Notes to the consolidated financial statements (10‐19)

FOR THE YEAR ENDED 31 DECEMBER 2013
(all amounts are presented in thousands of Russian Roubles, unless otherwise stated)

  1. Goodwill
  2. Intangible assets
  3. Available-for-sale investments, including shares pledged as collateral
  4. Investment in associates
  5. Inventories
  6. Trade receivables, prepayments, other receivables and other current assets
  7. Originated loans
  8. Cash and cash equivalents, fixed-term deposits and restricted cash
  9. Equity
  10. Bank borrowings

10 Goodwill

Movements in goodwill arising from the acquisition of subsidiaries are:

2013

2012

Carrying amount at 1 January

11,371,695

295,275

Acquisition of subsidiaries

10,822,521

Currency translation difference

1,305,455

253,899

Carrying amount at 31 December

12,677,150

11,371,695

Goodwill impairment test

Goodwill is allocated to cash-generating units (CGUs) which represent the lowest level within the Group at which the goodwill is monitored by management and which are not larger than a segment, as follows:

31 December 2013

31 December 2012

EuroChem Antwerpen NV

11,600,248

10,377,202

EuroChem Agro

781,627

699,218

Other

295,275

295,275

Total carrying amount of goodwill

12,677,150

11,371,695

The recoverable amount of each CGU was determined based on value-in-use calculations. These calculations use cash flow projections based on development strategy and financial budgets approved by management covering a five year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rates do not exceed the long-term average growth rate for the business sector of the economy in which the CGU operates.

Management determined budgeted prices and expenses based on past performance and market expectations. The weighted average growth rate used is consistent with the forecasts included in industry reports.

Assumptions used for value-in-use calculations are listed below:

31 December 2013

31 December 2012

WACC rates

8.8%

10.0%

Long-term annual inflation rate

1.6%-2%

2.0%

Estimated growth rate beyond the five-year period

2.0%

2.0%

The Group did not recognise any goodwill impairment at 31 December 2013 and 31 December 2012.

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11 Intangible assets

Movements in the carrying amount of intangible assets were:

Know-how and production technology

Customer relationships

Acquired software and licences

Other

Total

Cost at 1 January 2012

413,034

667,909

1,080,943

Accumulated amortisation

(342,163)

(128,317)

(470,480)

           

Carrying amount at 1 January 2012

70,871

539,592

610,463

           

Additions

9,909

113,971

123,880

Acquired through business combinations

3,353,225

3,597,778

705,856

551,892

8,208,751

Disposals:

– Cost

(469)

(469)

– Accumulated amortisation

2

2

Reclassification to non-current assets held for sale:

– Cost

(983,366)

(983,366)

– Accumulated amortisation

44,698

44,698

Amortisation charge

(289,744)

(127,917)

(237,891)

(151,110)

(806,662)

Currency translation difference

– Cost

57,230

(54,731)

18,821

8,027

29,347

– Accumulated amortisation

(1,263)

58

(875)

962

(1,118)

Cost at 31 December 2012

3,410,455

2,559,681

1,147,620

1,341,330

8,459,086

Accumulated amortisation

(291,007)

(83,161)

(580,929)

(278,463)

(1,233,560)

           

Carrying amount at 31 December 2012

3,119,448

2,476,520

566,691

1,062,867

7,225,526

           

Additions

110,864

8,267

119,131

Disposals:

– Cost

(5,906)

(5,906)

– Accumulated amortisation

458

458

Amortisation charge

(427,839)

(184,402)

(308,563)

(154,717)

(1,075,521)

Currency translation difference:

Cost

398,636

292,941

94,799

65,293

851,669

Accumulated amortisation

(57,846)

(11,579)

(42,600)

(3,653)

(115,678)

Cost at 31 December 2013

3,809,091

2,852,622

1,353,283

1,408,984

9,423,980

Accumulated amortisation

(776,692)

(279,142)

(932,092)

(436,375)

(2,424,301)

Carrying amount at 31 December 2013

3,032,399

2,573,480

421,191

972,609

6,999,679

During the year ended 31 December 2012 an intangible asset with carrying value of RR 938,668 thousand, initially recognised as part of a business combination, was reclassified as held for sale and subsequently sold. The result was recognised as other operating expense.

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12 Available-for-sale investments, including shares pledged as collateral

The Group sold all available-for-sale investments which were comprised solely of the shares of K+S Group, a German manufacturer of potassium-based fertilizers and salt, by 31 December 2013

31 December 2013

31 December 2012

K+S Group ordinary shares

1,914,636

K+S Group ordinary shares pledged as collateral

909,017

Total available-for-sale investments

2,823,653

Movements in the carrying amount of available-for-sale investments, including shares pledged as collateral, were:

2013

2012

Carrying amount at 1 January

2,823,653

22,467,999

Acquisition of available-for-sale investments

59,607

Revaluation of available-for-sale investments

(1,419,124)

711,688

Disposal of available-for-sale investments, including:

– available-for-sale investments at cost

(2,953,774)

(19,847,259)

– reclassification of revaluation to profit and loss

1,549,245

(568,382)

Carrying amount at 31 December

2,823,653

K+S Group shares, including shares pledged as collateral

At 31 December 2012 the Group held 2,005,434 shares, or 1.048% of the issued share capital of K+S Group with a fair value of RR 2,823,653 thousand with reference to the share price quoted on the Xetra trading system of Euro 35.00 per share.

During the year ended 31 December 2013 the Group sold 2,005,434 shares of K+S Group to EuroChem Group S.E., the parent company of the Group, for RR 1,404,529 thousand and recognised a loss of RR 1,549,245 thousand in the profit and loss. Out of the total, 89,436 shares were sold for a consideration of RR 101,489 thousand paid in ten business days (Note 33) and 1,915,998 shares were sold for RR 1,303,040 thousand with a deferred payment bearing an interest of 3-month Libor +2%. This deferred payment was recognised as an originated loan and was settled in December 2013 (Note 16).

K+S Group shares pledged as collateral

At 31 December 2013 the Group did not hold any K+S Group shares pledged as collateral.

As at 31 December 2012 the Group had 645,608 K+S Group shares pledged as collateral for a bank loan with a fair value of RR 909,017 thousand with reference to the share price quoted on the Xetra trading system (Note 19). Pledged shares were reclassified to a separate line named ‘Available-for-sale investments pledged as collateral’ in the consolidated statement of financial position, as the mortgagee had the right to use and dispose of these shares.

The Group held economic exposure in relation to the encumbered and/or used shares. The mortgagee was obliged to replace the original financial collateral by transferring equivalent securities upon the performance of the obligations of the mortgagor.

Dividends and withholding tax

In May 2013 the Group received dividend income from K+S Group of RR 114,204 thousand (2012: RR 101,676 thousand) offset by withholding tax of RR 30,121 thousand (2012: RR 26,817 thousand). In July 2013 the Group received RR 12,644 thousand of withholding tax refund on dividends paid during 2012 (2012: RR 69,969 thousand of withholding tax refund on dividends paid during 2011).

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13 Investment in associates

In April 2013 the Group acquired 53,943 ordinary shares of OJSC ‘Murmansk Commercial Seaport’ (the ‘Associate’) located in the North-West of Russia and owning 100% shares of CJSC ‘Agrosphera’, for RR 3,113,860 thousand paid in cash. Out of the total payment, RR 2,522,755 thousand was paid in December 2012 and RR 591,105 thousand was paid in April 2013.

In September 2013 the Group acquired 670 ordinary shares of the Associate on the basis of the mandatory offer for RR 38,675 thousand paid in cash.

The share capital of OJSC ‘Murmansk Commercial Seaport’ consists of 113,160 ordinary shares and 37,718 preference shares. Ordinary shares held by the Group of 54,613 represent 48.26% of total number of the ordinary shares and 36.20% of total issued share capital of OJSC ‘Murmansk Commercial Seaport’.

The General meeting of the shareholders of OJSC ‘Murmansk Commercial Seaport’ held in August 2013 resolved not to pay dividends for the year 2012. As a result the holders of the preference shares gained voting rights and the voting rights of the Group have reduced from 48.26% to 36.20%. Movements in the carrying amount of the Group’s investment in associates were:

2013

Carrying amount at 1 January

Acquisition of interest in associates

3,152,535

Share of profit from associates

379,105

Carrying amount at 31 December

3,531,640

Reconciliation of the summarised financial information presented to the carrying amount of Group’s interest in associates as at 31 December 2013:

OJSC ‘Murmansk Commercial Seaport’

Opening net assets 1 January 2013

Net assets at acquisition date

3,909,527

Profit for the period

913,617

Dividends on preference shares for the period

(117,806)

Closing net assets at 31 December 2013

4,705,338

Interest in associates, %

48.26%

Interest in associates

2,270,796

Goodwill

1,260,844

Carrying value at 31 December 2013

3,531,640

Net assets of associate were adjusted for theoretical dividends on preference shares. Dividends on preference shares are determined as 10% of net statutory profit for the reporting period.

The right of holders of preference shares to receive dividends is not absolute and dividends will only be paid after the shareholders decision to declare the dividends. The preference shares are non-cumulative, i.e. unpaid dividends for the previous periods will not be declared and paid in the future periods.

No dividends on preference shares were declared or paid in 2013.

Summarised financial information of associates is as follows at 31 December 2013:

OJSC ‘Murmansk Commercial Seaport’

Current assets

3,066,737

Non-current assets

3,529,832

Current liabilities

(347,205)

Non-current liabilities

(1,544,026)

Net assets

4,705,338

Sales from the date of acquisition

3,146,250

Net profit from the date of acquisition

913,617

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14 Inventories

31 December 2013

31 December 2012

Finished goods

10,090,537

12,204,775

Materials

7,152,950

6,676,323

Catalysts

3,332,012

2,930,421

Work in progress

2,429,338

1,546,258

Less: provision for obsolete and damaged inventories

(334,086)

(351,458)

Total inventories

22,670,751

23,006,319

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15 Trade receivables, prepayments, other receivables and other current assets

31 December 2013

31 December 2012

Trade receivables

Trade receivables denominated in RR

1,848,881

1,379,193

Trade receivables denominated in US$

4,118,169

3,124,112

Trade receivables denominated in Euro

5,290,300

6,180,130

Trade receivables denominated in other currencies

889,534

184,036

Less: impairment provision

(251,809)

(299,916)

Total trade receivables – financial assets

11,895,075

10,567,555

 

Prepayments, other receivables and other current assets

Advances to suppliers

2,949,696

3,571,238

VAT recoverable and receivable

4,577,592

4,840,961

Income tax receivable

185,234

189,113

Other taxes receivable

364,647

16,008

Other receivables

624,158

575,366

Less: impairment provision

(215,628)

(220,048)

Subtotal non-financial assets

8,485,699

8,972,638

Other receivables

213,933

321,067

Interest receivable

31,539

11,353

Subtotal financial assets

245,472

332,420

Total prepayments, other receivables and other current assets

8,731,171

9,305,058

     

Total trade receivables, prepayments, other receivables and other current assets

20,626,246

19,872,613

Including

Financial assets

12,140,547

10,899,975

Non-financial assets

8,485,699

8,972,638

Management believes that the fair value of accounts receivable does not differ significantly from their carrying amounts.

As at 31 December 2013, trade receivables, prepayments, other receivables and other current assets of RR 467,437 thousand (31 December 2012: RR 519,964 thousand) were individually impaired and an impairment provision was recognised. The individually impaired receivables mainly relate to counterparties which are facing significant financial difficulties. The ageing of these receivables is as follows:

31 December 2013

31 December 2012

Less than three months

42,497

From three to 12 months

69,758

106,985

Over 12 months

355,182

412,979

Total gross amount of impaired trade receivables, prepayments, other receivables and other current assets

467,437

519,964

As at 31 December 2013, trade receivables of RR 1,342,818 thousand (31 December 2012: RR 915,247 thousand) were past due but not impaired; of this amount RR 734,639 thousand were covered either by credit insurance, bank guarantees or backed by solid ratings from independent rating agencies. The ageing analysis of these trade receivables from past due date is:

31 December 2013

31 December 2012

Less than three months

1,020,749

737,344

From three to 12 months

288,883

169,053

Over 12 months

33,186

8,850

Trade accounts receivable past due not impaired

1,342,818

915,247

The movements in the provision for impairment of accounts receivable are:

2013

2012

Trade receivables

Other receivables

Trade receivables

Other receivables

As at 1 January

299,916

220,048

246,628

161,311

Acquisitions through business combinations

105,311

Provision charged

74,483

99,305

96,352

127,709

Provision used

(107,354)

(80,980)

(19,810)

(61,886)

Provision reversed

(31,266)

(26,461)

(123,027)

(5,398)

Foreign exchange difference

16,030

3,716

(5,538)

(1,688)

Total provision for impairment of accounts receivable as at 31 December

251,809

215,628

299,916

220,048

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16 Originated loans

Note

2013

2012

Balance as at 1 January

6,301,867

Originated loan recognised from sale transaction of K+S Group shares to parent company

12

1,303,040

Originated loan to parent company

33

659,482

Originated loan to other related party

33

405,602

1,927,340

Originated loan to JV partner

99,575

Loan provided to the acquired subsidiary before acquisition

116,229

Intragroup elimination of loan provided to the acquired subsidiary before acquisition

(117,512)

Repayment of originated loans to parent company

33

(2,005,728)

Repayment of loans acquired in a business combination transaction by a third party

(6,301,867)

Repayment of originated loans by related parties

33

(1,920,005)

Foreign exchange loss/(gain)

51,877

(6,052)

Balance as at 31 December

513,848

Note

31 December 2013

31 December 2012

Current originated loans

Unsecured US$ denominated loan to the partner of the Hong Kong Joint Venture (note 37), fixed interest rate 6.5% p.a.

98,188

Total current originated loans

98,188

 

Non-current originated loans

Unsecured US$ denominated loan to related party, which is the entity under common control with the Group, interest rate 2.62% p.a.

33

415,660

Total non-current originated loans

415,660

Total originated loans

513,848

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17 Cash and cash equivalents, fixed-term deposits and restricted cash

31 December 2013

31 December 2012

Cash on hand and bank balances denominated in RR

636,604

1,524,397

Bank balances denominated in US$

5,830,088

3,029,315

Bank balances denominated in Euro

7,091,967

4,401,502

Bank balances denominated in other currencies

428,598

311,452

Term deposits denominated in RR

985,890

610,919

Term deposits denominated in US$

1,152,418

993,372

Term deposits denominated in Euro

53,520

4,275,552

Term deposits denominated in other currencies

373,310

297,638

Total cash and cash equivalents

16,552,395

15,444,147

     

Fixed-term deposits in RR

2,341,600

1,361,570

Fixed-term deposits in US$

92,506

2,277,953

Fixed-term deposits in Euro

7,650

32,073

Total fixed-term deposits

2,441,756

3,671,596

Current restricted cash

405,442

Non-current restricted cash

88,558

44,003

Total restricted cash

88,558

449,445

Term deposits at 31 December 2013 and 31 December 2012 are held to meet short term cash needs and have various original maturities but can be withdrawn on request without any restrictions.

Fixed-term deposits have various original maturities and can be withdrawn with early notification and/or with penalty accrued or interest income forfeited. No bank balances, term and fixed-term deposits are past due or impaired. Analysis of the credit quality of bank balances, term and fixed-term deposits is as follows:

31 December 2013

31 December 2012

A to AAA rated*

14,494,899

12,312,745

BB- to BBB+ rated*

3,982,279

6,764,587

B- to B+ rated*

565,491

468,535

C to CCC rated*

3,314

Unrated

37,788

13,814

Total

19,080,457

19,562,995

  • * Based on the credit ratings of independent rating agencies Standard & Poor’s and Fitch Ratings as at 15 January 2014.

At 31 December 2013 there was no current restricted cash held at banks. At 31 December 2012 current restricted cash held at banks totalling RR 405,442 thousand consisted of RR 382,757 thousand held in banks to meet the next principal and interest payments on bank borrowings and of RR 22,685 thousand to comply with statutory regulations.

At 31 December 2013 RR 88,558 thousand of non-current restricted cash (31 December 2012: RR 44,003 thousand) was held in bank accounts as security deposits for third parties.

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18 Equity

Share capital.

The nominal registered amount of the Company’s issued share capital at 31 December 2013 is RR 6.8 billion (31 December 2012: RR 6.8 billion). The total authorised number of ordinary shares is 68 million shares (31 December 2012: 68 million shares) with a par value of RR 100 per share. All authorised shares have been issued and fully paid.

Number of ordinary shares

Share capital, RR thousand

Number of treasury shares

Treasury shares at acquisition cost, RR thousand

At 31 December 2012

68,000,000

6,800,000

7,812,395

(39,047,045)

At 31 December 2013

68,000,000

6,800,000

8,598,009

(44,687,136)

Treasury shares.

During the year ended 31 December 2013 there were the following transactions with treasury shares:

  • the title on 118,617 own shares representing 0.17% of the issued share capital was transferred to the Group, prepayment for which of RR 683,999 thousand was made to EuroChem Group S.E., the parent company of the Group, in December 2012;
  • the Group bought back from EuroChem Group S.E. 2,271,276 of its own shares which represented 3.34% of the issued share capital for RR 13,359,153 thousand paid in cash;
  • the Group sold to EuroChem Group S.E. 1,604,279 of its own shares which represented 2.36% of the issued share capital for RR 9,885,186 thousand received in cash. The gain on this transaction of RR 1,482,125 thousand was recognised directly in equity.

Therefore, at 31 December 2013 EuroChem Capital Management Ltd, the Group’s wholly-owned subsidiary, held 8,598,009 ordinary shares of the Company(31 December 2012: 7,812,395 ordinary shares). These shares represent 12.64% (31 December 2012: 11.49%) of the Company’s share capital and carry voting rights in the same proportion as other ordinary shares.

Capital contribution.

During the year ended 31 December 2013 the Group received the capital contribution from its shareholder of RR 1,589,459 thousand (Note 33). This contribution was accounted for as a reserve in the consolidated statement of changes in equity.

Profit distribution.

In accordance with Russian legislation, the Company distributes profits as dividends or transfers them to reserves (fund accounts) on the basis of financial statements prepared in accordance with Russian Accounting Rules. The statutory accounting reports of the Company are the basis for profit distribution and other appropriations. Russian legislation identifies the net statutory profit as the basis for distribution. For the yea ended 31 December 2013, the net statutory profit of the Company as reported in the published annual statutory accounting report was RR 29,930,816 thousand (2012: RR 20,591,476 thousand) and the closing balance of the accumulated profit including the net statutory profit totalled RR 120,447,120 thousand (31 December 2012: RR 90,516,304 thousand). However, this legislation and other statutory laws and regulations are open to legal interpretation in relation to the depletion of distributable reserves. Accordingly management believes that, at present, it would not be appropriate to disclose an amount for the distributable reserves in these consolidated financial statements.

Dividends

During 2013 and 2012 the Group did not declare or pay dividends.

Other reserves.

As at 31 December 2013 an accumulated net gain from currency translation differences of RR 6,663,503 thousand (31 December 2012: RR 1,485,464 thousand) was recorded in other reserves in the consolidated statement of changes in equity. As at 31 December 2012 a negative reserve of RR 130,121 thousand related to a decrease in the fair value of the investments in the shares of K+S Group below their historical cost was recorded in other reserves in the consolidated statement of changes in equity (Note 12).

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19 Bank borrowings

31 December 2013

31 December 2012

Current bank borrowings

Short-term bank loans, denominated in US$

981,876

Short-term bank loans, denominated in Euro

603,429

Current portion of long-term bank loans in RR

2,500,000

Current portion of long-term bank loans in US$

4,862,646

6,350,925

Current portion of long-term bank loans in Euro

161,515

72,242

Less: short-term portion of transaction costs

(135,296)

(218,613)

Total current bank borrowings

8,370,741

6,807,983

 

Non-current bank borrowings

Long-term bank loans, denominated in RR

20,000,000

20,000,000

Long-term bank loans, denominated in US$

52,962,611

45,669,328

Long-term bank loans, denominated in Euro

1,534,391

1,444,860

Less: current portion of long-term bank loans in RR

(2,500,000)

Less: current portion of long-term bank loans in US$

(4,862,646)

(6,350,925)

Less: current portion of long-term bank loans in Euro

(161,515)

(72,242)

Less: long-term portion of transaction costs

(1,321,111)

(1,124,637)

Total non-current bank borrowings

65,651,730

59,566,384

Total bank borrowings

74,022,471

66,374,367

Movements in Group’s bank borrowings during 2013 and 2012 were as follows:

2013

2012

Balance as at 1 January

66,374,367

77,395,339

Bank loans received, denominated in US$

77,341,467

12,377,927

Bank loans received, denominated in Euro

125,113

Bank loans received, denominated in Ukrainian Hryvna

616,318

Bank loans repaid, denominated in US$

(73,763,050)

(16,675,458)

Bank loans repaid, denominated in Euro

(734,028)

(3,295,374)

Bank loans repaid, denominated in Ukrainian Hryvna

(617,021)

Capitalisation and amortisation of transaction costs, net

600,123

267,135

Foreign exchange (gain)/loss, net

4,204,295

(3,820,315)

Balance as at 31 December

74,022,471

66,374,367

The Group’s bank borrowings mature:

31 December 2013

31 December 2012

– within 1 year

8,370,741

6,807,983

– between 1 and 2 years

19,971,014

16,973,081

– between 2 and 5 years

44,454,880

41,024,285

– more than 5 years

1,225,836

1,569,018

Total bank borrowings

74,022,471

66,374,367

At 31 December 2013 and 31 December 2012 the fair value of current bank borrowings and borrowings bearing floating interest rates was not materially different from their carrying amounts.

The fair value of borrowings bearing fixed interest rate is estimated based on expected cash flows discounted at an interest rate of 6.81% at 31 December 2013 exceeding their carrying amount by RR 557,643 thousand (31 December 2012: fair value estimated with interest rate of 6.5% exceeded the carrying amount by RR 1,081,570 thousand).

The Group has not entered into any hedging arrangements in respect of its foreign currency obligations or interest rate exposures.

Under the terms of loan agreements, the Group is required to comply with a number of covenants and restrictions, including the maintenance of certain financial ratios and financial indebtedness and cross-default provisions.

Interest rates and outstanding amount

In September 2013 the Group obtained a credit facility of US$ 1.3 billion bearing interest at 3-month Libor +1.8 % and maturing in September 2018. This new facility replaced the 5-year club loan which was obtained in 2011 for US$ 1.3 billion with a floating interest rate of 1-month Libor +1.8% and repaid in September 2013.

In 2011 the Group signed a RR 20 billion 5-year non-revolving fixed-interest rate loan facility with a leading Russian bank. As at 31 December 2013 the outstanding amount was RR 20 billion (31 December 2012: RR 20 billion).

In 2010 the Group signed a 10-year export credit agency-backed loan facility with a floating interest rate based on 6-month Libor for financing the construction of the cage shaft at the Gremyachinskoe potash deposit.In 2012, due to the termination of a construction contract US$ 261 million of the initial credit limit was reduced to US$ 109.5 million. At 31 December 2013 the outstanding amount was US$ 94.9 million (31 December 2012: US$ 109.5 million).

In 2012 the Group signed a US$ 100 million framework agreement for a 2-year revolving facility bearing a floating interest rate based on Libor. During the year ended 31 December 2013 the facility was utilised and at 31 December 2013 the outstanding amount was US$ 30 million (31 December 2012: nil).

In 2010 the Group signed a Euro 36.7 million, 13-year export credit agency-backed loan facility with a floating interest rate based on 6-month Euribor for financing the acquisition of permanent hoisting equipment for the cage and skip shafts of the Gremyachinskoe potash deposit development project from a Czech engineering company. After the end of the availability period in February 2013 the credit limit was reduced to the utilised amount of Euro 35.9 million. At 31 December 2013 the outstanding amount was Euro 34.1 million (31 December 2012: Euro 35.9 million).

In 2009 the Group signed a loan agreement for Euro 85 million at a floating interest rate based on 1-month Euribor, which was converted into a revolving committed facility in 2010. In 2012 the credit limit was reduced to Euro 30 million. In March 2013 an amendment was signed which extended the maturity to March 2014. In August 2013 this loan was repaid in full before its stated maturity.

In September 2012 the Group signed a US$ 120 million 1-year credit line agreement bearing a floating interest rate based on 3-month Libor. In December 2012 it was converted into a revolving facility. During the year ended 31 December 2013, the facility was fully utilised and repaid.

In 2012 the Group signed a US$ 75 million framework agreement for a 2-year revolving facility bearing a floating interest rate based on Libor. During the year ended 31 December 2013 the facility was partially utilised and repaid (31 December 2012: nil).

In 2010 the Group signed a US$ 250 million 5-year credit line agreement bearing a floating interest rate based on 1-month Libor with a European commercial bank. At 31 December 2013 the outstanding amount was US$ 148 million (31 December 2012: nil).

In October 2013 the Group signed a 3-month fixed-interest rate loan facility for 90 million Ukrainian Hryvnas in order to finance activities at Ukrainian-based subsidiary of the Group. The facility was utilised and fully repaid in December 2013.

In October 2013 the Group signed a US$ 100 million 3-month fixed interest rate credit agreement with a Russian bank. The facility was utilised and was fully repaid in December 2013.

Undrawn loan facilities

In October 2013 the Group signed a US$ 250 million 2-year loan agreement bearing a floating interest rate. At 31 December 2013 the outstanding amount was nil (31 December 2012: nil)

Collaterals and pledges

At 31 December 2013 the Group did not have assets pledged or held as collateral.

At 31 December 2012 the Group’s collaterals included:

  • cash collateral of RR 382,757 thousand restricted by banks to secure the next principal and interest payments (Note 17)
  • a bank loan of RR 39,484,510 thousand collateralised by future export proceeds of the Group under sales contracts with certain customers. The loan was fully repaid;
  • a bank loan of RR 603,429 thousand secured by K+S Group shares as collateral which was represented by 645,608 shares with a fair value of RR 909,017 thousand at 31 December 2012. Fair value was determined by reference to the share price quoted on the Xetra trading system (Note 12). The loan was fully repaid.

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