Polymetal International PLC Russian Court ruling on 2007 tax dispute (4349H)
July 11 2012 - 6:20AM
UK Regulatory
TIDMPOLY TIDMTTM
RNS Number : 4349H
Polymetal International PLC
11 July 2012
Release time IMMEDIATE
Date 11 July 2012
Polymetal International plc
Russian Supreme Arbitration Court ruling on 2007 tax dispute
Polymetal International plc (LSE: POLY) (together with its
subsidiaries - the "Company" or the "Group") announces that the
Russian Supreme Arbitration Court yesterday made a final ruling on
the tax dispute of the Group, and supported the tax authorities,
requiring the Group to pay RUB 883 million (approx. US$27 million)
in additional taxes (including fines and accrued interest).
On July 10, 2012, the Supreme Arbitration Court (SAC) made a
final ruling on the tax dispute between CJSC Magadan Silver, a
wholly owned subsidiary of the Group, and tax authorities in
relation to the sale of silver by the Group in 2007 pursuant to
certain forward sale contracts with ABN AMRO Bank (originally
entered into with Standard Bank of London). The tax authorities
claimed that the Group lowered its tax base by selling silver at
30-45% below the market price. The Group argued that the silver
sales to ABN AMRO were part of a US$105 million loan agreement
signed in December 2004, which included forward contract sales at
the then current market price. The decision of the SAC supports the
tax authorities, requiring the Group to pay RUB 883 million
(approx. US$27 million) in additional taxes (including fines and
accrued interest), and this ruling is not subject to appeal.
The nature and details of the tax dispute and the history of the
litigation since the completion of the field tax audit in 2009 and
up to 28 October 2011 were disclosed by the Company in its
Prospectus related to its Initial Public Offering of shares on the
London Stock Exchange, with subsequent disclosure provided in the
Annual Report of the Company for the year ended 31 December 2011.
The Company also disclosed the uncertainties surrounding the
litigation and the relevant tax law, including a possibility of not
being able to ultimately defeat the claim.
In 2011, based on success in defending the case in lower level
courts and an assessment of the Group's tax position, the Board
concluded that the payment of the amounts claimed by the tax
authorities was not probable, and accordingly no provision had been
created in the financial statements as at 31 December 2011.
The additional tax charges according to the SAC decision
(approx. US$27 million) will be reflected as an expense in the
financial statements for the six months ended 30 June 2012 and are
due to be paid in July 2012.
Enquiries
Media Investor Relations
----------------- ----------------- -------------------------------------
College Hill Polymetal
Leonid Fink Pavel Danilin
Tony Friend +44 20 7457 2020 Maxim Nazimok +7 812 313 5964
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Joint Corporate Brokers
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Morgan Stanley Canaccord Genuity
Edward Knight John Prior
Sandip Patodia +44 20 7425 8000 Roger Lambert +44 20 7523 8350
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FORWARD-LOOKING STATEMENTS
THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED
TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING
STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE
FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF
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FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S
CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE
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WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT
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CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO
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UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE
IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN
EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS
ARE BASED
This information is provided by RNS
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