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EVRAZ PLC

Environmental & Social Information Jun 18, 2019

5304_rns_2019-06-18_cfb995b9-8c9e-4ab8-afb1-296a4118ade5.pdf

Environmental & Social Information

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June 2019

INTRODUCTION AND REPORTING PRINCIPLES 3
PAYMENTS IN RUSSIA 6
Company #1. EVRAZ KGOK 6
Company #2. Evrazruda 7
Company #3. Mezhegeyugol Coal Company 8
Company #4. Raspadskaya 9
Company #5. Raspadskaya-Koksovaya 10
Company #6. Razrez Raspadskiy11
Company #7. Shakhta Abashevskaya12
Company #8. Shakhta Alardinskaya13
Company #9. Shakhta Esaulskaya14
Company #10. Shakhta Osinnikovskaya15
Company #11. Shakhta Uskovskaya 16
Company #12. United Coal Company Yuzhkuzbasugol 17
THRESHOLD IN US\$ 18
DISCLAIMER19

INTRODUCTION AND REPORTING PRINCIPLES

Introduction

This Report on payments to governments (the "Report") is prepared in accordance with the requirements of the Disclosure and Transparency Rules Instrument 2014 Report on payments to governments, issued by the Financial Conduct Authority (the "FCA's Instrument"). The FCA's Instrument requires issuers active in the extractive industry and logging of primary forest to publish an annual report on the payments they make to governments.

The FCA's Instrument has multiple references to the Accounting Directive (Directive 2013/34/EU of 26 June 2013 on the annual financial statements) and the Report should be prepared in accordance with Chapter 10 of the Accounting Directive.

EVRAZ plc ("EVRAZ" or the "Company") is obliged to prepare the Report under the requirements of the Financial Conduct Authority, since the Company conducts extractive activities around the world and its securities are traded on the London Stock Exchange.

The Report is published on the official site of EVRAZ plc and can be found at http://www.evraz.com/sustainability/payments-to-governments/

Basis for preparation

The Report provides citizens, authorities and independent users with information on payments made to governments where EVRAZ performs its extractive activities. Payments are reported in respect of extractive activities only. For the purpose of this Report any activities involving the exploration, prospection, discovery, development or extraction of minerals are understood as extractive activities.

In accordance with the legislation referred to above payments should be disclosed:

  • Per government (federal, regional or local) to which the payments were made with the name of the payee. For the purpose of this Report, any federal, regional or local authority, as well as any department, agency or company controlled by that authority, is understood as a government; and
  • Per company or project (if possible). For the purpose of this Report, any single contract, license, concession or similar legal agreement that forms the basis for payment liabilities is understood as a project.

For the purpose of this Report payments are broken down by government and companies only. Payments are not allocated between the Company's projects, as the Group does not attribute payments to a specific project/mine. For the purpose of preparing the Report the scope of companies was the same as in the Group's consolidated financial statements.

Materiality level and functional currency

The Report is prepared in US\$. Payments made in currencies other than US\$ were translated into US\$ using the following average exchange rates for the year:

US\$ to Russian Rubles: 62.7

For the purpose of the Report the threshold of GBP 86,000 was translated into US\$ 114,810 using the average exchange rate for the year of US\$ 1,335 per GBP.

Payments in scope

For the purpose of the Report the following types of payment are disclosed:

a. Production entitlements.

These are the host government's share of production in the reporting period derived from projects operated by the Company. As a rule, the government's share of the production sharing agreement is in the form of payment in-kind.

b. Taxes levied on the income, production or profits of companies.

These payments include corporate income tax, mineral extraction tax, flat and surface taxes. Taxes on consumption (VAT, sales tax, GST and similar taxes), customs and stamp duties, personal, social, property, environmental and land taxes, as well as withholding taxes (on income from non-extractive activity and paid by third parties) are excluded.

Interest on late tax payments and penalties are excluded. Disclosed payments are net of tax refunds and adjusted for overpayments.

c. Royalties.

These are payments for the right to extract minerals. Royalties may be in the form of inkind payments.

d. Dividends.

These are payments made by the Company to a government in lieu of production entitlements or royalties, where the government is an ordinary shareholder of the Company.

e. Bonuses.

These are payments made by companies to a host country upon signing a contract, or upon the achievement of certain levels of production (stated in the contract).

f. Licence fees, rental fees, entry fees and other consideration for licences or concessions ("fees").

These are payments for access to the area where extractive activities are performed.

g. Payments for infrastructure improvements.

These are payments made by a company to governments in the form of infrastructure expenditure (e.g. building a road or a bridge), excluding any voluntary contributions and charitable payments. Payments for infrastructure improvements may be in the form of in-kind payments.

The Company does not have any payments in-kind to report.

Companies excluded from the Report

The following companies of EVRAZ were intentionally excluded from the Report:

i) Mining Metallurgical Company Timir, MUK-96, Shakhta Kureinskaya and Shakhta Kusheyanovskaya. Payments to governments made by these companies fall below the materiality level.

PAYMENTS IN RUSSIA

Significance threshold (USD): 114,810

Company #1. EVRAZ KGOK

Type of payments Federal Government
(MI FNS po
krupneyshim
nalogoplatelchikam #
5)
Regional
government (MRI
FNS Rossii po
Sverdlovskoy
oblastu #27)
Local government
(Administraziya
Kachkonarskogo
GO)
Local Govenment (TU
Rosimuschestva v
Sverdlovskoy oblasty)
Local
Government(MKU
"KUI Administraziya
GO "Gorod
Lesnoy")
Local Government
(Department of Lesnogo
Hozyaistva GKU SO
"Verhoturinskoye
Lesnichestvo")
Total
(in USD)
1 Production entitlements - - - - - - -
2 Taxed levied on income, production
or profits of companies
- - - - - - -
2,1 Corporate income tax 12,131,978 68,747,874 - - - - 80,879,852
2,2 Extraction tax 2,366,330 3,549,496 - - - - 5,915,826
3 Royalties - - - - - - -
4 Dividends - - - - - - -
5 Bonuses (signature, discovery,
production)
- - -
6 Licence fees, rental fees, entry fees
and other considerations
- - - - - - -
6,1 One-time payments for the use of
sub-surface resources
- - - - - - -
6,2 Regular payments for the use of
sub-surface resources
- - - - - - -
6,3 Payment for land usage - 2,133,576 - - - - 2,133,576
6,4 Rent of land - - 23,978 103,620 214,648 28,082 370,327
7 Payments for infrastructure
improvements
- - - - - - -

Company #2. Evrazruda

Type of payments Federal Government (MI
FNS po krupneyshim
nalogoplatelchikam # 5)
Regional Government
(MI FNS po
krupneyshim
nalogoplatelchikam #
5)
Local Government
(g.Tashtagol)
Local Government
(g.Gurievsk)
Local Government
(g.Novokuznetsk)
Total
(in USD)
1 Production entitlements - - - - - -
2 Taxed levied on income, production or
profits of companies
- - - - - -
2,1 Corporate income tax 88,552 501,795 - - - 590,347
2,2 Extraction tax 3,970,858 5,956,286 - - - 9,927,144
3 Royalties - - - - - -
4 Dividends - - - - - -
5 Bonuses (signature, discovery,
production)
- - - - - -
6 Licence fees, rental fees, entry fees and
other considerations
- - - - - -
6,1 One-time payments for the use of sub
surface resources
- - - - - -
6,2 Regular payments for the use of sub
surface resources
- - - - - -
6,3 Payment for land usage - - 1,331,107 442,283 424,344 2,197,735
6,4 Rent of land - - 105,684 1,948 80,428 188,060
7 Payments for infrastructure
improvements
- - - - - -

Company #3. Mezhegeyugol Coal Company

Type of payments Federal Government (MRI FNS #3 po
RT)
Regional Government (MRI FNS
#3 po RT)
Local Government
(Administraziya Tandinskogo I
Kyzylskogo kozhuuna)
Total
(in USD)
1 Production entitlements - - - -
2 Taxed levied on income, production or profits of
companies
- - - -
2,1 Corporate income tax - - - -
2,2 Extraction tax - - - -
3 Royalties - - - -
4 Dividends - - - -
5 Bonuses (signature, discovery, production) - - - -
6 Licence fees, rental fees, entry fees and other
considerations
- - - -
6,1 One-time payments for the use of sub-surface resources - - - -
6,2 Regular payments for the use of sub-surface resources 4,254 6,381 - 10,635
6,3 Payment for land usage - - - -
6,4 Rent of land - - 48,176 48,176
7 Payments for infrastructure improvements - - - -

Company #4. Raspadskaya

Type of payments Federal Government
(MRI FNS po
krupneyshim
nalogoplatelschikam
#2 po Kemerovskoy
oblasty)
Regional
Government (MRI
FNS po
krupneyshim
nalogoplatelschika
m #2 po
Kemerovskoy
oblasty)
Regional
Government (MRI
FNS po
g.Mezhdurechensk
u #8 )
Local Government (MRI
FNS po
g.Mezhdurechensku #8 )
Komitet po
Imuschestvu
g.Mezhdurechens
ka
Federal Government
- Departament
Lesnogo kompleksa
Kemerovskoy
oblasti
Federal
Government (MRI
FNS po
g.Mezhdurechensku
#8 )
Total
(in USD)
1 Production entitlements - - - - - - - -
2 Taxed levied on income, production
or profits of companies
- - - - - - - -
2,1 Corporate income tax 2,816,430 15,959,666 - - - - - 18,776,096
2,2 Extraction tax 1,340,400 2,010,600 - - - - - 3,351,000
3 Royalties - - - - - - - -
4 Dividends - - - - - - - -
5 Bonuses (signature, discovery,
production)
- - - - - - - -
6 Licence fees, rental fees, entry fees
and other considerations
- - - - - - - -
6,1 One-time payments for the use of
sub-surface resources
- - - - - - -
6,2 Regular payments for the use of
sub-surface resources
- - 1,714 - - - 1,143 2,857
6,3 Payment for land usage - - - 811 - - - 811
6,4 Rent of land - - - - 1,433,125 245,259 - 1,678,384
7 Payments for infrastructure
improvements
- - - - - - - -

Company #5. Raspadskaya-Koksovaya

Type of payments Federal Government (MRI FNS
po krupneyshim
nalogoplatelschikam #2 po
Kemerovskoy oblasty)
Regional Government (MRI
FNS po krupneyshim
nalogoplatelschikam #2 po
Kemerovskoy oblasty)
Local Government (MRI FNS
po g.Mezhdurechensku #8 )
Komitet po Imuschestvu
g.Mezhdurechenska
Total
(in USD)
1 Production entitlements - - - - -
2 Taxed levied on income, production or profits of
companies
- - - - -
2,1 Corporate income tax 2,860,513 16,209,573 - - 19,070,086
2,2 Extraction tax 1,048,901 1,573,351 - - 2,622,252
3 Royalties - - - - -
4 Dividends - - - - -
5 Bonuses (signature, discovery, production) - - - - -
6 Licence fees, rental fees, entry fees and other
considerations
- - - - -
6,1 One-time payments for the use of sub-surface
resources
- - - - -
6,2 Regular payments for the use of sub-surface
resources
- - - - -
6,3 Payment for land usage - - 323 - 323
6,4 Rent of land - - - 1,918,349 1,918,349
7 Payments for infrastructure improvements - - - - -

Company #6. Razrez Raspadskiy

Type of payments Federal Government (MRI
FNS po krupneyshim
nalogoplatelschikam #2 po
Kemerovskoy oblasty)
Regional Government
(MRI FNS po
krupneyshim
nalogoplatelschikam #2
po Kemerovskoy oblasty)
Federal Government -
Departament Lesnogo
kompleksa
Kemerovskoy oblasti
Komitet po Imuschestvu
g.Mezhdurechenska
Federal Government
(MRI FNS po
g.Mezhdurechensku #8 )
Total
(in USD)
1 Production entitlements - - - - - -
2 Taxed levied on income, production or
profits of companies
- - - - - -
2,1 Corporate income tax 4,645 ,68 26,322,619 30,967,787
2,2 Extraction tax 1,850,639 2,775,958 - - - 4,626,596
3 Royalties - - - - - -
4 Dividends - - - - - -
5 Bonuses (signature, discovery, production) - - - - - -
6 Licence fees, rental fees, entry fees and
other considerations
- - - - - -
6,1 One-time payments for the use of sub
surface resources
- - - - - -
6,2 Regular payments for the use of sub-surface
resources
- - 1,216 1,216
6,3 Payment for land usage - - - - - -
6,4 Rent of land - - 231,972 187,394 - 419,365
7 Payments for infrastructure improvements - - - - - -

Company #7. Shakhta Abashevskaya

Table 1. Payments broken down by governments

Type of payments Federal Government (IFNS#4
po Kemerovskoy oblasty)
Regenal Government
(IFNS#4 po Kemerovskoy
oblasty)
Federal Government -
Departament Lesnogo
kompleksa Kemerovskoy
oblasti
Komitet gradostroitelstva I
zemelnyh resursov administrazii
g. Novokuznetska
Total
(in USD)
1 Production entitlements - - - - -
2 Taxed levied on income, production or profits
of companies
- - - - -
2,1 Corporate income tax - - - - -
2,2 Extraction tax 7,894 11,841 - - 19,735
3 Royalties - - - - -
4 Dividends - - - - -
5 Bonuses (signature, discovery, production) - - - - -
6 Licence fees, rental fees, entry fees and other
considerations
- - - - -
6,1 One-time payments for the use of sub-surface
resources
- - - - -
6,2 Regular payments for the use of sub-surface
resources
- - - - -
6,3 Payment for land usage - - - - -
6,4 Rent of land - - 4,420 162,721 167,141
7 Payments for infrastructure improvements - - - - -

Company #8. Shakhta Alardinskaya

Type of payments Federal Government (MI
FNS po krupneyshim
nalogoplatelchikam # 5)
Regional Government
(MI FNS po krupneyshim
nalogoplatelchikam # 5)
Local Government (IFNS
№ 5, g.Osinniki)
Local Government (IFNS№
13,Novokuznetskiy rayon)
Federal Government -
Departament Lesnogo
kompleksa
Kemerovskoy oblasti
Total
(in USD)
1 Production entitlements - - - - - -
2 Taxed levied on income, production or
profits of companies
- - - - - -
2,1 Corporate income tax 2,341,071 12,867,456 15,208,527
2,2 Extraction tax 1,027,847 1,541,770 - - - 2,569,617
3 Royalties - - - - - -
4 Dividends - - - - - -
5 Bonuses (signature, discovery,
production)
- - - - - -
6 Licence fees, rental fees, entry fees and
other considerations
- - - - - -
6,1 One-time payments for the use of sub
surface resources
- - - - - -
6,2 Regular payments for the use of sub
surface resources
- - - - - -
6,3 Payment for land usage - - 389,175 12,673 - 401,849
6,4 Rent of land - - - - 3,118,91 3,119
7 Payments for infrastructure
improvements
- - - - - -

Company #9. Shakhta Esaulskaya

Type of payments Federal Government (MRI
FNS po krupneyshim
nalogoplatelschikam #2 po
Kemerovskoy oblasty)
Regional Government (MRI FNS
po krupneyshim
nalogoplatelschikam #2 po
Kemerovskoy oblasty)
Local Government (IFNS№
13,Novokuznetskiy rayon)
Federal Government -
Departament Lesnogo kompleksa
Kemerovskoy oblasti
Total
(in USD)
1 Production entitlements - - - - -
2 Taxed levied on income, production or profits
of companies
- - - - -
2,1 Corporate income tax 948,061.59 5,372,349.03 6,320,411
2,2 Extraction tax 281,190.33 421,785.49 - - 702,976
3 Royalties - - - - -
4 Dividends - - - - -
5 Bonuses (signature, discovery, production) - - - - -
6 Licence fees, rental fees, entry fees and other
considerations
- - - - -
6,1 One-time payments for the use of sub-surface
resources
- - - - -
6,2 Regular payments for the use of sub-surface
resources
- - - - -
6,3 Payment for land usage - - 157,271.60 - 157,272
6,4 Rent of land - - - 6,000.86 6,001
7 Payments for infrastructure improvements - - - - -

Company #10. Shakhta Osinnikovskaya

Type of payments Federal
Government (MI
FNS po
krupneyshim
nalogoplatelchikam
# 5)
Federal
Governme
nt (IFNS№
13)
Regional
Government
(IFNS#5
Kemerovskaya
oblast)
Regional
Government
(IFNS№ 13)
Local
Government
(IFNS № 5,
g.Osinniki)
Local
Government
(IFNS№
13,Novokuznetsk
iy rayon)
KUMI Administraziya
Novokuznetskog
o municipalnogo
rayona
Total
(in USD)
1 Production entitlements - - - - - - - - -
2 Taxed levied on income,
production or profits of companies
- - - - - - - - -
2,1 Corporate income tax 1,547,266.68 - 8,767,844.50 10,315,111
2,2 Extraction tax 370,690.94 - 556,036.41 - - - - - 926,727
3 Royalties - - - - - - - - -
4 Dividends - - - - - - - - -
5 Bonuses (signature, discovery,
production)
- - - - - - - - -
6 Licence fees, rental fees, entry
fees and other considerations
- - - - - - - - -
6,1 One-time payments for the use of
sub-surface resources
- - - - - - - - -
6,2 Regular payments for the use of
sub-surface resources
- 164.27 - 246.41 - - - - 411
6,3 Payment for land usage - - - - 81,044.48 111,207.41 - - 192,252
6,4 Rent of land - - - - - - 241,282.03 167,065.31 408,347
7 Payments for infrastructure
improvements
- - - - - - - - -

Company #11. Shakhta Uskovskaya

Type of payments Federal Government
(MRI FNS po
krupneyshim
nalogoplatelschikam #2
po Kemerovskoy
oblasty)
Regional Government
(MRI FNS po
krupneyshim
nalogoplatelschikam #2
po Kemerovskoy
oblasty)
Federal
Government
(SibNedra)
Local Government (MRI
FNS Rossii #13 po
Kemerovskoy oblasti)
KUMI Federal Government -
Departament Lesnogo
kompleksa Kemerovskoy
oblasti
Total
(in USD)
1 Production entitlements - - - - - - -
2 Taxed levied on income,
production or profits of
companies
- - - - - - -
2,1 Corporate income tax 3,546,157 20,183,839 23,729,996
2,2 Extraction tax 843,403 1,265,105 - - - - 2,108,508
3 Royalties - - - - - - -
4 Dividends - - - - - - -
5 Bonuses (signature,
discovery, production)
- - - - - - -
6 Licence fees, rental fees,
entry fees and other
considerations
- - - - - - -
6,1 One-time payments for the
use of sub-surface resources
- - 10,881,629 - - - 10,881,629
6,2 Regular payments for the
use of sub-surface resources
- - - - - - -
6,3 Payment for land usage - - - 63,489 - - 63,489
6,4 Rent of land - - - - 31,924 5,937 37,861
7 Payments for infrastructure
improvements
- - - - - - -

Company #12. United Coal Company Yuzhkuzbasugol

Type of payments Federal
Government (IFNS
#2)
Regional
Government
-
Kemerovska
ya oblast
(IFNS #2)
Federal
Governme
nt (IFNS
#13)
Regional
Government -
Kemerovskaya
oblast (IFNS
#13)
Local Government
(IFNS#4 ) Komitet
Gradostroitelstva I
zemelnyh resursov
g.Novokuznetska
Local government
(Meazhdurechensk
IFNS № 8)
KUMI
Local
Government
(IFNS№
13,Novokuznetski
y rayon)
Local
Government
(MKUUMI
g.Kaltan)
Federal
Government -
Departament
Lesnogo
kompleksa
Kemerovsko
y oblasti
Total
(in USD)
1 Production entitlements - - - - - - - - - -
2 Taxed levied on income,
production or profits of
companies
- - - - - - - - - -
2,1 Corporate income tax 5,415,950 31,602,630 37,018,579
2,2 Extraction tax 665,161 997,742 - - - - - - - 1,662,903
3 Royalties - - - - - - - - - -
4 Dividends - - - - - - - - - -
5 Bonuses (signature,
discovery, production)
- - - - - - - - - -
6 Licence fees, rental fees,
entry fees and other
considerations
- - - - - - - - - -
6,1 One-time payments for the
use of sub-surface resources
- - - - - - - - - -
6,2 Regular payments for the
use of sub-surface resources
- - 907 1,361 - - - - - 2,268
6,3 Payment for land usage - - - 166,503 47,218 64,439 - - - 278,160
6,4 Rent of land - - - - 43,456 41,659 146,705 44,900 59 924 336,645
7 Payments for infrastructure
improvements
- - - - - - - - - -

THRESHOLD IN US\$

2018 average exchange
rate USD/RUB
62.7 page 159 of the Company's Annual Report 2018
2018 average exchange
rate GBP/RUB
83.58 https://www.audit-it.ru/currency/sr_vz.php?currency=GBP&period_month=12&period_year=2018&finyear_start=0&getcurrency=1
Average exchange rate
GBP/USD -
1.335 http://www.bankofengland.co.uk/boeapps/iadb/fromshowcolumns.asp?Travel=NIxIRxSUx&FromSeries=1&ToSeries=50&DAT=RNG&FD=1&FM=Jan&FY=2018&TD=1&TM=Jun&TY=2019&
VFD=Y&VPD=Y&NewRevSince=Y&RFD=3&RFM=Jun&RFY=2007&html.x=19&html.y=21&CSVF=TT&C=DMY&Filter=Y&VUD=B
calculated
Threshold, GBP 86,000
Threshold, USD 114,810

DISCLAIMER

Whilst every effort has been made to ensure the accuracy of the information contained in this publication, EVRAZ plc cannot exclude any negligent use of the data disclosed. The Report is prepared in accordance with the requirements of current legislation, and EVRAZ plc does not undertake to update this Report if any changes in the relevant legislation will be made or any explanations will be issued in the future. Furthermore, EVRAZ plc cannot warrant the accuracy of methods used to disclose the payments, if the relevant methods were not prescribed by FCA's Instrument and EU Directives.

Consequently, the use of the Report is solely at the recipient's own risk. This publication is made available for information purposes only.

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