Annual Report 2007 - Severstal

Financial statements
OAO Severstal and subsidiaries
Notes to the consolidated financial statements
for the year ended December 31, 2007
(Amounts expressed in thousands of US dollars, except as otherwise stated)
10. Cash and cash equivalents
December 31,
2007 2006 2005
Petty cash 607 254 429
Cash at bank 1,181,536 427,944 389,807
Escrow accounts 82 6,994 18,918
Short-term deposits with maturity of less than 3 months 364,656 893,829 687,166
Investments in quoted monetary instruments – 62,327 88,320
Cash balances of consolidated bank:
Cash – 1,171 823
Nostro accounts at the Central Bank of Russia – 110,036 39,781
Nostro accounts at other banks – 6,637 16,997
Placements with banks – 191,830 85,646
1,546,881 1,701,022 1,327,887
As described in note 28 to these consolidated financial statements, as at December 31, 2006 and December 31, 2005 the Group had a subsidiary OAO
Metallurgical commercial bank (“Metcombank”). Nostro accounts of Metcombank at the Central Bank of Russia and at other banks and interbank loans
given by Metcombank with an original maturity of three months or less were included in cash and equivalents as at December 31, 2006 and 2005
respectively.
11. Short-term bank deposits
Short-term bank deposits totaled US$ 666.0 million at December 31, 2007 (December 31, 2006: US$ 1,147.3 million, December 31, 2005:
US$ 674.5 million) and comprised of deposits with an original maturity of more than three months but remaining period to maturity of less than
one year. The majority of such deposits have an original maturity of less than 6 months, and such deposits are used by the Group to earn investment
income, while preserving a high liquidity position. Substantially all such deposits can be withdrawn, in case of necessity, prior to the maturity date with
no loss in principal but reduced interest income.
12. Short-term financial investments
December 31,
2007 2006 2005
Held-for-trading securities:
Promissory notes and bonds of third parties 26,834 128,375 72,429
Promissory notes of related parties 7,457 5,198 4,772
Quoted equity securities 56,003 19,143 1,079
Other securities 56,270 – –
Loans:
Loans to related parties 82,205 75,699 81,133
Loans to third parties 38,046 11,912 24,408
Loans to bank customers:
Third parties – 54,991 71,232
Related parties – 29,166 15,739
Loan loss provisions – (2,758) (3,008)
Available-for-sale securities 818 116 67
267,633 321,842 267,851
Loans given to related parties were provided at interest rates ranging from nil to 15% per annum, and were given to finance working capital and investments.
86 Severstal Annual Report 2007