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)
15. Related party transactions
Year ended December 31,
2007 2006 2005
Sales and income received from other related parties:
Sales 701,868 725,714 665,589
Interest income 24,185 31,567 12,984
726,053 757,281 678,573
Purchases from related parties:
Purchases from associates:
Non-capital expenditures 1,810 1,878 7,956
Purchases from joint ventures:
Non-capital expenditures 218,912 139,752 77,464
Purchases from other related parties:
Non-capital expenditures 666,137 1,012,740 647,643
Capital expenditures 8,572 130,769 57,413
674,709 1,143,509 705,056
16. Inventories
December 31,
2007 2006 2005
Raw materials and supplies 1,346,320 1,239,119 899,758
Work-in-progress 459,051 389,660 319,992
Finished goods 732,099 593,593 505,778
2,537,470 2,222,372 1,725,528
Of the above amounts US$ 162.2 million (December 31, 2006: US$ 146.9 million, December 31, 2005: US$ 193.6 million) are stated at net realizable value.
During the year ended December 31, 2007, the Group recognized a US$ 24.9 million release and a US$ 25.5 million accrual of inventory obsolescence
provision (December 31, 2006: US$ 32.2 million and US$ 8.2 million respectively; December 31, 2005: US$ 20.8 million and US$ 1.0 million respectively).
17. Other current assets
December 31,
2007 2006 2005
Advances paid and prepayments 232,998 185,767 144,892
Other taxes and social security prepaid 16,359 19,578 12,809
Reserves at Central Bank of Russia – 12,325 4,938
Other assets 72,005 41,538 19,046
321,362 259,208 181,685
88 Severstal Annual Report 2007