Extract from the consolidated financial statements of Zarubezhneft Group and information on the auditor, for the financial year

Zarubezhneft JSC annually engages external auditors for auditing the consolidated financial statements prepared under the IFRS. Selection of the audit company for audit of Zarubezhneft Group consolidated financial statements for 2019–2020 was carried out through an open request for proposals as per the requirements stated in Federal Law No. 223-ФЗ (FZ) “On Procurement of Goods, Work and Services by Certain Types of Legal Entities” dated July 18, 2011.

The winner of the tender and the auditor of the consolidated financial statements of Zarubezhneft Group for 2019–2020 was Deloitte & Touche CIS CJSC. Deloitte & Touche CIS JSC performs quality control of audit engagements as of and before the date of issue of the audit opinion, as well as inspection and monitoring of quality of auditor’s documentation for the audits prior completed. The cost of the services provided by Deloitte & Touche CIS JSC as to the audit of the consolidated financial statements for 2019, amounted to 11,159 thous RUB.

The independence of the auditor is confirmed by regular inspections of the Federal Treasury and the SRO the listed auditors belong to.

Extract from the consolidated financial statements of Zarubezhneft Group prepared under the ifrs, for the year ended on december 31, 2019, mm rub

Consolidated statement of profit and loss and other comprehensive income for the year ended on December 31, 2019
Million, Russian RUB 2019 2018
Revenue From Sales and Joint Operations Income
Sales of oil, gas and petroleum products 65,300 58,521
Support services and other sales 9,521 10,996
Joint venture income 18,068 22,526
Total Revenue From Sales and Joint Operations Income 92,889 92,043
Costs and Expenditures
Cost of purchased oil, gas and petroleum products (40,637) (35,953)
Business and operating expenses (15,512) (15,715)
Selling and marketing, general running, and administrative expenditures (6,236) (6,188)
Taxes other than the profit tax (5,543) (5,336)
Depreciation, depletion and amortization (4,606) (3,525)
Transportation expenditures (2,600) (2,244)
Geological exploration costs (211) (118)
Export duty (342) (655)
Other income/(expenses), net 2,209 (544)
Profit from operating activities 19,411 21,765
Expenditures on assets impairment, net (413) (6,977)
Financial income 999 595
Financial expenditures (806) (1,862)
Currency differences, net (2,918) 4,042
Profit before profit tax 16,273 17,563
Current profit tax (1,888) (4,030)
Deferred profit tax (932) (1,943)
NET PROFIT FOR THE YEAR 13,453 11,590
Net profit/(loss) for the year, attributable to:
Parent company shareholder 13,310 11,837
Minority shares 143 (247)
13,453 11,590
OTHER COMPREHENSIVE INCOME/(EXPENSES)
Items Subject to Reclassification to Profits and Losses
Effect of translation to presentation currency (7,257) 12,246
Cash flow hedge result - 323
Other Comprehensive Income/(Expenses) for the Year less Profit Tax (7,257) 12,569
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 6,196 24,159
Other comprehensive income/(expenses) for the year, attributable to:
Parent company shareholder 5,426 24,960
Minority shares 770 (801)
6,196 24,159
Consolidated statement of financial position as of December 31, 2019
Million, Russian RUB December 31, 2019 December 31, 2018
ASSETS
Non-Current Assets
Property, plant and equipment 40,924 38,583
Investment in Joint Ventures 74,822 87,653
Debt securities 4,230 -
Deferred tax assets 1,104 1,629
Other non-current assets 3,028 2,296
124,108 130,161
Current Assets
Inventories 4,427 8,943
Trade and other receivables 5,447 4,773
Dividends debt 5,111 9,383
Taxes recoverable and tax prepayments 1,676 1,139
Borrowings issued 4,160 4,458
Debt securities 6,861 1,062
Deposits, cash and cash equivalents 35,387 32,836
Other current assets 1,146 1,086
64,215 63,680
TOTAL ASSETS 188,323 193,841
EQUITY CAPITAL AND LIABILITIES
Capital and Provisions
Authorized capital 50,729 50,729
Other provisions 14,310 13,243
Provision for translation to presentation currency 22,284 30,168
Undistributed profit 57,624 51,873
Parent company shareholders’ equity 145,007 146,013
Minority shares (8,207) (9,485)
TOTAL CAPITAL AND PROVISIONS 136,800 136,528
Long-Term Liabilities
Long-term loan liabilities 14,743 15,231
Long-term estimated liabilities 10,988 10,195
Deferred tax liabilities 5,716 5,320
31,447 30,746
Short-Term Liabilities
Short-term loan liabilities 6,441 10,975
Trade and other payables 8,291 8,555
Short-term estimated liabilities 1,424 1,448
Tax liabilities 1,623 2,871
Derivative financial instruments 186 1,327
Other short-term liabilities 2,111 1,391
20,076 26,567
Total liabilities 51,523 57,313
Total capital and liabilities 188,323 193,841