the main causes 
of the accidents identified were falls from heights traffic 
incidents and machinery and equipment related incidents 
a fivestep safety risk assessment procedure was developed 
and implemented across group sites this helps personnel 
to pay special attention to potential safety risks before job 
assignment that may be avoided if anticipated  polyus gold international  annual report  2013
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another initiative implemented by the company at all the 
group’s sites was a procedure for root­cause analysis of ac ­ cidents and incidents the aim here is to identify the core 
causes of accidents not so as to punish irresponsible per­ sonnel but in order to eliminate the unsafe conditions and 
at­risk behavior thus minimising and eliminating the num ­ ber of accidents
every accident is reported regardless of its outcome wheth­ er lost time injury accidents are classified or not as work 
related the reporting procedure is always thorough and ex­ ecuted promptly the exact time depends on the accident’s 
severity but will never be more than 24 hours each flash 
report contains an accident description preliminary root 
causes and immediate actions taken after an accident root 
cause investigation a detailed root cause analysis report 
is prepared and distributed in the affected bu 
as part of a programme to improve the health and safety 
management system in collaboration with dupont a sus­ tainable solutions safety leadership programme was devel­ oped for pgil operating sites
the training programme addressed issues related to the 
organisation of the safety management system in the com­ pany improving the efficiency of the system the leader’s 
role in changing the safety culture the distribution of re­ sponsibilities risk assessment accident root cause identifi­ cation and mitigation etc
in future the group plans to engage dupont specialists 
again to introduce safety initiatives at pgil bus one such 
initiative is a behavior based audit aimed at consistent im­ provement in the health and safety culture at the company
353 performance results
 
 
lti frequency rate employees 
per 200000 hours worked
1
030
025
020
015
010
005
000
027
025
017
018
011
2009 2010 2011 2012 2013
lti frequency rate by bu employees 
per 200000 hours worked
070
060
050
040
030
020
010
000
000 000 000
015
000
005
corporate headquarters
krasnoyarsk bu
irkutsk ore bu
irkutsk alluvial bu
yakutia bu kuranakh
exploration bu
security service
construction service
engineering service
logistics service
pgil
energy service
magadan bu
008
015
002
028
065
011 011
1 
the data for 2012 was amended to reflect changes to accounting methodology polyus gold international  annual report  2013
70
back to the contents
our major aspiration is attracting retaining and developing highly 
talented and diverse employees within a healthy and safe work­ place to foster sustainable development
people are crucial to the success of the company the wide geogra­ phy of the company’s activities and the scale and complexity of our 
projects provide excellent opportunities for professional and career 
growth
36 employees
code of corporate ethics
the group’s mission is to develop natural resources and human potential for the benefit of shareholders employees 
and the community
the group’s greatest asset is its people the basic principles of corporate ethics are a logical continuation of our 
mission and are based on respect for fundamental human rights such as freedom from any discrimination freedom 
of thought conscience and religion freedom of peaceful assembly and societies freedom of opinion and expression
one of the rules of the code of corporate ethics reads as follows
respect for the individual
employees have the right to fair and just treatment discrimination and harassment of any kind are contrary to this 
code and are unacceptable
target status plans for 2014
developing a values­based 
management system in progress
to be continued in 2014
development and implementation 
of the system
promoting the group’s in the 
labour market so as to attract the 
best specialists
in progress
career portal successfully launched
monitoring and addressing company­related 
feedback on the internet to be continued in 2014
employee professional develop­ ment
in progress
creating training centers to be continued in 2014
enhancing the recruitment system
in progress
communications strategy developed
to be continued in 2014
developing corporate recruitment 
standards
developing remuneration and 
incentive systems
in progress
the process of unifying the remuneration 
system across bus continued in 2013
to be continued in 2014
implementing a grading system 
in corporate headquarters
organisational development
in progress
unification of the bu organisational structures 
is underway to be continued in 2014 polyus gold international  annual report  2013
71
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361 approach
polyus gold is one of the largest employers in each of the 
areas where it operates each ounce of gold mined by the 
company creates jobs for many people attracting and de­ veloping talented and motivated employees aligned with 
polyus gold’s corporate values is crucial to ensuring contin­ ued success the company therefore aspires to ensure that 
all its labour practices follow the principles of sustainable 
development this approach focuses on 
• creating safe working conditions
• training staff to identify and eliminate hazards at work
• encouraging the professional growth of the company’s 
specialists and
• improving employees’ social conditions and supporting 
local communities
polyus gold’s human resources policies aim to provide the 
company with an effective and socially stable workforce 
capable of meeting current and future challenges
362 highlights of 2013 
organizational development
the reporting year saw intensive activities to enhance the com­ pany’s human resources hr management as well as changes 
in the organisational structure to improve hr processes and 
facilitate achievement of the group’s strategic goals two func­ tional lines were created within the hr department – one re­ sponsible for interaction with the bus and the other for person­ nel administration and organisational development 
in line with the goals set for 2013 extensive work was 
conducted on unifying the bu organisational structure fo­ cusing on aligning business processes both within bus and 
between bus and the corporate centre a new organisation 
structure based on the ‘client­contractor principle’ was suc ­ cessfully developed and implemented in the logistics ser­ vice at the irkutsk bu an ore unit the new organisation 
structure is at the approval stage and is supposed to be im­ plemented in 2014 development the organisational struc­ ture for the natalka project is also at the final stage 
the personnel aspects of some other activities such as cen­ tralisation of the procurement function and development 
of an equipment reliability system were also addressed
incentives
another important aspect of hr management at the com­ pany is the unification of the incentive systems across the 
bus each bu system was analysed to determine where pay­ ments need to be standardised however due to a number 
of obstacles including changes in top management some 
goals set for 2013 are still to be achieved development 
of a grading system and implementation of a values­based 
management system were postponed until 2014
employee development
because the group understands the importance and value 
of its employees it strongly believes that developing its em­ ployees is crucial to maintaining a competitive advantage 
in a constantly changing and challenging economic environ­ ment to ensure that its workforce is highly qualified the 
group provides a wide spectrum of training opportunities 
and skills and career development opportunities
the internal demand for learning opportunities has in­ creased and this in turn has lent new significance and im­ portance to the group’s existing internal learning and de­ velopment system
in order to improve the availability and accessibility of employ­ ee training the group has continued to make use of e­learn­ ing solutions an induction programme based on the exist­ ing e­learning course ‘our work is gold’ has been updated 
and is being successfully implemented by the group in line 
with other e­learning courses related to personal motivation 
project management successful negotiations and industrial 
safety an additional plus has been that the above e­learning 
initiatives have helped reduce training costs
the group undertakes to provide professional retraining 
for workers that have been made redundant with a view 
to helping them secure future employment
all major operational bus krasnoyarsk bu irkutsk bu ore 
unit yakutia bu kuranakh have training centres that 
provide a wide range of professional training programmes for 
personnel of the respective bus as well as for the group’s 
professional services operations and contractors such a cen­ tre is being created at the magadan bu natalka mine and 
is expected to start operating in the spring of 2015
all training programmes for occupations involving danger­ ous activities have been approved and adopted by the fed­ eral service for environmental technological and nuclear 
supervision rostechnadzor
a new trend over the reporting period was the attraction 
of highly qualified specialists in various fields from the glob­ al gold mining industry with the aim of implementing in­ ternational experience and best practices at the company’s 
operations one of the goals here is to develop training pro­ grammes for employees where international experts share 
their knowledge skills and development vision polyus gold international  annual report  2013
72
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363 life at polyus
 
as it operates in remote locations and in harsh climates the 
company acknowledges its responsibility to provide decent 
working social and living conditions for its employees and 
strives each year to improve them in accordance with com­ pany’s social standard
among others the company provides financial assistance 
to employees in the following circumstances
• paying for the expenses for employees and their fami­ lies to travel to their workplaces on appointment and 
for holiday travel expenses
• providing free or subsidised meals for employees
• organising corporate and sporting events
• providing treatment for employees at health and reha­ bilitation centers and other medical institutions
• compensating employees for expenses related to their 
children’s stay at health camps located in russia
• making one­off payments for special occasions eg 
marriages and births
• retirement benefits and
• financial assistance to relatives of deceased employees 
including financing the education of children of de­ ceased employees at higher and secondary vocational 
institutions
pgil aims to provide comfortable accommodation healthy 
meals and various recreational activities for its employees 
such as libraries gyms cable tv and wi­fi
one of the most important priorities of the company’s so­ cial policy is to promote healthy living and to encourage 
workers to take part in regular exercise and sports
in summer 2013 the 1st corporate sports festival was held 
under the motto “fair play – a flawless victory” bringing 
together 10 teams – a total of 150 participants – from all 
bus and students from four krasnoyarsk educational insti­ tutions 
364 attracting employees 
one of the major objectives for pgil hr management is to 
attract and retain talented employees and to promote its 
hr brand the profile of the company in the labour mar­ ket in considering its policy the company takes into ac­ count the following human resource issues
• recognition of the importance of human capital to the 
company’s success
• the overall demographic situation in siberia and rus­ sia’s far east
• the economic impact of job creation in these regions
• the existence of development projects requiring con­ tinual recruitment
• corporate risk assessment procedures see section 311
to address the topic properly two focus group surveys 
were conducted as a result two issues impeding recruit­ ment and retention of a talented workforce were identified
• the company’s low visibility in the labour market and
• concerns about duration of the rotation­based work 
months onmonths off
the decision was made to unify the group’s hiring pro­ cesses and procedures and a number of measures were 
developed to this end
• the pgil careers website httprabotapolyusgoldcom  
in russian launched at the end of 2012 gained popu­ larity throughout the reporting year with an average 
of 500­700 visitors daily it provides information on ca­ reer opportunities for both young specialists and expe­ rienced professionals giving an overview of the com­ pany’s operations and student programmes covering 
corporate news and events and allowing people to apply 
for jobs directly through the site it also touches upon 
the working and living conditions at the company’s min­ ing sites see section 63 of the sustainability report 
and the characteristics of rotation­based work 
• a communications strategy was developed 
• the group profile is being updated with the aim of pre­ senting the group as a whole and forming a positive im­ age among potential employees and to unify and sim­ plify the job application process
• in 2013 preparations were made for the establishment 
of a corporate careers centre which is to become fully 
operational in 2014
• the hr department began monitoring careers websites 
and feedback about the polyus group in order to iden­ tify and remedy flaws 
• a list of recommended recruitment services providers 
was compiled helping bus to make more informed deci­ sions when choosing partners
• outsourcing schemes were successfully implemented 
in the construction service and might be spread to other 
operations they are useful when production tasks re­ quire large numbers of short­term employees the com­ polyus gold international  annual report  2013
73
back to the contents
pany works closely with educational institutions specialis­ ing in metals and mining studies to ensure a constant 
flow of properly qualified young specialists who are keen 
to work for the company for further information please 
see the communities section
on november 29 the government of the magadan region 
held a ceremony to present the awards for the competition 
to find the “best employer implementing a youth mentor­ ing system in the magadan region in 2013” the company’s 
magadan bu scooped the award and additionally olga litvi­ nova deputy director general for personnel was awarded 
an honorary diploma
the competition is designed to develop the labour potential 
of the magadan region by increasing the competitiveness and 
occupational mobility of young people in the labour market 
next year the pgil hr department plans to continue im­ provements across the key areas identified the recruit­ ment policy will remain the focal point of all hr activities 
all other measures including developing a grading system 
and kpis as well as improving social and living conditions 
are required to support the major aim of promoting the 
company’s brand in the labour market and strengthening the company’s most valuable asset – its people 
365 performance results
2011 2012 2013
employees by function 2011–2013 
100
0
manual 
workers
office 
employees
22 22 24
78 78 76
employees by gender 2013
100
0
manual 
workers
office 
employees
board
of directors
102
898
125
875
305
695
male female
krasnoyarsk bu
irkutsk ore bu
irkutsk alluvial bu
yakutia bu kuranakh
exploration bu
magadan bu
employees by bu 2013 
security service
construction service
engineering service
logistics service
energy service
pgil corporate headquarters
282
85
142 90
04
76
36
116
07
117
15
31
krasnoyarsk region
irkutsk region
the sakha republic yakutia
employees by region 2013 
magadan region 
moscow
42
28
10
19
2 polyus gold international  annual report  2013
74
back to the contents
krasnoyarsk bu 
irkutsk ore bu 
irkutsk alluvial bu 
yakutia bu kuranakh 
yakutia bu nezhdaninskoye 
magadan bu 
security service 
construction service 
engineering service 
logistics service 
energy service 
corporate headquarters 
  
  
  
  
  
  
  
  
  
   
  
  
  
  
  
  
  
  
  
  
  
   
  
  
employees by gender 2013  see also section 211
krasnoyarsk bu 
irkutsk ore bu 
irkutsk alluvial bu 
yakutia bu kuranakh 
yakutia bu nezhdaninskoye 
magadan bu 
security service 
construction service 
engineering service 
logistics service 
energy service 
corporate headquarters 
9010
689 15
79  67
372  252
male female
8515
8317
6436
7228
8020
982
955
5446
937
6040
6337
5008  578
1432  256
2331  484
1148  639
52  20
1201  296
2170  123
2155  155
188  112
0 1000 3000 5000 2000 4000 6000
the company’s board of directors is comprised  
of one female and seven male members
employees by gender 2013
8
0
board of directors board of directors
1
7
male female
employees by gender 2013
15000
10000
5000
0
manual workers office employees
1530
13487
1467
3338
male female polyus gold international  annual report  2013
75
back to the contents
  
  
  
  
  
  
  
  
  
   
  
  
employees by age group 2013 
krasnoyarsk bu 
irkutsk ore bu 
irkutsk alluvial bu 
yakutia bu kuranakh 
yakutia bu nezhdaninskoye 
magadan bu 
security service 
construction service 
engineering service 
logistics service 
energy service 
corporate headquarters 
20303415
19361134
18232139
below 30 40­50 30­40 50 and above
23292722
27252324
20232334
18272728
3153646
25272425
21292723
19243225
12392326
standard entry wage compared to local 
minimum wage by bu 2013 usd
700
600
500
400
300
200
100
0
irkutsk 
region
krasnoyarsk 
region
magadan
region
the sakha republic 
yakutia
standard entry 
level wage
local 
minimum wage
federal 
minimum wage polyus gold international  annual report  2013
76
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number of employees trained
2011–2013
average number of hours of training per year per 
employee by employee category 2013
employees trained as percentage 
of total headcount 2011–2013 
average number of hours of training per year per 
employee trained 2011–2013
10000
5000
0
50
40
30
20
10
0
120
100
80
60
40
20
0
140
120
100
80
60
40
20
0
5806
119
110
29
2011
manual workers
2011
2011
38
88
2012 2012
2012
8012
53
41
99
2013
office employees
2013
2013
8404 polyus gold international  annual report  2013
77
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upgraded skills
obtained secondary
profession
employees by type of training undertaken 2013
completed initial training
obtained professional
development training
1419
856
543
5194
talent pool 2011–2013
600
500
400
300
200
100
0
359
280
477
63
66
104
30 22
51
total number 
of talent pool 
members
number of talent pool 
members assigned 
to other positions  
including in other bus
number 
of members
excluded from 
the talent pool
2011 2012 2013
employees hired in the reporting 
period 2013
2500
2000
1500
1000
500
0
krasnoyarsk bu
irkutsk ore bu
irkutsk alluvial bu
yakutia bu kuranakh
 exploration bu
security service
construction service
engineering service
logistic service
corporate headquarters
energy service
magadan bu
percentage of local management 
2011–2013 
2011 2012 2013
100
0
local
management
other
regions
28
72
37
63
26
74 polyus gold international  annual report  2013
78
back to the contents
the group strives to integrate environmental stewardship into 
every activity 
this commitment to efficient resource usage and environmental 
protection is a competitive advantage for the company helping 
us to reduce our environmental impact and decrease operating 
costs thus delivering higher returns to our shareholders
37 environmental  
stewardship
371 key targets
target status plans 
development of closure plans for all 
mines in accordance with russian 
legislation and icmm guidelines audit 
of mine closure plans for currently 
operational group mines
in progress closure plans for several mines 
verninskoye olimpiada blagodatnoye tit­ imuhta natalka and kuranakh were reviewed 
and updated srk consulting was engaged 
to conduct an audit and adjustment of con­ ceptual closure plans in compliance with 
icmm principles and russian law to be continued in 2014
development of an environmental 
management system ems for group 
subsidiaries
in progress ems implemented at olimpiada 
and kuranakh mine sites
to be continued in 2014 
develop and implement ems 
for all operational polyus gold 
bus
development of water management 
and water balance plans for the olim­ piada and verninskoye mines
a water balance and water management plan 
for natalka project was developed and is to 
be updated in 2014 
develop similar water man­ agement plans for the olim­ piada and verninskoye mines 
in 2014–2015
preparation of an environmental and 
social impact assessment esia 
report for new projects
in 2012 the esia report for natalka was com­ pleted and is in compliance with international 
finance corporation standards in 2013 the 
environmental and social action plan based 
on esia study and an environmental moni­ toring programme are being implemented 
in 2013 the esia report for nezhdaninskoye 
was completed
in 2014 the group will con­ tinue to implement and moni­ tor the natalka action plan 
an esia report for chertovo 
koryto will be produced
environmental accident and emer­ gency reporting
in progress a corporate environmental acci­ dent reporting standard including a root­cause 
analysis procedure was developed
this standard for environ­ mental accident reporting will 
be introduced at all polyus 
gold operating bus  polyus gold international  annual report  2013
79
back to the contents
372 approach and highlights of 2013
environmental protection and conservation is one of the 
group’s most important activities the group focuses on those 
aspects of its operations which have the most impact on the 
environment the company identifies and prioritises issues af ­ fecting its business and stakeholders taking into consideration 
environmental social and economic parameters
development of a cyanide management system is one of 
the company’s top priorities an effective system will en­ sure controls are put in place on each phase of the cyanide 
management cycle purchasing transportation operation 
and detox a new cyanide tailings inco detox plant is being 
commissioned and will begin operating in early 2014 at the 
olimpiada mine this process will be more efficient than the 
standard methods of neutralisation 
the group recognises the scale of the problems posed 
by increasing demand for reliable and secure power supply 
along with the need to decrease ghg emissions accord­ ingly the mitigation of ghg emissions is one the group’s 
of the key long­term environmental challenges 
one of the key objectives for pgil in 2014 will be to develop 
a greenhouse gas policy which will set our framework for 
managing and reporting on ghg emissions in line with in­ ternational best practice
a water balance assessment was conducted at our magadan 
bu in 2012 and a similar assessment is currently planning 
to be undertaken at other bus leading technical consult­ ants have been engaged to develop innovative solutions 
to maximise capture and reuse of contact water 
water treatment facilities are being designed at the two 
group’s sites verninskoye and olimpiada these projects 
will make it possible to increase the percentage of reclaimed 
water at the mine site
in the reporting period the company in collaboration with 
srk consultants and other environmental and engineering 
professionals launched environmental programmes focus­ ing on ardml acid rock drainage and metal leaching 
studies in these studies the chemical interactions between 
water and waste rock low grade ore tailings are being as­ sessed in order to develop and introduce measures to pre­ vent and minimise negative impact on the environment 
conceptual life of mine closure plans were developed for all 
operating sites the plans developed in 2012 were reviewed 
and modified as necessary the aim of the closure plans 
is to estimate potential costs for the rehabilitation and recla­ mation of the mine site by the end of life of the mine these 
plans fully comply with russian law and icmm principles
the group continues to organise ongoing training for 
personnel responsible for environmental protection in ac­ cordance with environmental legislation this helps the 
company maintain a high level of awareness of regulatory 
requirements and respond to them promptly 
achieving compliance with icmm principles on environmen­ tal policies standards and performance indicators remains 
a key target for the company an audit was performed 
by the environmental consultancy erm in order to identify 
areas for improvement with the aim of full compliance with 
the icmm requirements in 2014–2015 the group aims 
to focus on the gaps identified and to achieve full compli­ ance with icmm requirements
the company continues to sharpen its focus on environ­ mental management in its projects and operations with 
this in mind the company is introducing an integrated man­ agement system based on iso 14001 and ohsas 18001 re­ quirements that embraces a comprehensive approach to ef­ ficient environmental and health and safety management 
the group believes that timely reporting helps to man­ age environmental performance accordingly it is working 
on the implementation of the corporate environmental inci­ dent reporting standard to be incorporated in all bus  polyus gold international  annual report  2013
80
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purchase of primary energy resources in 2013 tonnes
amount of electricity produced  
and sold 2011–2013 million kwh
consumption of primary energy sources in 2013 tonnes
water for central heating 2011–2013  
thousand gcal
coal
diesel
gasoline
coal
diesel
gasoline
oil
other
oil
other
531587
520175
169018
156400
23102
1925
2517
28976
448 301
900
800
700
600
500
400
300
200
100
0
800
700
600
500
400
300
200
100
0
amount of electricity 
sold
amount of heating 
sold
amount of electricity
produced
amount of heating 
produced
2011 2011 2012 2012 2013 2013
7975
7063
7900
7027
7581
7553
4181
920
3890
971
3590
946
373 performance results
energy polyus gold international  annual report  2013
81
back to the contents
amount of electricity purchased 2011–2013  
thousand kwh
water for central heating purchased  
2011–2013 thousand gcal
total energy saved due to conservation and effi
ciency improvements in 2011–2013 kwh per unit
significant air emissions 2011–2013 tonnes
air emissions and climate change
energy saved under the conservation and energy 
efficiency programme in 2013 kwh per unit
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
60
50
40
30
20
10
0
2011 2011 2012 2012 2013 2013
14488115
332
16158038
482
17482210
252
2011 2012 2013
1059
1359
1174
160
140
120
100
80
60
40
20
0
other measures
395
778
01
equipment replacement 
process optimisation
2011 2012 2013
5418
10000
5000
0
carbon oxide 
co
sulfur dioxide
so
2
volatile organic 
compounds vocs
amount of nitrogen 
oxides loke nitrogen 
dioxide no
2

particulate 
dust 
emissions
1754
471
8341
8641
3511
5432
8938 9110
3005
4516
602
823
7885
2139 polyus gold international  annual report  2013
82
back to the contents
total water withdrawal in 2011–2013 thousand cubic metres 
600
500
400
300
200
100
0
2011 2012 2013
416
455
483
350
300
250
200
150
100
050
0
2011 2012 2013
248
277
298
total ghg emissions co
2
e 2011–2013  
million tonnes
indirect ghg emissions co
2
e 2011–2013 
million tonnes
20
175
150
125
100
075
050
025
0
2012 2013
178
185
2011
168
direct ghg emissions co
2
e 2011–2013  
million tonnes
2011 2012 2013
12816
7537
krasnoyarsk bu irkutsk alluvial bu irkutsk ore bu yakutia bu 
kuranakh
exploration bu magadan bu
13228
9151
14319
13665
16000
14000
12000
10000
8000
6000
4000
2000
0
1184
2687
2982 3083
3056
2966
90 54 28
414 448
2435
water polyus gold international  annual report  2013
83
back to the contents
total water withdrawal by source 2011–2013 
thousand cubic metres
percentage of water recycledreused 2011–2013
total volume of water discharged  
thousand cubic metres 2011–2013
40000
35000
30000
25000
15000
10000
5000
0
surface 
water
ground 
water
municipal 
water
2013
61
16746
19733
2012
234
17036
13784
2011
214
16739
11080
22000
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0 2011
127313
2012
158016
2013
209153
2011 2012 2013
93 97 90
89
68
71
71
93
92
0
47
16
100
50
0
krasnoyarsk bu irkutsk ore bu irkutsk alluvial bu yakutia bu kuranakh
total volume of water recycledreused  
thousand cubic metres 2011–2013
300000
250000
200000
150000
100000
50000
0
2011 2012
249481
261231
2013
284135
total water effluents discharged  
tonnes 2011–2013 
3000
2500
2000
1500
1000
500
0
2011 2012
2049
2667
2013
2849
28033
total water 
withdrawal
31054 36540 polyus gold international  annual report  2013
84
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total land disturbed and recultivated in 2013  
hectares
land resources and biodiversity waste
land disturbed 
in 2013
land 
recultivated 
in 2013
total land distributed 
and not recultivated 
on 31122013
35856
10537
149947 16000
14000
12000
10000
8000
6000
4000
2000
0
total waste in 2011–2013 thousand tonnes
300000
250000
200000
150000
100000
50000
0
2011
06
419947
1447038
1867070
total waste 
generated
2012
09
584591
1860314
2444964
2013
22
482531
2119963
2534116
transferred 
and neutralised stored reused
waste generated in 2013 thousand tonnes
250000
200000
150000
100000
50000
0
overburden other
tailings 
solid phase
generated stored
2105129
318468
 4285285
06 02
163525 polyus gold international  annual report  2013
85
back to the contents
20
172
149
20
18
16
14
12
10
8
6
4
2
0
2011 2012 2013
total environmental protection expenditures  
in 2013 usd thousand
environmental protection expenditures
number of sanctions for noncompliance with  
environmental laws and regulations in 2011–2013
total monetary value of the fines 
in 2011–2013 usd thousand
current expenditure  
on nature protection
ecological and natural 
resource payment
capital invesments  
for environmetal protection 
and rational use of natural 
resources
10731
237605
40325
6
15
9
16
14
12
10
8
6
4
2
0
2011 2012 2013
total environmental expenditures in 2013  288662 polyus gold international  annual report  2013
86
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38 communities
in order to further develop the strong ties that pgil has with its 
stakeholders the company proactively builds relationships with 
people and communities affected by its activities
target status plans for 2014
workshops on community develop­ ment plans cdps
in progress
bu cdp’s were discussed with  
bu personnel and their comments were 
incorporated into the reports conduct workshops
position of community relations cr 
manager
to be introduced at natalka and sub­ sequently at all group subsidiaries
in progress
sustainability and community manager ap­ pointed at natalka
introduce cr manager position 
at other operations
implement stakeholder engagement 
and cdp corporate policy
in progress
stakeholder engagement policy  
and human rights policy developed  
and approved by board of directors
community development policy 
to be developed
achieve compliance with icmm 
principles
on stakeholder engagement 
procedures
and social performance indicators
in progress
stakeholder engagement policy developed
implementation of stakeholder 
engagement policy
enhancement of stakeholder 
engagement practices
381 approach 
polyus gold strives to establish relationships with individuals 
and legal entities at a local and national level to create new 
projects to expand the scope of cooperation and to use more 
efficient approaches to achieving the social and economic 
goals of the company and society 
most polyus gold operations are located in rural and remote 
areas the company therefore interacts with a broad spec­ trum of local and indigenous communities with a range of in­ terests and concerns specifically polyus gold engages with 
local and indigenous communities through 
• their participation in the company’s activities
• newsletters and targeted communications and
• public hearings and meetings
a core component of the polyus gold commitment to sustaina­ bility is contribution to the socio­economic development of the 
areas and local communities where it operates 
in the reporting year the majority of charity and community 
development functions with the exception of cooperation with 
educational institutions were handed over to the government 
relations department the pr department manage sponsor­ ship projects the basis for the company’s charitable and 
community relations activities in its regions of operation is laid 
down in agreements on socio­economic cooperation with local 
authorities this framework has been in place since 2009 the 
company plans for the format of such agreements to be uni­ fied across all regions in 2014 each agreement specifies the 
aims and targets of cooperation and an action plan is draft­ ed every year all requests and proposals that are submitted 
to the company’s bus are assessed against a set of criteria
• their compliance with the agreements with local authori­ ties
• the extent of their beneficial effect on the region and
• their urgency and importance polyus gold international  annual report  2013
87
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in 2013 no major projects were planned and executed how­ ever the company continued its charitable activity focusing 
on the following fields
• science and education
• physical culture and sports
• social support and protection of the public and
• support for the local population in emergency situations
for example the company took an active part in the clearup 
work following floods in the magadan region 
382 students 
as part of its focus on attracting young people with initiative 
and the capability to  think innovatively the company pays 
special attention to engagement with educational institu­ tions and students the company provides students with 
an opportunity to learn about global best practice in the 
mining industry to demonstrate their talents and abilities 
and to become part of large­scale projects
pgil works closely with a number of educational institutions 
specialising in metallurgy and mining studies including the 
siberian federal university the siberian state industrial 
university the ural state mining university the far east­ ern federal university and others for a full list see http
rabotapolyusgoldcomdlya­ studentov­ i­ vypusknikovpro­ gramma in russian in 2013 an agreement was signed 
with siberian federal university boosting cooperation in the 
fields of education employment and careers research and 
development and information technology the agreement 
involves a number of joint activities aimed at providing a 
competitive level of graduate training
in 2013 the company conducted student opinion surveys 
and designed eye­catching and innovative corporate infor ­ mation stands and placed them in universities and voca­ tional training institutions
the following student programmes are available for univer­ sity students and students of institutes of basic and second­ ary vocational education
learn the worth of gold
 
“learn the worth of gold” a programme of collaboration 
with professional educational institutions was launched 
by pgil in 2008 since then nearly 2000 students have 
participated about 20 of whom have go on to join the 
company the programme focuses attracting and select­ ing young engineers and technical workers and develop­ ing their professional skills “learn the worth of gold” aims 
to reduce the time needed for them to become established 
in their career
the programme is open to senior students of universities 
and institutes of basic and secondary education specialising 
in fields that are in demand at the company today the pro­ gramme is being implemented in more than 40 universities 
and vocational training institutes nationwide
under the programme students are offered an internship 
at the company after graduation following on­the­job 
training the company the student and an educational in­ stitution may agree on specialised training and the student’s 
future employment at the group
during the internship experienced mentors help the stu­ dents master the intricacies of the profession and adapt 
to working life
“learn the worth of gold” provides students with an op­ portunity to
• acquire great professional experience
• obtain materials needed for coursework or research and
• get a job at the company after graduation
james nieuwenhuys 
at a meeting with students 
from the moscow institute 
of steel and alloys 
during the meeting james told the students about 
trends in the gold mining industry pgil’s position 
in the global gold industry and the current state and 
prospects of the company polyus gold international  annual report  2013
88
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the polyus goldcaf grant competition 
 
the goal of this programme is to identify and support the best 
students and student initiatives and to apply their abilities and 
potential to projects aimed at tackling social issues in the cities 
where the programme takes place
the programme includes two competitions
student projects
the purpose of this contest is to identify and support the best 
student projects in the social sphere the best projects receive 
grants of up to usd 3000 per project
the students take part in the competition’s role­playing train­ ing and seminars where they learn to develop present and 
implement their own social projects
individual achievements
the purpose of this contest is to reward those students who 
are the most active and show the most initiative those who 
earn the most points for their projects and personal achieve­ ments in the calendar year receive prizes of between usd 250 
and 500 
the competition categories are
• participation in university life
• professional and personal growth
• participation in public life and
• art and sport
the programme is growing every year with the involvement 
of new educational institutions
a workshop and conference 
‘improving the quality of train­ ing given to young profession­ als in the mining industry 
the perspective from business and education­ al institutions’ was held in april 2013 as part  
of the ‘learn the worth of gold’ programme
this conference was attended by leaders and spe­ cialists from the company and representatives 
of leading russian educational institutions the 
conference discussed issues related to the reform 
of vocational education young professionals’ expec­ tations of their future employer and the measures 
necessary to improve the quality of graduates and 
help them adapt more quickly to the working envi­ ronment
in october 2013 the student 
initiatives programme was laun­
ched with more than 400 stu­ dents from educational institu­ tions specialising in metallurgy 
and mining studies participating 
the main event of the first stage was trip to the three 
participating cities chita irkutsk and novokuznetsk 
where the participants met with 15 municipal or­ ganisations working for the benefit of young people 
in various areas youth affairs committees environ­ mental and children’s organisations the city’s muse­ ums and libraries youth business incubators extreme 
sports communities  polyus gold international  annual report  2013
89
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39 gri content index
application level
independently assured
 – fully disclosed
 – partially disclosed
na – not applicable
ar – annual report
sr2012 – sustainability report 
2012
profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
strategy and analysis 
1 statement from the most senior decision­ maker of the organization about the 
relevance of sustainability to the organi­ zation and its strategy
 message from coo 64
chairman’s statement 14
chief executive officer statement 23
2 description of key impacts risks and op­ portunities
 sustainability approach 58
message from coo 64
sustainability governance 65
health and safety 67
employees 70
environmental stewardship 78
communities 84
principal risks and uncertainties 20
risk committee report 142
organisational profile 
3 name of the organisation  about this report 56
4 primary brands products andor services  polyus at a glance 6
5 location of organisation’s headquarters  the company is headquartered in london
united kingdom
6 number of countries where the organisa­ tion operates and names of countries 
with either major operations or that are 
specifically relevant to the sustainability 
issues covered in the report
 about this report 56
7 nature of ownership and legal form polyus at a glance 6
8 markets served  polyus at a glance 6
9 scale of the reporting organisation  about this report 56
employees 70
polyus at a glance 6
financial review 26
ownership structure
wwwpolyusgoldcominvestorsshares
ownershipstructure
in 2013 the average headcount of the group 
was 19452 employees polyus gold international  annual report  2013
90
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
10 total workforce by employment type 
employment contract and region broken 
down by gender
 employees 70
11 percentage of employees covered by col­ lective bargaining agreements
 94 of employees are covered by collective 
bargaining agreements
12 the organisation’s supply chain  sustainability approach 58
13 significant changes during the reporting pe­ riod regarding size structure or ownership
 about this report 56
commitments to external initiatives
14 explanation of whether and how the 
precautionary approach or principle is ad­ dressed by the organisation
 in the reporting period the company did not 
apply the precautionary principle to identify 
monitor and manage risks
15 externally developed economic environ­ mental and social charters principles 
or other initiatives to which the organisa­ tion subscribes or endorses
 about this report 56
16 memberships of associations such as in­ dustry associations andor nationalinter­ national advocacy organisations
 sustainability approach 58
identified material aspects and boundaries
17 entities included in the organisation’s con­ solidated financial statements or equiva­ lent documents
 about this report 56
18 the process for defining the report con­ tent and the aspect boundaries
 about this report 56
19 material aspects identified in the process 
for defining report content
 sustainability approach 58
20 materials aspects’ boundary within the 
organisation
 about this report 56
sustainability approach 58
21 materials aspects’ boundary outside the 
organisation
 about this report 56 
sustainability approach 58
22 the effect of any restatements of infor­ mation provided in previous reports and 
the reasons for such restatements
 about this report 56 58
23 significant changes from previous report­ ing periods in the scope and aspect 
boundaries
 about this report 56 polyus gold international  annual report  2013
91
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
stakeholder engagement
24 list of stakeholder groups engaged by the 
organisation
 sustainability approach 58
sr2012 communities stakeholder engage­ ment 43
25 the basis for identification and selection 
of stakeholders with whom to engage
 sustainability approach 58
sr2012 communities stakeholder engage­ ment 43
26 the organisation’s approach to stake­ holder engagement including frequency 
of engagement by type and by stakehold­ er group and an indication of whether 
any of the engagement was undertaken 
specifically as part of the report prepara­ tion process
 sustainability approach 58
sr2012 communities stakeholder engage­ ment 43
27 key topics and concerns that have been 
raised through stakeholder engagement 
and how the organisation has responded 
to those key topics and concerns includ­ ing through its reporting
 sustainability approach 58
sr2012 communities stakeholder engage­ ment 43
report profile
28 reporting period for information provided  about this report 56
29 date of most recent previous report  about this report 56
30 reporting cycle  about this report 56
31 contact point for questions regarding the 
report or its contents
 about this report 56
32 the ‘in accordance’ option the organisa­ tion has chosen and the gri content 
index for the chosen option
 about this report 56
assurance
33 policy and current practice with regard 
to seeking external assurance for the report
 about this report 56
governance
34 the governance structure of the organisa­ tion including committees of the highest 
governance body
 sustainability governance 65
governance  124 polyus gold international  annual report  2013
92
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
35 the process for delegating authority for 
economic environmental and social topics 
from the highest governance body to se­ nior executives and other employees
 sustainability governance 65
hsec committee report 146
36 whether the organisation has appointed 
an executivelevel position or positions 
with responsibility for economic environ­ mental and social topics
 sustainability governance 65
37 processes for consultation between stake­ holders and the highest governance body 
on economic environmental and social 
topics
 governance relations with shareholder 125
sr2012 employees personnel rights 26
employees may inform the board of directors’ 
personnel committee of violations of the code 
of corporate ethics
38 the composition of the highest gover­ nance body and its committees
 sustainability governance 65
governancediversity policy 134
39 whether the chair of the highest gover­ nance body is also an executive officer
 board of directors composition 128
40 the nomination and selection processes 
for the highest governance body and its 
committees
 governance nomination committee
report 144
41 processes for the highest governance 
body to ensure conflicts of interest are 
avoided and managed
 code of corporate ethics
relationship agreements wwwpolyusgold
comcompanycorporategovernance
relationshipagreements
lists of affiliated persons wwwpolyusgold
cominvestorsojscpolyusgoldlistsof
affiliatedpersons
42 the role of senior executives and the high­ est governance body in the development 
approval and updating of the organisation’s 
purpose value or mission statements strat­ egies policies and goals related to eco­ nomic environmental and social impacts
 hsec committee report 146
43 measures taken to develop and enhance 
the highest governance body’s collective 
knowledge of economic environmental 
and social topics
 hsec committee report 146
44 processes for evaluating the highest 
governance body’s own performance 
particularly with respect to economic 
environmental and social performance
 governanceevaluation 125
hsec committee report 146 polyus gold international  annual report  2013
93
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
45 the highest governance body’s role in the 
identification and management of eco­ nomic environmental and social impacts 
risks and opportunities
 sustainability governance 65
hsec committee report 146
46 the highest governance body’s role in re­ viewing the effectiveness of the organ­ isation’s risk management processes for 
economic environmental and social topics
 materiality and risk assessment 58
risk committee report 142
47 the frequency of the highest governance 
body’s review of economic environmental 
and social impacts risks and opportunities
 sustainability governance 65
hsec committee report 146
risk committee report 142
48 the highest committee or position that 
formally reviews and approves the organ­ isation’s sustainability report and ensures 
that all material aspects are covered
 sustainability governance 65
hsec committee report 146
49 the process for communicating critical 
concerns to the highest governance body
 sustainability governance 65
hsec committee report 146
50 the nature and total number of criti­ cal concerns that were communicated 
to the highest governance body and 
the mechanisms used to address and 
resolve them
 hsec committee report 146
51 the remuneration policies for the highest 
governance body and senior executives
 directors remuneration report 198
52 the process for determining remuneration  directors remuneration report 198
53 how stakeholders’ views are sought and 
taken into account regarding remuneration
directors remuneration report 198
54 the ratio of the annual total compensa­ tion for the organization’s highest­paid 
individual in each country of significant 
operations to the median annual total 
compensation for all employees exclud­ ing the highest­paid individual in the 
same country
directors remuneration report 198
55 the ratio of percentage increase in an­ nual total compensation for the organ­ isation’s highest­paid individual in each 
country of significant operations to the 
median percentage increase in annual 
total compensation for all employees 
excluding the highestpaid individual 
in the same country
directors remuneration report 198 polyus gold international  annual report  2013
94
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
ethics and integrity
56 the organisation’s values principles 
standards and norms of behavior such 
as codes of conduct and codes of ethics
 mission 
code of ethics 
human rights policy
diversity policy 
stakeholder engagement policy
corporate and social responsibility 52
57 the internal and external mechanisms for 
seeking advice on ethical and lawful behav­ ior and matters related to organisational 
integrity such as helplines or advice lines
 governanceanti­corruption efforts 137
58 the internal and external mechanisms 
for reporting concerns about unethical 
or unlawful behavior and matters related 
to organisational integrity
 governanceanti­corruption efforts 137
grievance mechanism under the human 
rights policy
economic performance indicators
ec1
comm
direct economic value generated and 
distributed
 financial review 26
ec2 financial implications and other risks and 
opportunities for the organisation’s activi­ ties due to climate change
 sr2012 environmental stewardship air emis­ sions and climate change 39
natalka esia assessed risks for natalka proj­ ect due to climate change
ec3 coverage of the organisation’s defined 
benefit plan obligations
 the company fully complies with russian laws 
by paying contributions to the pension fund
ec4 financial assistance received from 
government
 no financial assistance was received from the 
government during the reporting period
ec5 ratios of standard entry level wage 
by gender compared to local minimum 
wage at significant locations of operation
 employees 70
the company does not allow any forms of dis­ crimination thus all employees regardless 
of their gender or any other diversity fac­ tors receive equal wages for the same scope 
quantity and quality of labour
ec6
 comm
proportion of senior management hired 
from the local community at significant 
locations of operation
 employees 70
ec7 development and impact of infrastructure 
investments and services supported
communities 84
sr2012 communities 45 
ec9 proportion of spending on local suppliers 
at significant locations of operation
 sustainability approach 58 polyus gold international  annual report  2013
95
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
environmental performance indicators
en1 materials used by weight or volume  operational review 42
en2 percentage of materials used that are 
recycled input materials
 the company did not assess percentage of re­ cycled input materials used in 2013
the rate of use of such materials is very low
en3 energy consumption within the organisa­ tion
 environmental stewardship 78
en5 energy intensity  energy intensity ratio – 021
the ratio denominator ore processed t
data on energy consumed within the organi­ zation was used
energy types included fuel electricity heat­ ing
en6 reduction of energy consumption  environmental stewardship 78
en7 reductions in energy requirements 
of products and services
na
en8 total water withdrawal by source  environmental stewardship 78
en10 percentage and total volume of water 
recycled and reused
 environmental stewardship 78
en11 operational sites owned leased man­ aged in or adjacent to protected areas 
and areas of high biodiversity value 
outside protected areas
 the company has no operations in specially 
protected nature conservation areas
en12
 comm
description of significant impacts of activi­ ties products and services on biodiver­ sity in protected areas and areas of high 
biodiversity value outside protected areas
 the company has no operations in specially 
protected nature conservation areas
en13 habitats protected or restored  the company has no operations in specially pro­ tected nature conservation areas the company 
has conducted esias in compliance with ifc 
standards for newly developed projects
mm1 amount of land owned or leased and 
managed for production activities or ex­ tractive use disturbed or rehabilitated 
environmental stewardship 78
sr2012 environmental stewardship land re­ sources and biodiversity 38 polyus gold international  annual report  2013
96
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
mm2 the number and percentage of total 
sites identified as requiring biodiversity 
management plans according to stated 
criteria and the number percentage 
of those sites with plans in place 
 the company has no operations in specially 
protected nature conservation areas the 
company is implementing environmental ac­ tion plans for managing its impact on biodiver­ sity at the new projects based on independent 
esia’s 
en14 total number of iucn red list species and 
national conservation list species with 
habitats in areas affected by operations 
by level of extinction risk
 a number of bird species included in the red 
book of the russian federation and magadan 
region dwell near magadan bu however all 
species are migratory and do not nest in the 
project area
en15 direct greenhouse gas ghg emissions 
scope 1
 environmental stewardship 78
en16 energy indirect greenhouse gas ghg 
emissions scope 2
 environmental stewardship 78
en18 greenhouse gas ghg emissions inten­ sity
 ghg intensity ratio – 73 ghg intensity is mea­ sured in thousand tonnes of co
2
e page 82 per 
million cubic metres of rock moved page 43 
ghg emissions included direct scope 1 in­ direct scope 2
gases included in the calculation co
2
 nh
4
 
n
2
o
en19 reduction of greenhouse gas ghg emis­ sions
 environmental stewardship 78
en20 emissions of ozone­depleting substances 
ods
 no significant emissions of ozonedepleting sub­ stances were identified in the reporting period
en21
 comm
nox sox and other significant air emis­ sions
 environmental stewardship 78
en22 total water discharge by quality and 
destination
 environmental stewardship 78 
discharges are not reused by other organisa­ tions
en23 total weight of waste by type and dis­ posal method
 total waste in 2011–2013
en24
 comm
total number and volume of significant 
spills
 the company has implemented a programme 
and plans to report data on significant spills 
shortly during 2013 there were no significant 
spills reportable environmental incidents
mm3 total amounts of overburden rock tailings 
and sludges and their associated risks 
 environmental stewardship 78 polyus gold international  annual report  2013
97
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
en25 weight of transported imported exported 
or treated waste deemed hazardous under 
the terms of the basel convention annex 
i ii iii and viii and percentage of trans­ ported waste shipped internationally
na
en26 identity size protected status and biodi­ versity value of water bodies and related 
habitats significantly affected by the orga­ niation’s discharges of water and runoff
there are four water bodies significantly af­ fected by the organisation’s discharges of wa­ ter and runoff at krasnoyarsk bu and 28 – at 
irkutsk alluvial bu all water bodies fall into 
different commercial fishing importance cat­ egories
en27 extent of impact mitigation of environ­ mental impacts of products and services
na the group’s products do not have any signifi­ cant environmental impact
en28 percentage of products sold and their 
packaging materials that are reclaimed 
by category
na the group’s products do not require packag­ ing materials
en29 monetary value of significant fines and 
total number of non­monetary sanctions 
for non­compliance with environmental 
laws and regulations
 environmental stewardship 78
en30 significant environmental impacts of 
transporting products and other goods 
and materials for the organization’s 
operations and transporting members of 
the workforce
the significant environmental impacts of trans­ portation were assessed for natalkamagadan 
bu in accordance with the ifc requirements
all new projects will be subject to such assess­ ment in the future
en31 total environmental protection expendi­ tures and investments by type
 environmental stewardship 78
en32 percentage of new suppliers that were 
screened using environmental criteria
 all suppliers are required to sign a contract ad­ dendum specifying their responsibility for envi­ ronmental and hs issues 
en33 significant actual and potential negative 
environmental impacts in the supply chain 
and actions taken
 the introduction of assessment of significant 
actual and potential negative environmen­ tal impacts in the supply chain is planned for 
2014­2015
en34 number of grievances about environmen­ tal impacts filed addressed and resolved 
through formal grievance mechanisms
 three grievances were filed in the reporting 
period
claims under two of them were not confirmed 
and one was resolved with corrective actions 
taken polyus gold international  annual report  2013
98
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
labour practices and decent work performance indicators
la1 total number and rates of new employee 
hires and employee turnover by age 
group gender and region
employees 70 
turnover remained more or less at the previ­ ous year’s level and is in line with the rates 
of other mining companies using the rotational 
team method
la2 benefits provided to fulltime employ­ ees that are not provided to temporary 
or parttime employees by significant 
locations of operation
 sr2012 employees motivation 28­31
the company provides the same benefits 
to all employees except for additional medical 
insurance which is not provided to part­time 
employees
la4 minimum notice periods regarding opera­ tional changes including whether these 
are specified in collective agreements
 all notice periods regarding significant opera­ tional changes are in compliance with the la­ bour code of the russian federation
mm4 number of strikes and lockouts exceed­ ing one week’s duration by country 
 there were no strikes or lockouts exceeding 
one week’s duration in the reporting period
la5 percentage of total workforce represented 
in formal joint management–worker 
health and safety committees that help 
monitor and advise on occupational 
health and safety programmes
the hsec committee operating at the board 
level is the key body responsible for the health 
and safety issues in the company
a separate management – worker health and 
safety committee also operates at natalka
la6
 comm
type of injury and rates of injury occupa­ tional diseases lost days and absentee­ ism and total number of work­related 
fatalities by region and by gender
health and safety 67
la7 workers with high incidence or high risk 
of diseases related to their occupation
 health and safety 67
the company has no operations in areas with 
a high risk of serious diseases
la8 health and safety topics covered in formal 
agreements with trade unions
the cooperation in the field of hs with the 
trade unions is carried out at yakutia bu 
kuranakh
la9 average hours of training per year per 
employee by gender and by employee 
category
 employees 70
la10 programmes for skills management and 
lifelong learning that support the contin­ ued employability of employees and assist 
them in managing career endings
 employees 70
la11 percentage of employees receiving regu­ lar performance and career development 
reviews by gender and by employee 
category
 sr2012 employees motivation financial in­ centives 28­29
all employees undergo performance reviews 
on the basis of a kpi system polyus gold international  annual report  2013
99
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
la12 composition of governance bodies and 
breakdown of employees per employee 
category according to gender age group 
minority group membership and other 
indicators of diversity
employees 70
governance 124
governancediversity policy 134
the company does not aggregate data on  
employees by minority group the group fully 
complies with russian laws and does not allow 
any forms of discrimination
la13 ratio of basic salary and remuneration 
of women to men by employee category 
by significant locations of operation
 there is no wage discrimination by gender re­ muneration depends on the scope quantity and 
quality of labour differences in gross wages 
and salaries can be explained by the structure 
of employment requirements of labour law and 
specific mining industry conditions mean that 
male employees are mostly involved in produc­ tion female employees hold positions in service 
units administrative services medical centres 
canteens and others where salaries are lower 
than in the main operations
la14 percentage of new suppliers that were 
screened using labour practices criteria
in 2013 the company adopted the human 
right policy that outlines polyus gold’s com­ mitment to universal human rights in particu­ lar the rights of its employees to a safe and 
healthy working environment to non­discrimi ­ nation and the freedom of association where 
reasonable polyus gold shall encourage its 
suppliers within its sphere of influence to com­ ply with the principles stated in it  
la15 significant actual and potential negative 
impacts for labour practices in the supply 
chain and actions taken
 the introduction of assessment of significant 
actual and potential negative impacts for la­ bour practices in the supply chain is planned 
for 2014­2015
la16 number of grievances about labour 
practices filed addressed and resolved 
through formal grievance mechanisms
 13 grievances were filed in the reporting pe­ riod of which nine were resolved
seven grievances filed before the reporting 
period were also resolved during 2013 
human rights performance indicators
hr1 total number and percentage of signifi­ cant investment agreements and con­ tracts that include human rights clauses 
or that underwent human rights screening
 in 2013 the company adopted the human 
right policy that outlines polyus gold’s com­ mitment to universal human rights where 
reasonable polyus gold shall encourage its 
business partners within its sphere of influ­ ence to comply with the principles stated in it   polyus gold international  annual report  2013
100
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
hr2 total hours of employee training on hu­ man rights policies or procedures con­ cerning aspects of human rights that 
are relevant to operations including the 
percentage of employees trained
 in 2013 the company adopted the human 
right policy that outlines polyus gold’s com­ mitment to universal human rights  all em­ ployees are familiarized with the policy and are 
responsible for understanding and following it
hr3 total number of incidents of discrimina­ tion and corrective actions taken
 no incidents of discrimination were registered 
in 2013 the company strictly complies with 
the law and does not permit any form of dis­ crimination
hr4 operations and suppliers identified 
in which the right to exercise freedom 
of association and collective bargaining 
may be violated or at significant risk and 
measures taken to support these rights
 the company strictly abides by the laws and does 
not operate in regions where freedom of asso­ ciation and collective bargaining may be at risk
sr2012 employees personnel rights 26
hr5 operations and suppliers identified 
as having significant risk for incidents 
of child labour and measures taken 
to contribute to the effective abolition 
of child labour
 the group ensures full compliance with the 
law at all subsidiaries child labour is totally 
unacceptable
hr6 operations and suppliers identified as hav­ ing significant risk for incidents of forced 
or compulsory labour and measures 
to contribute to the elimination of all forms 
of forced or compulsory labour
 the company ensures full compliance with 
the law and does not operate in regions where 
there is a risk of forced or compulsory labour 
forced or compulsory labour is strictly prohib­ ited by russian law
hr7 percentage of security personnel trained 
in the organisation’s human rights policies 
or procedures that are relevant to opera­ tions
 all security personnel is guided by the com­ pany’s code of ethic human rights policy and 
duty regulations that stipulate the standards 
of conduct and respect for human rights
hr8 total number of incidents of violations 
involving rights of indigenous peoples and 
actions taken
 no incidents involving indigenous peoples’ 
rights were identified during the reporting pe­ riod
mm5 total number of operations taking place 
in or adjacent to indigenous peoples’ 
territories and number and percentage 
of operations or sites where there are for­ mal agreements with indigenous peoples’ 
communities 
 sr2012 employees diversity and local hiring 
28
sr2012 communities stakeholder engage­ ment 44
hr9 total number and percentage of opera­ tions that have been subject to human 
rights reviews or impact assessments
 all operating sites have been subject to rus­ sian formal eia process polyus gold international  annual report  2013
101
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
hr10 percentage of new suppliers that were 
screened using human rights criteria
in 2013 the company adopted the human 
right policy that outlines polyus gold’s com­ mitment to universal human rights where 
reasonable polyus gold shall encourage its 
suppliers within its sphere of influence to com­ ply with the principles stated in it 
hr11 significant actual and potential negative 
human rights impacts in the supply chain 
and actions taken
 the introduction of assessment of significant 
actual and potential negative human rights 
impacts in the supply chain is planned for 
2014–2015
hr12 number of grievances about human rights 
impacts filed addressed and resolved 
through formal grievance mechanisms
 in 2013 the company adopted a human 
rights policy and a stakeholder engagement 
policy which introduced a grievance mecha­ nism no grievances were filed during the re­ porting period polyus gold is working on the 
development and improvement of the griev­ ance procedures 
society performance indicators
so1 percentage of operations with imple­ mented local community engagement 
impact assessments and development 
programmes
 communitites 84
sr2012 environmental stewardship
performance results 33
sr2012 communities sponsorship  
and charity 45
so2 operations with significant actual and po­ tential negative impacts on local communi­ ties
 an esia was conducted for the yakutia 
bu nezhdaninskoye the adopted stake­ holder engagement policy includes a devel­ opment stakeholder engagement plan the 
plan’s framework was agreed with the bus 
the company plans to continue efforts in this 
field in the following years
mm6 number and description of significant 
disputes relating to land use customary 
rights of local communities and indigenous 
peoples
 there were no significant disputes relating 
to land use customary rights of local com­ munities and indigenous peoples during the 
reporting period
mm7 the extent to which grievance mecha­ nisms were used to resolve disputes relat­ ing to land use customary rights of local 
communities and indigenous peoples and 
the outcomes
 there were no significant disputes relating 
to land use customary rights of local com­ munities and indigenous peoples during the 
reporting period
so3 total number and percentage of opera­ tions assessed for risks related to corrup­ tion and the significant risks identified
 anti­corruption efforts 137
the security department is responsible for 
routine analysis of possible risks related 
to corruption polyus gold international  annual report  2013
102
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
so4 communication and training on anti­cor ­ ruption policies and procedures
 sustainability approach 58
anti­corruption efforts 137
so5 confirmed incidents of corruption and ac­ tions taken
 no incidents of corruptions were identified 
in the reporting period
so6 total value of political contributions by 
country and recipientbeneficiary
 the company does not engage in any politi­ cal activities and does not make any political 
contributions 
so7 total number of legal actions for anti­com­ petitive behaviour anti­trust and monop ­ oly practices and their outcomes
 there were no legal actions for anti­competitive 
behaviour anti­trust or monopoly practices
so8
 comm
monetary value of significant fines and to­ tal number of non­monetary sanctions for 
non­compliance with laws and regulations
 there were no sanctions for non­compliance 
with laws and regulations
so9 percentage of new suppliers that were 
screened using criteria for impacts on so­ ciety
 in 2013 the company adopted the stakeholder 
engagement policy that paves the way for the 
introduction of the impacts on society screen­ ing in 2014­2015
so10 significant actual and potential negative 
impacts on society in the supply chain and 
actions taken
 a social audit of the company was conducted 
which lays foundation for the introduction of 
assessment of significant actual and potential 
negative impacts on the local communities in 
the supply chain is planned for 2014­2015
so11 number of grievances about impacts on 
society filed addressed and resolved 
through formal grievance mechanisms
 in 2013 the company adopted a human rights 
policy and a stakeholder engagement policy 
which introduced grievance mechanisms no 
grievances were filed during the reporting pe­ riod polyus gold is working on the develop­ ment and improvement of the grievance pro­ cedures
mm8 number and percentage of company’s 
operating sites where artisanal and small­ scale mining asm takes place on or ad­ jacent to the site the associated risks and 
the actions taken to manage and mitigate 
these risks
na
mm9 sites where resettlements took place the 
number of households resettled in each 
and how their livelihoods were affected in 
the process
 no resettlement took place in the reporting 
year polyus gold international  annual report  2013
103
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profile 
disclosure disclosure
level 
of reporting location of disclosure  comment
mm10 number and percentage of operations with 
closure plans
sr2012 environmental stewardship manag­ ing biodiversity 38
four mines – olimpiada verninskoye natalka 
and aldan – have closure plans in compliance 
with the icmm requirements closure plans in 
accordance with russian legislation are devel­ oped for other mine sites
product responsibility performance indicators
pr1 percentage of significant product and ser­ vice categories for which health and safety 
impacts are assessed for improvement
na due to the nature of the product
pr2 total number of incidents of non­compli ­ ance with regulations and voluntary codes 
concerning the health and safety impacts 
of products and services during their life 
cycle by type of outcomes
na
pr3 type of product and service information 
required by the organisation’s procedures 
for product and service information and la­ beling and percentage of significant prod­ uct and service categories subject to such 
information requirements
na
pr4 total number of incidents of non­compli ­ ance with regulations and voluntary codes 
concerning product and service informa­ tion and labelling by type of outcomes
na
pr5 results of surveys measuring customer 
satisfaction
na
pr6 sale of banned or disputed products na
pr7 total number of incidents of non­compli ­ ance with regulations and voluntary codes 
concerning marketing communications in­ cluding advertising promotion and spon­ sorship by type of outcomes
na
pr8 total number of substantiated complaints 
regarding breaches of customer privacy 
and losses of customer data
na
pr9 monetary value of significant fines for non
compliance with laws and regulations con­ cerning the provision and use of products 
and services
na irkutsk region
shaman cape stands in the south west of lake baikal 
which at 1642 metres is the deepest lake on the planet 
home to unique species of flora and fauna baikal is  
a unesco world heritage site remuneration
4 polyus gold international  annual report  2013
106
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on behalf of the board i am pleased to present the directors’ 
remuneration report for 2013
for much of the year the committee was ably chaired 
by lord clanwilliam who stepped down on 13 november 
2013 i would like to thank lord clanwilliam for his many 
years of successful service to the board and the remunera
tion committee and his support since stepping down 
last year’s directors’ remuneration report received a vote 
in favour of 9826 of votes cast at the 2013 annual gen
eral meeting and i thank shareholders for their support 
this year the committee has agreed that where practicable 
and appropriate the company should take a bestpractice 
approach and voluntarily follow uk regulations with regard 
to the directors’ remuneration report although it is not 
a requirement of its jersey incorporation 
therefore in line with the new uk reporting regulations 
the directors’ remuneration report has been redesigned this 
year and split into three sections
• the remuneration committee report describes the 
main committee activities during the year under review 
section 42 
• the directors’ remuneration report explains how polyus 
gold’s remuneration policy has been implemented and 
details the compensation paid to executive and non
executive directors during the 2013 financial year sec
tion 43
• the directors’ remuneration policy report describes our 
proposed remuneration policy and its alignment with 
our business strategy including a summary of the key 
elements of pay section 44
our remuneration strategy has remained largely consist
ent over many years however this year we continued 
the process started in 2012 of evaluating compensation 
arrangements for executive directors and senior mana
gement in light of the company’s uk listing the remu
neration policy for the senior management team has been 
reviewed and we have approved the structure and targets 
of the shortterm incentive scheme to strengthen the link 
between performance and reward 
going forward we will keep our remuneration strategy un
der review to ensure that we continue to reward the senior 
management team for the achievement of strong financial 
results and the creation of shareholder value
bruce buck
chairman of the remuneration committee
london 24 march 2014 
4 remuneration
41 statement from the chairman 
of the remuneration committee polyus gold international  annual report  2013
107
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42 remuneration  
committee report
membership
current members
• bruce buck independent nonexecutive director and 
chairman of the remuneration committee
• adrian coates independent nonexecutive director and 
senior independent director and
• kobus moolman independent nonexecutive director
former members
• lord clanwilliam independent nonexecutive director
1

the current remuneration committee was formed by a res
olution of the board of directors acting on the recommenda
tion of the nomination committee
key objectives
•  to ensure that members of the company’s executive 
management are provided with appropriate incentives 
to encourage enhanced performance and are rewarded 
in a fair and responsible manner for their individual con
tributions to the company’s success
• review of the ongoing appropriateness and relevance 
of the remuneration policy
committee responsibilities
the description of the committee’s role and responsibilities 
and its full terms of reference are available on the compa
ny’s website – wwwpolyusgoldcomcompanycorporate 
governanceremunerationcommittee
none of the committee members has any personal financial 
interest other than as a shareholder conflict of interest 
crossdirectorships or daytoday involvement in the run
ning of the business the terms of reference of the remu
neration committee restrict membership to an initial period 
of three years after which time membership may be ex
tended by the board for a further three years provided ap
pointees still meet the membership criteria
meeting and discussions
the remuneration committee met seven times over the 
course of the financial year additionally a number of work
inggroup meetings and conference calls between commit
tee members and the company’s legal and remuneration 
advisors were held please refer to section 63 “board of 
directors composition” for details of members’ attendance 
at committee meetings
review of the committee work
during the year the committee undertook a comprehensive 
review of senior management compensation packages per
formance was reviewed against 2012 bonus scheme targets 
and the bonus pool for 2012 was approved
advisors to the committee
during the year the remuneration committee was advised 
by specialist consultants towers watson who provided in
dependent advice on matters under consideration by the 
committee and updates on good practice legislative re
quirements and market practice towers watson’s fees for 
this work amounted to usd 105000 the remuneration 
committee is satisfied that the advice provided on executive 
remuneration is objective and independent and that no con
flict of interest arises as a result of these services 
the committee also received assistance from the former 
chief executive officer but it should be stressed that 
he played no part in discussions related to the setting of his 
own remuneration in particular the committee sought his 
advice and received recommendations from him in respect 
of his direct reports
since stepping down from the board lord clanwilliam has 
remained an advisor to the committee on matters relating 
to senior executive pay lord clanwilliam’s fees for 2013 
amount to usd 30000 and he does not provide any other 
services to the company or its subsidiaries
1 
resigned from the committee on 13 november 2013 polyus gold international  annual report  2013
108
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in this section of the report we explain how polyus gold’s 
remuneration policy has been implemented during the 2013 
financial year given the changes in remuneration policy fol
lowing a review in the year the following section refers 
to a previous policy in place for the years prior to 2013 
this policy was closely aligned to local russian market prac
tice and is a legacy of the company’s growth in russia 
as such companythe main elements of compensation paid 
to the chief executive officer were a fixed base salary an
nual bonus and benefits
executive directors’ remuneration
in 2013 there were two chief executive officers
pavel grachev – appointed 27 november 2013  
as interim ceo
german pikhoya – resigned 27 november 2013
base salary
the base salary of the chief executive officer is reviewed 
on an annual basis a number of factors are taken into ac
count when salaries are reviewed key among them is cor
porate and individual performance and competitiveness as
sessed against appropriate peers in businesses in a similar 
sector and of a similar size and complexity
the 2013 base salary increase for german pikhoya was 
15 effective 1 april 2013 following mr pikhoya’s res
ignation pavel grachev was appointed as interim ceo 
mr grachev represents the interests of a major share
holder as a nonindependent director and does not re
ceive any compensation from the company for his ser
vices as interim ceo
benefits and allowances
the chief executive officer is entitled to receive benefits 
including payments for unused holiday meals healthy be
haviour payments modest payments made to nonsmoking 
employees additional allowances when travelling on busi
ness compensation for travelling on business trips outside 
of contracted working days and medical insurance during the 
financial year this amounted to usd 1233450 for german 
pikhoya the former chief executive officer pavel grachev did 
not receive any benefits during the financial year
under the current and proposed remuneration policy 
no director receives pension contributions this reflects lo
cal russian market practice
annual bonus
the annual bonus paid to the chief executive officer in 2013 
relates to the previous financial year 2012 and was based 
on annual performance and was measured by the achieve
ment of the following financial and nonfinancial targets
the table below outlines the 2012 performance metrics and 
their achievement during the 2012 financial year
indicators 
below
target
 achievement
on
target
 achievement
better
than target
 achievement
ebitda usd million 170
nav usd million 108
market standing in terms of mineral reserve
base and production volume 
100
share dynamics vs peer group 130
gold output tonnes 103
tcc usdoz 117
gold recovery  974
ohs incidents per 1000 employees 109
43 directors’  
remuneration report  polyus gold international  annual report  2013
109
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2013 annual bonus
pavel grachev is not eligible to receive an annual bonus award 
for the 2013 financial year the former ceo german pikhoya 
did not receive a bonus payment in relation to the 2013 finan
cial year in line with his resignation from the company
termination payments
german pikhoya resigned as ceo and director of the com
pany on 27 november 2013 on the date of his leaving 
the company compensation as outlined in the table below 
was paid
compensation element treatment upon termination
base salary base salary was paid up to the ceo’s termination date upon which all payments 
ceased
benefits and allowances entitlement to ongoing benefits allowances and other compensation ceased 
upon the date of termination 
compensation for unused leave to a value of usd 983516 was paid upon termi
nation
contractually entitled payments the ceo’s contract entered into in 2011 entitled german pikhoya to a termina
tion payment of 12 months average salary the calculation of average salary for 
the purposes of the termination payment is defined by russian law and includes 
all allowances and bonuses paid during the previous 12 months the termination 
payment received by the outgoing ceo was usd 3970525
outside appointments for the chief 
executive officer
to broaden the experience of the chief executive officer 
he may hold positions in other companies as a nonexe
cutive director provided that permission is sought in ad
vance from the senior independent director any external 
appointment must not conflict with the ceo and director’ 
duties and commitments to the company
pavel grachev is a nonexecutive director of jsc federal 
grid company and received no fees from this position in the 
financial year
nonexecutive directors’ remuneration
nonexecutive directors received fees for their services 
to the company in 2014 the chairman’s fee level was in
creased by 80 and the basic fee levels for other non
executive directors were increased by 40 in addition the 
members of the audit committee will receive an additional 
fee the amount of fees is as set out in the table below
role fees usd
chairman 450000
basic fees 350000
audit committee 
membership fee 30000 polyus gold international  annual report  2013
110
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auditable section
single total figure table
director
1
financial 
year
total  
salary  fees
usd
annual  
bonus
usd
total other 
emoluments
3
usd
fees paid 
to third  
parties
usd
total remu
neration
 usd
independent  
nonexecutive
ilya yuzhanov 2013 112500 – – – 112500
2012 na na na na na
adrian coates 2013 380000 – – – 380000
2012 217500 – – – 217500
bruce buck
2
2013 – – – 350000 350000
2012 – – – 200000 200000
edward dowling 2013 90000 – – – 90000
2012 na na na na na
kobus moolman 2013 380000 – – – 380000
2012 217500 – – – 217500
former
robert buchan 2013 104167 – – – 104167
2012 250000 – – – 250000
lord clanwilliam 2013 348333 – – – 348333
2012 217500 – – – 217500
german pikhoya 2013 1855377 3647083 5203974 – 10706434
2012 2452992 3153009 714818 – 6320819
directors’ shareholdings
there is no formal requirement for directors’ to own shares 
in the company information on directors’ shareholdings 
is presented in section 5 “directors’ report”
there are no disclosures in this annual report on remunera
tion in the following sections as the regulations would nor
mally require as there is no salient information to report for 
the 2013 financial year the sections are
• further details on pension arrangements – directors 
do not receive pension benefits
• chief executive officers percentage change in pay ver
sus other employees – the changes in executive direc
tors during the year do not make this comparison feasi
ble or reflective of normal practice particularly given the 
pay arrangements for the interim ceo
should such events occur going forward full disclosure will 
be provided in line with regulatory requirements
1
  there are three nonindependent nonexecutive directors anna kolonchina igor gorin and pavel grachev none of whom re
ceived remuneration for their services to the company in 2012 or 2013 please refer to section 62 “the board” for the information 
on board composition
2 
 fees for services provided by bruce buck are paid to the law firm of skadden arps slate meagher and flom llp of which mr buck 
is a partner fees in the table are net of vat charged at 20 which the company recovers
3 
 total other emoluments include compensation for unused leave meals healthy behaviour payments medical insurance daily allowances 
for travelling on business trips and compensation for travelling on business trips outside of contracted days termination payment polyus gold international  annual report  2013
111
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44 directors’ remuneration  
policy report
introduction
the remuneration committee presents the director’s remu
neration policy report which sets out polyus gold’s forward
looking remuneration policy for all executive directors as dis
cussed in the chairman’s letter because polyus gold is not 
incorporated in the uk this section of the directors’ remunera
tion report is not subject to a binding vote by shareholders 
however the committee feels that it is important to comply 
with best practice on a voluntary basis as far as practicable 
the following policy therefore aims to follow and be compliant 
with the new uk reporting regulations
in 201213 the committee reviewed compensation arrange
ments for executive directors and senior management in light 
of the company’s growth into a uk listed international gold 
miner  the policies that we summarise in this section are a re
sult of this review and were designed to align more closely 
with the longterm sustainable growth of the company our 
policy is broken into a number of sections
• remuneration policy in 2014 for executive directors 
which sets out details of our annual remuneration ele
ments
• other relevant policies relating to executive directors 
remuneration including recruitment service contracts 
appointment and termination
• remuneration policies that relate solely to the nonexe
cutive directors 
• statements regarding the contextual information that 
the committee considers when setting policy in respect 
of the executive and nonexecutive directors
polyus gold’s remuneration policy
the remuneration policy for the chief executive officer and 
senior management team was reviewed in 2013 2014 will 
therefore be a period of transition into the new remunera
tion structure 
 
future policy table
executive directors
operation maximum opportunity 
base salary
to maintain package 
competitiveness and 
reflect skills and expe
rience
reviewed annually with any change taking ef
fect from 1 june and taking into account
• individual and business performance
• level of experience
• scope of responsibility including any chang
es during the year
• external comparisons to the international 
gold mining uk and local russian markets
executive directors are eligible to receive 
an increase in base salary each year the 
committee will assess pay increase levels 
with reference to those factors described 
in this table but do not operate a limit 
on the level of increase that can be pro
vided
other benefits
to be market compet
itive for the purposes 
of recruitment and en
suring retention
the executive directors are entitled to certain 
additional benefits in line with typical practice 
in the uk and russia these include
• daily allowance for travelling on business 
trips
• compensation for travelling on business trips 
outside of contracted days
• medical insurance
the committee retains the discretion to pro
vide additional benefits as may be reasonably 
required to reflect changed circumstances for 
example in relation to existing or new direc
tors these may include but are not limited 
to relocation costs tax equalisation arrange
ments and cost of living allowances
the committee has not set a limit on the 
maximum level of benefits that can be pro
vided to executive directors
in providing additional benefits the com
mittee will ensure that costs to the com
pany are reasonable and not excessive
the amount of compensation for travelling 
on business trips outside of contracted 
days is defined by the rules of russian leg
islation polyus gold international  annual report  2013
112
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operation maximum opportunity 
pension
to be market competi
tive and to reward con
tinuing service
retirement related benefits can be provided 
to executive directors based on local market 
practice either through a dedicated retirement 
scheme or cash allowances
currently the company does not provide 
any retirement benefits to executive direc
tors
the committee retains the discretion 
to reassess this position however any 
future arrangements will not be excessive 
and will follow best practice
shortterm incentive 
plan stip
incentivise executives 
to achieve specific 
and stretching prede
termined goals over 
a shortterm period
annual payments under the stip are based 
on performance conditions calibrated and set 
by the committee at the start of each financial 
year 
performance is measured over the preceding 
financial year 
targets under the stip reflect the company’s 
annual plan which in turn reflects the strategic 
priorities of the group the company currently 
employs three broad stip performance meas
ures
• gold production
• total cash costs
• individual key performance indicators
production and cost targets act as a gateway 
and determine the level of opportunity avail
able which is then further assessed against in
dividual kpis
achieving ‘plan’ results will equate to ontarget 
stip payment maximum payment under the 
stip will only occur for exceptional annual per
formance under the plan 
the committee retains the discretion to assess 
and change the plan and performance measures 
each year in line with business needs
ontarget stip opportunity is set at 100 
of base salary for executive
directors
a maximum stip opportunity of 200 
of base salary is available for exceptional 
performance
the committee retains the discretion 
to adjust the level of bonus awarded ei
ther up or down in exceptional circum
stances if this discretion is enacted a full 
description of the circumstances and level 
of adjustment will be provided in the im
plementation report in the following year
• each year the board meets to set the budget for the year ahead the remuneration committee uses the budget external 
forecasts for macroeconomic parameters such as gold price inflation rate exchange rate and business strategy to ap
propriately calibrate annual targets for the year budgets are set to be stretching to ensure a strong link between pay 
performance and business strategy 
• pay arrangements for executive directors are similar in structure to that provided to the wider senior management team 
and corporate head office however the committee feels that given that the majority of operating locations are in russia 
with talent sourced locally the pay structure applied to roles below the senior team should naturally differ in structure
• polyus gold has avoided where possible including unnecessary discretion in the policy table however  exceptional or genuinely 
unforeseen circumstances may arise in the future and in those circumstances it may be in shareholders’ interests for polyus gold 
to put in place remuneration arrangements that are outside the terms of the policy set out in this report if this happens polyus 
gold will be permitted to implement remuneration arrangements that it considers appropriate in the circumstances
• a number of preexisting and outstanding obligations will remain at the time that the new policy becomes effective includ
ing obligations that are ‘grandfathered’ by virtue of being in force at 27 june 2012 polyus gold’s policy is to honour all 
preexisting obligations and commitments that were entered into before the effective date of this policy polyus gold international  annual report  2013
113
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1
  nonexecutive directors anna kolonchina and igor gorin each represent a major shareholder and hence are not deemed to be 
independent neither anna kolonchina nor igor gorin received a fee from the company for their directorship it is the committee’s 
intention that this policy will continue for all nonindependent nonexecutive directors
nonexecutive directors
1
operation maximum opportunity
fees
to attract and retain 
highcalibre experi
enced nonexecutive 
directors by offering 
globally competitive 
fee levels
nonexecutive director’s fees are fixed 
in the contract with each nonexecutive 
director
fees are reviewed annually and com
petitiveness of total fees is assessed 
against those in companies of a similar 
size complexity and industry
the contract signed with the chairman specifies 
a fee of usd 450000 pa the contracts signed 
with other nonexecutive directors specify a fee 
of usd 350000 pa for each director the mem
bers of the audit committee are additionally paid 
usd 30000 pa each for executing their duties
benefits nonexecutive directors receive reimbursement of expenses that are incurred in the perfor
mance of their duties as nonexecutive directors 
the company retains the discretion to provide further benefits to nonexecutive directors 
in line with standard practice in the market
recruitment and promotion policy
polyus gold operates in an international talent market and as such the company’s recruitment policy reflects the need 
to offer market competitive remuneration packages both in terms of opportunity level and structure the table below 
outlines the committee’s approach to the appointment or promotion of new directors
recruitment policy
base salary base salary for new appointees will be set as described in the main policy table upon promo
tion a director may be granted a higher than normal pay increase to align pay with the role’s 
new responsibilities and accountabilities
variable pay new appointees will be eligible to participate in the company’s incentive schemes on the same 
basis as described in the main policy table
buyout of existing 
awards from previ
ous employers
the committee will assess the value of previous awards that a prospective employee may for
feit upon leaving their previous employer in doing so the committee may seek independent 
advice andor valuation services
it is the intention of the committee that any buyout awards will be made on a value neutral 
basis or lower to the prospective incumbent will not be excessive and will be provided at an 
acceptable cost to the company
awards will mimic the vehicle of the forfeited award where possible with payment made 
in cash or shares where awards are subject to performance conditions the committee will 
make awards of a similar expected value as the forfeited awards
appointment awards where necessary to aid the recruitment of keycritical talent the committee may use 
its discretion to grant additional recruitment awards in cash or shares in the year  
of appointment polyus gold international  annual report  2013
114
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termination remuneration policy
the company’s forward looking policy does not allow for 
any payment to executive directors upon exiting the com
pany beyond that to which they are contractually entitled
interim chief executive officer
pavel grachev
date of service contract no service contract
notice period –
remuneration –
termination provisions –
nonexecutive directors
name remuneration date of appointment notice period
adrian coates 17032010 none
kobus moolman 26072011 none
bruce buck 26072011 none
edward dowling 04102013 1 month
ilya yuzhanov 04102013 1 month
anna kolonchina there are three nonindependent non
executive directors none of whom receive 
remuneration for their services to the 
company
26072011 1 month
pavel grachev 13112013 1 month
igor gorin 21032013 1 month polyus gold international  annual report  2013
115
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statement of consideration 
of employment conditions elsewhere 
in the company 
the remuneration committee will take into account the pay 
and employment conditions of other company employees 
when determining executive directors’ remuneration par
ticularly when determining base salary increases the re
muneration committee will also obtain information on the 
remuneration paid for comparable roles at other companies 
to provide a point of reference for determining remunera
tion policy
statement of consideration of shareholder 
views
representatives of two of the three major shareholders 
with 78 combined ownership wandle holdings limited 
anna kolonchina and pavel grachev and wamika trad
ing limited igor gorin sit on the board and therefore the 
committee regularly obtains feedback and views on the 
remuneration arrangements in place for executive direc
tors whilst the majority shareholding is with three parties 
we nevertheless communicate with our broader shareholder 
base this allows us to respond to the needs and concerns 
of all our shareholders throughout the year
bruce buck
chairman of the remuneration committee
london 24 march 2014
olimpiada board members at the pit edge magadan region
named after the author jack london’s lake is set  
in wild scenery in remote magadan directors’ 
report
5 polyus gold international  annual report  2013
118
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the directors present the annual report on the affairs of the group 
together with the financial statements and the independent audi
tor’s report for the year ended 31 december 2013 
fair balanced and understandable 
a key requirement of our financial statements is for the re
port and accounts to be fair balanced and understandable 
the directors are satisfied that the report and accounts 
meet this requirement as appropriate weight has been giv
en to both positive and negative developments in the year 
in justifying this statement the directors have considered 
the robust process which operates in creating the report 
and accounts including
• the clear guidance and instruction is given to all con
tributors
• revisions to regulatory requirements including the 
uk corporate governance code are monitored on an 
ongoing basis
• early warning meetings are conducted between man
agement and the auditors in advance of the year end 
reporting process
• input is provided by senior management and corporate 
functions
• further reviews are conducted by senior management
• a meeting of the audit committee is held to review and 
consider the draft annual report and accounts in ad
vance of the final sign off and
• final signoff is provided by the board of directors
the directors reviewed the annual report and believe that 
the annual report is true fair balanced and understandable 
and provides the information necessary for shareholders 
to assess the company’s performance business model and 
strategy the report discusses all aspects of the company’s 
business provides nonifrs financial metrics in addition 
to the figures disclosed in the consolidated financial state
ments and has a significant set of nonfinancial statistic 
certain parts of the annual report audited by independent 
consultants the independent auditors provided an opinion 
on the report as a whole
principal activities 
the principal activity of the group is the production and 
sale of gold in order to maintain its operations the group 
is also involved in exploration construction and research 
activities the group’s gold production activity is described 
in section 2 “strategic report” 
the group’s subsidiaries which principally affect the profits 
and net assets of the group in the reporting year are de
scribed in note 6 to the consolidated financial statements for 
the year ended 31 december 2013
business review 
information about the business review including the kpis 
risks and operational and financial performance can 
be found on pages 20 to 46
• a summary of performance during the year is presented 
in section 12 “performance”
• key performance indicators are described in section 26 
“analysis using key performance indicators”
• a description of the risks associated with the group can 
be found in section 25 “principal risks and uncertain
ties”
• the operational review is available on pages 43 to 46
• the financial review is available on pages 26 to 41
• information about the use of financial instruments 
by the company and its subsidiaries is given in note 33 
to the consolidated financial statements
as a whole the annual report provides information about 
the group’s businesses its financial performance during 
the year and likely future developments other than as de
scribed in this report there have not been any significant 
changes to the group’s principal activities during the year 
under review 
5 directors’ report polyus gold international  annual report  2013
119
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greenhouse gas emissions
the group’s total greenhouse gas ghg emissions in 2013 
were 483 million tonnes of co
2
e some 59 higher than 
in 2012
in 2013 38 of the group’s ghg emissions came from 
direct combustion of fossil fuels petrol diesel coal etc 
at the operating mines and 62 came from indirect emis
sions such as purchased electricity carbon dioxide ac
counted for 34 of total ghg emissions in 2013
total ghg emissions increase alongside increases in the 
volume of ore mined and processed because of the fluc
tuating nature of the gold price the stripping ratio and the 
gold grade we believe that the best measurement of ghg 
emissions is ‘ghg emission in thousand tonnes of co
2
e per 
million cubic metres of rock moved
for more details on ghg emissions
1
 including a breakdown 
by gases and sources of emission calculation methodol
ogy as well the company’s ghg policy and targets for the 
reduction of ghg emissions please refer to section 3 “sus
tainability report”
corporate governance statement
as a company with a premium listing on the london stock 
exchange polyus gold international limited is required 
by the uk listing authority to disclose its compliance with the 
uk corporate governance code the code is publicly available 
at httpswwwfrcorgukcorporateukcgcodecfm
dividends 
the dividend policy is described in section 66 “dividend poli
cy” the dividends for the year ended 31 december 2013 are 
subject to review by the board and shareholders’ approval 
however given the current gold price environment and the 
ongoing capital requirement on natalka project the board 
is not currently contemplating dividends in respect of fy2013 
there were no interim dividends in 2013
directors and directors’ interests 
the composition of the board of directors is given in sec
tion 63 “board of directors composition” as of 31 decem
ber 2013 two directors held shares in the company
2013 2012
ghg emission thousand tonnes 
of co
2
emillion cubic metres 
of rock moved
73 68
director
number of shares 
as at 31 dec 2013
 issued share 
capital
number of shares 
as at 31 dec 2012
 issued share 
capital
adrian coates 33000 0001 33000 0001 
kobus moolman 39579 0001 39579 0001
1
 carbon dioxide equivalent
natalka assembling of mills polyus gold international  annual report  2013
120
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directors’ indemnity
in 2012 the board reviewed and approved qualifying third 
party indemnity provisions for the directors 
acquisition of the company’s own shares 
at the annual general meeting held on 31 may 2013 share
holders authorised the company to make onmarket pur
chases of up to 303214996 of its ordinary shares repre
senting approximately 10 of the company’s issued share 
capital at that time shareholders will be asked at the 2014 
annual general meeting to renew this authority the direc
tors currently have no intention of exercising this authority 
if granted 
during the financial year ended 31 december 2013 the 
company did not make any onmarket or offmarket pur
chases of its own shares under any share buyback pro
gramme 
the remuneration of the directors set out in section 43 
“directors’ remuneration report” 
capital structure 
the company has 3600000000 shares authorised and 
3032149962 shares issued details of the movements 
in the company’s issued share capital during the year are 
shown in note 25 to the consolidated financial statements 
for the year ended 31 december 2013 the company has 
one class of ordinary shares which carry no right to fixed 
income each share carries the right to one vote at general 
meetings of the company 
pursuant to the authority granted to them by the share
holders at the company’s agm held on 31 may 2013 the 
directors have the authority to allot shares up to a maxi
mum nominal amount of £ 1516074 the directors have 
not exercised this authority the authority expires unless 
previously renewed varied or revoked on 31 may 2018
the company has no employee share schemes 
registration and domicile 
the company is incorporated and registered in jersey under 
company number 91264 the company has its registered 
offices at queensway house hilgrove street st helier jer
sey je1 1es channel islands the company’s london office 
is 18b charles street london w1j 5du united kingdom 
charitable donations 
during the year the group made charitable donations of usd 
3914 thousand principally to local charities serving the com
munities in which the group operates there were no political 
donations during the year ended 31 december 2013 
substantial shareholdings 
at 31 december 2013 the company had been notified 
in accordance with chapter 5 of the disclosure and trans
parency rules of the following holdings of voting rights 
in the company 
• wandle holdings limited where the beneficiary is the 
suleyman kerimov foundation 4022
• receza limited and wamika trading limited where the 
beneficiary is gavriil yushvaev 1928
• lizarazu limited where the beneficiary is amirkhan mori 
1850
• chengdong investment corporation a wholly owned sub
sidiary of cic international co limited 499 and 
• jsc vtb bank 365
there were no changes to the significant shareholders’ 
holdings as of 24 march 2014 polyus gold international  annual report  2013
121
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substantial shareholdings as at 24 march 2014
shareholder number of shares nature of holding  of issued share capital 
wandle holdings limited
1 
1219680676 indirect 4022 
lizarazu limited
2 
560947743 indirect 1850 
wamika trading limited
3
303214996 indirect 1000
receza limited
3
281265281 indirect 928
chengdong investment corporation
4
151607496 indirect 499
jsc vtb bank 110761797 indirect 365
1 
wandle holdings limited is an entity where the beneficiary is the suleyman kerimov foundation 
2 
lizarazu limited is an entity where the beneficiary is amirkhan mori 
3 
wamika trading limited and receza limited are entities where the beneficiary is gavriil yushvaev 
4 
chengdong investment corporation is a whollyowned subsidiary of cic international co limited
auditors 
each of the persons who is a director at the date of ap
proval of this annual report confirms that 
• so far as the director is aware there is no relevant audit 
information of which the company’s auditors are una
ware
• the director has taken all the steps that heshe ought 
to have taken as a director in order to make himself
herself aware of any relevant audit information and 
to establish that the company’s auditors are aware 
of that information 
deloitte have expressed their willingness to continue in of
fice as auditors and a resolution to reappoint them will 
be proposed at the forthcoming annual general meeting
by order of the board 
pavel grachev interim ceo
london 24 march 2014 krasnoyarsk region
ergaki national park to the south of the krasnoyarsk region 
is famous for its wild craggy peaks 6
corporate 
governance 
report polyus gold international  annual report  2013
124
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6 corporate  
governance report
61 chairman’s statement
polyus has applied principles set out in the uk corporate gov
ernance code including the principles relating to the role and 
effectiveness of the board in 2012
i am pleased to state that for the reporting year the com
pany complied with the provisions set out in the code and 
the board complied with main principles of the code 
i joined the polyus’ board in october 2013 and was excited 
that the company operated highlevel corporate governance 
standards and welcomed new initiatives it is my pleasure 
to chair the board of such a company such standards are 
very important for me personally and for my colleagues on 
the board
the governance section explains how we achieve that and 
how the principles have been applied you may also refer to 
the directors’ remuneration report and the audit committee 
report for additional information on compliance with the code
leadership
in my opinion the company is headed by an effective 
board which is collectively responsible for the longterm 
success of the company every director acts in what they 
consider the best interests on the company consistent with 
their statutory duties there is a clear division of respon
sibilities at the head of the company between the board 
and the executives responsible for the running of the com
pany’s business no one individual has unfettered powers 
of decision as chairman of the board i am responsible for 
leadership of the board and ensuring its effectiveness in 
all aspects of its role the nonexecutive directors as part 
of their role as members of a unitary board constructively 
challenge and help develop proposals on strategy
effectiveness
the board and its committees have the appropriate balance 
of skills experience independence and knowledge of the 
company to enable them to discharge their respective du
ties and responsibilities
appointment of new directors to the board is made on the basis 
of formal rigorous and transparent procedures and the search 
for board candidates is made against objective criteria with due 
regard for the benefits of diversity on the board detailed expla
nation is given in section 611 “nomination committee report”
all directors are able to allocate sufficient time to the com
pany to discharge their responsibilities effectively in com
pliance with the code cl b32 the terms and conditions 
of appointment of nonexecutive directors are available for 
inspection by any person at the company’s registered office 
during the normal business hours and at the agm 
all directors receive an induction on joining the board and 
regularly update and refresh their skills and knowledge and 
familiarity with the company as required in order to fulfil 
their role directors are supplied in a timely manner with 
information in a form and of a quality appropriate to enable 
them to discharge their duties
in the year 2013 the board undertook a formal and rigorous 
annual evaluation of its performance and that of its com
mittees and individual directors please refer to the para
graph headed “evaluation” later in this section
all directors are submitted for reelection annually and 
their reappointment is subject to their continued satisfac
tory performance 
accountability
the board’s responsibility to present a fair balanced and un
derstandable assessment extends to interim and other price
sensitive public reports and reports to regulators as well as to 
information required to be presented by statutory requirements 
the board annually conducts a review of the effectiveness 
of the company’s risk management and internal control sys
tems including financial operational and compliance con
trol please refer to section 610 “risk committee report”
the board has established formal and transparent arrangements 
for considering how to apply corporate reporting risk manage
ment and internal control principles and for maintaining an ap
propriate relationship with the company’s auditors for more 
information please refer to section 69 “audit committee report”
remuneration
directors’ remuneration is sufficient to attract retain and 
motivate directors of the quality required to run the com
pany successfully for detailed information please see sec
tion 42 “remuneration committee report”  polyus gold international  annual report  2013
125
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relationships with shareholders
the board maintains a dialogue with shareholders based on 
the mutual understanding of objectives the board use the 
agm to communicate with the investors and to encourage 
their participation the directors attended the agm held 
on 31 may 2013 directors have developed an understand
ing of the views of major shareholders about the company 
through direct faceto face contact analysts’ briefings and 
surveys of shareholder opinion a notice of agm and related 
papers were made available to shareholders and placed on 
the website on 29 april 2013 
the chairmen of the committees usually present at the agm 
and are available to answer questions the company arrang
es for the notice of the agm and related papers to be sent 
to shareholders at least 20 working days before the meeting
the company places great importance on maintaining ac
tive engagement with its key financial audiences institu
tional investors including current and potential sharehold
ers bondholders and both equity and fixed income sellside 
analysts 
the company strictly abides by all applicable disclosure re
quirements for its premium listing on the lse following 
the placement of our first eurobond in 2013 we further 
improved transparency of our reporting to ensure equal ac
cess for all financial audiences to pricesensitive informa
tion and to better facilitate investor communications 
the company releases trading updates on a quarterly basis 
and in accordance with ifrs releases financial results on a 
halfyearly basis such announcements are always support
ed by webcast presentations and conference calls conduct
ed on the same day and hosted by senior management 
relevant reports announcements and presentations of re
sults and other developments of importance to the market 
are immediately placed on the company’s website www
polyusgoldcom in the ‘investors’ or ‘media’ sections the 
market is informed well in advance about forthcoming re
sults announcements in the ‘investor calendar’ section of 
the website historical financial information is also available 
on the website 
the company’s senior management maintain contact with 
our investor base around the world through regular road
shows 12 per year investor conferences about 10 per 
year and other investor meetings in 2013 the company 
participated in 11 investor conferences and met over 150 
institutional investors 
geographical distribution of pgil free float
compliance with the uk corporate 
governance code
i confirm that during the reporting year the company has 
complied with the uk corporate governance code the 
corporate governance statement can be found in section 5 
“directors’ report” 
details of the board evaluation policy and its operation are 
given below the nomination committee established a diver
sity policy which was approved by the board and a summary 
is presented below in addition the board and the hsec 
committee developed the human rights policy the policies 
were adopted at a board meeting on 13 december 2013 
board evaluation
the board is required to review its performance and that of 
its members this year the process was facilitated internally 
with a review of questionnaires completed by the individual 
directors the results were considered by the board as part of 
its review of performance the questionnaire asked directors 
to grade areas such as the performance of the board and its 
committees the effectiveness of executive and nonexecutive 
directors the monitoring of operational performance and cor
porate governance as well as leadership and culture
in the normal course of business an annual performance re
view of the board and its committees is undertaken in accord
ance with section в61 of the code a performance review of 
the chairman of the board was undertaken in february 2014
the evaluation process concluded that the board and its 
committees remain effective in fulfilling their responsibili
ties and that each director continues to make a valuable 
contribution to the running of the group an external board 
evaluation process will be carried out in 2014
in addition the audit committee carried out a selfassess
ment of its performance in december 2013 and the chair
man of the audit committee reported on this process to the 
board in december
ilya yuzhanov
chairman of the board london 24 march 2014
rest of 
the world china russia uk
europe 
exuk
north 
america
38
23 15
10
9
6 polyus gold international  annual report  2013
126
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the purpose of the board according to the schedule of 
matters reserved for the board is to
• monitor group activities to see that sustainable value is 
being created
• evaluate business strategies and monitor their imple
mentation
• monitor and review the performance of management
• monitor the performance of the existing asset portfolio 
and new business initiatives
• develop review and monitor board and senior executive 
succession plans
• maintain a current view of prevailing market conditions 
and trends
• monitor key performance indicators
• provide accountability to shareholders through appropri
ate reporting and regulatory compliance
• monitor the auditing and control mechanisms
• understand and ensure the management of operational 
business and financial risks to which the group is ex
posed
• observe and ensure compliance with health safety en
vironment and community policy
• review its own contribution to the company’s perfor
mance
• ensure continuing adherence to disclosure provisions of 
relevant legislation
• safeguard the group’s reputation values ethics culture 
and assets including knowledge
• evaluate its own performance and that of the board ad
visory committees
board activity
the board acts in compliance with fca disclosure and 
transparency rules following the spirit of the uk corporate 
governance code to good effect the board met sufficiently 
regularly to discharge its duties effectively in compliance 
with the formal schedule of matters in the best interest of 
the company
in 2013 22 meetings were held including 7 facetoface 
meetings 12 conference calls and 3 meetings held by 
means of passing a written resolution one of the meet
ings was held in krasnoyarsk and the board additionally 
inspected the company’s mining operations in the krasno
yarsk region in addition outside of the framework of board 
meetings the directors inspected the group’s other mining 
operations
in addition to it’s discharge of the duties outlined in the 
schedule of matters reserved for the board during 2013 
the board paid detailed attention to developments with the 
natalka project discussion and implementation of new poli
cies the issue of a usd 750 million eurobond the sale by 
onexim of its interests to lizarazu limited and receza lim
ited relationship agreements between the company and 
its principal shareholders and subsequent changes to the 
composition of the board 
natalka
on a regular basis the board considered reports on the sta
tus of the natalka project the board’s stated plan was to 
have the full flow sheet operational by the middle of 2014 
but continued weakness in the price of gold led to a rese
quencing of this plan and a decision was taken to postpone 
commissioning of the 10 mtpa plant whilst continuing to 
develop technology at the pilot plant the board consid
ered that this would additionally allow for a rescheduling of 
capital and operating expenditures
62 the board
the board remain committed to guiding the strategic and entre
preneurial development of the group and support the principle 
of collective responsibility for the success of the group polyus gold international  annual report  2013
127
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group policies
the board considered and adopted new human rights and 
diversity policies each of these policies is described later in 
this section of the report 
eurobond issue
early in 2013 the board investigated the funding options 
available to the group to finance its expansion plans and 
decided that its best interests would be served by the issue 
of a usd 750 million eurobond management was tasked 
with putting the necessary plans in place
ownership and board changes
following the changes in ownership arising from the sale of 
the stake in the company owned by onexim the board ap
proved new relationship agreements with its major share
holders these agreements led to changes in the composi
tion of the board and its committees
chairman ilya yuzhanov 
the chairman is responsible for leadership of the board 
in particular he will
• ensure effective operation of the board and its commit
tees in conformity with the highest standards of corpo
rate governance
• ensure effective communication with shareholders host 
governments and other relevant constituencies and that 
the views of these groups are understood by the board
• set the agenda style and tone of board discussions to 
promote constructive debate and effective decision
making
• chair the nomination committee and build an effective 
and complementary board initiating change and plan
ning succession on board and group executive appoint
ments
• support the ceo in the development of strategy and 
more broadly to support and advise the ceo
• promote effective relationships and communications 
between nonexecutive directors and members of the 
group’s executive
• ensure that the board receives accurate timely and 
clear information on the group’s performance the is
sues challenges and opportunities facing it and matters 
reserved to it for decision
chief executive officer pavel grachev
1
the ceo is responsible for the daytoday management 
of the group in particular he will
• assist the board in the development of the group’s strat
egy and objectives
• oversee the development of the group’s budgets for 
approval by the board
• implement the group’s strategy and policies 
• maintain a close working relationship with the board in 
general and the chairman in particular
senior independent director 
adrian coates
adrian coates is the senior independent director  
in particular he will
• act as a sounding board for the chairman 
• serve as an intermediary for the other directors where 
necessary 
• make himself available to shareholders if they have any 
concerns which have not been resolved through the nor
mal channels
• conduct an annual review of the performance of the 
chairman
1 
interim ceo polyus gold international  annual report  2013
128
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63 board of directors  
composition
ilya 
yuzhanov
• chairman of the board
•  chairman of the 
nomination committee
bruce 
buck
•  i ndependent  
nonexecutive director
•  chairman of the 
remuneration 
committee
•  member of the 
nomination committee
•  member of the health 
safety environment and 
community committee
adrian 
coates
• senior independent  
 director
•  chairman of the risk 
committee
•  member of the audit 
committee
•  member of the 
nomination committee
•  member of the 
remuneration 
committee
edward 
dowling 
•  i ndependent  
nonexecutive director
•  chairman of the health 
safety environment and 
community committee
•  member of the audit 
committee
•  member of the risk 
committee
•  member of the 
nomination committee polyus gold international  annual report  2013
129
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igor 
gorin
• nonexecutive director
•  member of the risk 
committee
•  member of the health 
safety environment and 
community committee
pavel 
grachev 
•  ex ecutiv e dir ector
•  interim chief executive 
officer
•  member of the 
nomination committee
anna 
kolonchina 
• nonexecutive director
•  member of the risk 
committee
kobus 
moolman
•  i n d e p endent  
nonexecutive director
•  chairman of the audit 
committee
•  member of the risk 
committee 
•  member of the 
remuneration 
committee polyus gold international  annual report  2013
130
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current members
ilya yuzhanov 
chairman of the board since 4 october 2013 chairman 
of the nominations committee since 4 october 2013
skills and experience
• leningrad state university economics 1982
• leningrad state university phd economics 1989
• ojsc gazprom board member 1999–2003
• minister for antimonopoly policy and support to entre
preneurship of the russian federation 1999–2004
• ojsc united energy systems of russia board member 
1999–2008
• ojsc russian railways board member 2002–2004
• ojsc nomosbank chairman and member of the su
pervisory board 2004–2013
• ojsc kirovsky zavod board member 2006–2009 
• ojsc novatek board member 2006–2009 
• ojsc uralkali board member 2006–2011 
• ojsc interregional distribution grid companies holding 
june 2008 to december 2008
• ojsc polymetal chairman of the board 2008–2012 
• ojsc alrosa supervisory board member 2009–2012
• ojsc otkritie financial corporation board member 
2012 – march 2014
other current appointments 
• association of independent directors of russia super
visory board
• ojsc alrosa supervisory board chairman since 2009
• rusnano state corporation board and audit committee 
member since 2012
honours awards memberships
• association of independent directors russia’s best in
dependent director 2007 and 2010
• association of independent directors russia’s best 
chairman of the board 2012
bruce buck
independent nonexecutive director since 26 july 2011 
chairman of the remuneration committee since 13 no
vember 2013 member since 26 july 2011 member 
of the nominations committee since 26 july 2011 mem
ber of the health safety environment and community 
committee since 26 july 2011 chairman prior to 13 no
vember 2013
skills and experience
• columbia university school of law jd 1970
• registered foreign lawyer in england and wales with 
25 years experience
• financing of transactions mergers and acquisitions 
other current appointments 
• skadden arps slate meagher  flom llp europe man
aging partner 
• chelsea fc plc chairman of the board 
• chelsea football club limited operating subsidiary 
of chelsea fc plc chairman of the board
• fa premier league the uk’s top tier league member 
of the audit committee
• orbis uk uk registered charity trustee and member 
of the audit committee 
the board of directors is composed of eight members the non
executive chairman ilya yuzhanov six nonexecutive directors 
bruce buck kobus moolman adrian coates igor gorin edward 
dowling and anna kolonchina and executive director  pavel grachev 
in compliance with the uk corporate governance code half the board 
excluding chairman ilya yuzhanov
1
 – are independent directors  
bruce buck kobus moolman adrian coates and edward dowling
1  
a31 of uk cgc states that the chairman should on appointment meet the independence criteria but thereafter the test of inde
pendence is not appropriate in relation to chairman  polyus gold international  annual report  2013
131
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adrian coates
independent nonexecutive director of kazakhgold ltd 
since 17 march 2010 and senior independent director 
of pgil since 26 july 2011 chairman of the risk commit
tee since 26 july 2011 member of the audit committee 
since 17 march 2010 member of the nomination com
mittee since 26 july 2011 member of the remuneration 
committee since 26 july 2011
skills and experience
• cambridge university ma in economics 1983
• london business school mba 1984
• ubs investment bank managing director metals and 
mining responsible for originating the landmark billiton 
ipo 1996–1998
• hsbc bank plc global sector head resources and en
ergy 1998–2008
• lead banker in a number of largescale metals and min
ing transactions
• consultant to a number of leading metal and mining 
companies
other current appointments
• regal petroleum plc nonexecutive director chairman 
of the audit committee since 2010
edward dowling 
independent nonexecutive director since 4 october 2013 
chairman of the health safety environment and commu
nity committee since 13 november 2013 member of the 
audit committee since 13 november 2013 member of 
the risk committee since 4 october 2013 member of the 
nomination committee since 13 november 2013
skills and experience
• pennsylvania state university bs inmining engineering 
and mineral processing 1982
• pennsylvania state university ms in mineral processing 
1987
• pennsylvania state university phd in mineral processing 
1998
• phelps dodge engineer 1988–1992
• chino mines company a phelps dodge subsidiary  
operations manager and general superintendent 
1992–1993
• cyprus amax minerals svp process management 
and engineering 1993–1998
• cleveland cliffs inc executive vice president head 
of operations 1998–2004 
• de beers executive director for group mining and ex
ploration 2004–2006 
• meridian gold inc president and ceo 2006 to 2008
• alacer gold president and ceo 1998–2012
other current appointments 
• alacer gold director since 2008
• teck resources limited director since 2012 
honours awards memberships
• society for mining metallurgy and exploration distin
guished member since 1979
• us national mining association member since 1993
• mining and metallurgical society of america member 
since 1993
• us national materials advisory board 1993–2006
• colorado school of mines university advisory board 
member 2006–2012
• robert hallowell richards award 2001
• daniel cowan jackling award 2013 
igor gorin
nonexecutive director since 31 march 2013 member 
of the risk committee since 26 april 2013 member of  the 
health safety environment and community committee 
since 13 november 2013
skills and experience
• financial university under the government of the rus
sian federation with honours ma international eco
nomic relations 2000
• financial university under the government of the rus
sian federation phd international economic relations 
2003
• jsc vtb bank senior officer of corporate banking de
partment 2000–2002
• commerzbank associate directordeputy head of the 
of local credit office moscow 2002–2005
• raiffeisenbank russia head of ecm and ma practice in 
investment banking 2005–2011
• raiffeisenbank investment investment banking arm of 
raiffeisenbank russia managing director 2011–2013
• independent ma and financial advisor may 2013 – 
present polyus gold international  annual report  2013
132
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pavel grachev 
executive director interim chief executive officer since 27 
november 2013 member of the nomination committee 
since 13 november 2013
skills and experience
• saint petersburg state university law 1997
• university of trieste law 1998
• nafta moskva llc head of legal department 2006–2008 
• ojsc polymetal board member 2006–2008 
• polyus gold board member 2009–2011 
• ojsc uralkali general director 2010–2011 
• ojsc uralkali board member 2010–2012 
• pik group board member 2009–2011 chairman 
2010–2011 
• alpina capital acl limited cyprus head of moscow 
representative office 2011–2013 
• ojsc far east and baikal region development fund 
general director january to september 2013
other current appointments
• nafta moskva cyprus limited chairman of the board
• jsc federal grid company board member 
anna kolonchina 
nonexecutive director since 26 july 2011 member of the 
risk committee since 26 july 2011
skills and experience
• financial university under the government of the rus
sian federation economics 1994
• deutsche bank ag london director 2001–2008 
• wainbridge limited managing director march 2008 to 
november 2008
• ojsc pik group vicepresident for economics and fi
nance 2008–2010 
other current appointments
nafta moskva managing director since 2010
kobus moolman
independent nonexecutive director since 26 july 2011 
chairman of the audit committee since 26 july 2011 mem
ber of the risk committee since 26 july 2011 member of 
the remuneration committee since 13 november 2013
skills and experience
• north western university in potchefstroom ma finan
cial accounting 1978
• south african institute of chartered accountants quali
fied chartered accountant 1978
• ernst  young south africa where he became a senior 
audit partner 1981–2002
• deloitte  touche cis russia senior audit partner 
leader of the mining industry group 2002–2008 
• international audit firm kingdom of bahrain audit and 
ifrs technical partner for the gulf cooperation council 
region 2009–2010 
other current appointments
saudi arabian mining company ma’aden kingdom of sau
di arabia chief audit executive since 2010
honours awards memberships
• independent regulatory board of the south african in
stitute of chartered accountants member since 1978
• independent regulatory board for auditors in south af
rica member since 1978
members resigning during the year
german pikhoya 
resigned on 27 november 2013
executive director chief executive officer member of the 
health safety environment and community committee
lord clanwilliam 
resigned on 13 november 2013
independent nonexecutive director member of the audit 
committee member of the nominations committee chair
man of the remuneration committee and member of the 
health safety environment and community committee
robert buchan 
resigned on 31 may 2013
independent nonexecutive director chairman of the 
board chairman of the nomination committee
vladimir chernukhin 
since 21 march 2013 resigned on 10 april 2013
nonexecutive director
alexander mosionzhik 
resigned on 5 march 2013
nonexecutive director
dmitry razumov
resigned on 5 march 2013
nonexecutive director polyus gold international  annual report  2013
133
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1 
includes meetings in the form of conference calls and resolutions
2  
number of meetings during the reporting year
3  
resigned from the board and nomination committee on 31 may 2013
4  
the first figure indicates the number of boardcommittee meetings attended the second figure indicates the total number of board
committee meetings during the service of the director
5  
appointed to the board and nomination committee on 4 october 2013
6  
appointed to the board on 17 march 2010 risk committee on 26 july 2011 audit committee on 17 march 2010 remuneration 
committee on 26 july 2011 nomination committee on 26 july 2011
7  
resigned from the board and relevant committees on 27 november 2013
8  
appointed to the board and nomination committee on 13 november 2013 was appointed interim ceo on 27 november 2013
9  
appointed to the board on 26 july 2011 remuneration committee on 26 july 2011 nomination committee on 26 july 2011 hsec 
committee on 26 july 2011
10  
appointed to the board on 26 july 2011 risk committee on 26 july 2011 audit committee on 26 july 2011 appointed to remuner
ations committee on 13 november 2013
11  
appointed to the board and risk committee on 4 october 2013 appointed to hsec audit and nominations committees on 13 no
vember 2013
12  
resigned from the board and relevant committees on 13 november 2013
13  
appointed to the board on 21 march 2013 risk committee on 26 april 2013 hsec committee on 13 november 2013
14  
appointed to the board on 26 july 2011 risk committee on 26 july 2011
15  
due to the restrictions of the uk takeover code anna kolonchina alexander mosionzhik and dmitry razumov did not attend board 
meetings after the company had been put into the offer period by the uk takeover panel from 13 september 2012 until 22 febru
ary 2013 for more details refer to section 5 “director’s report”
16  
resigned from the board on 5 march 2013
17  
appointed on 21 march 2013 and resigned on 10 april 2013
board and committees’ meetings frequency and attendance
1
director 
board  
22 meetings
2
 
remuneration 
committee 
7 meetings
2

nomination 
committee 
4 meetings
2

audit 
committee 
7 meetings
2

risk  
committee 
4 meetings
2

hsec 
committee 
4 meetings
2

chairman
robert buchan
3
910
4
01
ilya yuzhanov
5
67 22
senior independent 
director
adrian coates
6
2122 67 44 77 44
executive director
german pikhoya
7
2020 33
pavel grachev
8
55 11
independent nonexecu
tive directors
bruce buck
9
2022 77 44 44
kobus moolman
10
2022 11 77 44
edward dowling
11
67 11 11 22 22
lord clanwilliam
12
1518 66 23 56 22 33
nonexecutive directors
igor gorin
13
1517 33 11
anna kolonchina
14 15
1519 34
alexander mosionzhik
15 16
11
dmitry razumov
15 16
01
vladimir chernukhin
17
13 polyus gold international  annual report  2013
134
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64 diversity policy
a truly diverse board will make good use of the differences 
and other qualities of its directors these differences will be 
considered when determining the optimum composition of 
the board and where possible should be balanced appro
priately notwithstanding the foregoing all board appoint
ments will always be made on merit in the context of the 
skills and experience that the board as a whole requires to 
be effective
the nomination committee will engage appropriate execu
tive search consultants for the search process for nonexe
cutive directors the search process is expected to identify 
candidates from a variety of backgrounds and perspectives 
who meet the requirements for the role and give due con
sideration to the benefits of diversity the board will only 
engage executive search consultants who have signed up 
to the voluntary code of conduct for executive search firms 
on gender diversity on corporate boards
the board recognises that some challenges in achieving di
versity on the board arise from the industry in which the 
company operates and are not specific to the company as 
such the company faces challenges similar to those faced 
by other organisations in the metals and mining industries
notwithstanding this the board is committed to ensuring 
that an appropriate mix of skills and experience is repre
sented on the board in order to provide efficient stew
ardship
the board has taken note of the policies of companies with
in its international peer group
the board is committed to having female representation 
and since its shares were admitted to the premium seg
ment of the london stock exchange the company has al
ways had female representation on its board
in december 2013 the board approved the diversity policy fol
lowing a recommendation from the nomination committee 
the board recognises the benefits of diversity diversity encom
passes diversity of perspective experience skills background 
knowledge international and industry experience and gender 
amongst many other factors  polyus gold international  annual report  2013
135
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65 human rights policy 
polyus gold international limited and its subsidiaries pol
yus gold recognise that all companies have a responsi
bility to respect human rights when conducting business 
cognisant of the increasing recognition in the extractive 
industry of the rights of individuals polyus gold is commit
ted to observing human rights in the course of its business 
operations
to this end it supports the endorsement in 2011 of the un 
guiding principles on business and human rights and the 
rights contained in 
•  the universal declaration on human rights
• the international covenant on civil and political rights
• the international covenant on economic social and cul
tural rights
• the international labour organization’s declaration 
on fundamental principles and rights at work and
• voluntary principles on security and human rights
the policy outlines polyus gold’s commitment to universal 
human rights in particular it recognises the rights of its 
employees to a safe and healthy working environment to 
freedom from discrimination and freedom of association 
further polyus gold acknowledges the customs and cul
tures of local communities in the areas in which we operate
this policy is informed by and should be read in conjunction 
with polyus gold’s diversity and anticorruption policies
in december the board approved a human rights policy  
to be implemented across the group the policy reflects the 
group’s longstanding respect for the rights of its employees  
and the individuals affected by its operations  polyus gold international  annual report  2013
136
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66 dividend policy
the company aims to pay dividends amounting to a minimum  
of 20 of the group’s annual net profit calculated in ac
cordance with international financial reporting standards 
ifrs 
in developing its recommendations on the amount of divi
dends to be paid to shareholders annually and the corre
sponding share of the net profit to be allocated to such divi
dend payments the board will take into account the need 
to balance funding of growth projects and the payment of 
dividends including any limitations imposed by the produc
tion investment and other financial needs of the group the 
group’s debt position and any tax legislation applicable to 
the group
following the introduction of the dividend policy in 2013 
the company declared i a final dividend in the amount 
of usd 00824 per ordinary share and ii a special divi
dend in the amount of usd 00232 per ordinary share both 
in respect of the financial year ended 31 december 2012 
the final dividend was paid on 7 june 2013 to those share
holders who appeared on the register of the company at 
1800 hrs uk time on 24 may 2013
the company’s dividend policy was approved by the board at its 
meeting on 20 april 2012
blagodatnoye inside of the plant polyus gold international  annual report  2013
137
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67 anticorruption efforts
any evidence of violations of applicable anticorruption laws 
will be investigated as a result of which disciplinary meas
ures may be taken
the company obeys the requirements of the national anti
corruption laws of the countries in which it does business
members of the board of directors and senior executives of 
the company are expected to observe high ethical stand
ards and not tolerate any form or exercise of bribery and 
corruption from their peers employees or contractors the 
board of directors and senior managers receive regular re
ports on and hold investigations into compliance with anti
corruption policies and legislation
since 2011 the company has had an anticorruption poli
cy in place across all of its business units and professional 
services arms the anticorruption policy covers all of the 
prohibitions and restrictions established by the legislation of 
the countries where the company operates including rus
sian anticorruption legislation and the bribery act 2010 of 
the united kingdom
the company has established and applies internal antibrib
ery procedures which are based on the principles recom
mended by the ministry of justice of the united kingdom 
procedures are regularly improved by the company with 
due regard to any risks identified updates to legislation and 
the recommendations of regulatory bodies specific tasks 
ensuring compliance with the antibribery procedures are 
distributed among the functional units of the company
the company pays great attention to ensuring that employees 
are made familiar with the policy and other anticorruption pro
cedures and remain so through regular briefings and training
in 2013 all company employees went through training 
testing and certification on compliance with anticorruption 
legislation and the execution of local policies in 2013 all 
employees signed a document committing themselves to 
complying with the requirements of anticorruption legisla
tion and local policies
as necessary compliance staff provide counselling to per
sonnel and partners on all matters relating to the exercise 
of proper conduct in this area
the company exercises due diligence in its relations with 
third parties partners and contractors in order to mini
mise the risks of prohibited acts being committed for or 
on behalf of the company the company conducts pre
liminary checks before approval of all contracts and project 
agreements and regularly inspects and monitors projects in 
higherrisk areas
accessible communication systems have been introduced 
to support whistleblowing and speakup schemes to report 
violations of current policies
responsible staff members have been appointed at the cor
porate headquarters and in all business units and profes
sional service arms of the company forming local teams 
to ensure compliance with the established regulations and 
policies
company employees regularly participate in international 
conferences on combating corruption in the private and 
public sectors to aid the development and implementation 
of the latest compliance strategies and best practices across 
the company
throughout 2013 neither the company nor any employees 
or officers of the company were involved in court proceed
ings in connection with corrupt practices
the company operates a zerotolerance policy on bribery or any 
other form of corruption at all levels polyus gold international  annual report  2013
138
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1 
the definition of a senior manager is in line with para 669 of the frc guidance and is wider than the definition of key management personnel 
kmp in ias 24 “related party disclosures” and ifrs 102 the financial reporting standard applicable in the uk and republic of ireland
name position date of appointment
vyacheslav dzyubenko deputy ceo for internal control 27 january 2014 
sergey fedorov first deputy ceo
10 april 2013 as deputy ceo  
for capital construction and  
1 october 2013 as first deputy ceo
alexey golubenko
head of yakutia kuranakh business unit 
general director of ojsc aldanzoloto grk 10 august 2011
pavel grachev interim ceo 27 november 2013 
konstantin gusev
deputy ceo for supplies materials and 
machinery 2 december 2013
mikhail gusev
head of magadan business unit general 
director of ojsc matrosov mine 30 october 2013
oleg ignatov cfo
appointed 8 august 2008  
resigned 27 march 2014
fyodor kirsanov
general director of ojsc polyus gold and 
cjsc polyus
11 march 2013 as deputy ceo for sup
plies materials and machinery
1 october 2013 as 1st deputy ceo and 
2 december 2013 as general director of 
ojsc polyus gold and cjsc polyus 
valery konstantinov
head of irkutsk alluvial business unit gen
eral director of ojsc lenzoloto and cjsc 
zdk lenzoloto 21 november 2011
kyrill martynov head of krasnoyarsk business unit 18 july 2013
james nieuwenhuys coo 23 may 2011
elena romanova hr director 18 september 2013
mikhail stiskin cfo
2 december 2013 as deputy ceo for 
strategy and corporate development and 
27 march 2014 as cfo
igor tsukurov
head of irkutsk ore business unit general 
director of ojsc pervenets 12 november 2012
boris zakharov
deputy general director for engineering 
and innovations 1 november 2008
sergey zhuravlev deputy ceo for government relations 3 march 2014
68 senior management
1 polyus gold international  annual report  2013
139
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69 audit committee report
membership
current members
•  kobus moolman independent nonexecutive director 
and chairman of the audit committee
•  adrian coates independent nonexecutive director
 
and 
senior independent director and
•  edward dowling independent nonexecutive director
1

former members
•  lord clanwilliam independent nonexecutive director
2

the board believes that the current composition of the 
audit committee has the required level of experience to 
be sufficient to meet the standards imposed by the uk 
corporate governance code in the event that any issues 
should arise which would be deemed outside the areas 
of expertise of the members independent professional 
advice would be sought
key objectives
• to provide effective governance over the group’s finan
cial reporting and the adequacy of reporting and
• to effectively oversee the performance of both the in
ternal audit team and the work of the external auditor
committee responsibilities
a description of the committee’s role and responsibilities 
is available on the company website wwwpolyusgoldcom 
companycorporategovernanceauditcommittee
meetings and discussions
the audit committee met seven times over the course of the 
financial year the committee’s agenda is linked to events in 
the group’s financial calendar and is predominantly cyclical 
although each member has the right to call for reports on 
matters of interest 
please refer to section 63 “board of directors composition” 
of this annual report for details of members’ attendance at 
committee meetings
review of the committee’s work
the audit committee met with management internal and 
external auditors to ensure that management was fulfill
ing its financial reporting responsibilities to the directors 
who approve the consolidated financial statements the 
company’s external auditors had unrestricted access to the 
audit committee to discuss the scope of their audit and 
the adequacy of internal controls and to review financial 
reporting issues
financial reporting and compliance
the committee’s business included the review and approval 
of financial statements for the fy2012 and h12013 review 
and approval of the annual report and interim management 
report for the fy2012 and h12013 approval of the auditor’s 
fees for 2013 review and approval of the annual budget 
for 2014 monitoring of the external audit and audit time
table for 2013 appointment of the external auditor and in 
conjunction with the risk committee monitoring of internal 
audit and risk management systems
risk management and internal control
the board has established a continuous process for iden
tifying evaluating and managing the significant risks the 
group faces and for determining the nature and extent of 
the significant risks it is willing to take in achieving its stra
tegic objectives the board regularly reviews the process 
which has been in place from the start of the year to the 
date of approval of this report the board is also responsible 
for the group’s system of internal control and for review
ing its effectiveness such a system is designed to manage 
rather than eliminate the risk of failure to achieve business 
objectives and can only provide reasonable and not abso
lute assurance against material misstatement or loss
in compliance with provision c21 of the uk corporate gov
ernance code the board regularly reviews the effectiveness 
of the group’s risk management and internal control sys
tems the board’s monitoring covers all material controls 
including financial operational and compliance controls it 
is based principally on reviewing reports from management 
to consider whether significant risks are identified evalu
ated managed and controlled and whether any significant 
weaknesses are promptly remedied and indicate a need for 
more extensive monitoring the board has also performed 
a specific assessment for the purpose of this annual report 
this assessment considers all significant aspects of risk 
1 
appointed to the committee on 13 november 2013
2 
resigned from the committee on 13 november 2013 polyus gold international  annual report  2013
140
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management and internal control arising during the period 
covered by the report including the work of internal audit 
the audit and risk committees assist the board in discharg
ing its review responsibilities
the audit committee investigated a range of issues which 
in their opinion and that of their external auditors posed 
a risk of adverse impact on group financial statements a 
financial risk management policy developed in 2011 and 
the principles of a treasury policy are formally described in 
other policies and documents of the company 
following the decline in the gold price the committee in
vestigated impairment of ppe capital constructioninpro
gress and exploration assets across the business seeking 
assurances that the impairment tests used met the re
quirements of ias 36 impairment of assets in particular 
management were tasked with performing comprehensive 
impairment reviews at the verninskoye mine the kuranakh 
mine and natalka project and examining possible impair
ment of exploration and evaluation assets ee capital 
constructioninprogress and stockpiles at nezhdaninskoye 
chertovo koryto poputninskoye panimbinskoye bamskoye 
and some other smaller deposits as a result the company 
recognised impairment charges of usd 472 million in 2013 
please refer to section 28 “financial review” for more in
formation on impairments 
inventory is required to be carried at the lower of its cost 
and net realisable value the measurement and valuation 
of gold in circuit and stockpiles included in inventory and 
their net realisable values is complex involves judgement 
and is based on assumptions about gold content and future 
processing costs 
during the course of its review of the risk management and 
internal control systems the board and the audit and risk 
committees have not identified nor been advised of any 
failings or weaknesses which it has determined to be sig
nificant 
anticorruption policy
a comprehensive anticorruption policy has been introduced 
and the company’s external auditor has been tasked with 
examining any relatedparty transactions to ensure that 
business was conducted ‘at arms length’ 
internal audit
among the committee’s key responsibilities are the moni
toring of the effectiveness of the group’s internal audit func
tion and approving its head approving the annual internal 
audit plan and reviewing reports presented by the internal 
auditor the internal audit plan was approved by the com
mittee on 20 march 2013 the audit committee met with 
the head of internal audit on a regular basis to discuss the 
department’s remit the audit committee received internal 
auditor reports on a quarterly basis the committee as
sesses the effectiveness of the internal audit as satisfactory
external auditors
deloitte llp who have been appointed as an auditor since 
admission to premium listing in 2012 provide the commit
tee with relevant reports following the audit and review re
sults reviews information and advice throughout the year 
as set out in their engagement letter their performance as 
well as independence has been formally assessed by the 
committee having due regard to their expertise resourcing 
and experience the committee performs an assessment of 
the timing of the audit significant key risk areas covered 
and procedures performed to get the audit assurance the 
committee also interacts with the management to receive 
its views and opinions on the work done by its auditors’ in 
particular through an anonymous questionnaire the com
mittee remains satisfied of their effectiveness there are no 
contractual obligations restricting the committee’s choice 
of external auditors and the committee did not consider it 
necessary this year to conduct a tender process for the ap
pointment of its auditors  polyus gold international  annual report  2013
141
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in accordance with uk regulations deloitte llp adhere to 
a strict partner rotation policy based on the mandatory re
quirements of auditing practices board ethical standard 3 
the committee monitors this rotation and confirms that a 
new lead audit partner will be subject for reappointment 
following the completion of the 2015 audit the committee 
is aware of the recommendations set out by the frc in the 
updated uk governance code in relation to audit tendering 
which states that companies should put the external audit 
contract out to tender at least every ten years 
the committee recognise that as with any complex opera
tion there is always a risk of fraud and false accounting and 
it seeks to minimise this risk by flagging its concerns with 
both its internal and external auditors and seeking to en
sure that appropriate tests and audit procedures are used
there is a nonaudit service policy in place approved by 
the audit committee where it is clearly stated that any work 
related to the “unacceptable nonaudit services” need to 
be discussed and preapproved if applicable by the audit 
committee irrespective of any amount engagements that 
fall within the audit services classification of services as 
set out above are considered to be preapproved by the 
audit committee to a level of usd 250000 audit services 
engagements with expected fees in excess of this amount 
should be approved by the audit committee
nonaudit services expenditure over usd 250000 per en
gagement or usd 750000 in aggregate requires approval 
by the audit committee where fees for nonaudit services 
in the year exceed usd 750000 in aggregate all permitted 
engagements may only be awarded to the statutory audi
tor with prior approval of the audit committee before com
mencement of the work
discharge of responsibilities 
according to provision c38 of the uk corporate govern
ance code the audit committee reports on how it discharg
es its responsibilities on the significant issues reviewed by 
the committee 
in order to discharge its responsibilities the audit com
mittee invites the cfo as well as other executive manag
ers and external consultants to attend meetings the audit 
committee discharges financial and corporate reporting 
internal audit and control budgeting and planning to the 
management and independent assurance and audit to the 
external auditor 
audit committee statement 
having discussed information received from the manage
ment auditors and consultants the audit committee be
lieves that the company’s procedures and financial records 
can be relied upon for the preparation of the annual finan
cial statements 
the audit committee considers that the annual report is in 
compliance with the fsa disclosure and transparency rules 
the audit committee considers that the annual financial 
statements are in compliance with ifrs 
the audit committee has therefore recommended to the 
board of directors that the annual report be approved
approved by the audit committee and signed on its behalf by
kobus moolman 
chairman of the audit committee 
london 24 march 2014 polyus gold international  annual report  2013
142
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610 risk committee report
membership
current members
• adrian coates independent nonexecutive director 
chairman of the risk committee
• anna kolonchina nonexecutive director
• kobus moolman independent nonexecutive director
• igor gorin nonexecutive director
1
 and
• edward dowling independent nonexecutive director
2
 
former members
• lord clanwilliam independent nonexecutive director
3
 
key objectives
•  to ensure effective oversight of business risks and their 
mitigation and to monitor internal control procedures 
and processes and related compliance activities
committee responsibilities
a description of the committee’s role and responsibilities 
is available on the company website wwwpolyusgoldcom
companycorporategovernanceriskcommittee
meetings and discussions
please refer to section 63 “board of directors composition” 
for information on attendance at the committee
review of the committee’s work
the committee continued with its ongoing work of the regu
lar analysis of the companywide risk management system 
quarterly review of the production risk management re
port oversight of internal risk management and its ongoing 
monitoring of world gold prices this year the committee 
additionally focused on ongoing data security and disaster 
recovery efforts and work to secure iso2301 certification 
developments at the natalka project and efforts to secure 
reliable power supplies for its processing facilities
the committee is authorised to seek any information it re
quires from any employee of the group in order to perform 
its duties to obtain at the group’s expense outside legal 
or other professional advice on any matter within its terms 
of reference and to call any employee to be questioned at 
a meeting of the committee as and when required in the 
discharge of its duty to oversee the internal audit process 
the committee is assisted by the audit committee
risk management 
the risk committee reviews and commissions manage
ment reports on strategic business risks
4
 the committee 
also reviews the production risk management reports on 
current production risks on a quarterly basis which include 
a factor analysis of current risks information about changes 
to the most significant technical and production risks and 
the status of programmes aimed at mitigating these risks 
additionally information on accidents and technical failures 
recorded at the company’s operations are provided to the 
committee 
disaster recovery 
at its meetings the committee reviewed the issues of da
tabase information security and a disaster recovery plan 
raised by the it unit aimed at ensuring uninterrupted op
eration of the corporate headquarters and regional offices 
in the event of adverse events network failure unexpected 
power loss cyberattack failure of key server equipment 
due to fires and other accidents the committee consid
ered that implementation of these measures had been sat
isfactorily undertaken 
business continuity
in early 2013 the risk committee approved the engage
ment of external consultants to implement business con
tinuity management
5
 at individual business units and the 
corporate headquarters during the year  under the supervi
sion of the internal control unit and of the operating unit 
work has been carried out to bring the existing system into 
compliance with the new iso2301 international standard 
the results of this ongoing work were reviewed by the com
mittee and its recommended changes will be implemented 
in the first half of 2014 
1 
appointed to the committee on 26 april 2013
2 
appointed to the committee on 4 october 2013
3 
appointed to the committee on 26 april 2013 resigned from the committee on 4 october 2013
4  
provision in accordance with enterprise risk management erm adopted in compliance with iso31000 risk management – prin
ciples and guidelines
5
 adopted in compliance with iso223012012 business continuity management polyus gold international  annual report  2013
143
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world gold prices
world gold prices fell substantially during the year  the com
mittee commissioned from management a series of financial 
and operational mitigation options to deal with further pos
sible gold price falls the committee discussed the possible 
use of hedging instruments to protect the company’s cash 
flow the committee approved the development and adop
tion of procedures authorising limited hedge transactions 
using gold produced at the kuranakh mine the company’s 
highest cost mine in the event such hedge transactions 
were not implemented during 2013
the natalka project
the board company management and the committee have 
placed a special focus on developments at the natalka pro
ject management consultants mckinsey had previously 
helped to create a register of project risks and measures 
for their monitoring and mitigation and assisted with the 
indication of timelines and responsible persons mckinsey 
were therefore engaged to monitor the implementation of 
the project throughout the year at its meetings the com
mittee discussed the status of the project and examined 
reports on the management of risks associated with the 
organisation of preparation and development of the mine 
a major risk at the natalka project is securing the provision 
of stable power supply as the natalka project is located far 
from the generating plants the committee reviewed meas
ures aimed both at mitigating energy risks for the natalka 
project and ensuring guaranteed commissioning of power 
lines as well as obtaining the necessary permits and approv
als the committees’ work fed directly into the decision to 
resequence the development plan of the natalka project
a more comprehensive review of the individual risks faced 
is included in section 25 “principal risks and uncertainties” 
along with measures taken by the company to mitigate 
these risks
despite the company’s efforts to mitigate risk throughout 
its operations the committee remains mindful of the fact 
that mining activities in remote locations and in extreme 
weather conditions will continue to pose significant risks 
and that these risks are compounded by political and regu
latory risks and a volatile world market for gold the com
mittee will continue its close monitoring of the situation in 
the year to come
adrian coates 
chairman of the risk committee 
london 24 march 2014 polyus gold international  annual report  2013
144
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611 nomination  
committee report
membership
current members
• ilya yuzhanov independent nonexecutive director and 
chairman of the nomination committee
1

• bruce buck independent nonexecutive director
• adrian coates independent nonexecutive director and 
senior independent director
• pavel grachev nonexecutive director
2
 and
• edward dowling independent nonexecutive director
3

former members
• robert buchan independent nonexecutive director 
and chairman of the nomination committee
4
 and
• lord clanwilliam independent nonexecutive director
5
 
key objectives
• to ensure that board has an appropriate mix of knowl
edge skills experience and diversity to enable it to ef
fectively discharge its responsibilities
• to give full consideration to succession planning for di
rectors and other senior executives in the course of its 
work taking into account the challenges and opportuni
ties facing the company and the skills and expertise 
needed on the board in the future
• to be responsible for identifying and nominating for the 
approval of the board candidates to fill board vacancies 
as and when they arise and
• to recommend to the board the membership and chair
manship of the audit nomination remuneration risk 
and health safety and environment committees
committee responsibilities
a description of the committee’s role terms of reference 
and responsibilities is available on the company website 
wwwpolyusgoldcomcompanycorporategovernance
nominationcommittee
meetings and discussions
please refer to section 63 “board of directors composition” 
for information on attendance at the committee
review of the committee’s work
the committee met formally four times and informally in 
person or via conference call on approximately ten addition
al occasions and considered new appointments to the board 
and a new ceo developed a comprehensive diversity policy 
and conducted an internal review of board performance 
including individual evaluations of board members
following the announcement by robert buchan that he in
tended to step down as chairman of the board the com
mittee evaluated the balance of skills knowledge experi
ence and diversity on the board and prepared a detailed 
person specification for an independent executive search 
consultancy heidrick and struggles a search firm which 
has no other connection with the company were engaged 
to help find suitable candidates
the nominations committee held a number of joint meet
ings with the remuneration committee to gauge overall 
progress and to participate in specific conversations with 
selected candidates and in october made a recommenda
tion to the board that it appoint ilya yuzhanov as chairman 
of the board and chairman of the nominations committee 
ilya yuzhanov has significant experience in nonexecutive 
positions in various mining companies and is additionally 
a member of the supervisory board of the association of 
independent directors of russia at the same meeting the 
committee also recommended that edward dowling be ap
pointed as an independent nonexecutive director of the 
company and as a member of the health safety and envi
ronment and risk committees later  the committee recom
mended that edward dowling be appointed as a member of 
the audit committee and the nomination committee
1 
appointed to the committee on 4 october 2013
2 
appointed to the committee on 13 november 2013
3 
appointed to the committee on 13 november 2013
4 
resigned from the committee on 31 may 2013
5 
resigned from the committee on 13 november 2013 polyus gold international  annual report  2013
145
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at its november meeting the committee recommended 
that pavel grachev be appointed to the board as a non
executive director later in november upon the resignation 
of german pikhoya as director and ceo pavel grachev was 
appointed as interim ceo of the company to serve in that 
position until a new permanent ceo is appointed during 
2013 the committee initiated an intensive search to recruit 
a new chief executive officer
the committee instituted a comprehensive compliance 
programme requiring detailed information gathering and 
background checks for all candidates every new member 
of the board is informed of all premium listing disclosure 
requirements and the necessity to disclose relatedparty in
formation and undergoes training sessions
recognising that diversity is an essential component of suc
cessful corporate governance the board developed and ap
proved a comprehensive diversity policy which encompass
es among other things diversity of perspective experience 
skills background knowledge international experience and 
gender the policy suggests criteria for determining the op
timum composition of the board and procedures to ensure 
that appointments are made on the basis of merit for a 
detailed description of the diversity policy see section 64 
“diversity policy” 
as part of its ongoing commitment to ensuring that the 
company is effectively and efficiently governed the com
mittee undertook a performance review of the board and 
its committees each member of the board was asked to 
complete a detailed questionnaire which asked them to 
grade the performance of the board and its committees 
the effectiveness of executive and nonexecutive directors 
leadership and culture and the monitoring of operational 
performance and corporate governance following an eval
uation of the evidence the committee concluded that the 
board and its committees remain effective and that each 
director continues to make an effective contribution
in the coming year the committee will continue to assess 
potential enhancements to the board and its committees 
and monitor relevant developments in corporate govern
ance with emphasis on development and succession plan
ning for senior management providing updates and train
ing for directors and facilitating an external review of the 
board’s performance 
ilya yuzhanov
chairman of the nomination committee 
london 24 march 2014 polyus gold international  annual report  2013
146
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membership
current members
• edward dowling independent nonexecutive director 
chairman of the committee
1

• bruce buck independent nonexecutive director  chair
man of the committee
2
 and
• igor gorin nonexecutive director
3

former members
• lord clanwilliam independent nonexecutive director
4

• german pikhoya chief executive officer
5

key objectives
• to provide effective governance over the group’s poli
cies and procedures in health safety the environment 
community and human rights issues and
• to promote best practice and encourage a positive ap
proach across the company’s operations
committee responsibilities
a description of the committee’s role and responsibilities 
is available on the company website wwwpolyusgoldcom 
companycorporategovernanceenvironmentandcom
munity
meetings and discussions
please refer to section 63 “board of directors composition” 
for information on attendance at the committee
review of the committee’s work
in addition to its watchdog role this year the committee 
has overseen major developments in each of the areas 
within its remit including new health and safety environ
mental and sustainability initiatives in discharging its re
sponsibilities the committee works closely with the other 
board committees particularly in the areas of risk assess
ment and management
the committee arranges for periodic reviews of its own 
performance and at least annually reviews its constitution 
and terms of reference to ensure that it is operating effec
tively and recommends any changes it considers necessary 
to the board for approval
health and safety
in 2013 regrettably the company reported three fatali
ties compared with six in 2012 following an independent 
thirdparty health and safety audit conducted at the alluvial 
operations in the irkutsk region where these three fatali
ties took place a comprehensive health and safety action 
plan was developed to be rolled out at the start of the pro
duction season in spring 2014
612 health safety  
environment and community 
committee report
1  
resigned as chairman on 4 october 2013 remains a committee member
2
 appointed to the committee on 4 october 2013
3  
appointed to the committee on 13 november 2013
4  
resigned from the committee on 4 october 2013
5  
resigned from the committee on 27 november 2013 polyus gold international  annual report  2013
147
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during the reporting year the group’s lost time injury fre
quency rate was 011 a 39 decrease from 018 in 2012 
despite this progress the committee remains resolute 
on all workplace accidents
the committee oversaw the introduction of new medical 
emergency response and occupational health standards 
which were implemented across the polyus group during 
the year the committee will keep the system under review 
during 2014 additionally the committee reviewed and ap
proved the polyus gold 2013–2015 health and safety road 
map which sets out new standards and goals for the com
ing two years
the safety of the company’s employees and stakeholders 
is of paramount importance to the board and to that end 
the committee along with all other board members took 
part in the dupont safety leadership training programme 
on 13 december 2013 further the committee approved 
the implementation of the second stage of the dupont 
safety leadership training programme at the krasnoyarsk 
and magadan business units in 2014
the committee undertook a quarterly review of manage
ment’s response to the most serious health and safety in
cidents the newly introduced procedures for incident root 
cause analysis which were implemented across the polyus 
gold group will prove an invaluable tool in investigating 
and mitigating such incidents in the future
environment and community
the committee reviewed and approved the 2012 sustain
ability report further the global reporting initiative a 
leading sustainability body rated the report a in an appli
cation level check the committee additionally monitored 
the group’s progress against its road map to membership 
of the international council on mining and metals an indus
try body founded in 2001 to improve sustainable develop
ment performance in the mining and metals industry
the human rights policy was reviewed and approved 
by the committee and subsequently approved by the board 
on 13 december 2013 and the stakeholder engagement 
policy was examined by the committee and signedoff by 
the committee chairman the policy sets new standards 
and parameters for the company’s work with the local com
munities affected by the group’s operations
please refer to section 3 “sustainability report” for more 
information on the group’s activities in this area
edward dowling
chairman of the hsec committee
london 24 march 2014 republic of sakha yakutia
the unesco listed lena pillars rising as high as  
300 metres run alongside the lena river for almost 100 km financial 
statements
7 polyus gold international  annual report  2013
150
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the directors are responsible for preparing the annual re
port and the consolidated financial statements in accord
ance with applicable law and regulations company law 
requires the directors to prepare financial statements for 
each financial year 
the board of directors is required to prepare the consoli
dated financial statements in accordance with internatio
nal financial reporting standards ifrs as issued by the 
international accounting standards board iasb and as 
adopted by the european union under company law the 
directors must not approve the accounts unless they are 
satisfied that they give a true and fair view of the state of 
affairs of the company and of the profit or loss of the group 
for that period 
in preparing the consolidated financial statements interna
tional accounting standard 1 requires that the board of di
rectors
• properly select and apply accounting policies
• present information including accounting policies 
in a manner that provides relevant reliable comparable 
and understandable information
• provide additional disclosures when compliance with the 
specific requirements in ifrss are insufficient to enable 
users to understand the impact of particular transactions 
other events and conditions on the group’s consolidated 
financial position and financial performance
• make an assessment of the group’s ability to continue 
as a going concern
the following statement which should be read in conjunction 
with the independent auditor’s responsibilities stated in the inde
pendent auditor’s report set out at pages 152157 is made with 
a view to distinguish the responsibilities of the board of directors 
and those of the independent auditors in relation to the consoli
dated financial statements of polyus gold international limited 
71 directors’ responsibility statement
7 financial 
statements polyus gold international  annual report  2013
151
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the board of directors 
is also responsible for
•  maintaining proper and adequate accounting records 
that are sufficient to show and explain the group’s 
transactions and disclose with reasonable accuracy at 
any time the consolidated financial position of the group 
and enable them to ensure that the consolidated finan
cial statements of the group comply with the companies 
jersey law 1991
• safeguarding the assets of the group
• taking reasonable steps for the preventing and detect
ing fraud and other irregularities
•  maintaining the integrity of the corporate and financial 
information included on the group’s website
legislation in the united kingdom and jersey governing 
the preparation and dissemination of consolidated financial 
statements may differ from legislation in other jurisdictions 
responsibility statement
we confirm that to the best of our knowledge
• the consolidated financial statements prepared in ac
cordance with international financial reporting stand
ards give a true and fair view of the assets liabilities 
financial position and profit or loss of the group and the 
undertakings included in the consolidation taken as a 
whole
• the strategic report includes a fair review of the devel
opment and performance of the business and the posi
tion of the group and the undertakings included in the 
consolidation taken as a whole together with a descrip
tion of the principal risks and uncertainties that they 
face
• the annual report and consolidated financial statements 
taken as a whole are fair balanced and understandable 
and provide the information necessary for shareholders 
to assess the group’s performance business model and 
strategy
the consolidated financial statements of the group for the 
year ended 31 december 2013 were approved on 24 march 
2014 by the board of directors
on behalf of the board of directors
pavel grachev
interim chief executive officer
london 24 march 2014 polyus gold international  annual report  2013
152
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72 independent  
auditor’s report
independent auditor’s report to the members of polyus gold international limited
opinion 
on consolidated 
financial statements 
of polyus gold 
international limited
in our opinion the consolidated financial statements
•  give a true and fair view of the state of the group’s affairs as at 31 december 2013 and 
of the group’s profit for the year then ended
• have been properly prepared in accordance with international financial reporting stand
ards ifrss as adopted by the european union and
• have been prepared in accordance with the companies jersey law 1991
the consolidated financial statements comprise the consolidated income statement consol
idated statement of comprehensive income consolidated statement of financial position 
consolidated statement of changes in equity consolidated statement of cash flows and the 
related notes 1 to 35 the financial reporting framework that has been applied in their prep
aration is applicable law and ifrss as adopted by the european union
going concern we have reviewed the directors’ statement on page 53 that the group is a going 
concern we confirm that
• we have concluded that the directors’ use of the going concern basis of accounting in the 
preparation of the consolidated financial statements is appropriate and
• we have not identified any material uncertainties that may cast significant doubt 
on the group’s ability to continue as a going concern
however because not all future events or conditions can be predicted this statement  
is not a guarantee as to the group’s ability to continue as a going concern
our assessment 
of risks of material 
misstatement
the assessed risks of material misstatement described below are those that had the greatest 
effect on our audit strategy the allocation of resources in the audit and directing the efforts 
of the engagement team polyus gold international  annual report  2013
153
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risk how the scope of our audit responded to the risk
potential impairment of fixed assets 
in a reducing gold price environment there 
is a risk that the carrying value of the mining 
assets capital construction in progress and mine 
under development described in notes 15 16 
and 17 to the consolidated financial statements 
may not be recoverable 
management performed impairment tests on the 
kuranakh mines within the yakutia kuranakh 
business unit the verninskoye mine within 
the irkutsk ore business unit and following 
the recently announced resequencing at the 
natalka mine under development within the 
magadan business unit 
we challenged management’s significant assumptions by
• comparing foreign exchange rates and the long term gold prices 
assumed to external forecasts
• assessed the discount rates used by recalculation and compari
son to other gold producers 
• holding discussions with operational management to understand 
and evaluate the details of the capital expenditure phasing at na
talka and the forecast spend on the planned flow increases and 
• using our internal mining specialists venmyndeloitte to perform 
a high level review of the mine plans of both natalka and vernin
skoye including the operating expenditure in comparison to similar 
operations and the consistency of the discounted cash flows with 
the respective life of mine plans and the declared ore reserves 
potential impairment of exploration and 
evaluation ee assets
the group capitalises ee expenditure in line 
with ifrs 6 exploration for and evaluation 
of mineral resources the assessment of each 
asset’s future prospectivity requires significant 
judgement there is a risk that amounts are 
capitalised which no longer meet the recognition 
criteria of ifrs 6 
management has performed a review of the ee 
portfolio of assets as set out in note 18 to the 
consolidated financial statements and following the 
decline in the gold price during the year  recorded 
a significant impairment as several of these were 
no longer likely to be progressed to development 
we 
• held discussions with key operational and finance staff to under
stand the exploration and appraisal activities
• reviewed and evaluated management’s assessment of the existence 
of impairment indicators in the portfolio of ee assets as set out 
in note 18 to the consolidated financial statements by assessing the 
appropriateness of management’s assumptions and estimates 
•  reviewed the exploration licence conditions for any potential breach
es and
• reviewed management’s approved exploration budgets for 2014 in or
der to check that exploration projects were ongoing and committed
• where an ee asset has been impaired we have challenged man
agement on the events that led to the impairmentand the judge
ments surrounding the recoverability of the carrying values
measurement and valuation of inventory 
inventory as set out in note 20 to the 
consolidated financial statements is required 
to be carried at the lower of its cost and 
net realisable value the measurement and 
valuation of gold in circuit and ore stockpiles 
included in inventory and their net realisable 
value is complex involves judgement and 
is based on assumptions about gold content 
and future processing costs there is also a risk 
of obsolescence of stores and spares 
we 
•  evaluated the assumptions and judgements used in management’s 
assessment of the net realisable value of ore stockpiles including 
specifically comparing future gold price assumptions to external 
data and running sensitivities to assess the key judgements 
•  analysed movements of the gold in circuit on a stagebystage basis 
and confirmed through discussions with operational management 
that the movements are in line with changes in operations   
•  assessed management’s inventory costing calculations to confirm 
that it is measured in accordance with ias 2 – inventories 
•  attended inventory counts at the krasnoyarsk irkutsk alluvial and 
irkutsk ore business units and 
•  reviewed the analysis of stores and spares throughput  polyus gold international  annual report  2013
154
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the audit committee’s consideration of these risks is set out on page 140
our audit procedures relating to these matters were designed in the context of our audit of the 
financial statements as a whole and not to express an opinion on individual accounts or disclo
sures our opinion on the financial statements is not modified with respect to any of the risks 
described above and we do not express an opinion on these individual matters
our application 
of materiality
we define materiality as the magnitude of misstatement in the consolidated financial state
ments that makes it probable that the economic decisions of a reasonably knowledgeable 
person would be changed or influenced we use materiality both in planning the scope of our 
audit work and in evaluating the results of our work
we determined materiality for the group to be usd 30 million which is approximately 5 
of the group’s profit before impairment charges of usd 472 million and tax and below 1 
of equity impairment charges have been added back because if included they would signifi
cantly distort the materiality assessment year on year
lower materiality levels of between usd 15 million and usd 24 million have been applied for the 
component audits
we agreed with the audit committee that we would report to the committee all audit differences 
in excess of usd 600000 as well as differences below that threshold that in our view war
ranted reporting on qualitative grounds we also report to the audit committee on disclosure 
matters that we identified when assessing the overall presentation of the financial statements
an overview of the 
scope of our audit
our group audit was scoped by obtaining an understanding of the group and its environment 
including groupwide controls and assessing the risks of material misstatement at the group level  
based on that assessment our group audit scope focused primarily on the krasnoyarsk and 
irkutsk alluvial business units which were subject to a full scope audit and the magadan and 
capital construction business units where we performed a full audit of capital construction 
in progress ccip and mine under development additions 
this has given us coverage of 84 of the group’s revenue 86 of the group’s production 
99 of the group’s operating profit before impairment charges 86 of the group’s fixed as
sets and 94 of the group’s ccip and mine under development additions
in addition other business units irkutsk ore yakutia kuranakh and exploration were subject 
to specified audit procedures to address the risks of material misstatement identified above
at the parent entity level we also tested the consolidation process and carried out analytical 
procedures to confirm our conclusion that there were no significant risks of material misstate
ment of the aggregated financial information of the remaining components not subject to a full 
audit or audit of specified account balances
the group audit engagement team also performed site visits such that the group audit partner 
or his designate visited the olimpiada blagodatnoye titimukhta natalka and verninskoye mine 
sites and the headquarter office in moscow at the direction of the group audit team the component 
audit team in russia also visited the krasnoyarsk irkutsk alluvial irkutsk ore and magadan busi
ness units during the year   polyus gold international  annual report  2013
155
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matters on which 
we are required 
to report  
by exception 
adequacy 
of explanations 
received and 
accounting records
under the companies jersey law 1991 we are required to report to you if in our opinion
•  we have not received all the information and explanations we require for our audit or
• proper accounting records have not been kept by the parent company or proper returns adequate 
for our audit have not been received from branches not visited by us or
•  the consolidated financial statements are not in agreement with the accounting records and 
returns
we have nothing to report in respect of these matters
corporate governance 
statement
under the listing rules we are also required to review the part of the corporate governance 
statement relating to the company’s compliance with nine provisions of the uk corporate 
governance code we have nothing to report arising from our review
our duty to read other 
information in the 
annual report
under international standards on auditing uk and ireland we are required to report to you 
if in our opinion information in the annual report is
• materially inconsistent with the information in the audited consolidated financial statements 
or
• apparently materially incorrect based on or materially inconsistent with our knowledge 
of the group acquired in the course of performing our audit or
• otherwise misleading
in particular we are required to consider whether we have identified any inconsistencies 
between our knowledge acquired during the audit and the directors’ statement that they 
consider the annual report is fair balanced and understandable and whether the annual report 
appropriately discloses those matters that we communicated to the audit committee which 
we consider should have been disclosed we confirm that we have not identified any such 
inconsistencies or misleading statements polyus gold international  annual report  2013
156
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other 
matter – directors’ 
remuneration
in our opinion the part of the directors’ remuneration report to be audited has been properly pre
pared in accordance with the provisions of the uk companies act 2006 as if that act had applied 
to the company
respective  
responsibilities 
of directors and 
auditor
as explained more fully in the directors’ responsibilities statement the directors are responsible 
for the preparation of the consolidated financial statements and for being satisfied that they give 
a true and fair view our responsibility is to audit and express an opinion on the consolidated finan
cial statements in accordance with applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing practices board’s ethical standards 
for auditors we also comply with international standard on quality control 1 uk and ireland our 
audit methodology and tools aim to ensure that our quality control procedures are effective under
stood and applied our quality controls and systems include our dedicated professional standards 
review team strategically focused second partner reviews and independent partner reviews
this report is made solely to the company’s members as a body in accordance with article 113a 
of the companies jersey law 1991 our audit work has been undertaken so that we might state 
to the company’s members those matters we are required to state to them in an auditor’s report 
andor those further matters we have expressly agreed to report to them on in our engagement 
letter and for no other purpose to the fullest extent permitted by law we do not accept or assume 
responsibility to anyone other than the company and the company’s members as a body for our 
audit work for this report or for the opinions we have formed polyus gold international  annual report  2013
157
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scope of the audit 
of the consolidated 
financial 
statements
an audit involves obtaining evidence about the amounts and disclosures in the consolidated financial 
statements sufficient to give reasonable assurance that the consolidated financial statements are 
free from material misstatement whether caused by fraud or error  this includes an assessment of 
• whether the accounting policies are appropriate to the group’s circumstances and have 
been consistently applied and adequately disclosed 
• the reasonableness of significant accounting estimates made by the directors and
• the overall presentation of the consolidated financial statements 
in addition we read all the financial and nonfinancial information in the annual report to identify 
material inconsistencies with the audited consolidated financial statements and to identify any infor
mation that is apparently materially incorrect based on or materially inconsistent with the knowl
edge acquired by us in the course of performing the audit if we become aware of any apparent 
material misstatements or inconsistencies we consider the implications for our report
douglas king fca 
for and on behalf of deloitte llp
chartered accountants and recognized auditor
london united kingdom
24 march 2014 polyus gold international  annual report  2013
back to the contents
consolidated income statement 159
consolidated statement of comprehensive income 160
consolidated statement of financial position 161
consolidated statement of changes in equity 162
consolidated statement of cash flows 164
notes to the consolidated financial statements 166212
73 consolidated  
financial statements 
in accordance with the ifrs
for the year ended 31 december 2013 polyus gold international  annual report  2013
159
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consolidated income statement
for the year ended 31 december 
in thousands of us dollars except for earnings per share data
notes 2013 2012
1
continuing operations
gold sales 7 2258599 2618024
other sales 70316 61889
total revenue 2328915 2679913
cost of gold sales 8 1346523 1265306
cost of other sales 47042 43832
gross profit 935350 1370775
gain on disposal of subsidiaries 53 – 6268
selling general and administrative expenses 9 225795 255705
other expenses  income net 10 13528 12184
impairment losses 11 471657 15424
research expenses 2499 2079
gain on loan settlement – 79084
operating profit 221871 1195103
finance costs 12 13878 31573
income from investments net 13 21348 35960
foreign exchange gain 4348 12026
profit from continuing operations before income tax 233689 1211516
income tax expense 14 90688 246412
profit from continuing operations 143001 965104
profit from discontinued operations 51 6374 15422
profit for the year 149375 980526
profit for the year from continuing operations attributable to
shareholders of the company 133860 922066
noncontrolling interests 9141 43038
143001 965104
profit  loss for the year from discontinued operations attributable to
shareholders of the company 6414 7613
noncontrolling interests 40 7809
6374 15422
weighted average number of ordinary shares  
in issue during the year ‘000s 3032150 2950916
earnings per share us cents from continuing operations  
basic and diluted
2
 
4 31
earnings per share us cents from discontinued operations  
basic and diluted
2
0 0
1
 the comparative information for the year ended 31 december 2012 reflects adjustments made in connection with the presentation 
of the effect of discontinued operations following the sale of operating subsidiaries in kazakhstan and kyrgyzstan note 5
2
 there were no financial instruments or any other instances which could cause antidilutive effect on earnings per share calculation polyus gold international  annual report  2013
160
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consolidated statement 
of comprehensive income for the year 
ended 31 december
in thousands of us dollars
2013 2012
1
profit for the year 149375 980526
items that may be reclassified subsequently  
or already reclassified to profit or loss
loss from change in fair value of availableforsale investments – 3976
losses recycled to profit or loss on disposal of availableforsale investments – 581
– 4557
items that will not be reclassified subsequently through profit or loss
effect of translation to presentation currency 318998 200568
other comprehensive loss  income for the year 318998 196011
total comprehensive loss  income for the year 169623 1176537
total comprehensive loss  income for the year from continuing op
erations attributable to
shareholders of the company 184774 1100576
noncontrolling interests 8777 60539
 175997 1161115
total comprehensive income  loss for the year from discontinued 
operations attributable to
shareholders of the company 6414 7613
noncontrolling interests 40 7809
 6374 15422
1
 the comparative information for the year ended 31 december 2012 reflects adjustments made in connection with the presentation 
of the effect of discontinued operations following the sale of operating subsidiaries in kazakhstan and kyrgyzstan note 5 polyus gold international  annual report  2013
161
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consolidated statement of financial
position at 31 december
in thousands of us dollars
notes 2013 2012
assets
noncurrent assets
property plant and equipment
1
15 1505649  1801780 
capital constructioninprogress
1
16 277950  363025 
mine under development
1
17 1574261  623568 
exploration and evaluation assets
1
18 174586  518810 
investments in securities and other financial assets 19 1765 16034
inventories 20 294912 242005
 3829123 3565222
current assets
investments in securities and other financial assets 19 48233 78360
inventories 20 702115 659480
deferred expenditures 21 16330 19090
trade and other receivables 22 27440 45369
advances paid to suppliers and prepaid expenses 27701 40619
taxes receivable 23 249724 220835
cash and cash equivalents 24 808675 959932
 1880218 2023685
total assets 5709341 5588907
equity and liabilities
capital and reserves
share capital 25 482 482
additional paidin capital 25 2151765 2151765
translation reserve 395318 76684
retained earnings 1922264 2110869
equity attributable to shareholders of the company 3679193 4186432
noncontrolling interests 275279 282645
 3954472 4469077
noncurrent liabilities
site restoration and environmental obligations 26 68546 119150
borrowings 27 936893 160792
deferred tax liabilities 28 134416 208998
other noncurrent liabilities 32969 25695
 1172824 514635
current liabilities
borrowings 27 268693 187555
trade other payables and accrued expenses 29 260377 289846
taxes payable 30 52975 127794
 582045 605195
total liabilities 1754869 1119830
total equity and liabilities 5709341 5588907
1
 the carrying values of property plant and equipment capital constructioninprogress mine under development and exploration 
and evaluation assets as of 31 december 2012 have been represented in these consolidated financial statements to provide for 
enhanced disclosure of longlived physical assets by type and nature of use for details refer to note 2  polyus gold international  annual report  2013
162
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consolidated statement of changes 
in equity for the year ended 31 december 
in thousands of us dollars
notes
number of 
outstand
ing shares 
thousands
equity attributable to shareholders of the company   
total
share
capital
additional  
paidin 
capital
treasury
shares
investments 
revaluation 
reserve
translation 
reserve
retained 
earnings total
non 
controlling
interests
balance at 31 december 2011 2805190 482  2189240  765013 4557  259751 1438992  2608507  236029  2844536 
profit for the year       929679  929679  50847  980526 
other comprehensive loss  income     4557 183067  178510  17501  196011 
total comprehensive income     4557 183067  929679  1108189  68348  1176537 
sale of treasury shares 226960   727538   133484 594054  30318  624372 
transfer of balance relating to call option   37475 37475      
dividends declared to shareholders  
  of the company 25       124318 124318  124318
dividends declared to  
  noncontrolling interests         52050 52050
balance at 31 december 2012 3032150  482  2151765      76684 2110869  4186432  282645  4469077 
profit for the year        140274  140274  9101  149375 
other comprehensive loss      318634   318634 364 318998
total comprehensive income      318634 140274  178360 8737  169623
effect of disposal of subsidiaries 52       8684 8684 8684   
dividends declared to shareholders  
  of the company 25       320195 320195   320195
dividends declared to  
  noncontrolling interests           24787 24787
balance at 31 december 2013 3032150  482  2151765      395318 1922264  3679193  275279  3954472 
equity attributable to shareholders of the company  polyus gold international  annual report  2013
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consolidated statement of changes 
in equity for the year ended 31 december 
in thousands of us dollars
notes
number of 
outstand
ing shares 
thousands
equity attributable to shareholders of the company   
total
share
capital
additional  
paidin 
capital
treasury
shares
investments 
revaluation 
reserve
translation 
reserve
retained 
earnings total
non 
controlling
interests
balance at 31 december 2011 2805190 482  2189240  765013 4557  259751 1438992  2608507  236029  2844536 
profit for the year       929679  929679  50847  980526 
other comprehensive loss  income     4557 183067  178510  17501  196011 
total comprehensive income     4557 183067  929679  1108189  68348  1176537 
sale of treasury shares 226960   727538   133484 594054  30318  624372 
transfer of balance relating to call option   37475 37475      
dividends declared to shareholders  
  of the company 25       124318 124318  124318
dividends declared to  
  noncontrolling interests         52050 52050
balance at 31 december 2012 3032150  482  2151765      76684 2110869  4186432  282645  4469077 
profit for the year        140274  140274  9101  149375 
other comprehensive loss      318634   318634 364 318998
total comprehensive income      318634 140274  178360 8737  169623
effect of disposal of subsidiaries 52       8684 8684 8684   
dividends declared to shareholders  
  of the company 25       320195 320195   320195
dividends declared to  
  noncontrolling interests           24787 24787
balance at 31 december 2013 3032150  482  2151765      395318 1922264  3679193  275279  3954472 
equity attributable to shareholders of the company  polyus gold international  annual report  2013
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consolidated statement of cash flows 
for the year ended 31 december 
in thousands of us dollars
notes 2013 2012
profit from continuing operations before income tax  233689 1211516
adjustments for
gain from disposal of subsidiaries 53  6268
impairment losses 11 471657 15424
finance costs 12 13878 31573
income from investments 13 21348 35960
amortisation and depreciation 15 213834 175115
gain on loan settlement  79084
foreign exchange gain net 4348 12026
other 2210 37498
 909572 1337788
movements in working capital
inventories 245862 99159
deferred expenditures 1425 521
trade and other receivables 11563 19591
advances paid to suppliers and prepaid expenses 6086 6480
taxes receivable 32255 76177
trade and other payables and accrued expenses 16057 3823
other noncurrent liabilities 8991 4044
taxes payable 36981 17701
cash flows from operations 626424 1154824
interest paid 32271 27613
income tax paid 174527 191844
net cash generated from continuing operations 419626 935367
net cash generated from discontinued operations 2713 56402
net cash generated from operating activities 422339 991769 polyus gold international  annual report  2013
165
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notes 2013 2012
investing activities
proceeds from subsidiaries’ disposal net of cash disposed  
usd 6083 thousand of cash disposed during 2013  
2012 usd 1258 thousand 52 53 291199 20973
purchases of capital constructioninprogress exploration and 
evaluation assets and assets for mine under development 1347217 713089
payments for stripping activity asset 37075 81802
interest received 31036 35942
increase in bank deposits 147485 58265
proceeds from redemption of bank deposits and sale of investments 185995 26066
other 3660 2692
proceeds from termination of sale and purchase agreement  40647
net cash utilised in continuing operations 1019887 726836
net cash utilised in discontinued operations 3494 36953
net cash utilised in investing activities 1023381 763789
financing activities
dividends paid to shareholders of the company 25 320195 124318
dividends paid to noncontrolling interests 42967 47547
proceeds from borrowings 1092617 273467
repayment of borrowings 236233 674542
proceeds from sale of treasury shares  624372
net cash generated from continuing operations 493222 51432
net cash utilised in discontinued operations  15460
net cash generated from financing activities 493222 35972
net decrease  increase in cash and cash equivalents 107820 263952
cash and cash equivalents at beginning of the year 24 959932 657448
effect of foreign exchange rate changes on cash and  
cash equivalents
 43437 38532
cash and cash equivalents at end of the year 24 808675 959932 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
166
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1 general
polyus gold international limited the “company” was incorporated on 26 september 2005 and reregistered as a public 
limited company under companies jersey law 1991 on 18 november 2005
on 19 june 2012 the company was admitted to the official list of the united kingdom listing authority and commenced 
trading on the london stock exchange’s premium listed market 
the principal activities of the company and its controlled entities the “group” are the extraction refining and sale of gold 
mining and processing facilities of the group are located in the krasnoyarsk and irkutsk regions and sakha republic of the 
russian federation and in the republic of kazakhstan until february 2013
the group also performs research exploration and development works primarily at the natalka licence area located in the 
magadan region further details regarding the nature of the business and of the significant subsidiaries of the group are 
presented in note 351
2 basis of preparation and presentation
going concern
in assessing its going concern status the directors have taken account of the group’s financial position expected future 
trading performance its borrowings and available credit facilities and its capital expenditure commitments considerations 
of gold price together with other risks facing the group after making appropriate enquiries the directors consider that 
the group has adequate resources to continue in operational existence for at least the next 12 months from the date of 
signing these consolidated financial statements and that it is appropriate to adopt the going concern basis in preparing 
these consolidated financial statements
compliance with the international financial reporting standards
the consolidated financial statements have been prepared in accordance with international financial reporting standards 
“ifrs” as issued by the international accounting standards board “iasb” and endorsed by the european union “eu” 
ifrs includes the standards and interpretations approved by the iasb including international accounting standards “ias” 
and interpretations issued by the international financial reporting interpretations committee “ifric”
basis of presentation
the entities of the group maintain their accounting records in accordance with the laws accounting and reporting regula
tions 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 as adopted by the eu 
accordingly such financial information has been adjusted to ensure that the consolidated financial statements are pre
sented in accordance with ifrs as adopted by the eu
the consolidated financial statements of the group are prepared on the historical cost basis polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
167
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the following new or amended ifrs standards have been issued by the iasb and endorsed by the eu as of 31 decem
ber 2013
title subject
effective 
for annual  
periods beginning 
on or after
effect on the consolidated 
financial statements in 
current and  or future 
periods
amendments to ias 1 
june 2011
presentation of items of other 
comprehensive income 1 july 2012
presentation of the consolidated 
statement of comprehensive 
income was updated to present
 items that will not be reclassified 
subsequently to profit or loss and 
 items that may be reclassified 
subsequently to profit or loss 
when specific conditions are met 
ifric 20
stripping costs in the produc
tion phase of a surface mine 1 january 2013 early adopted in 2012
annual improvements  
to ifrss 20092011  
cycle may 2012
annual improvements to 
ifrss 20092011 cycle 1 january 2013 adopted no effect
amendments to ifrs 1 
march 2012 government loans 1 january 2013 adopted no effect
amendments to ifrs 7  
dec 2011
disclosures – offsetting 
financial assets and financial 
liabilities 1 january 2013 adopted no effect
ias 19 revised june 2011 employee benefits 1 january 2013 adopted no effect
amendments to ias 12  
dec 2010
deferred tax recovery of 
underlying assets 1 january 2013 adopted no effect
amendments to ifrs 1  
dec 2010
severe hyperinflation and 
removal of fixed dates for 
firsttime adopters 1 january 2013 adopted no effect
ifrs 13 fair value measurement 1 january 2013
additional disclosure of fair value 
hierarchy was presented note 33
ifrs 12
disclosure of interests in other 
entities 1 january 2014
early adopted  
additional disclosure of infor
mation on noncontrolling inter
ests was presented note 35
amendments to ias 39 
jun 2013
novation of derivatives and 
continuation of hedge ac
counting 1 january 2014
management is currently 
assessing the impact 
amendments to ias 36 
may 2013
recoverable amount disclo
sures for nonfinancial assets 1 january 2014
management is currently 
assessing the impact 
amendments to ifrs 10 
ifrs 12 and ias 27 
oct 2012 investment entities 1 january 2014
management is currently 
assessing the impact 
amendments to ias 32 
dec 2011
offsetting financial assets and 
financial liabilities 1 january 2014
management is currently 
assessing the impact 
ifrs 11 joint arrangements 1 january 2014
management is currently 
assessing the impact 
ifrs 10
consolidated financial state
ments 1 january 2014
management is currently 
assessing the impact 
ias 28 revised may 2011
investments in associates and 
joint ventures 1 january 2014
management is currently 
assessing the impact 
ias 27 revised may 2011 separate financial statements 1 january 2014
management is currently 
assessing the impact  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
168
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2 basis of preparation and presentation continued
representation of longlived physical assets as of 31 december 2012
the carrying values of property plant and equipment capital constructioninprogress mine under development and 
exploration and evaluation assets as of 31 december 2012 have been represented in these consolidated financial state
ments to provide for enhanced disclosure of longlived physical assets by type and nature of use
• items of property plant and equipment and capital constructioninprogress used in construction of a mine not 
yet at the production stage natalka were represented in a new caption line “mine under development”
• items of property plant and equipment and capital constructioninprogress used in exploration and evaluation 
activities were represented within reporting line “exploration and evaluation assets”
the representation of the previously reported longlived physical assets as of 31 december 2012 is as follows
 as previously 
reported 
representa
tion of long
lived physical 
assets as restated 
property plant and equipment 2216637 414857 1801780
capital constructioninprogress 623277 260252 363025
mine under development  623568 623568
exploration and evaluation assets 467269 51541 518810
total 3307183  3307183
3 significant accounting policies
31 basis of consolidation
subsidiaries
the consolidated financial statements of the group incorporate the financial statements of the company and all its subsidi
aries from the date that control effectively commenced until the date that control effectively ceased control is achieved 
where the company
• has the power over the investee
• is exposed or has rights to variable returns from its involvement with the investee and
• has the ability to use its power to affect its returns
the company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes 
to one or more of the three elements of control listed above 
when the company has less than a majority of the voting rights of an investee it has power over the investee when the 
voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally 
the company considers all relevant facts and circumstances in assessing whether or not the company’s voting rights in an 
investee are sufficient to give it power including
• the size of the company’s holding of voting rights relative to the size and dispersion of the other vote holders
• potential voting rights held by the company other vote holders or other parties
• rights arising from other contractual arrangements and 
• any additional facts and circumstances that indicate that the company has or does not have the current ability 
to direct the relevant activities at the time that decisions need to be made including voting patterns at previous 
shareholders’ meetings  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
169
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consolidation of a subsidiary begins when the company gains control over the subsidiary and ceases when the company 
loses control of the subsidiary specifically income and expenses of a subsidiary acquired or disposed of during the year are 
included in the consolidated income statement and other comprehensive income from the date the company gains control 
until the date when the company ceases to control the subsidiary
noncontrolling interests in consolidated subsidiaries are identified separately from the group’s equity therein the non
controlling interest may initially be measured either at fair value or at the noncontrolling interest’s proportionate share 
of the fair value of the acquiree’s identifiable net assets the choice of measurement basis is made on an acquisitionby
acquisition basis subsequent to acquisition the carrying amount of the noncontrolling interest is the amount of those 
interests at initial recognition plus the noncontrolling interest’s share of subsequent changes in net assets since the date 
of the combination total comprehensive income is attributed to noncontrolling interests even if this results in the non
controlling interest having a deficit balance
changes in the group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transac
tions the carrying amounts of the group’s interests and the noncontrolling interests are adjusted to reflect the changes 
in their relative interests in the subsidiaries any difference between the amount by which the noncontrolling interests are 
adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners 
of the company
when the group loses control of a subsidiary the profit and loss on disposal is calculated as the difference between the 
aggregate of the fair value of the consideration received and the fair value of any retained interest and the previous carry
ing amount of the assets including goodwill and liabilities of the subsidiary and any noncontrolling interests amounts 
previously recognised in other comprehensive income in relation to the subsidiary are accounted for in the same manner 
as would be required if the relevant assets or liabilities were disposed of the fair value of any investment retained in the 
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent account
ing under ias 39 “financial instruments recognition and measurement” or when applicable the cost on initial recognition 
of an investment in an associate or jointly controlled entity
all intragroup balances transactions and any unrealised profits or losses arising from intragroup transactions are elimi
nated on consolidation
functional currency
the individual financial statements of the group’s subsidiaries are each prepared in their respective functional currencies 
the functional currency of the company is the us dollar the russian rouble “rub” is the functional currency of all the 
subsidiaries of the group except for the following subsidiaries operating with significant degrees of autonomy
subsidiaries functional currency
jenington international incorporated us dollar
polyus exploration limited us dollar
polyus investments limited us dollar polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
170
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3 significant accounting policies continued
32 presentation currency
the group presents its consolidated financial statements in the us dollar “usd” as management believes it is a more 
convenient presentation currency for international users of the consolidated financial statements of the group as it is a 
common presentation currency in the mining industry the translation of the financial statements of the group entities from 
their functional currencies to the presentation currency is performed as follows
• all assets liabilities both monetary and nonmonetary are translated at closing exchange rates at each reporting date
• all income and expenses are translated at the average exchange rates for the years presented except for signifi
cant transactions that are translated at rates on the date of such transactions
• resulting exchange differences are included in equity and presented as effect of translation to presentation cur
rency within the translation reserve and
• in the statement of cash flows cash balances at the beginning and end of each reporting period presented are 
translated at exchange rates at the respective dates all cash flows are translated at the average exchange rates 
for the years presented except for significant transactions that are translated at rates on the date of transaction
exchange rates used in the preparation of the consolidated financial statements were as follows
2013 2012 2011
russian roubleus dollar
year end rate 3273 3037 3220
average for the year 3185 3109 2939
 
33 foreign currencies
transactions in currencies other than the entity’s functional currencies foreign currencies are recorded at the exchange 
rates prevailing on the dates of the transactions all monetary assets and liabilities denominated in foreign currencies are 
translated at the exchange rates prevailing at the reporting date nonmonetary items carried at historical cost are trans
lated at the exchange rate prevailing on the date of transaction nonmonetary items carried at fair value are translated at 
the exchange rate prevailing on the date on which the most recent fair value was determined exchange differences arising 
from changes in exchange rates are recognised in the consolidated income statement
34 revenue recognition
gold sales revenue
revenue from the sale of refined gold and other goldbearing products is recognised when the risks and rewards of ownership 
are transferred to the buyer the group retains neither a continuing degree of involvement or control over the goods sold the 
amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will 
flow to the entity revenue from gold doré sales is recognised at the time of shipment from the refining plant when the group 
has received confirmation of sale to the third party revenue from goldbearing products is recognised when the goods have 
been delivered to a contractually agreed location gold sales are stated at their invoiced value net of valueadded tax
other revenue
other revenue comprises mainly sales of electricity transportation handling and warehousing services and other revenue 
from the sale of electricity is recognised when a contract exists delivery has taken place a quantifiable price has been 
established or can be determined and the receivables are likely to be recovered delivery takes place when the risks and 
benefits associated with ownership are transferred to the buyer revenue from service contracts is recognised when the 
services are rendered polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
171
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35 income tax
income tax expense represents the sum of the tax currently payable and deferred tax income taxes are computed in ac
cordance with the laws of countries where the group operates
current tax
the tax currently payable is based on taxable profit for the year taxable profit differs from profit before tax as reported in 
the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other 
years and it further excludes items that are never taxable or deductible the group’s liability for current tax is calculated 
using tax rates that have been enacted or substantively enacted by the reporting date
deferred tax
deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements of 
the separate legal entities and the corresponding tax bases used in the computation of taxable profit and are accounted for us
ing the balance sheet liability method deferred tax liabilities are generally recognised for all taxable temporary differences and 
deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable 
profits will be available against which those deductible temporary differences can be utilised such assets and liabilities are not 
recognised if the temporary difference arises from goodwill or from the initial recognition other than in a business combination 
of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit
deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and 
associates except where the group is able to control the reversal of the temporary difference and it is probable that the 
temporary difference will not reverse in the foreseeable future
deferred tax assets arising from deductible temporary differences associated with investments in subsidiaries and associ
ates are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise 
the benefits of the temporary differences and they are expected to reverse in the foreseeable future
the carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer 
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered
deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the li
ability is settled or the asset realised based on tax rates and tax laws that have been enacted or substantively enacted 
by the reporting date the measurement of deferred tax liabilities and assets reflects the tax consequences that would 
follow from the manner in which the group expects at the reporting date to recover or settle the carrying amount of its 
assets and liabilities
deferred tax assets and liabilities are offset when there is a legally enforceable right to setoff current tax assets against 
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to 
settle its current tax assets and liabilities on a net basis
current and deferred tax for the year
current and deferred tax are recognised as an expense or income in the consolidated income statement except when they 
relate to items that are recognised outside the consolidated income statement in which case the tax is also recognised 
outside the consolidated income statement or where they arise from the initial accounting for a business combination in 
the case of a business combination the tax effect is taken into account in calculating goodwill or determining the excess of 
the acquirer’s interest in the net fair value of the acquiree’s identifiable assets liabilities and contingent liabilities over cost polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
172
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3 significant accounting policies continued
36 operating leases
the leases of assets under which all the risks and benefits of ownership are retained by the lessor are classified as operat
ing leases costs for operating leases are recognised on a straightline basis over the lease term unless another systematic 
basis is more representative of the time pattern of the user’s benefit
37 dividends
dividends and related taxation thereon are recognised as a liability in the period in which they have been declared and 
become legally payable
retained earnings legally distributable by the company are based on the amounts available for distribution in accordance 
with the applicable legislation and as reflected in the statutory financial statements of the individual subsidiaries of the 
group these amounts may differ significantly from the amounts calculated on the basis of ifrs
38 property plant and equipment
mineral rights
mineral rights are recorded as assets upon acquisition at fair value and are included within mining assets capital construc
tioninprogress mines under development or exploration and evaluation assets
mining assets
mining assets are recorded at cost less accumulated amortisation mining assets include the cost of acquiring and develop
ing mining properties preproduction expenditure and mine infrastructure processing plant mineral rights and mining and 
exploration licences and the present value of future decommissioning costs
mining assets are amortised on a straightline basis over the estimated economic useful life of the asset or the remaining 
useful life of mines of 7 to 16 years per mine operating plans which call for production from estimated proven and prob
able ore reserves under the russian resource reporting code whichever is shorter amortisation is charged from the date 
a new mine reaches commercial production quantities and is included in the cost of production
the estimated remaining useful lives of the group’s significant mines based on the mine operating plans are as follows
olimpiada 14 years
blagodatnoye 16 years
kuranakh 10 years
verninskoye 11 years
nonmining assets
nonmining assets are stated at cost less accumulated depreciation depreciation is provided on a straightline basis over 
the economic useful lives of such assets
building structures plant and equipment 550 years
transport 311 years
other assets 310 years polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
173
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stripping activity asset
stripping costs incurred during the production phase are considered to create two benefits being either the production of 
inventory in the current period andor improved access to the ore to be mined in the future where production stripping 
costs are incurred and the benefit is improved access to ore to be mined in the future the costs are recognised as a strip
ping activity asset if the following criteria are met
• future economic benefits being improved access to the ore body are probable
• the component of the ore body for which access will be improved can be accurately identified and
• the costs associated with the improved access can be reliably measured
if not all of the criteria are met the production stripping costs are included in the cost of inventory which are expensed in 
the consolidated income statement as cost of gold sales as they are sold
the stripping activity asset is initially measured at cost which is the accumulation of costs directly incurred to perform 
the stripping activity that improves access to the identified component of ore plus an allocation of directly attributable 
overhead costs the costs associated with incidental operations are not included in the costs of stripping activity asset
the group uses an allocation basis that is based on volumes of waste extracted compared with expected volumes of ore 
extracted from a specific component of the ore body to allocate stripping costs between inventory and the stripping activity 
asset in accordance with the group’s mine operating plans production forecasts included in the mine operating plans are 
based on estimated proven and probable ore reserves under the russian resource reporting code
the stripping activity asset is accounted for as a part of property plant and equipment and subsequently depreciated us
ing the straightline method over the life of the identified component of the ore body that became more accessible as a 
result of the stripping activity after initial recognition the stripping activity asset is carried at cost less depreciation and 
any impairment losses
in 2014 the group is planning to adopt the unit of production method to depreciate the stripping activity asset if there is 
a material divergence in the expected future depreciation charge when compared to the straightline method
39 capital constructioninprogress
assets under construction at operating mines are accounted for as capital constructioninprogress the cost of capital 
constructioninprogress comprises its purchase price and any directly attributable costs to bringing it into working condi
tions for its intended use 
capital constructioninprogress is not depreciated 
when the capital constructioninprogress has been completed and in a condition necessary for them to be capable of 
operating in the manner intended by management the objects are reclassified to mining assets
310 mines under development
comprises amounts related to new mines development and includes the costs directly related to mine development pro
jects such as acquiring and developing mining properties preproduction expenditure construction of processing plant and 
mine infrastructure mineral rights and mining and exploration licences and the present value of future decommissioning 
costs polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
174
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3 significant accounting policies continued
311 finance costs directly attributable to the construction of qualifying assets
finance costs directly attributable to the construction or production of qualifying assets which are assets that necessarily 
take a substantial period of time to get ready for their intended use or sale are added to the cost of those assets until 
such time as the assets are substantially ready for their intended use or sale
investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying 
assets is deducted from the finance costs eligible for capitalisation
all other finance costs are recognised in the consolidated income statement in the period in which they are incurred
312 impairment of longlived tangible assets property plant and equipment capital 
constructioninprogress and mines under development
an impairment review of longlived tangible assets is carried out when there is an indication that those assets have suffered 
an impairment loss if any such indication exists the carrying amount of the asset is compared to the estimated recover
able amount of the asset in order to determine the extent of the impairment loss if any where it is not possible to esti
mate the recoverable amount of an individual asset the group estimates the recoverable amount of the cashgenerating 
unit to which the asset belongs
the recoverable amount is the higher of fair value less costs to sell or valueinuse if the recoverable amount of an asset 
or cashgenerating unit is estimated to be less than its carrying amount the carrying amount of the asset or cash
generating unit is reduced to its recoverable amount the impairment loss is recognised in the consolidated income state
ment immediately unless the relevant asset is carried at revalued amount in which case the impairment loss is treated as 
a revaluation decrease
where an impairment loss subsequently reverses the carrying amount of the asset or cashgenerating unit is increased 
to the revised estimate of its recoverable amount but only to the extent that the increased carrying amount does not 
exceed the original carrying amount that would have been determined had no impairment loss been recognised in prior 
periods
a reversal of an impairment loss is recognised in the consolidated income statement immediately unless the relevant as
set is carried at a revalued amount in which case the reversal of the impairment loss is treated as a revaluation increase
313 exploration and evaluation assets
exploration and evaluation assets represent capitalised expenditures incurred by the group in connection with the explora
tion for and evaluation of gold resources such as
• acquisition of rights to explore potentially mineralised areas
• topographical geological geochemical and geophysical studies
• exploratory drilling
• trenching
• sampling and
• activities in relation to evaluating the technical feasibility and commercial viability of extracting gold resource
exploration and evaluation expenditures are capitalised when the exploration and evaluation activities have not reached a 
stage that permits a reasonable assessment of the existence of commercially recoverable gold resources when the tech
nical feasibility and commercial viability of extracting a gold resource are demonstrable and a decision has been made to 
develop the mine capitalised exploration and evaluation assets are reclassified to mines under development  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
175
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impairment of exploration and evaluation assets
exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying 
amount of an exploration and evaluation asset may exceed its recoverable amount the following facts and circumstances 
among others indicate that exploration and evaluation assets must be tested for impairment
• the term of the exploration licence in the specific area has expired during the reporting period or will expire in the 
near future and is not expected to be renewed
• substantive expenditure on further exploration for and evaluation of gold resources in the specific area is neither 
budgeted nor planned 
• exploration for and evaluation of gold resources in the specific area have not led to the discovery of commercially 
viable quantities of gold resources and the decision was made to discontinue such activities in the specific area and 
• sufficient data exists to indicate that although a development in the specific area is likely to occur the carrying amount 
of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale
for the purpose of assessing exploration and evaluation assets for impairment such assets are allocated to cashgenerat
ing units being exploration licence areas
any impairment loss is recognised as an expense in accordance with the policy on impairment of tangible assets set out 
above
314 inventories
refined gold ore stockpiles and goldinprocess
inventories including refined metals doré metals in concentrate and in process and ore stockpiles are stated at the lower of 
production cost or net realisable value production cost is determined as the sum of the applicable expenses incurred directly 
or indirectly in bringing inventories to their existing condition and location refined metals are valued at the average cost of 
production per saleable unit of metal doré metals in concentrate and in process ore stockpiles are valued at the average 
production costs at the relevant stage of production net realisable value represents the estimated selling price for product 
based on prevailing spot metal prices less estimated costs to complete production and costs necessary to make the sale
stores and materials
stores and materials consist of consumable stores and are stated at the lower of cost and net realisable value costs of 
stores and materials are determined on a weighted average cost basis
net realisable value represents the estimated selling price for stores and materials less all costs necessary to make the sale
315 financial assets
financial assets are recognised on trade date where the purchase or sale of a financial asset is under a contract whose 
terms require delivery of the financial asset within the timeframe established by the market concerned and are initially 
measured at fair value plus transaction costs except for financial assets classified as at fair value through profit or loss 
which are initially measured at fair value
the group’s financial assets are classified into the following categories
• financial assets at fair value through profit or loss “fvtpl”
• heldtomaturity investments and
• loans and receivables
the classification depends on the nature and purpose of the financial asset and is determined at the time of initial rec
ognition polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
176
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3 significant accounting policies continued
financial assets at fvtpl
financial assets are classified as a fvtpl where the financial asset is either held for trading or it is designated as a fvtpl
a financial asset is classified as held for trading if
• it has been acquired principally for the purpose of selling in the near future or
• it is a part of an identified portfolio of financial instruments that the group manages together and has a recent 
actual pattern of shortterm profittaking or
• it is a derivative that is not designated and effective as a hedging instrument
a financial asset other than a financial asset held for trading may be designated as a fvtpl upon initial recognition if
• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would oth
erwise arise or
• the financial asset forms part of a group of financial assets or financial liabilities or both which is managed and 
its performance is evaluated on a fair value basis in accordance with the group’s documented risk management 
or investment strategy and information about the grouping is provided internally on that basis or
• it forms part of a contract containing one or more embedded derivatives and ias 39 “financial instruments rec
ognition and measurement” permits the entire combined contract asset or liability to be designated as at fvtpl
financial assets at fvtpl are stated at fair value with any gains or losses arising on remeasurement recognised in profit or 
loss the net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and 
is included in the lossincome from investments line item in the consolidated income statement fair value is determined 
in the manner described in note 33
heldtomaturity investments
promissory notes with fixed or determinable payments and fixed maturity dates that the group has the positive intent 
and ability to hold to maturity are classified as heldtomaturity investments heldtomaturity investments are recorded 
at amortised cost using the effective interest method less impairment with income recognised on an effective yield basis
loans and receivables
loans and receivables with fixed or determinable payments that are not quoted in an active market are classified as loans 
and receivables loans and receivables are measured at amortised cost using the effective interest method less any im
pairment interest income is recognised by applying the effective interest rate except for shortterm receivables when the 
recognition of interest would be immaterial
impairment of financial assets
financial assets other than those at fvtpl are assessed for indicators of impairment at each reporting date financial 
assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial 
recognition of the financial asset the estimated future cash flows of the investment have been impacted for financial as
sets carried at amortised cost the amount of the impairment is the difference between the asset’s carrying amount and 
the present value of estimated future cash flows discounted at the original effective interest rate
the carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the excep
tion of trade receivables where the carrying amount is reduced through the use of an allowance account when a trade 
receivable is uncollectible it is written off against the allowance account subsequent recoveries of amounts previously 
written off are credited against the allowance account changes in the carrying amount of the allowance account are rec
ognised in the consolidated income statement polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
177
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if in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to 
an event occurring after the impairment was recognised the previously recognised impairment loss is reversed through 
the consolidated income statement to the extent that the carrying amount of the investment at the date the impairment is 
reversed does not exceed what the amortised cost would have been had the impairment not been recognised 
derecognition of financial assets
the group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire or it 
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity if the 
group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the trans
ferred asset the group recognises its retained interest in the asset and an associated liability for amounts it may have to 
pay if the group retains substantially all the risks and rewards of ownership of a transferred financial asset the group 
continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received
effective interest method
the effective interest method is a method of calculating the amortised cost of a financial asset or liability and of allocat
ing interest income or expense respectively over the relevant period the effective interest rate is the rate that exactly 
discounts estimated future cash receipts or payments as applicable through the expected life of the financial asset or 
liability or where appropriate a shorter period
income is recognised on an effective interest rate basis for debt instruments other than those financial assets designated 
as at fvtpl
316 financial liabilities
financial liabilities including borrowings are initially measured at fair value net of transaction costs and subsequently 
measured at amortised cost using the effective interest method with interest expense recognised on an effective yield 
basis within finance cost
derecognition of financial liabilities
the group derecognises financial liabilities when and only when the group’s obligations are discharged cancelled or they expire
317 cash and cash equivalents
cash and cash equivalents comprise cash balances cash deposits and highly liquid investments with original maturities of 
three months or less which are readily convertible to known amounts of cash and are subject to an insignificant risk of 
changes in value
318 provisions
provisions are recognised when the group has a present obligation legal or constructive as a result of a past event it 
is probable that the group will be required to settle the obligation and a reliable estimate can be made of the amount of 
the obligation
the amount recognised as a provision is the best estimate of the consideration required to settle the present obligation 
at the reporting date taking into account the risks and uncertainties surrounding the obligation where a provision is 
measured using the cash flows estimated to settle the present obligation its carrying amount is the present value of those 
cash flows polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
178
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3 significant accounting policies continued
319 site restoration and environmental obligations
site restoration and environmental obligations include decommissioning and land restoration costs future decommission
ing and land restoration costs discounted to net present value are added to the respective assets and the correspond
ing obligations raised as soon as the constructive obligation to incur such costs arises and the future cost can be reliably 
estimated additional assets are amortised on a straightline basis over the lifeofmine the unwinding of the obligation 
is included in the consolidated income statement as finance costs obligations are periodically reviewed in light of current 
laws and regulations and adjustments made as necessary to the corresponding item of property plant and equipment
ongoing restoration costs are expensed when incurred
4 critical accounting judgements and key sources 
of estimation uncertainty
preparation of the consolidated financial statements in accordance with ifrs requires the group’s management to make 
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets 
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the 
reporting period the determination of estimates requires judgements which are based on historical experience current 
and expected economic conditions and all other available information actual results could differ from those estimates
critical judgements in applying accounting policies
judgement has been applied when selecting the appropriate accounting policies the following are the key assumptions 
concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a sig
nificant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year
the most significant areas requiring the use of management estimates and assumptions relate to
• justification of the economic useful lives of property plant and equipment
• recoverability of the exploration and evaluation assets
• determination and valuation of the stripping activity asset
• impairment of the tangible assets
• estimation of the site restoration and environmental obligations 
• interpretation of the tax legislation in accounting for income taxes and
• assessment of the outcome of contingencies
economic useful lives of property plant and equipment
the group’s mining assets classified within property plant and equipment are amortised using the straightline method 
over the lifeofmine based on a mine operating plan which calls for production from estimated proven and probable ore 
reserves under the russian resource reporting code when determining lifeofmine assumptions that were valid at the 
time of estimation may change when new information becomes available polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
179
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the factors that could affect estimation of lifeofmine include the following
• change of estimates of proven and probable ore reserves
• the grade of ore reserves varying significantly from time to time
• differences between actual commodity prices and commodity price assumptions used in the estimation of ore 
reserves
• unforeseen operational issues at mine sites and
• changes in capital processing and reclamation costs discount rates and foreign exchange rates possibly ad
versely affecting the economic viability of ore reserves
any of these changes could affect prospective amortisation of mining assets and their carrying value
nonmining property plant and equipment are depreciated on a straightline basis over their economic useful lives man
agement periodically reviews the appropriateness of the assets’ economic useful lives the review is based on the current 
condition of the assets and the estimated period during which they will continue to bring economic benefit to the group
exploration and evaluation assets
management’s judgement is involved in the determination of whether the expenditures which are capitalised as exploration 
and evaluation assets may be recouped by future exploitation or sale or should be impaired determining this manage
ment estimates the possibility of finding recoverable ore reserves related to a particular area of interest however these 
estimates are subject to significant uncertainties the group is involved in exploration and evaluation activities and some 
of its licensed properties contain gold resources under the definition of internationally recognised mineral resource report
ing methodologies a number of licensed properties have no mineral resource delineation management assumes that all 
licences will be renewed many of the factors assumptions and variables involved in estimating resources are beyond the 
group’s control and may prove to be incorrect over time subsequent changes in gold resources estimates could impact 
the carrying value of exploration and evaluation assets 
stripping activity asset 
the group incurs stripping costs during the production phases of its surface mining operations significant judgement is 
required to distinguish between the production stripping which relates to the extraction of inventory and which relates to 
the creation of a stripping activity asset
in order to perform the allocation the group is required to identify separate components towards which the stripping 
costs have been incurred for the ore bodies in each of its mines an identifiable component is a specific volume of the ore 
body that is made more accessible by the stripping activity significant judgement is required to identify and define these 
components and also to determine the expected volumes of waste to be stripped and ore to be mined in each of these 
components for the purposes of identification of separate components the group uses mine operating plans which are 
based on estimated proven and probable ore reserves under the russian resource reporting code
each discrete stage of mining identified in the mine plans is considered as a unit of account if the mine plan initially 
identifies several discrete stages of mining which will take place consecutively one after another these stages would be 
identified as components these assessments are undertaken for each individual mine
stripping costs incurred during the production phase should be allocated between inventory produced and the stripping ac
tivity asset by using the allocation basis the group considers that the volume of waste extracted compared with expected 
volume of a specific component of the ore body for a given level of ore production to be the most suitable allocation basis polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
180
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4 critical accounting judgements and key sources 
of estimation uncertainty continued
impairment of tangible assets
the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those as
sets are impaired in making the assessment for impairment indicators assets that do not generate independent cash flows 
are allocated to an appropriate cashgenerating unit management necessarily applies its judgement in allocating assets 
that do not generate independent cash flows to appropriate cashgenerating units and also in estimating the timing and 
value of underlying cash flows within the valueinuse calculation
factors which could impact underlying cash flows include 
• commodity prices and exchange rates
• timelines of granting of licences and permits
• capital and operating expenditure and
• available reserves and resources and future production profile
subsequent changes to the cashgenerating unit allocation or to the timing of cash flows could impact the carrying value 
of the respective assets
site restoration and environmental obligations
the group’s mining and exploration activities are subject to various environmental laws and regulations the group 
estimates site restoration and environmental obligations based on management’s understanding of the current legal re
quirements in the various jurisdictions terms of the licence agreements and internally generated engineering estimates 
a provision is recognised based on the net present values for decommissioning and land restoration costs as soon as the 
obligation arises actual costs incurred in future periods could differ materially from the amounts provided additionally 
future changes to environmental laws and regulations lifeofmine estimates and discount rates could affect the carrying 
amount of this provision
income taxes
the group is subject to income taxes in numerous jurisdictions significant judgement is required in determining the 
group’s provision for income taxes due to the complexity of legislation there are many transactions and calculations for 
which the ultimate tax determination is uncertain the group recognises liabilities for anticipated tax audit issues based 
on estimates of whether additional taxes will be due where the final tax outcome of these matters is different from the 
amounts that were initially recorded such differences will impact the income tax and deferred tax provisions in the period 
in which such determination is made
deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that suf
ficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised the estimation of that 
probability includes judgements based on the expected performance various factors are considered to assess the prob
ability of the future utilisation of deferred tax assets including past operating results operational plan expiration of tax 
losses carried forward and tax planning strategies if actual results differ from the estimates or if these estimates must be 
adjusted in future periods the financial position results of operations and cash flows may be negatively affected
contingencies
by their nature contingencies will only be resolved when one or more future events occur or fail to occur the assessment of 
such contingencies inherently involves the exercise of significant judgements and estimates of the outcome of future events  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
181
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5 discontinued operations and disposal of subsidiaries
in february 2013 the group completed the transaction for the sale of its operating subsidiaries in kazakhstan and kyr
gyzstan representing the kazakhstan business unit for a total consideration of usd 297282 thousand recognizing a gain 
on disposal of usd 4577 thousand the following companies were sold
• jsc “mmc kazakhaltyn” and its subsidiaries operating in kazakhstan and
• norox mining company limited and its subsidiaries operating in kyrgyzstan
these operating subsidiaries mainly comprised the following mining operations in northern and eastern kazakhstan the 
aksu mine which consists of the aksu mine and adjacent quartzite hills deposits the bestobe mine the zholymbet mine 
and the akzhal mine in addition these assets include development properties in northern eastern and central kazakhstan 
as well as exploration projects at yuzhny karaultube and kaskabulak 
there were no contingent liabilities or deferred consideration applicable to the sale all the proceeds were received in cash
as the kazakhstan operations did not meet the criteria for classification as a discontinued operation or assets held for 
sale as at 31 december 2012 it has not been represented as such in the statement of financial position the comparative 
income statement has been represented to show the discontinued operations separately from continuing operation for 
the respective period 
51 income statement effect of the discontinued operations
year ended 31 december 
2013 2012
gold sales 28729 166475
other sales 348 1717
total revenue 29077 168192
cost of gold sales 22981 96521
cost of other sales 115 1842
gross profit 5981 69829
selling general and administrative expenses 2501 12198
other income expenses net 558 619
impairment losses note 6  21361
operating profit 2922 36889
finance costs 523 3218
foreign exchange gain loss 867 7412
profit before income tax 3266 26259
current income tax expense 1790 11056
deferred income tax gain 321 219
net profit attributable to discontinued operations 1797 15422
gain from disposal of subsidiaries net of tax note 52 4577 
profit from discontinued operations 6374 15422 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
182
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5 discontinued operations and disposal of subsidiaries 
continued
52 assets and liabilities disposed in february 2013 as a result of discontinued operations
total assets  
liabilities disposed 
noncurrent assets
property plant and equipment note 15 264445
capital constructioninprogress note 16 40599
exploration and evaluation assets note 18 19190
inventories 919
325153
current assets
inventories 31250
trade and other receivables 7259
advances paid to suppliers and prepaid expenses 7061
cash and cash equivalents 6083
51653
noncurrent liabilities
site restoration and environmental obligations note 26 34641
deferred tax liabilities 26722
other noncurrent liabilities 525
61888
current liabilities
trade other payables and accrued expenses 11349
taxes payable 2180
13529
total net assets of disposal group 301389
noncontrolling interest disposed 8684
net assets disposed attributable to shareholders 292705
proceeds received 297282
gain on disposal of discontinued operations net of tax note 51 4577
53 disposal of subsidiaries during the year ended 31 december 2012
during the year ended 31 december 2012 the following subsidiaries of the group
• romaltyn mining srl romaltyn exploration srl romaltyn limited previously attributable to kazakhstan 
business unit and
• grk bargold ltd and yakutskoye grp ltd previously attributable to the exploration business unit
 were sold to independent non related parties
romaltyn mining and romaltyn exploration together “the romanian assets” hold rights to various mining assets in roma
nia including a gold treatment plant with an annual processing capacity of 25 million tonnes currently not in operation 
and a number of exploration properties romanian assets were acquired in 2009 together with the group’s subsidiaries 
in kazakhstan the disposal of the romanian assets was driven by the strategic objectives of the group and the increased 
focus on our core largescale operations polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
183
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grk bargold and yakutskoye grp hold rights to a number of exploration properties in russia the group’s investment in 
grk bargold was fully impaired during the year ended 31 december 2011
there were no contingent liabilities or deferred consideration applicable to the sales all the proceeds were received in cash
the following assets and liabilities were disposed during the year ended 31 december 2012
romanian  
assets
liabilities
grk bargold 
and yakutskoye 
grp assets
liabilities
total
assets
liabilities
disposed
property plant and equipment note 15 9772  9772
capital constructioninprogress note 16 6572  6572
exploration and evaluation assets note 18 3880 544 4424
cash 572 686 1258
other assets 900 18 918
site restoration and environmental obligations
note 26
5022  5022
other liabilities 1947 12 1959
total net assets disposed 14727 1236 15963
proceeds 20000 2231 22231
gain on disposal 5273 995 6268
6 segment information
for management purposes the group is organised in the following separate business segments defined by a combination 
of operating activities and geographical area separate financial information is available for each segment and is reported 
regularly to the chief operating decision maker “codm” and the executive committee the group’s seven identified re
portable segments are located and described as follows the kazakhstan business unit was disposed in february 2013 note 
52 therefore it is not presented in the segment information note
• krasnoyarsk business unit krasnoyarsk region of the russian federation – extraction refining and sale of 
gold from the olimpiada blagodatnoye and titimukhta mines as well as research exploration and development 
work at the olimpiada and blagodatnoye deposits
• irkutsk alluvial business unit irkutsk region bodaibo district of the russian federation – extraction refining 
and sale of gold from several alluvial deposits
• irkutsk ore business unit irkutsk region bodaibo district of the russian federation – extraction refining 
and sale of gold from the verninskoye mine research exploration and development works at chertovo korito 
smezhny and medvezhy zapadny deposits
• yakutia kuranakh business unit sakha republic of the russian federation – extraction refining and sale of 
gold from the kuranakh mines
• magadan business unit magadan region of the russian federation – represented by ojsc “matrosova mine” 
which performs development works at the natalka deposit
• exploration business unit krasnoyarsk region irkutsk region amur region and others – research and ex
ploration works in several regions of the russian federation 
• capital construction unit – represented by llc “polyus stroy” and cjsc “vitimenergostroy” which perform 
construction works at natalka verninskoye olimpiada and other deposits  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
184
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6 segment information continued
the reportable 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 the purposes of resource 
allocation based on the segment measure segment profit before income tax excluding the finance costs other sales costs 
of other sales and income from investments
business segment assets and liabilities are not reviewed by the codm and therefore are not disclosed in these consolidated 
financial statements segment financial information provided to the codm is prepared from the management accounts 
which are based on russian accounting standards
the group does not allocate segment results of companies that perform management investing activities and certain other 
administrative functions within its internal reporting
gold sales
segment  
profit  loss
capital 
expenditures
for the year ended 31 december 2013
business units
krasnoyarsk  1668495  134785  180899 
irkutsk alluvial 277351  70596  19587 
irkutsk ore  122002  583  78146 
yakutia kuranakh 190751  5260  17406 
magadan  68217 760772 
exploration  7076 13828 
capital construction  32738 45958 
total 2258599  103193  1116596 
for the year ended 31 december 2012
business units
krasnoyarsk 1948587 990463 144555
irkutsk alluvial 363552 97009 19825
irkutsk ore 76166 29687 151188
yakutia kuranakh 229719 57245 23446
magadan  20061 191043
exploration  10083 22535
capital construction  1339 133916
total 2618024 1145599 686508
gold sales reported above represent revenue generated from external customers there were no intersegment gold sales 
during the years ended 31 december 2013 and 2012 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
185
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the segment measure of profitloss reconciles to the ifrs reported profit before income tax on a consolidated basis as 
follows
year ended 31 december
2013 2012
segment profit per management accounts prepared  
in accordance with russian accounting standards 103193 1145599
differences between management accounts and ifrs
capitalised exploration development and construction works 105652 21895
impairment provisions and accruals 74240 377
additional depreciation charge and amortisation of mineral rights 45936 22314
calculation of goldinprocess at net production cost 77784 493
difference in stripping costs capitalisation 104736 29867
other 35610 684
adjusted segment net profit 228491 1175847
unallocated central costs results of financing and investing activities and 
related differences in accounting treatment under ifrs 5198 35669
profit before income tax 233689 1211516
the segment capital expenditures reconcile to the ifrs reported 
numbers on a consolidated basis as follows
segment capital expenditures per management accounts 
prepared in accordance with russian accounting standards 1116596 686508
differences between management accounts and ifrs
differences at the moment of recognition of capital expenditures 37705 46175
reclassification of advances paid for property plant and equipment and 
construction works 24030 21041
reclassification of materials related to construction works 157571 71375
differences in capitalised mine under development and exploration and 
evaluation costs 91038 2015
other 2295 5180
adjusted segment capital expenditure 1424645 790212
unallocated central capital expenditures 15046 18674
capital expenditures
 1439691 808886 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
186
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6 segment information continued
the impairment losses for the year ended 31 december 2013 impacted the following reportable segments
business units
krasnoyarsk
irkutsk 
ore
yakutia 
kuranakh exploration total 
mining assets note 15   59466  59466
stripping activity asset note 15   28377  28377
capital constructioninprogress 
note 16 2137  16639  18776 
exploration and evaluation assets 
note 18 12713   303755  316468 
longterm stockpiles note 20   33365  33365
goldinprocess note 20  15205   15205
total 14850 15205 137847 303755  471657 
the impairment losses for the year ended 31 december 2012 impacted the following reportable segments
business units
total 
krasnoyarsk
irkutsk 
alluvial
irkutsk 
ore magadan exploration 
continuing operations 
mining assets note 15  131    131
capital constructionin 
progress note 16  81 1189   1270
mine under development  
note 17    11622  11622
exploration and evaluation 
assets note 18 99    2302 2401
subtotal note 11 99 212 1189 11622 2302 15424
discontinued operations
property plant and equipment
 note 15 4307
capital constructionin 
progress note 16 17054
subtotal note 51 21361
total 36785
the group’s information about its noncurrent assets other than financial instruments by geographical location is as follows
31 december
2013 2012
russian federation 3827313 3224228
republic of kazakhstan  310821
kyrgyzstan  14069
united kingdom 45 70
total 3827358 3549188 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
187
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7 gold sales
year ended 31 december
2013 2012
refined gold 2258599 2588722
other goldbearing products  29302
total 2258599 2618024
8 cost of gold sales
year ended 31 december
2013 2012
consumables and spares 361889 304363
fuel
 184226 128801
labour
 385781 341898
tax on mining
 165573 192435
power
 57844 50113
outsourced mining services
 22563 31264
refining costs
 6132 5621
other
 83923 73245
subtotal
 1267931 1127740
amortisation and depreciation of operating assets note 15
 209152 169923
increase in goldinprocess and refined gold inventories
 130560 32357
total
 1346523 1265306
9 selling general and administrative expenses
year ended 31 december
2013 2012
salaries
 151027 133774
taxes other than mining and income taxes
 25471 62226
professional services
 21116 29011
amortisation and depreciation note 15
 4486 3458
other
 23695 27236
total
 225795 255705 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
188
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10 other expenses  income net 
year ended 31 december
2013 2012
change in estimations of decommissioning liabilities note 26 5521 15247
change in allowance for reimbursable value added tax 1551  618
donations 3914  6339 
loss on disposal of property plant and equipment and capital  
constructioninprogress 2716  3684 
maintenance expenses related to previously impaired exploration  
and evaluation assets 8117 
other 2751 6342
total 13528  12184
11 impairment losses
year ended 31 december
2013 2012
mining assets note 15 59466 131
stripping activity asset note 15 28377 
capital constructioninprogress note 16 18776 1270
mine under development note 17  11622
exploration and evaluation assets note 18 316468 2401
longterm stockpiles note 20 33365 
goldinprocess note 20 15205 
total 471657 15424
following the significant fall in the gold price in the first half of 2013 and the subsequent sustained lower price the group 
reassessed
• the carrying value of its mining assets stripping activity assets and capital constructioninprogress at its 
kuranakh mine in the yakutia business unit against its valueinuse 
• the future prospectivity of its exploration and evaluation asset portfolio and
• the recoverability of its longterm stockpiles and goldinprocess
after the related tax credit of usd 50867 thousand the posttax impairment charge is usd 420790 thousand polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
189
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impairment of property plant and equipment and capital constructioninprogress
as at 30 june 2013 the group recorded an impairment charge of usd 104482 thousand in respect of the kuranakh mine 
in the yakutia region following the significant fall in the gold price as a consequence of the sustained lower gold price the 
extended ramp up period of verninskoye and the resequencing of the natalka project impairment tests have also been 
performed on the verninskoye mine in the irkutsk region and the natalka mine under development in the magadan region 
no further impairments were required
the key assumptions that were used in the impairment testing were a weighted average long term gold price of usd 1350 
per oz and a posttax discount rate in the range 610 pretax 712 depending on the risk profile of each mine
the impairment tests are particularly sensitive to the assumed price of gold and impairments would be required at an as
sumed gold price below usd 1250 per oz
impairment of exploration and evaluation assets
the future prospectivity of its exploration and evaluation asset portfolio was reassessed and the following impairments 
identified
year ended 
31 december 2013
nezhdaninskoye deposit 247500 
degdekanskoye deposit 48258 
burgakhchan area 6393 
verkhnekadrinskaya area 6483 
vangashskaya area 6230 
apsakan deposit 1604
total 316468 
in the new lower gold price environment the company is prioritising its investments despite the identification of significant 
reserves at the nezhdaninskoye and degdekanskoye deposits the company now considers it unlikely that these will be 
developed
impairment of longterm stockpiles and goldinprocess 
the recoverability of certain lowgrade longterm ore stockpiles at kuranakh and gravitation tailings at verninskoye is now 
considered unlikely and accordingly these have been impaired 
12 finance costs
year ended 31 december
2013 2012
interest on borrowings 42634 24388
unwinding of discounts on decommissioning liability note 26 5442 9003
subtotal finance cost  48076 33391
interest capitalised in the cost of mine under development and capital 
constructionin progress 34198 1818
total finance cost expensed 13878 31573 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
190
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13 income from investments net
year ended 31 december
2013 2012
interest income on bank deposits 26910 35757
loss from revaluation and sale of investments  6851 378
other 1289 581
total 21348 35960
14 income tax expense
year ended 31 december
2013 2012
current tax expense 131963  231560 
deferred tax benefit  expense  41275 14852
total 90688  246412
the corporate income tax rates in the countries where the group has  
a taxable presence vary from 0 british virgin islands to 2325  
united kingdom
a reconciliation of russian federation statutory income tax the location  
of the group’s major production entities and operations to the income  
tax expense recorded in the consolidated income statement is as follows
profit from continuing operations before income tax 233689   1211516 
income tax at statutory rate applicable to principal entities 20 46738    242303 
tax effect of nondeductible expenses and other permanent differences 6379    3389
unrecognized deferred tax assets and writeoff of losses carried forward 
resulted from impairments 47477 
unrecognised tax losses 2957     124 
effect of different tax rates of subsidiaries operating in other jurisdictions 2374   15565 
reversal of previously recognised income tax expense 6856 
other 3633   2063
tax effect of utilisation of tax losses not previously recognised    6128
income tax expense at effective rate of 39 2012 20 90688   246412 
impairment of assets note 11 resulted in significant unrecognized deferred tax assets during the year ended 31 decem
ber 2013 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
191
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15 property plant and equipment
mining  
assets
nonmining 
assets
stripping 
activity asset total
cost
balance at 31 december 2011 2077283 55225 93812 2226320
additions   96623 96623
transfers from capital constructioninprogress 
and reclassifications note 16
471909 20903  492812
change in decommissioning liabilities note 26 32899   32899
disposals 23972 1720  25692
disposals of subsidiaries note 53 13580   13580
effect of translation to presentation currency 100913 3551 8081 112545
balance at 31 december 2012 2579654 77959 198516 2856129
additions     37692  37692 
transfers from capital constructioninprogress 
note 16
 371234  15865    387099 
reclassifications 22212  22212    
change in decommissioning liabilities note 26 6590     6590
disposals 41840 3585   45425
disposals of subsidiaries note 52 352839 3199   356038
effect of translation to presentation currency 166874 3790 15308 185972
balance at 31 december 2013 2404957  61038  220900  2686895 
accumulated amortisation  
depreciation and impairment
balance at 31 december 2011 771644 22369 7454 801467
charge 204960 4685 15031 224676
disposals 19747 608  20355
disposals of subsidiaries note 53 3808   3808
impairment 
  continuing operations notes 6 and 11 131   131
  discontinued operations note 6 4307   4307
effect of translation to presentation currency 45736 1377 818 47931
balance at 31 december 2012 1003223 27823 23303 1054349
charge  223034 3955 18094 245083
reclassifications 5187 5187  
disposals 37875  1482    39357 
disposals of subsidiaries 52 91249  344    91593 
impairment of continuing operations  
notes 6 and 11
 59466   28377 87843
effect of translation to presentation currency 71225  1672  2182  75079 
balance at 31 december 2013 1090561 23093 67592 1181246
net book value
31 december 2012 1576431 50136 175213 1801780
31 december 2013 1314396  37945  153308  1505649  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
192
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15 property plant and equipment continued
the carrying values of property plant and equipment capital constructioninprogress mine under development and 
exploration and evaluation assets as 31 december 2012 were represented in these consolidated financial statements to 
provide for enhanced disclosure of longlived physical assets by type and nature of its use for details refer to note 2 
following the disposal of subsidiaries note 5 mineral rights decreased by usd 128728 thousand the remaining difference 
was the result of amortisation 
the carrying values of mineral rights included in mining assets were as follows
31 december
2013 2012
mineral rights 49259  229056 
amortisation and depreciation charge is allocated as follows
year ended 31 december
2013 2012
cost of gold sales 
   continuing operations note 8 209152 169923
   discontinued operations 3686 20464
selling general and administrative expenses 
   continuing operations note 9 4486 3458
   discontinued operations 68 279
cost of other sales 196 1734 
capitalised within capital constructioninprogress 27495  28818 
total 245083  224676  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
193
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16 capital constructioninprogress
business units
total krasnoyarsk
irkutsk 
ore
yakutia 
kuranakh
capital 
construction other
balance at 31 december 2011  67759  185500   29063   2046   79213  363581 
additions 100733  111504   26684  133917  127112  499950 
transfers to property plant and 
equipment note 15 93674 159652 21524 99856 118106 492812
disposals   769                   452 1221
disposals of subsidiaries note 53                         6572 6572
impairment
continuing operations 
notes 6 and 11        1189            81 1270
discontinued operations note 6                        17054 17054
effect of translation to presentation 
currency  4217   9948   1868    930   1460   18423 
balance at 31 december 2012  78266   146111    36091    37037    65520   363025 
additions 209813  53253  15673  68229  36253  383221 
transfers to property plant and 
equipment note 15 113269 148662 26188 54671 44309 387099
disposals             309 309
disposals of subsidiaries note 52             40599 40599
impairment of continuing operations 
notes 6 and 11 2137    16639       18776
effect of translation to presentation 
currency 8168 7953 2320 3032 40 21513
balance at 31 december 2013 164505  42749  6617  47563  16516  277950 
the carrying values of property plant and equipment capital constructioninprogress mine under development and ex
ploration and evaluation assets as of 31 december 2012 were represented in these consolidated financial statements to 
provide for enhanced disclosure of longlived physical assets by type and nature of use for details refer to note 2
the principal projects in capital constructioninprogress within
• the krasnoyarsk business unit relates to the expansion of mill throughput at titimukhta expansion of the biooxi
dation facility installation of plant automation systems at olimpiada and blagodatnoye construction of additional 
dormitories at olimpiada and blagodatnoye and maintenance capital expenditure
• the irkutsk ore business unit relate to the rampup and infrastructure construction of the verninskoye mine polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
194
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17 mine under development
total 
balance at 31 december 2011 302475
additions 305525
new decommissioning liabilities raised note 26 2012
impairment of continuing operations notes 6 and 11 11622
effect of translation to presentation currency 25178
balance at 31 december 2012 623568 
additions 1023818 
change in decommissioning liabilities note 26 857
effect of translation to presentation currency 72268
balance at 31 december 2013 1574261 
the carrying values of property plant and equipment capital constructioninprogress mine under development and 
exploration and evaluation assets as of 31 december 2012 were represented in these consolidated financial statements 
to provide for enhanced disclosure of longlived physical assets by type and nature of its use for details refer to note 2 
the carrying values of mineral rights related to a mine project under development were as follows
31 december
2013 2012
mineral rights variation is due to exchange rate only 63251  68159 
mine under development include only natalka mine magadan business unit
  during the year ended 31 december 2012 impairment of mining assets in the amount of usd 11622 thousand was recognised  
following the decision to abandon activities related to the omchak deposit which represented a minor part of the natalka deposit polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
195
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18 exploration and evaluation assets
nezhda
ninskoye
deg
dekan
skoye
chertovo 
korito
razdo
linskoye panimba
olym
piada bamsky smezhny
medvezhy 
zapadny
blago
dat
noye other total
balance at  
31 december 2011 232345  48774  41200  22031  26020  21604  21054  5917  2702    30065  451712 
additions 19108  130  3139  3559  1295  1057  160  4039  1899    10858  45244 
change in decom 
missioning liabilities 
note 26 1901                      1901 
impairment  
of continuing 
operations notes 6 
and 11 2063                   338 2401
disposals  
of subsidiaries 
note 53                     4424 4424
effect of translation to 
presentation currency 11397  2888  2474  1317  1611  1322  1268  349  105    4047  26778 
balance at  
31 december 2012 262688  51792  46813  26907  28926  23983  22482  10305  4706    40208  518810 
additions 6678  395  4178  5765  426  2161  302  4817  456  4853  2621  32652 
change in decom
missioning liabilities 
note 26 2909                     2909
impairment  
of continuing 
operations notes 6 
and 11 247500
 
48258                 20710
 
316468
disposals of subsidiaries 
note 52          
 
19190 19190
effect of translation to 
presentation currency 18957 3929 3483 2093 2094 1785 1627 809 413 334 2785 38309
balance at  
31 december 2013     47508  30579  27258  24359  21157  14313  4749  4519  144  174586 
the carrying values of property plant and equipment capital constructioninprogress mine under development and 
exploration and evaluation assets as of 31 december 2012 were represented in these consolidated financial statements 
to provide for enhanced disclosure of longlived physical assets by type and nature of its use for details refer to note 2  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
196
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19 investments in securities and other financial assets
31 december
2013 2012
noncurrent
loan participation notes     13286 
loans receivable 1765  2748 
subtotal 1765  16034 
current
bank deposits 47815 68286
equity investments in listed companies held for trading    9276
other 418 798
subtotal 48233 78360
total 49998 94394
bank deposits
bank deposits bearing interest at 657–712 31 december 2012 780–876 per annum are denominated in rub with 
a maturity date in january – march 2014
20 inventories
31 december
2013 2012
inventories expected to be recovered after 12 months
stockpiles 291711 234550
goldinprocess  3201 7455
subtotal 294912 242005
inventories expected to be recovered in the next 12 months
stockpiles 110915 73280
goldinprocess 86619 112040
refined gold  28215  24393 
stores and materials  476366 449767
subtotal 702115 659480
total 997027 901485
the following impairments have been recognised following a reassessment of net realisable value by the company
year ended 31 december
2013 2012
longterm stockpiles notes 6 and 11 33365 
goldinprocess notes 6 and 11 15205 
total 48570  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
197
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21 deferred expenditures 
31 december
2013 2012
deferred expenditures 16330 19090
deferred expenditures relate to the preparation for the seasonal alluvial mining activities comprised of excavation costs 
general production and specific administration costs
22 trade and other receivables
31 december
2013 2012
trade receivables for gold sales     20284 
other receivables 39010  36342 
less allowance for doubtful debts 11570 11257
total 27440 45369 
substantially all gold sales are made to banks with immediate payment terms 
other receivables include amounts receivable from sales of electricity transportation handling warehousing services and 
other services the procedure for accepting a new customer includes checks by the security department regarding the 
customer’s business reputation licences and certifications
23 taxes receivable
31 december
2013 2012
reimbursable value added tax 217645  210383 
income tax prepaid 25186  6683 
other prepaid taxes 6893  3769 
total 249724  220835  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
198
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24 cash and cash equivalents
31 december
2013 2012
bank deposits  
 rub 453025  524947 
 usd 190389  100000 
current bank accounts  
 rub 73106 100411
 usd 91249  232769 
other cash and cash equivalents 906  1805 
total 808675 959932
bank deposits are denominated in rub and usd and bear interest of 4075 per annum with original maturity within 
three months
25 share capital
the authorised share capital of the company comprises 3600000 thousand ordinary shares with a par value of gbp 00001 
per share
the issued and fully paid up share capital of the company comprises 3032150 thousand ordinary shares issued at a pre
mium resulting in share capital of usd 482 thousand and additional paidincapital of usd 2151765 thousand
dividends to shareholders of the company
year ended 31 december  
2013 2012
dividend declared and paid during the year 
usd thousand 320195 124318
us cents per share 011 004
the final dividend for 2012 in the amount of usd 00824 per share and a special dividend of usd 00232 per share in 
respect of the sale of the group’s gold mining assets in kazakhstan kyrgyzstan and romania were approved at the annual 
general meeting at 31 may 2013 and paid on 7 june 2013  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
199
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26 site restoration and environmental obligations
business units
total krasnoyarsk
irkutsk 
alluvial 
irkutsk 
ore  
 yakutia 
kuranakh magadan exploration kazakhstan 
balance at 31 december 2011 47827 6079 16485 32046  5371 42068 149876
new obligations raised note 17     2012   2012
change in estimation 
notes 10 15 17 18 13653 299 5370 24694  1901 4728 46245
unwinding of discount on 
decommissioning obligations 4438 418 1501 2646   3140 12143
disposal of subsidiaries note 53       5022 5022
other    667  516  1183
effect of translation to presentation 
currency 2653 381 899 1417 48 380 575 5203
balance at 31 december 2012 41265 7177 13515 12082 2060 8168 34883 119150
change in estimation 
notes 10 15 17 18 8556 512 1635 349 857 3968     15877
unwinding of discount on 
decommissioning obligations 2835  459  900  951      297      5442 
disposals of subsidiaries note 52                         34641 34641
other                 147  256  309 94 
effect of translation to presentation 
currency 2818 515 953 886 129 388 67  5622
balance at 31 december 2013 32726  6609  11827  11798  1221  4365      68546 
the principal assumptions used for the estimation of site restoration and environmental obligations were as follows
31 december
2013 2012
discount rates 58–87 62–83
inflation rates 50–65 25–81
expected mine closure dates 2014–2045 2013–2050
the present value of costs to be incurred for settlement of the site restoration and environmental obligations is as follows
31 december
2013 2012
due from 2
nd
 to 5
th
 year 7412 3156
due from 6
th
 to 10
th
 year 15291 11447
due from 11
th
 to 15
th
 year 27251 45877
due from 16
th
 to 20
th
 year 17374 34884
due thereafter 1218 23786
total 68546 119150 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
200
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27 borrowings
nominal 
rate 
31 december
2013 2012
notes due in 2020 i 5625 744241 
hsbc credit facility ii 3 months usd 
libor3 99725 99325
unicredit bank credit facility to ojsc “pervenets” iii 3 months usd 
libor  24 22222 44444
unicredit bank credit facility iii 3 months usd 
libor295    99544
unicredit bank credit facility to ojsc “matrosova 
mine”
iii 6 months usd 
libor  202 55787 
société générale credit facility to ojsc “pervenets” iv 3 months usd 
libor  24 22222 44444
société générale export financing credit facility 
agreement to cjsc “gold mining company polyus”
iv 6 months usd 
libor  055 25546 25389
deutsche bank credit facility to ojsc “matrosova 
mine”
v 6 months usd 
libor  135 19544 
deutsche bank letters of credit with deferred payment 
issued by the order of ojsc “matrosova mine”
v
     nominated in usd 6 month usd 
libor  24  20676 30856
     nominated in eur cost of fund 
cof  27 92417 4345
vtb bank letters of credit with deferred payment 
issued by the order of ojsc “matrosova mine”
vi
     nominated in usd 6 months usd 
libor  17 48560 
     nominated in eur euribor 18 32388 
rosbank letters of credit with deferred payment 
issued by the order of cjsc “gold mining company 
polyus”
vii
6 months usd 
libor  235 22258 
subtotal 1205586 348347
less current portion due within 12 months 268693 187555
longterm borrowings 936893 160792
summary of borrowing agreements 
i notes due in 2020
on 29 april 2013 the company issued usd 750 million notes maturing in 2020 with a fixed coupon rate of 5625 paid 
semiannually the notes are accounted for at amortised cost at the effective interest rate proceeds from the notes are 
being utilised on the natalka construction project respectively interest expense in amount of usd 28795 thousand was 
fully capitalised into mine under development balance at the effective interest rate of 5835 
ii hsbc 
on 10 february 2012 the company entered into a three year usd 100 million credit facility with hsbc to fund the re
demption of the guaranteed senior notes which were redeemed early in 2012 the facility is to be repaid in five equal 
instalments in intervals of three months starting from march 2014 the facility was fully utilised as of 31 december 2013 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
201
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iii unicredit bank
on 4 october 2011 ojsc “pervenets” a subsidiary of the group entered into a three year usd 100 million term loan facil
ity agreement with société générale as a lender to fund general corporate purposes on 6 october 2011 société générale  
transferred usd 50 million of the facility see note iv below to a new lender unicredit bank the facility is to be repaid in 
nine equal instalments in intervals of three months starting from 4 october 2012 as of 31 december 2013 usd 50 million 
had been drawn down and five repayments made
on 29 december 2011 the company entered into a two year usd 100 million facility agreement arranged by unicredit 
bank to fund the redemption of guaranteed senior notes which were redeemed early in 2012 the facility was fully re
deemed as of 31 december 2013
on 26 april 2013 ojsc “matrosova mine” a subsidiary of the group entered into a usd 59 million usd equivalent of 
eur 45 million credit facility agreement arranged by unicredit bank and guaranteed by oekb the austrian export credit 
agency to fund the acquisition of mining equipment scheduled repayments were made in 2013 the maturity of the out
standing amounts varies from 2014 to 2021 
iv société générale 
on 4 october 2011 ojsc “pervenets” a subsidiary of the group entered into a three year usd 100 million term loan facil
ity agreement with société générale as a lender to fund general corporate purposes on 6 october 2011 société générale   
transferred usd 50 million of the facility to a new lender unicredit bank see note iii above the facility is to be repaid in 
nine equal instalments in intervals of three months starting from 4 october 2012 as of 31 december 2013 usd 50 million 
had been drawn down and five repayments made
as of 31 december 2013 usd 25546 thousand was outstanding out of a usd 67502 thousand export financing credit 
facility agreement with société générale for financing to be used for the purchase of mining equipment the facility was es
tablished for facilitation of exports from the united states of america and guaranteed by exportimport bank of the united 
states the maturity of the outstanding amounts varies from 2014 to 2016 the credit facility is secured by the pledge of 
plant and equipment with the net book value of usd 46924 thousand 2012 usd 52375 thousand 
v deutsche bank 
on 7 august 2013 ojsc “matrosova mine” a subsidiary of the group entered into a usd 22 million credit facility agree
ment arranged by deutsche bank and guaranteed by ekn the swedish export credit agency to fund the acquisition of 
mining equipment scheduled repayments were made in 2013 the maturity of the outstanding amounts varies from 2014 
to 2018 
as of 31 december 2013 ojsc “matrosova mine” had outstanding a number of letter of credit agreements with deutsche 
bank for the acquisition of mining equipment with deferred payment terms the maturity of the outstanding amounts var
ies from 2014 to 2015
vi vtb bank 
as of 31 december 2013 ojsc “matrosova mine” had outstanding a number of letter of credit agreements with vtb bank 
for the acquisition of mining equipment with deferred payment terms the maturity of the outstanding amounts varies 
from 2014 to 2017
vii rosbank 
as of 31 december 2013 cjsc “gold mining company polyus” had an outstanding letter of credit agreement with rosbank 
for the acquisition of mining equipment with deferred payment terms the maturity of the outstanding amounts varies 
from 2014 to 2016 polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
202
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27 borrowings continued
viii unused credit facilities
on 15 march 2012 cjsc “gold mining company polyus” a subsidiary of the group entered into a three year rub 10 bil
lion approximately usd 306 million credit line with vtb bank to fund its general corporate purposes the interest rate is 
subject to a separate agreement under each of the credit line drawdowns
on 25 july 2012 ojsc “matrosova mine” a subsidiary of the company entered into a finance agreement with vtb bank 
for a total amount of up to rub 5 billion approximately usd 153 million the facility is used to support the purchase of 
equipment for the natalka project 
ix other matters
cjsc “gold mining company polyus” guaranteed liabilities of all the companies of the group under all the finance agree
ments
there were a number of covenants in effect as of 31 december 2013 under several loan agreements according to which 
the respective subsidiaries of the company and company itself are limited in distribution of their assets the group is not 
allowed to divest more than 10 of its assets in any form of transaction without prior consent of the banks limitation is 
applicable to the most significant subsidiaries of the group
in addition in accordance with certain bank covenants the company is restricted in the right to dispose of the controlling 
share in certain significant subsidiaries of the group also there is a restriction on transfer of noncore assets between 
certain subsidiaries of the group
the group was in compliance with these covenants as of 31 december 2013
28 deferred tax liabilities
the movement in the group’s deferred taxation position was as follows
year ended 31 december
2013 2012
net deferred tax liability at beginning of the year 208998  184207 
recognised in the consolidated income statement 41275 14633 
deferred tax liability disposed as a result of  discontinued operations 26722 
other 12650 
effect of translation to presentation currency 19235 10158 
net deferred tax liability at end of the year 134416  208998 
deferred taxation is attributable to the temporary differences that exist between the carrying amounts of assets and li
abilities for financial reporting purposes and the amounts used for tax purposes the deferred tax amounts resulted from 
temporary differences in the following accounts are presented below polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
203
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31 december
2013 2012
property plant and equipment 108739  192923 
inventory 72559  61592 
investments 202 1825
receivables 777  1322
accrued expenses 47457 42370
total 134416 208998
unrecognised deferred tax asset
the unrecognised deferred tax asset in respect of tax losses carried 
forward available for offset against future taxable profit of certain 
subsidiaries within the group 87620  40143 
such tax losses expire in periods up to ten years and are not recognised 
as management does not believe it is probable that future taxable profit 
will be available against which the respective entities can utilise the 
benefits
unrecognised deferred tax liability
the unrecognised deferred tax liability for taxable temporary  
differences associated with investments in subsidiaries 26298  78020 
the deferred tax liability presented above was not recognised because the group is able to control the timing of the rever
sal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future
29 trade other payables and accrued expenses
31 december
2013 2012
trade payables to third parties 32349  41204   
other payables
other accounts payable and accrued expenses 89644  103968   
wages and salaries payable 86372  81768 
dividends payable to noncontrolling interests 6085  25906 
interest payable 9632  726 
total other payables 191733  212368 
accrued annual leave 36295  36274 
total 260377 289846
the average credit period for payables at 31 december 2013 was 19 days 2012 21 days  no interest was charged on 
the outstanding payables balance during the credit period the group has financial risk management policies in place 
which include budgeting and analysis of cash flows and payments schedules to ensure that all amounts payable are settled 
within the credit period polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
204
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30 taxes payable
31 december
2013 2012
income tax payable 705  30583 
value added tax 13442  14227 
social taxes 22774  20319 
tax on mining 7898  15306 
property tax 2787  4123 
other taxes 5369  43236 
total 52975 127794
31 related parties
related parties include substantial shareholders entities under common ownership and control with the group and mem
bers of key management personnel the company and its subsidiaries in the ordinary course of business enter into pur
chase and service transactions with related parties
the group had no transactions with its shareholders during the years 2013 and 2012 
entities under common ownership
the group had the following outstanding balances and investments with entities under common control
31 december
2013 2012
cash and cash equivalents at bank “mezhdunarodniy finansoviy club”  151692 
loan participation notes “rbc”  14366 
investments in securities and other financial assets at “mezhdunarodniy 
finansoviy club”  7603 
equity investments in listed companies held for trading “rbc”  7465 
advances and prepaid expenses paid to suppliers  298 
following the disposal of the company’s shares by one of the principal shareholders in february 2013 certain entities 
ceased to be related parties 
the group entered into the following transactions with entities under common control
year ended 31 december 
2013 2012
purchase of goods and services  2988 
interest income 1353 10147 
key management personnel
shortterm compensation of key management personnel amounted to 47876  35012  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
205
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32 commitments and contingencies
commitments
capital commitments
the group’s contracted capital expenditure commitments are as follows
31 december
2013 2012
natalka project  69129 300859
other  77350 155649
total 146479 456508
operating leases group as a lessee
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 2060 future minimum lease payments due under noncan
cellable operating lease agreements at the end of the year were as 
follows
due within one year 4385 2928
from one to five years 14260 9236
thereafter 34545 19085
total 53190 31249
contingencies
litigations
in the ordinary course of business the group is subject to litigation in a number of jurisdictions the outcome of which is 
uncertain and could give rise to adverse outcomes at the date of issuance of these consolidated financial statements there 
were no material claims and litigation applicable to the group except for the lawsuit related to the additional dividends 
distribution attributable to preferred shares of ojsc “lenzoloto” for the amount of usd 8978 thousand management 
believes that this claim will not have a material adverse impact on the group
insurance
the insurance industry is not yet well developed in the russian federation and many forms of insurance protection com
mon in more economically developed countries are not yet available on comparable terms the group does not have full 
insurance coverage for its mining processing and transportation facilities for business interruption or for third party li
abilities in respect of property or environmental damage arising from accidents on the group’s property or relating to the 
group’s operations other than limited coverage required by law polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
206
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32 commitments and contingencies continued
the group as a participant in exploration and mining activities may become subject to liability for risks that cannot be 
insured against or against which it may elect not to be insured because of high premium costs losses from uninsured 
risks may cause the group to incur costs that could have a material adverse effect on the group’s business and financial 
condition
taxation contingencies in the russian federation
commercial legislation in the russian federation including tax legislation is subject to varying interpretations and frequent 
changes in addition there is a risk of tax authorities making arbitrary judgements of business activities if a particular 
treatment based on management’s judgement of the group’s business activities was to be challenged by the tax authori
ties the group may be assessed with additional taxes penalties and interest
generally taxpayers are subject to tax audits with respect to three calendar years preceding the year of the audit however 
completed audits do not exclude the possibility of subsequent additional tax audits performed by upperlevel tax inspec
torates reviewing the results of tax audits of their subordinate tax inspectorates also according to the clarification of the 
russian constitutional court the statute of limitation for tax liabilities may be extended beyond the three year term set 
forth in the tax legislation if a court determines that the taxpayer has obstructed or hindered a tax inspection
management of the group is confident that applicable taxes have all been accrued and consequently creation of provi
sions is not required
under the russian tax legislation the authorities have a period of up to three years to reopen tax declarations for further 
inspection changes in the tax system that may be applied retrospectively by the authorities could affect the group’s previ
ously submitted and assessed tax declarations
with regards to matters where practice concerning payment of taxes is unclear management estimate that there were no 
tax exposures at 31 december 2013 and 2012
environmental matters
 the group is subject to extensive federal and local environmental controls and regulations in the regions in which it oper
ates the group’s operations involve the discharge of materials and contaminants into the environment disturbance of land 
that could potentially impact on flora and fauna and give rise to other environmental concerns
the group’s management believes that its mining and production technologies are in compliance with the existing russian 
environmental legislation however environmental laws and regulations continue to evolve the group is unable to predict 
the timing or extent to which those laws and regulations may change such change if it occurs may require that the group 
modernises technology to meet more stringent standards
the group is obliged under the terms of various laws mining licences and ‘use of mineral rights’ agreements to decom
mission mine facilities on cessation of its mining operations and to restore and rehabilitate the environment management 
of the group regularly reassesses site restoration and environmental obligations for its operations estimations are based 
on management’s understanding of the current legal requirements and the terms of the licence agreements should the 
requirements of applicable environmental legislation change or be clarified the group may incur additional site restoration 
and environmental obligations polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
207
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33 financial instruments risk management activities
capital risk management
the group manages its capital to ensure that entities of the group will be able to continue as a going concern while max
imising the return to the shareholders through the optimisation of the debt and equity balance the capital structure of the 
group consists of net debt borrowings as described in note 27 less cash and cash equivalents disclosed in note 24 and 
equity of the group comprising issued share capital reserves retained earnings and noncontrolling interests
major categories of financial instruments
the group’s principal financial liabilities comprise borrowings other noncurrent liabilities and trade and other payables 
the main purpose of these financial instruments is to finance the group’s operations the group has various financial assets 
such as accounts receivable and loans advanced cash and cash equivalents and promissory notes and other investments
31 december
2013 2012
financial assets
financial assets at fvtpl
equity investments in listed companies held for trading     9276 
loans and receivables including cash and cash equivalents
cash and cash equivalents 808675  959932 
bank deposits 47815  68286 
trade and other receivables 27440  45369 
loans receivable 1765  2748 
loan participation notes accounted for at amortised cost     13286 
total financial assets 885695  1098897 
financial liabilities
borrowings 1205586  348347 
trade payables 32349  41204 
other payables 191733  242519 
other noncurrent liabilities     524 
total financial liabilities 1429668  632594 
all of the financial assets and liabilities carrying values approximate the fair value except for the notes due 2020 which 
has a fair value of usd 727943 thousand at 31 december 2013 and is classified as level 1 as the fair value is based on 
quoted prices
the main risks arising from the group’s financial instruments are interest rate foreign currency credit and liquidity risks 
interest rate risk
the company is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates the risk is man 
aged by the company by maintaining an appropriate mix between fixed and floating rate borrowings
if the interest rate was 1 higherlower during the year ended 31 december 2013 interest expense for the year 2013 
would increasedecrease by usd 9761 thousand 
the group does not enter into any hedging contracts or use other financial instruments to mitigate the commodity price risk polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
208
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33 financial instruments risk management activities 
continued
foreign currency risk
currency risk is the risk that the financial results of the group will be adversely affected by changes in exchange rates to 
which the group is exposed  the group undertakes certain transactions denominated in foreign currencies prices for gold 
are quoted in usd based on international quoted prices and paid in rub the majority of the group’s expenditures are 
denominated in rub accordingly operating profits are adversely impacted by appreciation of rub against usd in assess
ing this risk management takes into consideration changes in gold price
the carrying amounts of monetary assets and liabilities denominated in foreign currencies other than functional currencies 
of the individual group entities were as follows
31 december
2013 2012
assets
usd 291507  348508 
euro 1597  1888 
total 293104  350396 
liabilities
usd 1098881  381499 
euro 93767  14087 
total 1192648  395586 
currency risk is monitored on a monthly basis by performing sensitivity analysis of foreign currency positions in order to 
verify that potential losses are at an acceptable level
the table below details the group’s sensitivity to changes of exchange rates by 10 which is the sensitivity rate used by 
the group for internal analysis the analysis was applied to monetary items at the reporting dates denominated in respec
tive currencies
year ended 31 december
2013 2012
profit or loss rub to usd 80737  3852 
profit or loss rub to euro 12688  1612 
credit risk
credit risk is the risk that a customer may default or not meet its obligations to the group on a timely basis leading to 
financial losses to the group credit risk arises from cash cash equivalents and deposits kept with banks loans granted 
advances paid promissory notes and trade and other receivables and other investments in securities
in order to mitigate the credit risk the group conducts its business with creditworthy and reliable counterparties mini
mises the advance payments to suppliers and actively uses letters of credit and other trade finance instruments polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
209
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the group employs a methodology for inhouse financial analysis of banks and nonbanking counterparties which enables 
the management to estimate an acceptable level of credit risk with regard to particular counterparties and to set appropri
ate individual risk limitations within the group’s core companies the procedures for preparing new agreements include 
analysis and contemplation of credit risk estimation of the aggregate risk associated with a counterparty arising both from  
an agreement under consideration and from previously existing contracts if any and verifying compliance with individual 
credit limits 
the group’s credit risk profile is regularly observed by management in order to avoid undesirable increase in risk limit 
concentration of credit and to ensure compliance with the above mentioned policies and procedures
although the group sells more than 84 of the gold produced to three major customers the group is not economically 
dependent on these customers because of the high level of liquidity in the gold commodity market  a substantial portion 
of gold sales are made to banks on advance payment or immediate payment terms therefore credit risk related to trade 
receivables is minimal the outstanding receivables for gold sales are presented as follows
31 december
2013 2012
trade receivables for gold sales     20284 
gold sales to the group’s three major customers individually exceeding 9 of the group’s gold sales are presented as 
follows
year ended 31 december
2013 2012
nomos banks       1057160      1092484 
vtb bank      446465      1004958 
bank of moscow           390789         239301 
gold sales to three major customers 
84 of the group’s gold sales       1894414     2336743 
other receivables include amounts due in respect of the sale of electricity transportation handling and warehousing ser
vices and other services the procedures for accepting a new customer include checks by the security department and 
responsible onsite management for business reputation licences and certification creditworthiness and liquidity
management of the group believes that there is no other significant concentration of credit risk
liquidity risk
liquidity risk is the risk that the group will not be able to settle all liabilities as they are due  the group’s liquidity position 
is carefully monitored and managed the group manages liquidity risk by maintaining detailed budgeting and cash fore
casting processes and matching the maturity profiles of financial assets and liabilities to help ensure that it has adequate 
cash available to meet its payment obligations
historically the group has not relied extensively on external financing following the development of new capital projects 
during 2013 the group issued notes and arranged certain external finance facilities with the banks see note 27
management believes that in case of need the group would be able to raise sufficient funding within a reasonable time
frame and on favourable terms due to its strong historical operations and positive operating cash flow  polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
210
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33 financial instruments risk management activities 
continued
the group’s cash management procedures include mediumterm forecasting budget approved each financial year and 
updated on a quarterly basis shortterm forecasting monthly cashflow budgets are established for each business unit 
and a review of each entity’s daily cash position using a twoweek rolling basis
presented below is the maturity profile of the group’s financial liabilities as at 31 december 2013 based on undiscounted 
contractual payments including interest payments
borrowings
other 
 noncurrent 
liabilities
trade
and other
payables total principal interest
due in the first year 268693  60711  214385 543789 
due in the second year 117524  44977   162501
due in the third year 25924  44291   70215
due in the fourth year 19413  43722   63135
due in the fifth year 9145  43417   52562
due in the period between sixth to 
eight years 
  
770921 
 
 57712 
 

 

 
 828633 
total 1211620  294830  214385 1720835
presented below is the maturity profile of the group’s financial liabilities as at 31 december 2012 based on undiscounted 
contractual payments including interest payments
borrowings
other 
 noncurrent 
liabilities
trade 
and other 
payables total principal interest
due within three months 11481 2053 524 282997 297055
due within three to nine months 61235 4526   65761
due within nine to twelve months 115294 2673   117967
due in the second year 52811 4080   56891
due in the third year 108366 659   109025
due in the fourth  year 290 2   292
due in thereafter     
total 349477 13993 524 282997 646991
34 events after the reporting date
there have been no material reportable events since 31 december 2013 and the date of signing the report
 borrowings are presented net of upfront commissions paid to banks polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
211
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35 investments in significant subsidiaries
351 information about significant subsidiaries of the group 
subsidiaries nature of business
effective  held
1
  
at 31 december
 
2013 2012
incorporated in russian federation
ojsc “polyus gold”
 2
management company 95 95
cjsc “gold mining company polyus” mining open pit 95 95
ojsc “aldanzoloto grk” mining open pit 95 95
ojsc “lenzoloto” market agent 61 61
cjsc “zdk lenzoloto” mining alluvial 63 63
cjsc “lensib”
 3
mining alluvial 38 38
cjsc “svetliy” mining alluvial 53 53
cjsc “marakan” mining alluvial 53 53
cjsc “dalnaya taiga” mining alluvial 52 52
cjsc “sevzoto”
 3
mining alluvial 41 41
ojsc “matrosova mine” mining development stage 95 95
cjsc “tonoda” mining exploration stage 95 95
ojsc “pervenets” mining open pit 95 95
ojsc “southverkhoyansk mining company” mining exploration stage 95 95
llc “polyus stroy” construction 95 95
incorporated in british virgin islands
polyus exploration limited geological research 95 95
jenington international incorporated market agent 95 95
incorporated in kazakhstan
jsc “mmc kazakhaltyn” mining underground  100

1
 effective  held by the company including holdings by other subsidiaries of the group
2
 effective  includes 9295 of ordinary shares held directly by the company as at 31 december 2013 and 2012
3
 the company maintains control of these entities as it continues to govern their financial and operating policies and manage returns 
from them through its ability to appoint the majority in the board of directors a majority of the board members for these entities 
are representatives of the company and are therefore consolidated even though the effective interest is less than 50 as at 
31 december 2013 and 2012 and for the years then ended direct ownership in those subsidiaries by immediate parent is in each 
case exceeds 50 and there are no other additional agreements or other instances which could have set limits on the company’s 
ability to execute its control over its subsidiaries polyus gold international  annual report  2013
notes to the consolidated financial statements for the year 
ended 31 december 2013 in thousands of us dollars
212
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35 investments in significant subsidiaries continued
352 summarised financial information of each of the group’s subsidiary that have  
a material noncontrolling interest
the summarised financial information below represents amounts before intragroup eliminations 
summarized statements
ojsc “polyus gold” 
consolidated
ojsc “lenzoloto” 
consolidated
2013 2012 2013 2012
information as at 31 december
current assets 1994597 2393823 175523 215118
noncurrent assets 3822698 3240275 68881 72301
current liabilities 536031 805513 25120 25137
noncurrent liabilities 1157767 351572 13522 9232
equity attributable to the owners of the subsidiary 3848218 4194368 127060 157348
noncontrolling interests 275279 282645 78702 95702
information for the years ended 31 december
revenue 2258599 2618024 277351 363552
loss  profit for the year 61004 891931 2142 73118
loss  profit attributable to noncontrolling interests 3825 20298 12966 20977
total comprehensive loss  income 380002 1087942 2142 73118
net cash inflow from operating activities 428380 968543 74470 110968
net cash outflow  inflow from investing activities 1160594 1255066 5018 61467
net cash inflow  outflow from financing activities 635969 452847 82622 112094
dividends paid to noncontrolling interests 42967 47547 25741 35425
353 significant restrictions on the company’s ability to access or use the assets and settle the 
liabilities of the group
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 stand
ards 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 the 
distributable profits and reserves in these consolidated financial statements polyus gold international  annual report  2013
213
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balance reserve 
the volume of material that indicates the presence of metal 
at a sufficient probability level the economic value of which 
is confirmed by the state reserves committee 
biooxidation biox
oxidation of sulphide minerals exposed to bacteria with 
metal extraction through desalination 
carboninleach cil 
a gold recovery process in which goldbearing ore acti
vated carbon and cyanide are mixed as slurry the cyanide 
dissolves the gold which is subsequently absorbed by and 
separated from the carbon
carboninpulp cip 
a method of recovering gold and silver from pregnant cya
nide solutions by adsorbing the precious metals to granules 
of activated carbon 
cutoff grade 
the minimally acceptable sample value that can be used 
to determine the economic value of a mineral unit cutoff 
grade – unit value that optimises net value generated by 
developing property 
cyanidation cyanide desalination 
a method of extracting gold or silver from crushed or milled ore 
by dissolving it in a weak cyanide solution may be performed 
on crushed ore stored in containers or in piles in the open air 
cyanide code 
international cyanide management code for the manufac
ture transport and use of cyanide in the production of gold  
a voluntary industry programme for the gold mining indus
try to promote responsible management of cyanide used in 
gold mining enhance the protection of human health and 
reduce the potential for environmental impacts 
doré doré alloy 
unrefined gold a commercial end product of a gold mill 
which is produced by alloying the products of the previous 
ore concentration processes
equator principles 
a voluntary set of standards for determining assessing and 
managing social and environmental risk in project financing 
flotation 
process of physical segregation during which minerals at
tach to bubbles and resurface as other minerals sink 
heap leaching hl 
a process whereby valuable metals usually gold and silver 
are leached from a heap or pad of crushed ore by leaching 
solutions percolating down through the heap and collected 
from a sloping impermeable liner below the pad 
iso 14001
international standard for the establishment of an environ
mental management system 
appendix  
glossary polyus gold international  annual report  2013
214
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jorc code 
australasian reporting code for mineral resources and ore 
reserves developed by the joint committee on ore reserves 
of the australasian institute of mining and metallurgy the 
australian institute of geological sciences and the mineral 
council of australia the currently valid code dates to 2004 
mineral reserve 
russian classification the russian equivalent of the west
ern notion of mineral resources and ore reserves mineral 
reserves are subdivided into the categories a b c
1
 and 
c
2
 depending on the extent of their certainty and degree 
of technological exploration 
offbalance mineral reserves 
material volume which manifests metal availability to a suf
ficient extent of certainty but whose economic extraction 
profitability has not been proved 
ohsas 18001
international standard for health and safety management 
open pit 
open surface excavation among these are opencast mines 
and open pits
mineralised body which is either profitably exploited or which 
manifests reasonable certainty of profitable exploitation 
ore field 
the total number of mines used to exploit a common min
eral deposit or a group of closely interconnected ore bodies 
diggings 
ore reserve jorc code 
the part of measured andor indicated mineral resources 
that may be mined on an economically profitable basis 
oxide ore 
ore exposed to the process of natural oxidation 
refractory ore 
ore that resists the action of chemical reagents in the nor
mal treatment processes and which may require pressure 
leaching or other means to effect the full recovery of the 
valuable minerals 
resininpulp rip 
as carboninpulp but using resin to absorb the leached gold 
state reserves commission 
state reserves commission of the federal agency for sub
soil use 
state commission for mineral reserves set up in 1927 the 
src controls the usage of mineral resources on behalf of 
the rf ministry of ecology and natural resources 
sulphide ore 
ore in its primarily mineralised state which has not been 
exposed to natural oxidation  polyus gold international  annual report  2013
215
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ardml acid rock drainage and metal leaching
bu business unit
board board of directors
cdp community development plan
cil carbon in leach
cip carbon in pulp
cpi consumer price index
esia environmental and social impact assessment
ems environmental management system
ghg greenhouse gas
 
gri   global reporting initiative – global reporting 
initiative in the area of sustainable develop
ment
gt gram per tonne
hr human resources
hsec health safety environment and community 
hsms health and safety management system
hs health and safety
icmc international cyanide management code
icmm international council on mining and metals
ifc international finance corporation
ifrs international financial reporting standards
iso 14001  international standard for the establishment 
of an environmental management system
kpi key performance indicator
lse london stock exchange
lti lost time injury 
ltifr lost time injury frequency rate 
mii measured indicated and inferred
mtpa million tonnes per annum
mw megawatt
ngo nongovernment organisation
pgil polyus gold international limited
ppe personal protective equipment
 
pp proved and probable
rd research and development
ril resininleach
rip resininpulp
sag semiautogenous grinding 
t tonne
appendix  
abbreviations polyus gold international  annual report  2013
216
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polyus gold international limited 
address argyll 18b charles street london w1j 5du 
tel 44 0 20 3585 3537 fax 44 0 20 3585 3538 
wwwpolyusgoldcom 
infopolyusgoldcom
registrar 
computershare investor services jersey limited 
po box 329 queensway house hilgrove street st helier jersey je4 9xy 
tel 44 0 1534 281200
auditor
deloitte llp
2 new street square london ec4a 3bz united kingdom 
tel 44 20 7936 3000 fax 44 20 7583 1198
contacts  
and advisors polyus gold international  annual report  2013
217
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Summary:
 polyus gold international  annual report  2013
24
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operational and financial review
historically high production was offset by a weaker gold 
price and we recorded revenues of approximately usd 23 
billion versus 27 billion in 2012 during the year we pro
duced usd 422 million of operational cash flow raised usd 
1093 million of new debt and invested usd 1340 million 
in capital construction at the yearend we had usd 349 
million of net debt
dividends
on 31 may 2013 the shareholders approved a final dividend 
in respect of the financial year ended 31 december 2012 
of usd 00824 per ordinary share and a special dividend in re
spect of the financial year ended 31 december 2012 of usd 
00232 per ordinary share in recognition of the successful 
sale of our gold mining assets in kazakhstan kyrgyzstan and 
romania the special dividend and final dividend combined 
represent an aggregate dividend payment of usd 01056 per 
ordinary share for 2012 this resulted in a total payment of ap
proximately usd 320 million which is around 33 of the ad
justed profit from continuing operations for 2012
during april 2014 the board will decide whether to propose 
a dividend for the financial year 2013 taking into account 
the company’s dividend policy the current market situation 
and financial condition
cost control
in the year 2013 the gold price fell 29 most companies 
in the sector including pgil undertook cost control measures 
to align their operations with the new market conditions pol 
yus’ cost control initiatives were focused in three main areas
• the group’s 2013 budget was reviewed and we were 
able to cut selling general and administrative expenses 
sga operational and capital expenditures we also 
decreased exploration expenditures in the krasnoyarsk 
and irkutsk regions
• in january 2013 we committed to commence mining 
activities at the natalka project by the yearend with 
full commissioning of the mine in summer 2014 pro
gress reviews on the natalka development suggested 
that whilst this objective might be have been achiev
able it also carried the possibility of significant addi
1 
yearonyear yoy hereinafter means comparing fy2013 with fy2012
in january 2013 in the trading update for the 2012 we commit
ted to produce 15901684 k oz in 2013 we met the production 
target thanks to the increased output at the verninskoye mine 
yoy
1
 increase by 43 k oz and improved grade and recovery 
at the olimpiada mine 38 k oz yoy increase 
27 chief executive 
officer’s review  polyus gold international  annual report  2013
25
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tional expenditure and greater risks against a backdrop 
of an unfavourable gold price environment our strategy 
is not to produce gold at any price and in any condi
tions accordingly we decided to resequence the de
velopment plan for the natalka project and postpone 
commissioning of the plant from summer 2014 to sum
mer 2015 and continue working on optimising capital 
expenditures and operating technology 
• we developed contingency plans for lower gold price 
scenarios the plans include a detailed action list start
ing with improvements in operational efficiency reduc
tions in discretionary capital expenditures and decrease 
in the level of inventories through to measures like clo
sure of nonefficient enterprises the contingency plans 
also consider the possibility of hedging at certain gold 
price levels
impairments
following the fall in the gold price in h1 2013 the company 
in line with the industry has reassessed the future prospects 
of its exploration and evaluation ee asset portfolio and has 
also reconsidered the economic recoverability of its mining as
sets as a result based on a longterm gold price assump
tion of approximately usd 1350 per oz the company has 
recognised noncash impairment charges of usd 472 million 
in 2013 where usd 49 million is related to the impairment 
of longterm stockpiles and goldinprocess 
these impairments are indeed disappointing but thanks 
to the company’s conservative policy in evaluating reserves 
and projects the level of impairments was moderate com
pared to our global peers
our good operational results came out of the hard work of the 
group’s employees over the last few years on behalf of the 
management i would like to thank our employees for their 
efforts in delivering this successful performance in 2013
pavel grachev
interim ceo
london 24 march 2014
olimpiada an open pit polyus gold international  annual report  2013
26
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adjusted ebitda
3
 of usd 
910 million 2012 usd 1303 
million and adjusted ebitda 
margin of 39 2012 49
adjusted operating profit
2
 
of usd 694 million compared 
to usd 1211 million in 2012
following the significant fall in the gold price in 2013  
an impairment of usd 472 million was recognised primary related 
to the nezhdaninskoye usd 248 million and degdekanskoye  
usd 48 million deposits at the exploration stage and the kuranakh 
mine usd 138 million
gold sales down by 14 to usd 
23 billion reflecting a 17 
fall in the gold price but partly 
offset by a 4 increase in gold 
sold fy 2012 usd 26 billion
total cash costs tcc per 
oz sold
1
 rose by just 1 to usd 
707 per oz following improved 
cost control throughout the 
operations and the appreciation 
of the us dollar against the 
russian rouble by 2 which 
helped to offset cost inflation
281 financial highlights
28 financial review
adjusted profit for the year 
from continuing operations
4
 
decreased 42 to usd 564 
million fy 2012 usd 978 
million
adjusted earnings per share
5
 
of 17 us cents fy 2012 32 
us cents
profit for the year from 
continuing operations decreased 
to usd 143 million compared 
to usd 965 million in 2012
net debt position of usd 349 
million compared with a net 
cash position of usd 680 
million at the end of 2012
1 
tcc per oz sold – for a definition and the calculation used refer to section 2811 “total cash costs per oz sold”
2 
adjusted operating profit represents operating profit before impairment charges
3 
adjusted ebitda – for a definition and calculation refer to section 2810 “adjusted ebitda”
4 
adjusted profit for the year from continuing operations represents profit from continuing operations before impairment charges
5  
adjusted earnings per share represents adjusted profit from continuing operations attributable to the shareholders of the company 
divided by the weighted average number of ordinary shares polyus gold international  annual report  2013
27
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financial results
usd ‘000 unless specified otherwise
year ended 31 december
 change
yoy 2013 2012
gold production k oz 1649 1569 5
gold sold k oz 1631 1571 4
average realised gold price usd per oz 1385 1666 17
total revenue 2328915 2679913 13
profit for the year from continuing operations 143001 965104 85
weighted average number of ordinary shares ‘000s
1
3032150 2950916 3
earnings per share – basic and diluted us cents 4 31 87
adjusted operating profit 693528 1210527 43
adjusted operating profit margin  30 45 –
adjusted profit for the year from continuing operations 563791 977966 42
adjusted earnings per share – basic and diluted us cents 17 32 47
net cash flow from operations 422339 991769 57
capital expenditures 1439691 808886 78
adjusted ebitda 910076 1303131 30
adjusted ebitda margin  39 49 –
total cash cost per oz sold usd per oz 707 697 1
allin sustaining costs per oz sold usd per oz
2
1002 1007 1
net debtcash 349096 679871 –
1  
the weighted average number of shares changed following the sale of treasury shares on 10 may 2012 which resulted in an in
crease in the number of shares outstanding and therefore the average number for the year
2 
allin sustaining costs per oz sold – for a definition and calculation refer to section 2812 “allin sustaining costs per oz sold” polyus gold international  annual report  2013
28
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adjustments for impairment charges for the years ended 31 december 2013 and 2012 
see note 11 to the consolidated financial statements
usd ‘000
year ended 31 december 2013 year ended 31 december 2012
reported impairment adjusted reported impairment adjusted
operating profitloss  
for the year from 
continuing operations 221871 471657 693528 1195103 15424 1210527
addless
finance costs 13878 – 13878 31573 – 31573
income from investments 
net 21348 – 21348 35960 – 35960
foreign exchange gain 4348 – 4348 12026 – 12026
current income tax 
expense 131964 – 131964 246193 – 246193
deferred income tax gain 
expense 41276 50867 9591 219 2562 2781
profitloss for the 
year from continuing 
operations 143001 420790 563791 965104 12862 977966
attributable 
to shareholders of the 
company 133860 394275 528135 922066 12237 934303
weighted average 
number of ordinary 
shares ‘000s 3032150 – 3032150 2950916 – 2950916
earnings per share 
from continuing 
operations basic and 
diluted us cents 4 – 17 31 – 32 polyus gold international  annual report  2013
29
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282 external market factors affecting 
the group’s financial results
the group’s results are affected significantly by movements 
in the price of gold currency exchange rates principally 
the russian roubleus dollar rate and the prevailing infla
tion rates 
gold price
the market price of gold is the most significant factor in
fluencing profitability and operating cash flow in 2013 the 
gold price was volatile and traded in the range usd 1694 
per oz to usd 1192 per oz gold opened the year at usd 
1694 per oz and closed at usd 1205 per oz a fall of 29 
average afternoon gold price fixing in the year 
ended 31 december 2013 usd per oz
exchange rate
the group’s revenue from gold sales is denominated in us 
dollars but the majority of the group’s operating expenses 
are denominated in russian roubles rub accordingly 
an appreciation of the russian rouble against the us dollar 
may negatively affect the group’s margins increasing the 
us dollar value of its russian rouble denominated costs 
conversely an appreciation of the us dollar against the 
russian rouble should positively affect the group’s margins 
by decreasing the us dollar value of its roubledenominated 
costs in 2013 the usd appreciated by 76 against the 
rub and by a further 104 in january – february 2014
 rubusd exchange rate in 2013
inflation
the group’s principal operations are located in russia the 
increase in russia’s cpi consumer price index in 2013 
was 65 2012 66 and the increase in the ppi pro
ducer price index was 81 2012 7 the last fifteen 
years have seen both indices trending downwards 
1700
1600
1500
1400
1300
1200
1100
jan2013
feb2013
mar2013
apr2013
may2013
jun2013
aug2013
sep2013
oct2013
nov2013
jan2014
dec2013
jul2013
3400
3300
3200
3100
3000
2900
jan2013
feb2013
mar2013
apr2013
may2013
jun2013
aug2013
sep2013
oct2013
nov2013
jan2014
dec2013
jul2013 polyus gold international  annual report  2013
30
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in 2013 the group’s gold sales amounted to usd 2258599 
thousand 14 less than in 2012 the decrease in the value 
of gold sales is largely attributable to the fall in the gold 
price on the world market at the end of 2013 the group 
held approximately 34 k oz of refined gold which were sold 
in january 2014 thus in the reporting period the group 
produced 1649 k oz and sold 1616 k oz produced in 2013 
and 15 k oz produced in 2012
total sales volume in 2013 was 1631 k oz against 1571 
k oz in 2012
revenue bridge for the years ended 31 december 
2013 and 2012 usd million
in 2013 the weightedaverage realised gold price was usd 
1385 per oz a 17 decrease on 2012 this was usd 26 
per oz lower than the aagpf on the london market be
cause of the seasonality of production from our alluvial de
posits which do not produce and sell gold during the first 
quarter of the year the aagpf for the first quarter of 2013 
was higher than the full year aagpf 
gold sales volumes by mine for the years ended 31 
december 2013 and 2012 k oz
283 gold sales note 7 to the consolidated financial statements
the following table shows the breakdown of the group’s gold sales for the years ended 31 december 2013 and 2012
year ended 31 december
 change
yoy 2013 2012
gold sales usd thousands 2258599 2618024 14
gold sales k oz 1631 1571 4 
average realised gold price usd per oz 1385 1666 17
average afternoon gold price fixing aagpf usd per oz
1
1411 1669 15
deficit of average realised price compared to average  
afternoon gold price fixing usd per oz for the year 26 3 865
3000
2500
2000
1500
1000
500
0
2012
revenue
2 618
2013
revenue
2 259
gold price 
growth 
decrease
458
gold 
bullion sales 
growth 
decrease
99
2013
kuranakh
138 138
olimpiada
800
700
600
500
400
300
200
100
0
2012
680
654
titimukhta
129
117
blagodatnoye
389
402
verninskoye
46
89
alluvials
205
214
1
 source london bullion market association polyus gold international  annual report  2013
31
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the following table shows sales breakdown by type and by mine in 2013
usd ‘000 
unless 
specified 
otherwise
 krasnoyarsk bu
olim
piada
blago 
datnoye
titimu
khta
1
alluvials kuranakh
vernin
skoye other total
gold produced 
koz 691 395 131 205 138 89 – 1649
gold sold koz
2
680 389 129 205 138 89 – 1631
gold sales 947487 542495 178513 277351 190751 122002 – 2258599
other sales – – – 10172 4311 849 54984 70316
total sales 947487 542495 178513 287523 195062 122851 54984 2328915
1 
includes sales of gold produced from ore purchased from the third partyowned veduga mine
2  
unrefined gold doré for all mines in the krasnoyarsk business unit is stored in a single unit therefore gold sales volumes are bro
ken down in proportion to refined gold production
• in 2013 42 of the group’s gold sales came from 
the olimpiada mine
• in 2013 the krasnoyarsk business unit sold 1198 k oz 
yearend stocks at the refinery in krasnoyarsk amount
ed to 34 k oz which were sold in 2014
•  the olimpiada mine produced 691 k oz of gold and sold 
680 k oz expansion of the biooxidation facility resulted 
in a higher recovery rate 745 vs 737 in 2012 
and therefore higher production up 6
• production at the titimukhta mine increased by 12 
yoy following a plant upgrade and ore deliveries from 
the third party owned veduga deposit
• there was a slight decrease in ore grade at the blago
datnoye mine but this was fully offset by an increase 
in the recovery rate 883 vs 864 in 2012 follow
ing automation of the plant
• production at the verninskoye mine met its design pa
rameters by the yearend following automation the re
covery rate increased by 10 sales increased by 93 
compared to 2012
• output from the kuranakh mine was stable  
at 138 k oz
• following the depletion of gold grade in sand washed 
the alluvials delivered lower volumes of gold
284 cost of gold sales note 8 to the consolidated financial statements
the following table shows the group’s cost of gold sales for the years ended 31 december 2013 and 2012
usd ‘000
years ended 31 december
 change
yoy 2013 2012
cash operating costs 1267931 1127740 12
amortisation and depreciation of operating assets 209152 169923 23
total cost of production 1477083 1297663 14
increase in goldinprocess 
and refined gold inventories 130560 32357 303
cost of gold sales 1346523 1265306 6 polyus gold international  annual report  2013
32
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cash operating costs
breakdown of сash operating costs for the years 
ended 31 december 2013 and 2012
cash operating costs increased from usd 1127740 thou
sand in 2012 to usd 1267931 thousand in 2013 this 12 
increase resulted mainly from increasing costs for consum
ables and spares fuel and labour cost inflation
consumables and spares
a change of mining plan at the olimpiada mine resulted in an 
increase of 28 in ore mined and coupled with the continu
ing rampup in production over the year at the verninskoye 
mine resulted in an increased consumption of tyres explo
sives and spare parts an increase in gold production at olim
piada 6 titimukhta 12 and verninskoye 95 
resulted in higher consumption of cyanide lubricants other 
chemicals grinding balls and spare parts market prices for 
some consumables and spares also increased for example 
the average purchase price for cyanides increased by 10
fuel
fuel costs grew by 43 to usd 184226 thousand this 
increase was as a result of various factors
• a 5 increase in inhouse power generation at the ol
impiada diesel power station to ensure stable power 
supply for the biox process
• the increasing depth of mining at the olimpiada pit 
which resulted in fuel and vehicle maintenance costs 
rising as distances lengthened
• a fuel price increase of approximately 9 
• increases in consumption of diesel fuel petrol oil prod
ucts and lubricants following an early start to the sea
son at the alluvials operation
labour
in 2013 labour costs made up the largest component 
of cash operating costs these costs increased by 13 
to usd 385781 thousand the krasnoyarsk and irkutsk ore 
business units were the major contributors to this increase
•  staffing numbers increased and salary increases of be
tween 10 and 14 were introduced at the krasno
yarsk operation to meet the needs of the competitive 
market for labour in the region
• an 18 increase in the number of personnel at the vernin
skoye mine as a result of the continuing rampup
• an increase in the number of personnel at the com
pany’s service business units due to the construction 
at natalka
tax on mining
the mining tax charge decreased by 14 to usd 165573 
thousand the group increased production by 5 however 
this was offset by a 17 fall in the average realised gold price
power
power expenses increased by 15 to usd 57844 thousand 
at the krasnoyarsk business unit external power consumption 
increased 9 as a result of an increase in ore processed the 
irkutsk ore business unit increased external power consump
tion by 39 and the irkutsk alluvial business unit by 10 
as a result of connection to the federal grid 
120
100
80
60
40
20
0
others
refining costs
outsourced 
mining services
power
tax on mining
labour
fuel
consumables 
and spares
2012
11
7
4
3
17
30
27
2013
7
2
5
13
30
15
29 polyus gold international  annual report  2013
33
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amortisation and depreciation 
of operating assets
amortisation and depreciation of operating assets increased 
by 23 in 2013 to usd 209152 thousand the increase 
primarily relates to increases in depreciation charges for 
fixed assets at
• verninskoye where the plant was put into operation 
in the second half of 2012 and the rampup in produc
tion continued through 2013
• olimpiada titimukhta and kuranakh where the depre
ciation of stripping activity asset has increased over the 
period due to higher carried forward balances
increase in goldinprocess  
and refined gold
in 2013 the total metal inventories balance increased 
by 61 mainly related to
• an increase in ore stockpiles at the krasnoyarsk busi
ness unit in the second quarter of 2013 the group 
changed the mine plan at the olimpiada deposit to en
sure the optimisation of equipment use and enhance
ments to inpit safety which resulted in ore stockpiling
• continued stockpiling of lowgrade ore at the irkutsk ore 
business unit for future processing
• mining operations started at natalka in 2013 the stock
piled ore will be used in production following the com
mencement of the processing plant
• a significant amount of refined gold accumulated at the 
krasnoyarsk refinery plant which was sold in january 
2014
various types of inventories are valued using different ap
proaches refined gold is valued at the average cost of pro
duction per saleable unit of metal workinprocess stock
piles and doré are valued at the average production costs 
at the relevant stage of production for more details please 
refer to section 288 “review of the statement of financial 
position”
285 selling general and administrative 
expenses sga note 9 to the 
consolidated financial statements
in 2013 the group’s sga expenses decreased by 12 
to usd 225795 thousand mainly because taxes other than 
mining and income taxes declined by 59
salaries
in 2013 the group’s administrative labour costs increased 
by 13 to usd 151027 thousand 
the increase is mainly related to oneoff severance re
lated payments to former senior managers of the group 
and an increase in the number of administrative personnel 
at verninskoye 
286 finance costs note 12 to the 
consolidated financial statements
the total cost of debt increased from 28 as at 31 december 
2012 to 44 as at 31 december 2013 and relates mainly 
to the 5625 usd 750 million notes issued during 2013 
however interest expenses accrued on the notes and let
ters of credit were capitalised within the mine under devel
opment balance recognising the use of the proceeds for 
the natalka project development therefore the group’s 
finance costs decreased by 56 in 2013 to usd 13878 
thousand and cost of debt net of interest capitalised de
creased from 28 to 27
debt outstanding and weightedaverage interest 
rate as at 31 december 2013 and 2012
1400000
1200000
1000000
800000
600000
400000
200000
0
31122013 31122012
348347
1205586
275
273
debt 
outstanding 
usd thousand
weighted avarage cost 
of debt net of interest 
capitalized at date  polyus gold international  annual report  2013
34
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287 dividends note 25 to the 
consolidated financial statements
on 31 may 2013 shareholders of the company unanimous
ly voted for final and special dividend payments for the year 
2012 in the total amount of 1056 us cents per ordinary 
share a record dividend payment for the company
dividends per ordinary share in 20082013 
us cents
1
 
 
 
payout ratio
2
 in 20082013 
288 review of the statement 
of financial position
this section presents an analysis of critical balance sheet 
items and should be read in conjunction with the descrip
tions presented in notes 1530 to the consolidated financial 
statements for the year ended 31 december 2013
property plant and equipment  
note 15 to the consolidated financial 
statements
the table below sets forth the components of the group’s 
net book value of property plant and equipment
3
 at 31 de
cember 2013 and 2012
usd ‘000
31 december  
change
yoy 2013 2012
mining assets 1314396 1576431 17 
nonmining  
assets 37945 50136 24 
stripping  
activity assets 153308 175213 13 
net book value 
of property 
plant and  
equipment 1505649 1801780 16
mining assets represent 87 of total property plant and 
equipment the value of these assets declined by 17 
as a result of the disposal of the mining assets in kazakh
stan and kyrgyzstan with a net book value of usd 261150 
thousand the decrease in net book value on account of the 
sale was offset by transfers from capital constructionin
progress due to 
• completion of construction of the full flowsheet at the 
verninskoye mine and associated infrastructure valued 
at usd 140410 thousand
• completion of various projects at the krasnoyarsk busi
ness valued at usd 109748 thousand including au
tomation of the processing plant at blagodatnoye and 
mill throughput expansion at titimukhta in addition 
housing for 570 staff was commissioned at olimpiada 
replacing old facilities 
120
100
80
60
40
20
00
2008 2009 2010 2011 2012 2013
30
nil nil
700
600
500
400
300
200
100
00
2008 2009 2010 2013 2011 2012
601
331
256
341
nil
nil
40
41
23
1
 dividends paid by ojsc polyus gold for 20082010 and pgil for 2011–2013
2
 dividends per share divided by earnings per share expressed as a percentage
3
 adjusted to accumulated amortisation depreciation and impairment
82
special dividends final and interim dividends polyus gold international  annual report  2013
35
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changes to the gross book value of mining assets during the year ended 31 december 2013 usd million
capital constructioninprogress cip 
note 16 to the consolidated financial 
statements
cip represents assets under construction valued at the cost 
of purchase plus the costs required to bring these assets 
into working order 
the following table shows the group’s cip additions for the 
years ended 31 december 2013 and 2012
usd ‘000
year ended  
31 december  
change
yoy 2013 2012 
krasnoyarsk bu 209813 100733 108
capital  
construction bu 68229 133917 49
irkutsk ore bu 53253 111504 52
irkutsk  
alluvial bu 18386 23501 22
yakutia  
kuranakh bu 15673 26684 41
other 17867 66780 73
subtotal  
continuing  
operations 383211 463119 17
discontinued 
operations – 36831 100
total 383211 499950 23
in 2013 additions to cip were mainly driven by the following
• a number of projects at the krasnoyarsk business unit 
including automation of two processing plants at olim
piada and one at titimukhta valued at usd 209813 
thousand
• development of infrastructure at verninskoye valued 
at usd 53253 thousand
• increase of activities of the capital construction bu at 
natalka usd 37280 thousand and
• the start of construction of the peleduy – mamakan pow
er line usd 30949 thousand
mine under development note 17 to the 
consolidated financial statements
mine under development includes only the natalka mine magadan 
business unit for details see section 293 “development” 
exploration and evaluation assets 
note 18 to the consolidated financial 
statements
in 2013 the group invested usd 32652 thousand into 
exploration and reserves evaluation activities some 28 
less than in 2012 this decrease relates to a slowdown and 
termination of exploration activity
• at nezhdaninskoye degdekanskoye and some other 
unpromising deposits which are not expected to be 
economically viable at current gold prices and which 
were therefore impaired at 30 june 2013 for details 
see note 11 to the consolidated financial statements 
• at panimba medvezhy zapadny and other deposits 
where exploration work has ceased because the depos
its are in the final stage of reserve evaluation
mining assets  
at 31122012
verninskoye 
mine
krasnoyarsk 
business unit
other transfers 
from cip
disposals forex 
effect
other mining assests 
at 31122013
2580
110
121
140
395
167
16
2405
3500
3000
2500
2000
1500
1000
500
0 polyus gold international  annual report  2013
36
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most exploration expenses in 2013 related to drilling sampling 
evaluation and costs for audits of reserves and resources 
the table below shows total capitalised exploration expen
ditures for the years ended 31 december 2013 and 2012
usd ‘000
years ended 
31 december
 
change 
yoy 2013 2012
nezhdaninskoye 6678
1
19108 65
razdolinskoye  
inc poputnenskoye
5765
3559
62
smezhny 4817 4039 19
blagodatnoye 4853 – 100
chertovo koryto 4178 3139 33
olimpiada 2161 1057 104
others 4200 14342 71
total investment 
in exploration  
and evaluation assets 32652 45244 28
exploration and evaluation expenditures are capitalised 
when the exploration and evaluation activities have not 
reached a stage that permits a reasonable assessment 
of the existence of commercially recoverable gold resourc
es when the technical feasibility and commercial viability 
of extracting a gold resource are demonstrable and a deci
sion has been made to develop a mine capitalised explora
tion and evaluation assets are reclassified to mines under 
development 
at the end of the year exploration and evaluation assets 
decreased by 66 expenditures of usd 32652 thou
sand were offset by impairment of usd 316468 thousand 
see note 11 to the consolidated financial statements and 
by disposal of subsidiaries see notes 52 and 18 to the 
consolidated financial statements 
inventories note 20 to the consolidated financial statements
the table below shows the balance of metal contained in inventories by type for the group’s subsidiaries for the years 
ended 31 december 2013 and 2012
usd ‘000
years ended 31 december  change 
yoy 2013 2012
krasnoyarsk bu 371840 305112 22
stockpiles 277928 213580 30
goldinprocess 65697 80090 18
refined gold 28215 11442 147
yakutia kuranakh bu 24676 55357 55
stockpiles 12170 45394 73
goldinprocess 12506 9963 26
irkutsk ore bu 78040 68039 15
stockpiles 66873 45795 46
goldinprocess 11167 22244 50
irkutsk alluvial bu 450 526 14
goldinprocess 450 526 14
magadan bu 45655 – 100
stockpiles 45655 – 100
discontinued operations kazakhaltyn – 22684 100
stockpiles – 3085 100
goldinprocess – 6648 100
refined gold – 12951 100
total 520661 451718 15
1 
capitalised expenditures before 30 june 2013 when impairment was recognised polyus gold international  annual report  2013
37
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this increase is represented by 
• the rise in ore stockpiles at the krasnoyarsk business 
unit in q2 2013 the group reviewed the mine plan 
at the olimpiada deposit in an effort to optimise equip
ment utilisation and enhance inpit safety these chang
es have resulted in an increase in stockpiled ore which 
will be processed during 2014 and thereafter
• mining of lowgrade ore at the irkutsk ore business unit 
which is stockpiled for future processing
• in 2013 41 million tonnes of ore were mined for stock
piling at natalka including 947 thousand tonnes at 20 
gt 1498 thousand tonnes of ore at 10 gt and 1668 
thousand tonnes at 06 gt
• a significant amount of refined gold was accumulated 
at the krasnoyarsk refinery plant totalling 34 k oz 2012 
15 k oz which the group sold in january 2014 
the value of stores and materials increased by 6 from 
usd 449767 thousand at the beginning of the year to usd 
476366 thousand as at 31 december 2013 mainly due to
• an increase in consumption at the verninskoye mine
• the krasnoyarsk business unit which increased con
sumption of fuel because of increased haulage costs 
following the change of the mining plan at olimpiada 
and the works to enlarge the pit
capital and reserves note 25 to the 
consolidated financial statements 
the translation reserve has moved by usd 318634 thou
sand in 2013 which reflected the weakening of the russian 
rouble 
during the reporting period the group’s retained earnings 
decreased by 9 to usd 1922264 thousand due to a de
crease in net profit attributable to shareholders of the par
ent company of usd 140274 thousand and usd 320195 
thousand in dividends declared and paid in respect of 2012 
borrowings note 27 to the consolidated 
financial statements 
during the year the company raised usd 1092617 thou
sand in new debt and repaid usd 236233 thousand please 
refer to section 289 “cash flow analysis” for details
as at 31 december 2013 the group’s consolidated debt 
was usd 1205586 thousand the structure of the debt 
at yearend was as follows
debt breakdown by maturity
debt breakdown by type
due within 12 months
due within 24 months
due thereafter
10
68
22
18
2
62
18
bank loans
eca financing
deferred payments under letters of credit
eurobonds polyus gold international  annual report  2013
38
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debt breakdown by currency
debt breakdown by interest rate type
the company expects to repay usd 268693 thousand in 2014 
for more details of the 2014 repayment schedule please refer 
to note 33 to the consolidated financial statements
net cashdebt is defined as shortterm and longterm 
debt less cash and cash equivalents and shortterm bank 
deposits shortterm bank deposits with an original matu
rity of more than 3 months can be withdrawn on demand 
and therefore have the same liquidity as cash and cash 
equivalents net debt should not be considered as an alter
native to current and noncurrent loans and borrowings and 
should not necessarily be construed as a comprehensive 
indicator of the group’s measure of liquidity
the following table sets forth the group’s net debt as at 
31 december 2013 and 2012
 
 
usd ‘000
31 december  
change 
yoy 2013 2012
noncurrent  
borrowings 936893 160792 483 
 current  
   borrowings 268693  187555 43 
  cash and cash 
equivalents 808675 959932 16 
 bank deposits 47815 68286 30 
net debtcash 349096 679871 151
usd eur
90
10
float
62
38
fixed
289 cash flow analysis
operating activities
the decrease in cash inflow from operating activities resulted from a combination of factors mainly the declining gold 
price and the increased working capital requirements due to growth in inventory balances at verninskoye and olimpiada
net ocf in 2012 gold price
decrease
growth in
cos and sga
working 
capital needs
effect from
disposal of
kazakhgold 
assets
sales 
volume 
increase
other net ocf 
in 2013
459
180
99
84
99
153
1200
1000
800
600
400
200
0
992
422
operating cash flow in 2013 usd million polyus gold international  annual report  2013
39
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investing activities
the group spent usd 1023381 thousand 2012 usd 
763789 thousand in investing activities 
in 2013 purchases of capital constructioninprogress ex
ploration and evaluation assets and assets for mine under 
development totalled usd 1347217 thousand 2012 usd 
713089 thousand the group raised usd 291199 thou
sand from the disposal of its subsidiaries in kazakhstan
financing activities 
the group raised usd 744241 thousand from the issue 
of notes due in 2020 usd 750 million net of up front com
mission and usd 348375 thousand from issued letters 
of credit and credit facilities from vtb bank rosbank and 
deutsche bank the group paid out usd 363162 thousand 
in dividends and usd 236233 thousand to repay borrow
ings this resulted in a net cash inflow from financing activi
ties of usd 493222 thousand
2810 adjusted ebitda
adjusted ebitda is defined by the group as profit before fi
nance costs income tax incomelosses from investments 
depreciation amortisation and interest and is further adjust
ed for certain items included in the table below the group 
has made these adjustments in calculating adjusted ebitda 
to provide a clearer view of the performance of its underly
ing business operations and to generate a metric that it be
lieves will give greater comparability over time with peers 
in its industry the group believes that adjusted ebitda  
is a meaningful indicator of its profitability and performance 
this measure should not be considered as an alterna
tive to profit for the year and operating cash flows based 
on ifrs and should not necessarily be construed as a com
prehensive indicator of the group’s measure of profitability
the following table sets forth the group’s adjusted ebitda 
for the years ended 31 december 2013 and 2012
usd ‘000
year ended 31 december
 
change 
yoy 2013 2012
profit for the year 143001 965104 85
net finance  
income
1
13032 4184 211
income tax charged 90688 246412 63
depreciation  
and amortisation for 
the year 213834 174797 22
impairments  
note 11 to the con
solidated financial 
statements 471657 15424 2958
other adjustments
2
3928 15338 702
gain on loan for
giveness and share 
purchase agreement  
termination – 79084 100
adjusted ebitda 910076 1303131 30
the group’s adjusted ebitda decreased by 30 mainly 
due to lower gold prices and increases in costs which were 
partly offset by increased sales volumes 
ebitda 2012 realised price
decrease
tcc growth sales volume 
growth
other ebitda 2013
459
58
99
25
1400
1200
1000
800
600
400
200
0
1303
910
adjusted ebitda growth structure in 2013 usd million
1
 net finance income represents net amount of income from investments and finance costs
2
  other adjustments include gain on disposal of investments gain from investments in listed companies held for trading foreign 
exchange gain loss from disposal of property plant and equipment and workinprogress and gain on disposal of subsidiaries polyus gold international  annual report  2013
40
back to the contents
the following table shows the breakdown of adjusted ebitda for the year ended 31 december 2013 for the principal 
revenue generating business units
usd ‘000
business unit
krasnoyarsk yakutia irkutsk ore
irkutsk  
alluvial
profitloss for the year 475985 112276    9993    54738
net finance incomeexpense 414           413     2999    6838
income tax chargedrecovered 126542 16179    2215    16832
depreciation and amortisation for the year 144050 18431    22471    15173
impairments 14850 137847    15205 –
other adjustments 11381 503     8133        294
adjusted ebitda 772394      28739    36600    80199
the following table shows the group’s tcc for the years ended 31 december 2013 and 2012
usd ‘000
years ended 31 december
 change
yoy 2013 2012
cost of gold sales 1346523 1265306  6 
 property plant and equipment depreciation 209152 169923 23 
 provision for annual vacation payment 18 3702 100 
 employee benefit obligations cost 5215 2369 120 
 change in allowance for obsolescence of inventory 2605 1562  67 
 nonmonetary changes in inventories
1
18487 4180  342 
total cash costs 1153266 1095054    5
gold sales k oz 1631 1571 4
tcc usd per oz sold 707 697 1
in 2013 the tcc per oz sold increased by 1 the key driver was an increase in the cost of gold sales by 6 for more details 
please refer to section 284 “cost of gold sales” partly offset by the appreciation of the us dollar against the russian rouble 
the aggregate adjusted ebitda of the group’s principal rev
enue generating business units is usd 917932 thousand and 
including the results of the other companies of the group 
gives a group adjusted ebitda of usd 910076 thousand
2811 total cash costs per oz sold
the group believes that the metrics total cash costs tcc 
and total cash costs per oz sold although nonifrs meas
ures provide a useful comparison with other industry players  
its use is common industry practice although the method 
of its calculation may differ as these items are nonifrs meas
ures an investor should not consider these items in isolation 
or as alternatives to the cost of sales profit for the year at
tributable to shareholders of the parent company net cash 
generated from operating activities or any other measure of fi
nancial performance presented in accordance with ifrs
total cash costs per oz sold is total cash costs divided 
by ounces of gold sold during the period
1  
nonmonetary changes in inventories is a calculation to estimate the noncash portion of costs included in the change in the amount 
of inventory primarily representing depreciation and amortisation polyus gold international  annual report  2013
41
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tcc per oz sold by mine in the years ended 31 december 2013 and 2012 usd per oz
•  olimpiada mine a 3 yoy decrease in tcc per ounce 
of gold sold as a result of an improvement in average 
grade and recovery
• blagodatnoye mine a slight increase in tcc of 3 yoy 
from a lower grade of ore processed offset by the im
proved recovery rate
• titimukhta mine an improvement of the recovery rate 
following installation of a new thickener and the expan
sion of the hydrometallurgical section offset by a 12 
decrease in gold grade
• verninskoye a 10 increase in tcc as a result 
of a combination of an increase in consumption of vari
ous mining and processing materials ore mining vol
umes increased growth in the number of personnel 
and increased prices for goods purchased
• alluvials a 5 decrease in tcc due to ongoing optimisa
tion of the mining plan and a 6 decrease in personnel
• kuranakh an increased zinc content in the ore fed to the 
plant significantly reduced the recovery rate this metal
lurgical issue together with an increase in cash operat
ing costs resulted in a 9 increase in tcc
2812 allin sustaining cash  
costs per oz sold
in june 2013 the world gold council wgc published 
a guidance note on the allin sustaining cash costs aisc 
metric for gold mining companies it is expected that the 
adoption of aisc by precious metal producers may help 
to provide investors governments local communities and 
other stakeholders with better visibility into the true cost 
of producing gold
aisc measures costs related to sustaining production
1
 
we calculate it in accordance with the recommendation 
of the wgc including tcc sga expenses sustaining capex 
and other cash costs attributable to current sales 
in 2013 aisc for the company was usd 1002 per oz sold 
which is 1 lower than in 2012 usd 1007 per oz sold the 
main reasons for the decrease are explained by a 2 fall 
of the russian rouble against the us dollar 61 lower strip
ping activity asset additions and a 12 reduction in sga 
expenses partly offset by overall inflation in the cost of sales 
and a 31 increase in sustaining capex
usd ‘000
year ended  
31 december
 
change
yoy 2013 2012
total cash costs 1153266 1095054  5 
sga less sga  
depreciation 221309  214157  3 
research expenses  2499  2079  20 
stripping activity  
asset additions  37692  96623  61 
sustaining capital ex
penditures  210236  159950  31 
unwinding of  
discounts on decommis
sioning liabilities  5442  9003  40 
adding back expenses 
excluded from tcc 2592 4509 43
allin sustaining costs 1633036 1 581 375    3
gold sales k oz 1631 1571 4
allin sustaining costs 
usd per oz sold 1002 1007 1
olimpiada titimukhta blagodatnoye verninskoye alluvials kuranakh
685
869
789
463
925 993
2013 2012
1200
1000
800
600
400
200
0
1  
nonsustaining costs are those costs incurred at new operations and costs related to ‘major projects’ at existing operations where 
these projects will materially increase production companies need to publicly disclose those operations and ‘major projects’ which 
are considered nonsustaining all other costs related to existing operations are considered sustaining
666
920
869
479
880
1085