REG - Evraz Plc - Half-year Report <Origin Href="QuoteRef">EVRE.L</Origin> - Part 4

EvrazAnnouncement

10/08/2017 07:07

- Part 4: For the preceding part double click  ID:nRSJ5874Nc 

operations, the Group may be subject to environmental claims and legal proceedings. The
quantification of environmental exposures requires an assessment of many factors, including changing laws and regulations,
improvements in environmental technologies, the quality of information available related to specific sites, the assessment
stage of each site investigation, preliminary findings and the length of time involved in remediation or settlement. 
 
The Group has a number of environmental claims and proceedings which are at an early stage of investigation. Environmental
provisions in relation to these proceedings that were recognised at 30 June 2017 amounted to $18 million. Preliminary
estimates of the incremental costs indicate that such costs could be up to $263 million. The Group has insurance
agreements, which would be expected to provide reimbursement of any such costs actually incurred. Management believes that,
as of now, an economic outflow of the additional costs is not probable and any pending environmental claims or proceedings
will not have a material adverse effect on its financial position and results of operations. 
 
In addition, the Group has committed to various environmental protection programmes covering periods from 2017 to 2022,
under which it will perform works aimed at reductions in environmental pollution and contamination. As of 30 June 2017, the
costs of implementing these programmes are estimated at $102 million. 
 
13.     Commitments and Contingencies (continued) 
 
Legal Proceedings 
 
The Group has been and continues to be the subject of legal proceedings, none of which has had, individually or in
aggregate, a significant effect on the Group's operations or financial position. At 30 June 2017, possible liabilities were
estimated at $2 million. 
 
14.     Fair Value of Financial Instruments 
 
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique: 
 
§ Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities; 
 
§ Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable,
either directly or indirectly; and 
 
§ Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on
observable market data (unobservable inputs). 
 
The carrying amounts of financial instruments, such as cash, short-term and long-term investments, short-term accounts
receivable and payable, short-term loans receivable and payable and promissory notes, approximate their fair value. 
 
The Group held the following financial instruments measured at fair value: 
 
                                                    30 June 2017  31 December 2016  
 US$ million                                        Level 1       Level 2           Level 3  Level 1  Level 2  Level 3  
                                                                                                                        
 Assets measured at fair value                                                                                          
 Available-for-sale financial assets                18            -                 -        3        -        -        
 Derivatives not designated as hedging instruments  -             2                 -        -        -        -        
                                                                                                                        
 Liabilities measured at fair value                                                                                     
 Hedging instruments                                -             12                -        -        22       -        
 
 
The following table shows fair values of the Group's bonds and notes. 
 
 US$ million                   30 June 2017     31 December 2016  
                               Carrying amount  Fairvalue         Carrying amount  Fairvalue    
                                                                                                
 USD-denominated                                                                                
 7.75% bonds due 2017          $        -       $        -        $        27      $        26  
 9.50% notes due 2018          76               81                126              137          
 6.75% notes due 2018          198              205               533              554          
 7.50% bonds due 2019          5                5                 349              359          
 6.50% notes due 2020          707              751               1,010            1,066        
 8.25% notes due 2021          773              864               772              856          
 6.75% notes due 2022          511              551               515              544          
 5.375% notes due 2023         756              765               -                -            
                                                                                                
 Rouble-denominated                                                                             
 12.95% rouble bonds due 2019  254              270               247              260          
 12.60% rouble bonds due 2021  262              289               255              269          
                                                                                                
                               $      3,542     $     3,781       $      3,834     $     4,071  
 
 
The fair value of the non-convertible bonds and notes was determined based on market quotations (Level 1). 
 
15.     Subsequent Events 
 
Interim Dividends 
 
On 9 August 2017, the Board of directors of EVRAZ plc decided to declare interim dividends for 2017 in the amount of $429.6
million, which represents $0.3 per share. 
 
Borrowings 
 
Until the date of issue of these consolidated financial statements, the Group entered into new long-term financing
agreements with certain banks, obtaining in total $350 million. 
 
In addition, the Group early repaid certain bank loans in the total amount of $283 million. 
 
This information is provided by RNS
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